Phone Service over the Internet How your nonprofit can take advantage of VoIP Sam Chenkin - January 14, 2015 Find out if your organization can save money — and perhaps gain additional benefits, such as enabling your workers to work anywhere — by switching to a VoIP (Voice over IP) phone system solution. VoIP means your nonprofit's phone calls and Internet would use the same infrastructure. Here we describe the available options and their pros and cons. Let's face it: the technologies available to organizations today are driven as much by marketing as by actual advances. "Cloud" is hot, and so everything is a "cloud solution." "Business continuity" is hot, and so every sales pitch includes the phrase "work from anywhere." Technologies are complicated, and vendors rely on buzzwords to get an audience, rather than trusting consumers to understand the complexity.Voice over Internet Protocol, or "VoIP," is one of the more recent buzzwords. This article will explain what VoIP is and how it can actually benefit your nonprofit or library.In the past, phone service for your organization was provided using entirely different technologies and infrastructure than your data infrastructure (which is what you use to access the Internet). There were separate wall jacks and separate equipment in your closet.Voice over Internet Protocol (VoIP) is a relatively old technology — now entering the mainstream — that blurs the line between your data infrastructure and phone infrastructure. With VoIP, some part of your phone calls will be carried over the same devices and cables as your email and Internet.VoIP has many advantages. Data networks are more flexible than analog (old-fashioned) voice networks, and so VoIP offers better resiliency. Data networks are also very good at getting data to the right place with tremendous flexibility, and therefore VoIP technologies can make you reachable anywhere. Most importantly, the ability for vendors to offer voice services over the Internet without a physical connection to your office has broken century-old monopolies and resulted in real competition. The result is dramatically lower prices and improved features.Of course, like any good buzzword, "VoIP" tells you something about the technology involved but fails to provide any helpful information about how that technology would actually work in your organization. For that we need to understand all of the different components of your organization's phone infrastructure.The Traditional Phone System Setup Your phone infrastructure is made up of four separate components and the connections between them. Phones: The devices that actually sit on your desk, or in some environments, the software phones running on your computers. PBX: A "Private Branch Exchange," which has traditionally lived in your physical office. A PBX is the device you configure to set up extensions, voicemail, hold music, etc. All of your phones connect to this device, which forwards external calls to your telecom company and internal calls to another phone. Telecom company: This is the company that connects your office's PBX with the rest of the world's phone network so you can do more than just dial local extensions. Telecom companies traditionally have also supplied the connection between their facilities and your PBX in the form of a T1 or POTS (plain old telephone service) line. The world: This is the broader phone network used throughout the world that allows us to reach other states and other continents with nothing more than a phone number.Technically, VoIP means that one of the connections between the components above works over the same kind of network that your email and Internet uses. The exact connection is entirely up to you. The rest of this article will explore the options typically utilized by nonprofits to take advantage of VoIP.VoIP with Traditional PBX VoIP with traditional PBX is a scenario very popular with larger organizations. With this scenario, your phones and your computers share the same data network — all connect to the same switches in your organization. You can use your existing Ethernet wiring and jacks (plug your computer into your phone and your phone into the wall). Your PBX connects to the data network as well, so phones can communicate with the PBX, while your computers can communicate with your servers or out to the Internet via your firewall.With this solution, your PBX still has a physical connection to the telecom company. Your organization will have separate data and voice connections to the larger world (though sometimes, like if you have a T1 line, they might share the same cable).This type of solution is particularly well suited to large organizations with multiple, large offices. Voice traffic between locations (extension-to-extension, internally) can be routed over the Internet using VoIP rather than through the telecom company. This can eliminate the need for expensive switching networks (Multiprotocol Layer Switching — MPLS — or similar) and allow multi-office organizations to easily reach extensions at other locations with very little additional cost.BenefitsConcernsThe ability to use the same wiring and data infrastructure can greatly reduce construction and maintenance costs.Because your phones and computers run on the same network, you can integrate systems for caller lookup, enable integration with your client or CRM database, etc.Organizations with multiple locations can route internal traffic over the Internet (VoIP) rather than through the telecom company, allowing people to call each other by extension, eliminating the need for an MPLS or similar network, and reducing costs.Your organization still needs to maintain an on-site PBX, which requires significant upfront investment and ongoing maintenance.You will still need to maintain a pure-voice connection like a T1. These connections are very expensive.If your connection to the telecom goes out, you lose the ability to route calls to extensions. Phone service remains dependent on on-site infrastructure.Hosted PBX Hosted PBX is a new offering quickly gaining popularity with small to medium-size organizations. With this solution, your PBX is hosted with your telecom company. Your phones connect over your Internet connection to this PBX.This setup dramatically lowers your cost and infrastructure needs. All you need on-site is an Internet connection and VoIP-compatible phones. Because voice connections to your telecom company are typically a large portion of your organization's utility costs (a T1 line runs between $200 and $500 a month), and PBXs are very expensive (several thousand dollars), you can immediately and significantly reduce the costs of your voice infrastructure.This solution also brings tremendous advantages in terms of accessibility and disaster recovery. Because your phones connect over the Internet to your telecom provider, they can be placed anywhere. You can bring your desktop phone home. You can give your remote staff an extension. And, since your PBX continues to work if your office loses power or Internet, you can reconfigure it on the fly to forward calls for a particular extension to a mobile number. In the event of a disaster, your organization's phones will stay up, and you will remain reachable.Hosted PBX is the right choice for most small to medium-size nonprofits.BenefitsConcernsThe ability to use the same wiring and data infrastructure can greatly reduce construction and maintenance costs.Because your phones and computers run on the same network, you can integrate systems for caller lookup, enable integration with your client or CRM database, etc.You can eliminate your costly dedicated voice connection and use your normal Internet connection for voice and data.You can work from anywhere.You can remain accessible even in the event of a disaster.Business Internet connections (fiber-optic, cable, etc.) tend to be less reliable than dedicated voice connections (T1s). This can be mitigated with redundant Internet connections.Since all voice traffic (including extension-to-extension calling) travels over your Internet connection, bandwidth needs may increase.In Conclusion: VoIP Solutions for Organizations of Any SizeIf your organization is small or medium-sized, or you are a large organization with many small or medium-sized offices, you would greatly benefit from a hosted PBX setup. If your organization has many large offices, then you should check out a setup that includes both VoIP and traditional PBX. Both of these VoIP solutions offer significant advantages as compared to the old-fashioned scenario in which your phone system and Internet connection are completely separate from each other.For large organizations with only a single location, a traditional phone system will probably work just fine. However, even these organizations can benefit from the flexibility of an on-site VoIP system.Additional Resources for VoIP and Phone SystemsCheck out 5 Reasons Why VOIP Is the Future Of Nonprofit CommunicationLearn more about the various options, including VoIP, in Idealware's article on Phone Systems on a Shoestring BudgetRead a quick list of VoIP features in 8 Things We Love About Internet Phone Calls (aka VoIP)Find out more about integrated communications options and how VoIP can play a big part in TechSoup's article on United Communications Options for Nonprofits This work is published under a Creative Commons Attribution-NonCommercial-NoDerivs 4.0 International License.