Few would dispute that customer engagement forms the bedrock of a successful business. Technology has progressively facilitated our ability to reach and connect with customers via social media, email, and other platforms. Yet, nothing quite replaces the unique advantage of the telephone: real-time voice interaction with customers.
Cloud vs. Hosted PBX Systems
Traditionally, businesses relied on basic telecommunications systems for their phone needs. This model no longer suffices for modern, especially larger, businesses, which require integration with mobile phones, texting, and call centers, as well as the incorporation of telephone systems into sales and marketing strategies.
Large businesses and enterprises must decide between three telephone system options: an onsite private branch exchange (PBX), a hosted PBX solution, and a hybrid of the two. Each option offers distinct features and benefits, and understanding these differences can lead to cost savings and enhanced employee and customer satisfaction. (Tip: Smaller businesses usually prefer hosted solutions.)
Benefits of Hosted PBX vs. Onsite PBX
Cost
While the initial and setup costs for a hosted solution are typically lower than those for an onsite system, long-term operating costs must also be considered. Factors include equipment lifespan, frequency of technology updates, ease of use, flexibility, and the support staff needed to maintain the system. Assess the total cost of ownership, not just the initial purchase price, when evaluating new networks.
Scalability
Both hosted and onsite PBX systems allow for expansion. A hosted provider can reduce some of the associated risks and complexities, though this convenience comes at an increased cost as the number of users grows. Additionally, hosted PBX providers may not be able to make changes as quickly or as precisely as an onsite PBX solution, which can be a limitation.
Features and Options
Businesses typically have two feature lists when selecting telephone systems: essential features and “nice-to-have” features. Evaluate your company’s needs, create these lists, and identify which solutions offer the desired feature set.
User Experience
Onsite systems often prioritize data traffic, resulting in higher-quality voice calls compared to hosted solutions, where voice and data packets compete for priority. Hosted vendors might offer a session border controller (SBC) to improve quality, but this adds to the system’s cost and complexity.
Support
Without in-house tech support, an onsite PBX is impractical. Businesses face too much uncertainty to invest in an onsite PBX without the proper staff. This is why onsite systems are rarely an option for small to medium-sized businesses (SMBs). Medium to large businesses often use Managed Services Providers for onsite PBX support, avoiding the need to hire a qualified in-house PBX expert.
Choosing Between Onsite and Hosted PBX
Onsite PBX
- High upfront costs are acceptable in exchange for low monthly costs.
- All employees work from the same office.
- The company is a large enterprise with stable size.
- The business handles a high call volume requiring many lines (e.g., call centers).
Hosted PBX
- High upfront costs are not feasible.
- Some employees work remotely, or there is no central office (e.g., virtual offices).
- The company is small or expects significant growth in workforce and needs.
- The business has moderate incoming call capacity.