Doing Nothing Can Be Costly

Recently, we met with a public entity that was still using a telephone system that they had purchased in 1994.  It seemed to them that it was doing an adequate job for them and there was no reason for them to change it.  Sure there were features that they would like to have that it didn’t support, but they work on a budget and have come to accept that they can’t always have what they want or need.  It seemed obvious that replacing it would be a very expensive proposition.

I think this is a very common scenario.   The cost of keeping the current system in place HAS TO be cheaper than buying a new one, doesn’t it?  If you aren’t spending the money on the new system, you have to be ahead, right?  Well, in this case – wrong!

It turns out that the 20 year old system was essentially obsolete.  A support contract on an obsolete system can be expensive.   Not taking advantage of newer technology can also be expensive.  This organization was paying about $13,000 per year on a support contract.   They were using older handsets with less than ideal capabilities.  Because it lacked certain functionality with regard to caller ID, DID, and a few others, they were spending about $4,000 per month in telephone lines.

In this case, spending some money is a “no brainer”.  A new ShoreTel system would cost them about $35,000.  Everybody gets new telephones with the features and capabilities they need to work more efficiently.  The support agreement on the system, which is all inclusive and includes all parts, all labor (telephone and on-site technicians), as well as software support with free new versions of software, is about $4,000 per year – an annual savings of about $9,000.

Because the new ShoreTel system is able to properly support DIDs, Caller ID, and consolidation of phone lines, the monthly phone bill would drop to about $1,500 – saving approx. $2,500 per month or an annual savings of about $30,000.

So in this particular case, they would be able to pay for 100% of a new ShoreTel system using money that was already allocated in their operational budgets, and still realize a savings of about $4,000 at the end of the year.  Amazingly, the net savings next year after buying a new ShoreTel system would be about $39,000.  And beyond the easy cost justification, the users would have proper DID numbers in place, client software running on their PC allowing them to work smarter and quicker, voice mails as emails if they wanted, and they could even integrate their smart phones into the system to allow them to be available and productive for more hours of the day.