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Is a PBX Phone System the
Right Choice for your Business

Find out what PBX means, how it works, what problems it solves, and advantages & disadvantages of PBX phone systems (& alternatives).

What is PBX?

PBX or private branch exchange is a telecommunications device used by businesses to route all the calls made within, to, and from their phone network. A PBX connects a business’ internal phone lines to each other and to the PSTN (Public Switched Telephone Network).

It has the intelligence to route incoming and outgoing calls based on pre-set rules programmed into it. Each terminating device connected to a PBX is called an “extension” and is assigned a unique (within that network) phone number.

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Components of a PBX phone system

A PBX phone system has the following components:

1. Private Branch Exchange Server:This is the main component of PBX phone systems. It handles everything from call routing to voicemail.

2. Voicemail server: This is where the recorded voice resides for automated greetings, and where all voicemail is stored.

3. Gateway: This connects your PBX to the PSTN.

4. Analogue phones: These phones are used by agents to make and receive calls. They are connected to the PBX via phone lines.

5. Physical wires: These connect the analogue phones to the PBX.

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Expensive setup

It was expensive to buy separate phone lines. Additionally, the businesses incurred high costs even for internal communication.

Waste of resources

It led to a waste of resources. It’s highly unlikely that all 50 agents will be speaking to customers simultaneously.

Advantages of using a PBX Phone System

Free internal communication
One of the primary advantages of a PBX phone system is the fact that they share a trunk line with internal phones. This results in free internal communication.

Lesser number of phone lines required
Reduces the number of phone lines that need to be purchased. For 50 agents, businesses need to buy only 7-10 phone lines since all communication is optimized by the PBX.

Extra features for handling high call volumes
PBX phone systems offer additional features for call management that allow businesses to handle high call volumes in an organized manner.

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Disadvantages of using a PBX Phone System

Infrastructure Heavy
PBX phone systems are infrastructure-heavy. They require components like PBX server, physical wires, voicemail server, etc to be bought and stored on-premises

Prone to downtime
They’re prone to downtime. If there’s anything wrong with the primary server, the entire phone system comes to a standstill.

Expensive to set up
They are extremely expensive to set up and maintain as compared to the alternative, cloud phone systems. Most businesses take years to break even on this investment.

Difficult to maintain
They are difficult to maintain and offer low flexibility and control. It requires hours to add or remove a single agent and maintenance is dependant on the vendor’s support.

No Analytics
PBX systems don’t offer the analytics and visibility a cloud phone system does. This gives businesses no insight into their communication patterns and trends, making it hard to optimize processes.

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Are PBX Business Phone Systems Still Relevant in 2021?

PBX phone systems solved a lot of problems back in the day, but they have now evolved beyond the old on-premise model. Today, alternatives offer ease of use, better functionality, low-maintenance, and cost-efficiency which is hard to compete with.

While many businesses across the globe have moved on to other types of business phone systems, a sizeable chunk of businesses still use PBX phone systems. This is primarily because of the investments they’ve already made in their PBX infrastructure that they find hard to let go of.

The communication landscape has changed drastically and businesses can no longer afford to be stuck in rigid and archaic infrastructure. All things considered, PBX phone systems only meet the minimum requirements of business communication at present, and some might even argue against that.

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Cloud PBX Phone Systems

Most of the PBX infrastructure is hosted on cloud, and all you need are phones. In this setup, you don’t need to buy bulky, expensive hardware. You can even route calls directly to agents’ mobile phones using cloud phone systems, enabling your agents to work remotely. This gives you the complete functionality of on-prem PBX along with a whole slew of innovative features.

On-Prem VoIP Phone Systems

The infrastructure on the on-prem VoIP phone systems is similar to PBX phone systems. The difference is that all communication happens over the Internet instead of the PSTN and that you can transfer a whole lot more than just voice via these channels. These systems also offer better features.

Cloud VoIP Phone Systems

This again offers the complete functionality of on-prem VoIP phone systems, with additional features. You get the best of both worlds – no infrastructure required (except VoIP phones) and access to all the functionality of an on-prem VoIP phone system.

Hosted PBX

Manage your employee’s phones all from your web browser. Simply purchase the service and phones, plug them in, and you’re done. You are free to adjust PBX features like call recording, call routing, auto attendants, hold music, and call forwarding. The best part is, you can fly through the online setup in minutes, not weeks. Since you directly manage this cloud-based PBX, all your devices are under your control.

On-Premises PBX

For the upfront cost with occasional maintenance (consulting) fees, you can enjoy an on-site PBX. This feature is ideal if you have no growth plans, or if it’s cost-prohibitive to make the switch. However, instead of a complete phone system overhaul, you can just upgrade your PBX to one that is IP-ready.

PBX SIP Trunking

For those with a PBX that want to take advantage of the VoIP benefits, there is an option for you. SIP Trunking provides the voice service for your company’s PBX. This multi-channel voice service is available without changing other PBX features. As your company grows, add more channels.

Adoption of Cloud-Based Telephone Systems

Easier to set up and maintain
You can have your telephony system up and running in less than an hour if implemented via cloud telephony whereas it can take up to days to set up a traditional business phone system. Exotel takes care of the hardware and software involved, freeing up time for your core business activities.

Make changes/additions instantly
Cloud telephony gives you more control and flexibility over your business telephony system. With Exotel, you can add/remove agents on the go whereas it requires a lot more time and effort in doing the same in a traditional setup.

Gain more visibility and insights
Exotel empowers you with data and allows you to have a bird’s-eye view over your department’s operations. Our detailed reports give you the insights required to improve processes and increase productivity while allowing you to accurately track each and every KPI for all your agents.

Enable your employees to work remotely
Moving to the cloud means that your employees can make and receive calls from anywhere, anytime. This results in an increase in call-pickup rates and overall productivity.

Integration with CRM/help desk software
Empower your teams by integrating cloud telephony with your favourite CRM or help desk tool. This makes things convenient by enabling your agents to make and receive calls contextually, from within the dashboard.

Better scalability
Exotel grows with you and scales seamlessly to accommodate all of your business needs, in a pay-as-you-go model. This is a far cry from all the time, effort, and costs involved in scaling an on-prem telephony system.

As technology advances and customers’ expectations grow, companies are adopting better ways of communicating with their customers. More and more businesses are migrating to VoIP or cloud phone systems for the many advantages these systems offer.

PBX still retains a significant market share when it comes to business phone systems and will continue to do so for years. However, the adoption of alternatives is increasing steadily and businesses need to seriously consider all the options available before making a choice.

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FAQs?