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What is VoIP...
VoIP or put correctly "Voice over Internet Protocol" is quite simply your normal speech converted from analogue (as it's spoken) into digital. Then split up into small packages of data that can be sent over a computer network, then reassembled at the other end and ultimately converted back to analogue to the person you have called.

The network used will run IP which is "Internet Protocol" which is the same network that you use to browse your websites and collect your email.

By eliminating the need for separate networks you can both reduce costs and also increase the flexibility of your systems:-

Imagine wanting an extension at home from your traditional office telephone system

You run a rather long piece of wire to your home or
Rent a private circuit from your Telco (generally very expensive) or
Simply have another phone line and then re-route the calls out and you pay the phone call.
or with VoIP

Connect both your home and office to the Internet via an ISP / Telco and then put a VPN capable Firewall/Router (standard way to connect to the Internet securely nowadays) at both the office and home and your 2 sites are then linked to each other and you can simply take your phone home and your calls will route over you Internet connection.
And of course your home can be next door, down the road or in another country as the Internet is worldwide.

Voice Over I.P