Break Even Analysis

Page 1 of 1 Managerial Application of Technology

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Application of IT—VoIP at Energiedienst Holding AG

The cost of an IT system should always be less than the savings the system provides the organization. An investment in an IT system should increase productivity or decrease the cost of maintaining existing processes or systems.

The Challenge

Energiedienst Holding AG was looking to update their phone systems to provide their users with greater services and to decrease costs. They decided on a Voice over Internet Protocol (VoIP) phone system because it could provide greater flexibility at lower administrative costs.

Before any investment in IT resources, a financial analysis has to be conducted to show the cost and benefit to the organization.

A Solution

A financial analysis showed that investment in the VoIP technology would reduce the yearly costs of, for example, maintenance, support, and monthly phone bills. The maintenance cost for the system was projected to decrease by as much as 20% per year and a potential 7% decrease in monthly phone bills. The analysis also showed that the VoIP system would pay for itself in less than 4 years and provide improved features such as Microsoft Outlook integration, voicemail transcription, and integration with other systems such as the CRM.

Energiedienst was able to use VoIP to decrease costs in setup, equipment, and monthly fees. One of the largest savings for the company was the introduction of video conferencing services that decreased travel costs. Often cost savings are in areas that are not related to the systems and, therefore, cannot be included in the cost justification for the project.

References

Kaufman, C. (2008). The benefits of business VoIP. Vendor Guru. Retrieved from http://www.teledata.com/PDF_Resources/Resources/Not%20ShoreTel%20- %20Why%20VOIP%20makes%20Business%20Sense.pdf

VoIP a natural choice. (2011). [Video file]. Retrieved from http://www.youtube.com/watch?v=Oh5rMBEpaLY

VoIP meets hydro power. Avaya. (2011). Retrieved from http://www.avaya.com/uk/case-for- avaya/customer-stories/energiedienst