What is VoIP?
VoIP stands for Voice over Internet Protocol. Through VoIP one can place and receive calls over the internet. For small businesses, VoIP is largely preferred over traditional phone systems. It is because along with a lot of added functionalities, VoIP is cheaper than traditional phones as well. As we progress into this article/blog we will discover how and why VoIP is better. But first let’s understand what one can do with VoIP.
VoIP has been around for some time now. It was developed around the year 1995 as a means of making international communication cheaper. The ‘InternetPhone’ connected one caller to the other through a common software. The speakers and microphone of both the users were connected through this common software. Fast forward to 2021 and VoIP can still be used to communicate with users overseas along with a lot of cool new developments.
Today, small businesses can use VoIP not just to communicate within their office but also with their customers. Along with the functionality of placing calls, VoIP allows businesses to :
- Record calls ( incoming and outgoing )
- Route calls to the desired department
- Use IVR ( Interactive Voice Response ) to allow customers to reach their desired department through prompts on their keypad.
- Get information about the caller not just limited to caller ID. This could include information such as their Name, DOB, if they are an existing customer or a new one, or any additional information that might have been stored in your database.
(NOTE – you can use this information to personalize the customer call and give them a better experience)
- Integrate with your business’s existing Database.
How does it work?
To put it in simple words, communication over the internet is achieved through a change in the format of the message ( voice, audio etc). For data to be transmitted over the internet, it needs to change its form. A voice call placed through the VoIP phone is broken down and converted into small packets. These separate broken down packets each contain information that when assembled at the receiver destination again forms back into the original audio.
Packet switching is a technique that involves sending packets of data according to the most efficient route available at the time. VoIP uses packet switching. As opposed to traditional phone lines that use circuit switching, which involves establishing a line and keeping it reserved for that purpose, packet switching is done across various networks and does not need a pre-established route. It allows the following advantages –
- Increased efficiency as the circuits are not reserved. They are used as and when they are needed.This also means that the network bandwidth is not wasted.
- Decreased cost, as there is no need to set up a physical network.
- Increased speed, as the best route for transmission is determined and used to send the packets.
VoIP Phones can be both hardware based and software based.What looks like a normal desktop phone, configured to send and receive calls over the internet is the hardware based VoIP phone. Other devices such as mobile phones, computers, tablets etc can also place calls over the internet if they have software that enables the same. These are software based VoIP phones. So employees can make and attend calls from anywhere, even using their personal phones or computers. One can be sitting in their office or in a theatre and still attend calls.
How does this work?
Step 1 – Your phone connects to your switch or router in your Local Area Network (LAN).
Step 2 -When you dial a telephone number, your IP phone tells your VoIP service provider to call the other party.
Step 3- Your VoIP service establishes the call and exchanges data packets from your IP phone.
Step 4 – Your VoIP phone converts these digital signals back into the sound you can hear.
ADVANTAGES AND DISADVANTAGES OF VOIP
Why should businesses use VoIP? : Advantages
Now as we’ve gained some understanding into what VoIP is and how it works, we can try and understand how it can be useful for businesses.
There are many reasons why businesses should consider investing in VoIP Phone systems. Some of them are –
- Allows multiple calls at a time – One of the very important features of a VoIP system is that it makes communication a lot easier. It allows you to make multiple calls at the same time like conference and group calls. It also makes inter department communication easier which in turn makes it easier for the customers to be connected to the desired department.
- Affordability – Whether your VoIP system is hardware based or software based, a major advantage of it over the traditional phones is its affordability. Since in both the cases calls are made over the internet, you need not bear the cost of the call rates of telephone service providers. You would be able to place calls at significantly lower rates or even free.
Installation of the hardware or software based VoIP system is also hassle free and doesn’t cost a fortune. If you choose a cloud based VoIP system there is no need to install any extra equipment or appoint employees to install and maintain it.
Even hardware based VoIP systems need only the VoIP phones that are then connected to the router with an ethernet cable.
- Scalability – With VoIP, as your business grows it’s easy for you to add new lines for your employees. You can also eliminate existing lines as you downsize without having to bear any additional costs. Traditional phones would have required new lines with new cabling, with VoIP one can set up additional lines with a few clicks on their online dashboard.
- Mobility – VoIP provides one with an ease to attend calls from anywhere they like. You don’t have to be chained to a desk to make and receive calls. With a VoIP system installed in your phone, tablet or laptop you can take your work anywhere. It also makes it easy for businesses to allow for remote work for their employees. ( As we have seen the shift to remote work during the pandemic). It is surely the future of work.
- Reporting and Metrics – Using Landline telephones for business communications limits you from understanding the call metrics. With VoIP, one can easily track important metrics such total call time, average handle time, hold time etc. These will help you to understand how you could handle calls better. Customer experience can be significantly improved once you are able to measure your performance.
Things to keep in mind with VoIP : Disadvantages
- High reliability on the Internet – As we know that VoIP places calls over the internet. So it goes without saying that having a strong internet connection is paramount to place good quality calls. If the network bandwidth is low it will affect the service.
2. Delayed and Disorganized – Sometimes when the VoIP system is used to send audio and video messages it might encounter some problems. This could be due to the delayed and disorganized assembly of the messages at the receiving end.It could be avoided with an optimal network bandwidth for transmitting messages.