Like all business components, Voice over Internet Protocol (VoIP) systems have costs of ownership, or the direct and indirect costs accrued by a certain service or product. Understanding your VoIP’s total cost of ownership will help with your tech budgeting and more.

If you’re in the market for a Voice over Internet Protocol (VoIP) phone system, you’re bound to come across solutions with similar features and add-on services. Some may offer a combination of these at a lower cost, so you might be tempted to go for the most affordable option.

Picking a VoIP solution for your business can be tricky since there are so many data plans to choose from. But here’s a pro tip: Calculate the total cost of ownership (TCO) and not just the monthly fees.

What is TCO?
TCO is the overall sum of procuring, deploying, and operating a VoIP system over its life cycle, which is typically five years.

When investing in new technology, cost is always a deciding factor, especially for VoIP phone systems. No matter what features or services it’s bundled with, there’s no point in investing in a phone system that easily puts you over budget. That’s why it’s important to evaluate the total cost of ownership (TCO) of VoIP systems.

For many business owners, calculating the return on investment of a new technology purchase can be tricky. Some may not even see the value of calculating it, and therefore skip this step. This, however, can be a costly mistake to your business because if your technology isn’t saving you money, it’s costing you.