Business Telephone Systems

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Business telephone systems no longer serve as a tool for simply making and receiving calls. Today’s unified communications systems allow employees to communicate by phone, video, and text, which is giving businesses the flexibility to connect with customers and clients in any way they prefer. The business phone system market has grown by leaps and bounds in recent years, with dozens of options to choose from, which makes finding the solution that’s right for your business a difficult task. Moreover, as a small to mid-sized business, you are likely approached by numerous phone providers about a variety of phone technologies.  How do you cut through the clutter to select the service provider that is right for you?

If you’re not sure yet, read on. We’ll fill you in on the pros and cons of these types of phone systems. This article provides a simple side by side comparison of the benefits and disadvantages of both the traditional telephone system and hosted PBX phones (commonly referred to as VoIP), so you can select the best business phone system for your company. There are four main types of telephone business systems:

  • Virtual phone systems
  • Landlines
  • VoIP
  • Cloud and on-premises systems.

Virtual Telephone Systems

A virtual telephone system is a relatively new technology based on the Internet and Cloud based computing. With the vast improvements in Internet service over the last decade, home users and small businesses have been able to benefit from cloud-hosted services. Service providers now can host systems on the Internet and provide remote services with confidence due to the rapid growth in available bandwidth to the end consumer. One of the opportunities that arose through cloud computing was virtual telephone systems.

Virtual phone systems connect those who call a main business phone number to remote workers on their mobile or home phones. These systems work as an extensive call-forwarding solution, transferring calls to an employee’s cell or home phone instead of a desk phone when a customer calls the main phone number. These systems include a variety of features, such as automated receptionists, voicemail, call forwarding, call screening, toll-free numbers, and online faxing.

Pros: This type of service allows businesses with offsite employees to present a professional image at all times. It also gives remote workers access to various phone system features that mobile and home phones don’t offer.

Cons: Virtual systems aren’t full-fledged phone systems. Your calls process using your mobile or home phone network. This means you pay for the call on the virtual system and use your mobile or home phone minutes. Some virtual services allow you to make calls via an internet connection when using the provider’s mobile app.

Best for: Small businesses with remote workers or sole proprietorships

Traditional Landline Telephone Systems

Landlines, in this instance, are a traditional phone system supported by a local or regional phone company. Also known as public switched telephone networks (PSTNs), landlines are analog systems that run via the telephone company’s traditional copper wiring. To run a landline service, you need on-premises PBX (private branch exchange) hardware. This is the hardware that can create multiple extensions and provide phone system features, such as call transferring and call directories. Some landline systems today are hybrids with VoIP systems. There is a traditional phone line that connects to a business’s data network, which it uses to connect each individual phone. Many phone system providers are phasing out landline systems, so it might be difficult to find one that still offers this type of service.

Pros of Landline Phone Systems:
  • Landline systems provide a reliable, time-tested solution that many companies are comfortable using.
  • Familiarity: For many businesses, landline phones are a consistent technology that’s been used for decades. This preference for familiarity may be especially strong for elderly relatives or for slow tech adopters who want to keep the same phone number and handset.
  • Accurate 911 service: Placing a 911 call from a landline is reliable and accurate. When the national emergency 911 system was established, landlines were the only phone option. Only 11 percent of the population has a full understanding of the location problems with 911 calls placed from a cell phone; yet, geolocation failure rates in some locations are as high as 90 percent.
  • Most phone system providers are moving away from landlines, making them more difficult not only to purchase but also to repair. It’s only a matter of time before these systems become obsolete.
  • High Cost: Landline phone service is typically priced high, and plans are needed for both local calls and long distance.
  • Few features: The aging technology allows for very few add-ons, and those that are available typically cost extra
Best for:
  • Large corporations that have the budget for them and an in-house IT staff to manage and maintain them, necessary for businesses without high-speed internet access.

VoIP Phone Systems

Instead of the copper wires that landlines run on, VoIP phone systems use the same internet connection that a company already uses. VoIP telephone systems provide a feature set that previously only large corporations using expensive PBX hardware had access to, such as automated attendants, call queues, and computer integration, which allows voicemails to be sent to email inboxes and computers to be turned into softphones. VoIP systems give remote workers access to the business’s phone system from their mobile devices.

Pros of VoIP Phone Systems:
  • VoIP provides a sophisticated phone system with all the bells and whistles. These systems are easy to set up and configure, and they are also significantly cheaper than landline systems.
  • Complete Portability: a VoIP number, also known as a virtual number, is completely portable. This means you can use the same number wherever you go.
  • Add-On Features at No Extra Cost: you probably might be quick to point out that even traditional PBX supports remote working through functionalities like call transfer, group ringing, call queuing and so on.
  • Increased Accessibility: cost efficiency aside, accessibility is one of the biggest benefits of VoIP for business. One distinct advantage cloud-based VoIP service offers is the ability to make calls from anywhere.
  • These systems rely on your internet connection. If you’re in a community with spotty internet service, this type of phone system won’t work for you.
Best for:
  • Small businesses wanting the functionality of a sophisticated phone system at a reasonable price and businesses that want their remote employees to have access to the phone system.

On-Premises VoIP Systems

With on-premises systems, your business houses all the equipment, including the PBX hardware needed to keep the telephone system running. On-premises systems require a large capital expenditure, as you are purchasing the equipment up front. While you pay one-time fees for all the hardware with a self-hosted system, with an on-premises system, but you also pay monthly fees for your SIP trunking, or PRI circuit, which is what allows you to make and receive calls. Your IT staff is responsible for maintenance, repairs, and upgrades of the system.

Pros of On-Premises VoIP Systems:
  • You are always in control of your service. You and your IT team ensure it is up and running and configured how you like.
  • There is a significant upfront cost, since you have to buy all the equipment. Additionally, you need someone on staff who can service and maintain the system.
Best for:
  • Businesses that don’t feel comfortable using the cloud and want total control over their system and access to the equipment at all times.
  • A business with an in-house IT team that can set up and maintain a VoIP system.
  • Businesses with regulatory or compliance requirements that may be difficult to meet in the cloud

Cloud-Based VoIP Systems

With cloud-hosted systems, there is no maintenance or hardware other than phones to worry about. The service provider houses, maintains, and also upgrades all of the PBX technology for you. The cloud allows growing businesses to easily add new lines and provides quick access to new features. Businesses typically pay a monthly fee on a per-user basis.

Pros of Cloud-Based VoIP Telephone Systems:
  • There is no PBX hardware or dial-tone service to purchase and maintain. Your provider takes care of all that for you. Additionally, you can set up and configure the system for your business from your computer.
  • You aren’t in control of the hardware. If the system goes down, you also have to rely on your provider to fix it as quickly as possible.
Best for:
  • Growing businesses on a fixed budget that don’t have an IT staff to operate and maintain PBX hardware; businesses that want quick access to new phone system features or have multiple locations and want their system all on one platform.

Now that you know the basics, you might be ready to make some decisions. If so, check out our best picks for business phone systems.