Butler University’s Voice over Internet Protocol Adoption

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Table of Contents

Introduction
Staying with the current plan
Closing down the company
Selling the company
Slowing down the rate of growth
Asking for a 90-day extension to take care of the cash flow problem
Reduce expenses
Other possibilities
Conclusion
References

Introduction

The development and implementation of a VoIP system are quite challenging for companies that have not dealt with such a system before. It is apparent that Butler University needed to shift from the analog telephony and network system to enhance the quality and speed of communication, but the plan did not highlight the long-term costs and goals. The challenges that faced the company emanated from the lack of development of a financial strategy that would meet the short-term and long-term costs of managing the VoIP system. As the situation stands, the company has limited options, and this paper looks into the respective options to highlight its viability in solving the prevailing issue.

Staying with the current plan

The current plan entails managing the in-house system that integrates the telephone and data services through the PBX system. The various support systems within the network must be included in the budget, and the institution needs to maintain the current support personnel from the various vendors. The company must ensure that the network does not crumble as it did during the first trial of the implementation process.

Seeing that the analog system was already scrapped out after the implementation of the PBX system, it would be devastating for the current system to break down (Brown, 2007). Staying with the current plan means that the institution will have to find a long-term solution to the budgetary deficits. Butler University will have to pay more to continue enjoying the services offered by the VoIP. Managing an in-house system is quite expensive.

Closing down the company

Closing the company is an alternative option that can eliminate the current issues are Butler. The essence of the VoIP was to enhance the quality of communication and data management, but it proved to be a costly system, and the institution was not ready to meet the extra cost. The institution did not expect such escalated costs in maintaining its system. Butler would work better with the previous system, whereby it would pay monthly fees to an outsourced service provider. This option is not feasible because the company has already spent too much money on software and hardware; however, it is still a viable option when considering the long-term costs of managing the VoIP network (Brown, 2007).

Selling the company

Selling the company is one of the most feasible approaches to solving the financial issue because the company would retrieve the money used to build it. The money would be used to finance a network outsourcing platform. The company has demonstrated its inadequacy of financing to run the company; hence, selling it would bring new prospects to outsource services from the prospective buyers.

Managing the VoIP network is quite costly; hence, Butler University should stick to outsourcing networking services. The economies of scale associated with outsourcing will enable the company to lower the cost of maintaining an information system. It is, however, not economically advisable for the institution to sell the company because this would leave a void in the communication system, which would require a hefty amount of money to fill (Hill & Jones, 2012). The University needs an effective communication system, and an in-house system is easier to align with the dynamic organizational changes.

Slowing down the rate of growth

The growth rate of a company is directly related to the increment of the finances allocated for growth. Growth in a company may force various functions to increase their budgets to work efficiently. The in-house VoIP system at Butler University portrayed an exponential growth rate in its initial implementation period, and there was a clear sign that the institution needed to increase the budget allocated to the communication channel (Brown, 2007).

Since it is clear that the required finances are not available, the growth rate of the service offered within the network must be slowed down. However, most of the financial issues in the system involve fixed costs; hence, slowing down the growth rate might not be a feasible solution. Slowing down the rate of growth also translates to the institution failing to continually upgrade its communication system to meet the growing demands of the students and the various departments.

Asking for a 90-day extension to take care of the cash flow problem

The cash flow problem in the company should be addressed with immediate effect because the various operations that facilitate an effective telephone and data network need to run constantly. The lack of a financial plan on a long-term basis is the underlying issue in the company; hence, a 90-day extension would come in handy to see the associated business entities develop a sustainable budget.

The company needs to identify the best way to run the VoIP system (Brown, 2007). The main sources of the cost overruns are the maintenance of the security systems and the installation and licensing of various software. The institution should look into tapping finances from different projects in other departments. The IT department is quite important; hence, it should receive more money to keep the students and departments connected to a reliable network.

Reduce expenses

Reducing the expenses associated with running the company is the most viable approach toward eliminating the underlying financial issue. Butler University may have ventured into a project that requires constant increments of the budget, but it can tame its spending by reducing the cost of running the system. One of the practical approaches to reducing costs is plummeting the cost of labor (Merrifield, 2009). Since VoIP is associated with the convergence of personnel, there is a clear indication that the company can afford to lay off a large number of employees in the IT department. The resulting cost-cutting should enable the company to meet the deficits in the budget on a long-term basis (Neu, 2013).

Other possibilities

The company can start providing VoIP services to other companies to meet financial needs. By increasing the number of clients using the VoIP, the PBX system will be easier to run because Butler will only meet a small portion of the cost. However, the company might need to enhance its hardware and software capabilities before starting to provide network services to other institutions; hence, this option might be relatively costly.

Conclusion

Butler University must maintain the VoIP system and its in-house management platform to ensure its communication system meets the needs of the students and the members of the various departments. The cost overruns that the company has realized should be addressed by reducing the costs of operation. The overlapping labor force should be trimmed down, especially in the IT department because the PBX system has led to a convergence of roles among the employees.

Butler made the right choice by taking the responsibility to manage an integrated voice and data network because the University needs a communication system that can easily adapt to the dynamic needs of the society within the institution. The security and financial issues should not force the company to close down or shift to an external supplier of voice and data services.

References

Brown, C. V. (2007). The VoIP Adoption at Butler University. In Brown, C. V., DeHayes, D. W., Hoffer, J. A., Martin, E. W., & Perkins, W. C. (Eds.), Managing Information Technology (pp. 144-166). Upper Saddle River, NJ: Prentice Hall.

Hill, C., & Jones, G. (2012). Strategic Management Theory: An Integrated Approach. Boston: Cengage Learning.

Merrifield. R. (2009). Rethink: A Business Manifesto for Cutting Costs and Boosting Innovation. Boston: Addison-Wesley Professional.

Neu, F. H. (2013). Cutting Costs: Successful Strategies for Improving Productivity. Santa Barbara: ABC-CLIO.

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