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Funding the costs of telephony – Guidance for commissioners and funders

By Mark McLean

This article provides guidance for commissioners and funders of voluntary and community organisations (VCOs) on the funding of telephony costs

It is easy to take telephony systems for granted, largely because they are essentially reliable and ubiquitous. But a small Voluntary and Community Organisation (VCO) may not necessarily be able to afford the products and services (direct dial numbers, voicemail, smartphones) on which their funders rely. It is important, then, to recognise telephony as part of the infrastructure that supports commissioned projects.

Telephone Products and Services – The Benefits

Today’s telephone products and services can also provide some specific benefits. They can facilitate home working, which aids work-life balance, can reduce environmental harm and increase the potential for people who are less mobile to become involved with VCOs. They can support business and service continuity, allowing calls to be diverted to a secondary site in the event of a critical incident at the VCO’s main premises.

For advice services, using the telephone channel rather than the face-to-face appointment as the first point of contact can be a cost effective way of using resources. Costs can also be saved by sharing systems or platforms, for example if several VCOs are served under a single contract, because unit costs can be lower through economies of scale. A comprehensive guide to telephony products, services and facilities of benefit to VCOs is included in the ICT Hub ‘Good Telephony Guide’.

Research conducted by the Telephone Helplines Association in 2006 found that VCOs faced several challenges when it comes to telephony. Most had an ad-hoc, rather than a strategic approach. The cost of setting up and maintaining telephone systems was a hurdle for the majority of VCOs, whilst the availability of in-house or external advice was patchy, with half of VCOs relying on suppliers or staff/trustees who happened to have some ICT knowledge.

The true costs

VCOs are faced with a long list of cost elements when setting up a new telephone system. These include:

• Costs of selecting and appointing a supplier
• Costs of legal disposal of existing equipment
• Capital cost of new equipment, including installation, cabling and accessories
• Cost of disruption caused by the installation
• Training for staff

Ongoing costs for billing options, number ranges, licences, insurance and maintenance can be substantial.

As telephone systems become increasingly associated with the internet, robust ‘voice over IP’ systems will become viable for smaller VCOs, and telephony costs will be absorbed within the cost of setting up and maintaining IT networks and broadband connections. However, VCOs will still need to select and implement fit-for-purpose solutions, both of which will take up resources. The THA is encouraging VCOs to ensure that all expenses are allowed for in telephony budgets.

A Strategic Approach

The lack of a strategic approach to telephony amongst VCOs means that individual VCO staff may end up buying a particular product or service for a specific project, but fail to the see the ‘bigger picture’. It can be more difficult to adopt a whole-organisation approach to telephony if funding streams for certain projects will only countenance costs directly related to a project. One VCO commented in the 2006 survey that:

“When applying for individual project funding, funders do not want to pay for a new system that benefits all the projects in the organisation.”

We are not suggesting that funders subsidise expenditure that has no impact at all on the services they are commissioning, but that they are sensitive to the indirect expenses which VCOs may reasonably apportion in their applications and tenders.

Funders should allow for this in their tender specifications and scope-of-works documents. You may also want to look at ‘win-win’ investments in telephony to improve accessibility to and continuity of those services that you are paying for the VCO to provide.

Finally, commissioners should consider opportunities for sharing of telephone platforms and services. For example, if you fund several services that work closely with each other, they may benefit from sharing their operations. Are there opportunities to bring together their enquiry handling functions? It may be useful to identify opportunities for generating savings for the taxpayer where the service provided to the citizen is also more accessible or more effective.

For more information on meeting your telephony needs please read the Good Telephony Guide (8.2 MB PDF file. Requires Adobe Reader. If you don't already have this, download it from Adobe).