If you're not familiar with the term "VoIP," get ready to change the way you think about communicating with your customers. VoIP, or Voice over Internet Protocol, is a new technology that takes analog audio signals, such as the kind you hear on the phone, and converts them to packets of data that travel over the Internet or private networks–just like e-mails or Web pages.VoIP is a revolutionary new way to communicate and has the potential to completely change the world's phone systems. VoIP providers like Vonage have been around for awhile and are growing steadily. Major carriers like AT&T are already setting up VoIP calling plans in several markets around the United States, while the FCC is looking seriously at the potential ramifications of VoIP service.

Benefits of VoIP For about the same cost as a typical land line, you can get a VoIP line for your agency, with all of the standard benefits like voice mail, call forwarding and call waiting. VoIP also often has good pricing for add-ons, like an extra fax line.Some VoIP companies boast better voice quality than a phone line, which can be an added bonus. Because the bandwidth for a broadband Internet connection is greater than the relative bandwidth of a phone line, more data can pass through the pipes at one time, allowing for high-quality audio.New applications are being developed just for VoIP, including Web-enabled call centers, remote telecommuting and even applications for personal productivity, like unified messaging and "follow me" services.Other benefits of VoIP include:o Mobility. You can take your phone anywhere in the world.o Convenience. With many VoIP services, you can check voice mail via the Web or attach messages to an e-mail sent to your computer or BlackBerry.o Cost savings, by eliminating long-distance charges.Add-on features include voice mail, caller ID, call conferencing, call forwarding and unlimited long distance.Limitations of VoIPWith all its benefits, VoIP also has limitations that must be considered. One disadvantage is that VoIP usually does not include a listing in the local Yellow Pages. Some VoIP services don't work in blackouts, or connect seamlessly to the nearest 911 dispatch centers. Limited 911 service, however, is being addressed by most carriers.One of the major downsides of VoIP usage for business is its potential lack of reliability. Phone lines tend to have less chance of failing than an Internet connection. Some agents have expressed concern about client privacy and security. It's highly unlikely that anyone could intercept your phone calls as they're transmitted over the Internet, but it is theoretically possible. However, keep in mind that the traditional telephone service providers are currently using the Internet to carry some long distance calls.Another consideration is bandwidth. If you use your Internet connection for high-bandwidth purposes, you may suffer from some break-up in the connection. VoIP calls are also subject to the limitations of normal computer issues.Types of VoIPVoIP provides more than one way to place a call. There are three types of VoIP service in common use:o ATA. The simplest and most common form of VoIP is available through the use of a device called an analog telephone adaptor (ATA). The ATA allows you to connect a standard phone to your computer or your Internet connection for use with VoIP.The ATA takes the analog signal from your traditional phone and converts it into digital data for transmission over the Internet. Some ATAs may ship with additional software for the host computer, but loading it is straightforward.o IP phones. These specialized phones look just like normal phones, with a handset, cradle and buttons. But instead of having the standard RJ-11 phone connectors, IP phones have an RJ-45 Ethernet connector. IP phones connect directly to your router and have all the hardware and software necessary to handle IP calls. Soon, Wi-Fi IP phones will be available, allowing subscribing callers to make VoIP calls from any Wi-Fi hot spot.o Computer-to-computer. This is probably the easiest way to use VoIP. All you need is the software, a microphone, speakers, a sound card and an Internet connection–preferably a fast one, like a cable or DSL modem. Except for your normal monthly ISP fee, there is usually no charge for computer-to-computer calls, regardless of the distance.Costs of VoIPOn average, small and midsize agencies can save 10% to 20% on IT and telecommunications by switching to VoIP. Of course, these numbers can vary widely depending on each agency's circumstances.When considering the cost of VoIP, agencies should also examine:o Telecommunications cost profile. How much is your agency currently spending? What are the per-call or per-minute charges?o Equipment. Is your existing equipment owned or leased? What are the maintenance costs? Can existing equipment be integrated with a business VoIP solution, or will new hardware be necessary? o Business VoIP solution cost. VoIP has start-up costs including software, hardware, consulting services, installation and training.What else do you need to know?Once you've decided that VoIP is right for your agency, determine which parts of your existing telecom equipment you can keep. Many PBXs can be IP-enabled with software upgrades and minor hardware additions, and you may be able to use the digital phones you already own. The potential cost savings are significant, while you increase the overall reliability of your phone system.When comparing systems, make sure you investigate the details carefully. Many systems say they include "everything," but may not include the specific features you require. The definition of a "complete" system varies from vendor to vendor, so be sure you're comparing equivalent systems.You may want to learn whether the phone systems are built on open standards. While all VoIP systems use the industry standard Internet Protocol (the "IP" in VoIP) to route calls, some use proprietary technology for administration or integration features. Having a system run entirely on open standards allows for greater flexibility in integration and customization. However, you may not be as concerned about flexibility as long as the features and costs match your requirements. The technology used in a particular system may affect your ability to leverage your existing equipment, so be sure to inquire about compatibility.Last, remember that some common business devices require analog phone lines–such as fax machines, some security systems and other devices. Make sure your vendor knows and accommodates these types of uses when planning for your communications needs.VoIP is just another technology that may help you and your agency perform more efficiently and effectively. But do your homework. VoIP may not be right for you–at least for now.Ted Baker is the president of Advanced Automation, which for 17 years has offered agency consulting services addressing a variety of management and agency development issues. He also is an author and frequent conference speaker. Ted can be reached at [email protected].