PBX phone systems use both hardware and software to connect devices such as routers, phones, adapters, and servers. The term dates back to the days of manual switchboards and patch cords, but the technology has greatly evolved over time.

Modern systems like IP PBX and VoIP PBX offer more cost-effective and feature-rich solutions that enhance productivity, such as call recording and voicemail-to-email capabilities.

If you’re looking to upgrade your traditional phone lines to PBX, this guide will walk you through everything you need to know to make the process as smooth as possible.

1. There are three types of PBX systems

As a business owner, the most important decision to make at the start of the implementation process is whether to choose on-premise PBX, hosted PBX, and hybrid PBX.

Let’s take a closer look at each:

On-premise PBX

Also known as legacy PBX or traditional PBX, this is a hardware-based system that sits in your office. It connects to the Public Switched Telephone Network (PSTN) using Primary Rate Interface (PRI) phone lines. It usually has a significant upfront cost and requires ongoing maintenance.

Hosted PBX

Commonly referred to as cloud PBX or virtual PBX, hosted PBX is a cloud-based phone system that manages your company’s calls and communication services. Instead of physical hardware on-site, your phone system is managed by a third-party provider in their data centers.

With it, you’ll get access to advanced phone features, such as voicemail, call routing, and conferencing, without the need for complex and costly equipment physically in your office. Hosted PBX systems are scalable and typically more cost-effective for small or midsize businesses.

Hybrid PBX

A hybrid PBX combines a traditional office phone system with internet-based features. It lets you keep your regular office phones and tap into online tools for added capabilities and remote work options. Hybrid PBX is particularly helpful for companies looking to transition to a hosted system.

2. Hosted PBX is easier to manage

Hosted PBX is truly a plug-and-play system, thanks to the power of VoIP (Voice over Internet Protocol). Instead of grappling with the challenges of an on-premise system, you can enjoy the convenience of a cloud solution.

All you have to do is register an account and sign up for a plan with a provider, much like any other online service you use. You are also able to scale your plan up or down easily, depending on business growth or seasonal spikes. Plus, as new features or functions are made available, accessing them is as simple as running a software update.

In contrast, on-premise PBX takes a lot of work to get up and running, ranging from initial installation and configuration to ongoing maintenance. If you don’t have a dedicated IT staff in place, you may need to hire an outside technician for maintenance. That can lead to potential downtime or disruptions in your service and eat away at your budget.

3. You can add VoIP to analog PBX

If you want to bring VoIP capabilities to a legacy analog PBX, you can employ a Session Initiation Protocol (SIP) gateway.

Essentially, SIP supports communication over the internet. It allows the transmission of voice and multimedia data, making it the backbone of VoIP services. It’s also used to set up, modify, and terminate real-time sessions, such as voice calls over IP networks.

When someone places a call using the legacy analog PBX, a SIP gateway converts the analog signal into digital packets. These digital packets are then routed over the internet to their destination, whether it’s another VoIP phone, a mobile device, or even a traditional landline.

VoIP has a lot of benefits for businesses, including:

• Access to new features: The best VoIP phone services offer advanced features that may not be available with traditional analog phone systems. This includes features like video conferencing, call recording, call forwarding, call routing, and voicemail to email transcription.
• Scalability: These systems are highly scalable, allowing businesses to add new lines or extensions as needed without the limitations of physical wiring.
• Cost savings: VoIP often costs less, especially for long-distance and international calls.
• Remote work compatibility: Employees can easily connect to the company’s phone system from anywhere with an internet connection, making it well-suited for telecommuting.

4. VoIP PBX offers real-time call analytics

Real-time call data can shed light on important parts of your operations, such as call volume and customer wait times, which directly impact customer satisfaction.

This type of information can be a major challenge — if not impossible — to compile with traditional PBX systems. But with VoIP PBX phone systems, the data is right at your fingertips.

Your VoIP account will give you immediate access to a wealth of call analytics and insights through real-time data. This allows you to quickly and easily identify call trends, assess agent performance, and ensure your customers receive the prompt, efficient service they expect.

This level of insight empowers your business to stay agile and responsive, ultimately enhancing the overall customer experience.

5. Cloud PBX can save you money

Cloud PBX systems are cheaper than traditional options for many reasons, but the biggest advantage is that you won’t need to buy a lot of equipment in order to implement them. With a cloud-based PBX phone system, you’re able to use the devices your team already has, such as desk phones, softphones, mobile devices, and headsets.

Costs associated with scaling operations are also lower with a cloud PBX system. If you’re planning to add more phone lines or new users, hire employees in different countries, or communicate with international clients and customers, cloud PBX is a budget-friendly option.

This is because VoIP providers allow you to adjust the bandwidth and customize your features without the need for any physical infrastructure changes in your office. You can add new users and take users away whenever you need to, right from your online account.

Cloud-based collaboration solutions are often the most cost-effective per month, too.

When you’re on the lookout for a PBX provider, it’s important to take into account the extra costs you might be paying for other software that’s already in use. For instance, you may be able to bundle video conferencing software, call recording tools, file-sharing, and virtual whiteboard solutions with your VoIP PBX.

By migrating to a unified solution, you can access a wide array of communication channels and collaboration tools all within the same platform. This streamlines operations for call agents, consolidates costs into one monthly bill, and saves money by helping you transition away from costly single-function software products.

6. Hosted PBX connects with other software

Transitioning to new communication tools may seem daunting, especially if your team has established systems in place. The good news is that a hosted PBX service offers integrations with the most popular third-party apps. These connections streamline your team’s workflow and minimize manual data entry, saving them time and effort.

Nextiva, for example, offers an app marketplace that connects with the most popular sales and marketing apps, such as Zoho and Salesforce. When integrated, these platforms fetch relevant contact details, making it easier for users to access customer information during calls or support interactions.

7. The right PBX depends on operations

Now that you know all about the different PBX systems and what they can do, which one should you invest in? The answer depends on how your company and teams operate.

If you only use landlines to make local calls or have already spent a lot on your existing infrastructure, a traditional solution may be the best option.

But if your team needs to make calls across the country or internationally, work remotely, or have access to call tracking features, you want a hosted PBX that is connected to a VoIP provider. Hosted systems are also the best option for businesses starting from scratch.

Here are some of the things you should consider when choosing a VoIP provider:

• Reliability: A modern PBX is only useful when it’s working. It’s important to choose a service that is online most of the time. Look for a provider that promises 99.999% uptime or better.
• Flexibility: Modern phone systems can work with regular VoIP desk phones or softphones that you can use on your computer or smartphone. This means you have options for how you make and receive calls.
• Support: If something goes wrong with your phone system, you want a team you can trust to help you out.
• Cost: When picking a service, make sure it fits your budget. Look for a provider that offers plans you can afford, and ask about discounts for yearly payment.
• Security: To keep your phone system safe, find a provider that has 24/7 monitoring and special certificates like SOC 2 or ISO/IEC 27001, which means they meet certain security standards. You might also want to think about features like call encryption to keep your calls private.

The right PBX solution can unlock key areas of your business. It can allow for remote work, help you get more customers, and provide a better experience, making it a valuable asset to your company.