VoIP Costs
VoIP ROI: A Worked Example
Most VoIP ROI claims are marketing arithmetic: compare the most expensive legacy setup against the cheapest cloud quote and declare victory. This example does it properly — a 25-user business, its real legacy cost stack on one side, the full hosted cost from this site's 25-user budget on the other, every assumption stated, and the soft savings labeled as soft.
Reuse the structure with your own invoices: ROI is a property of your starting point, and businesses already on cheap SIP trunks will see a very different answer from businesses on legacy PRI and per-line services.
The two cost stacks (25 users, monthly)
| Legacy stack (typical published-rate samples) | Monthly | Hosted VoIP stack (from our 25-user budget) | Monthly |
|---|---|---|---|
| PRI circuit + channel rental | $450 | Seats, DIDs, e911 (subtotal) | $686 |
| DID block (100 numbers) | $75 | Taxes & fees at 18% | $123 |
| Long distance (metered legacy rates) | $210 | Long distance (domestic bundled) | $0 |
| Maintenance contract on aging PBX | $180 | Maintenance (included) | $0 |
| Moves/adds/changes vendor visits (avg) | $95 | Admin self-service (internal time) | internal |
| Legacy total | $1,010/mo | Hosted total | $809/mo |
Payback and the honest caveats
Hard saving: $201/month. One-time migration cost from our budgets: ~$5,150 hardware and setup, plus ~$600 of porting/overlap costs — call it $5,750. Simple payback ≈ 29 months; five-year net saving ≈ $12,060 in bills minus $5,750 one-time ≈ $6,300, before counting avoided PBX end-of-life replacement (the legacy box in this example is two years from unsupported — avoiding a $9,000 forced replacement is the real economic event, and it is legitimate to count it, labeled as avoidance rather than cash saving). The soft savings — staff self-service instead of vendor visits, remote-work continuity, features the legacy system lacked — are real but we deliberately keep them out of the headline number. If your legacy stack is already SIP trunks and a healthy PBX, run the same table: the payback stretches past five years and the honest answer may be 'not yet' — which is exactly what a worked example is for.
Run your own ROI in an afternoon
- Assemble the true legacy stack from 3 months of invoices: circuits, numbers, usage, maintenance, vendor call-outs, and any internal PBX admin time you can honestly count.
- Build the VoIP stack from a normalized quote (all fees and taxes) plus one-time hardware, install, porting and overlap — our budget pages give the structure.
- Compute simple payback = one-time cost ÷ monthly hard saving. Under 18 months is strong; 18–36 months is typical; beyond 48 months, non-cost reasons must carry the decision.
- Add avoided costs separately and labeled: end-of-life replacement, capacity expansion the legacy system cannot do, outage risk reduction.
- Stress-test with ±20% on the two biggest lines (legacy usage, hosted seat rate at renewal) before presenting the number to anyone.
Frequently asked questions
- Is a 29-month payback good?
- For infrastructure with a 7–10 year service life, yes — especially when the alternative includes a forced PBX replacement. Judge payback against the system's expected life and your contract term, not against software-project norms.
- What if our legacy lines are already cheap?
- Then VoIP's case rests on features, mobility and avoiding end-of-life risk rather than bill reduction, and the honest ROI may be negative on cash alone. Plenty of businesses still migrate — but they should do it with open eyes, which is the point of the worked example.
- Should soft savings be in the board presentation?
- Present them as a separate, clearly labeled section with conservative values or excluded entirely. One inflated soft-saving line discredits the hard savings, which are usually sufficient.