VOIP or Voice Over Internet Protocol is a technology that allows you to make traditional phone calls over the Internet (Skype is one of the VOIP services that you most likely have heard of or used).
The reasons for moving to a VOIP-based phone system usually include costs savings, integration with other web resources and flexibility when working with multiple locations.
The size of your business and what you plan to do with the system will be major factors in whether it makes sense for you and for finding the right solution.
If you are looking for an inexpensive way to add features such as integration with your smartphones, call screening, forwarding voice messages to e-mail or integrating the phone system with your operating software, VOIP may be your solution.
If you have locations in various cities but want to have a phone system that worked as if you were all in the same building, VOIP may be your solution.
VOIP, when done right is a beautiful thing, but when it's done poorly or on a shaky internet connection, it can become a bit of a nightmare.
Your first evaluation point is making sure your Internet connection has enough bandwidth to accommodate your VOIP and traditional surfing needs together.
If you currently experience sporadic performance issues when going to websites or streaming audio or video, you may end up with a phone system that makes everyone sound like Max Headroom ( http://youtu.be/z52uxxyEy0E )
You can test your bandwidth and get a sense of how many simultaneous calls it can support at RingCentral's Connect Capacity test site: http://www.ringcentral.com/support/capacity.html .
Because VOIP relies upon your Internet connection to make calls, if your Internet service ever goes down, your ability to place and receive calls goes away as well. Make sure whatever you setup has some ability to automatically reroute your calls to voice mail or another phone should an outage occur.
If your business has mission critical communication needs, you may want to keep at least one traditional telephone line that allows you the ability to communicate should an outage occur. It also may be the only way that 911 service will work as some VOIP providers don't offer it.
Depending upon which service/hardware combination you choose, you may need to upgrade your routers and/or switches in order to configure the QOS (Quality Of Service) settings that allow you to give higher priority to VOIP traffic.
If you have an office full of hardcore Pandora or YouTube users, you may have to adjust their behaviors to avoid creating congestion on your network that will result in poor call quality.
In the past, setting up a VOIP system for your business required expensive and complicated hardware and software as well as some significant setup processes.
Today, you can use hosted services that don't require all that complexity and expense because everything is done in the cloud.
For compatibility reasons, look for phone equipment that uses the SIP (Session Initiation Protocol) standard so you aren't tied to any proprietary systems or providers.
For really basic small business needs, checkout the business plans at Vonage ( http://www.vonage.com/us-canada-calling-plans/small-business-voip-1500 ) or for more features and options checkout RingCentral's various offerings http://www.ringcentral.com . For more complex situations, checkout Vocalocity ( http://www.vocalocity.com ).
If you aren't much of a do-it-yourselfer, you'd be best served by consulting a professional that can help you navigate the complexities and help you make the best choice for your situation and budget.