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Small and midsized businesses (SMBs) face many of the same considerations as larger companies, but the IT requirements of SMBs can be unique. Technology decisions such as traditional PBX vs IP PBX, need to consider constraints on staffing, budget, requirements of existing systems, and the anticipated lifecycle of any investments. As a result, SMBs may find themselves pushed into a decision-making corner that favors either the fastest, easiest or lowest cost route to implementation.

Selecting a phone system can easily fall victim to this line of thinking. Either it needs to be set up fast, to start taking calls from customers as quickly as possible, or it needs to be set up cheaply, to avoid a significant impact on the bottom line. Digging a little deeper into the functionality and capabilities of each system can help SMBs narrow the field and find the solution that will be the best fit.

Understanding Traditional PBX vs. IP PBX

When most people think of business phone lines, they are probably visualizing a traditional PBX (Private Branch Exchange) system. Traditional PBX is an internal switchboard – a traditional line-to-line voice system that directly connects a caller with an agent through the exchange. One agent, one line. When a caller hears a recording that says all operators are busy, this literally means that every line is engaged, and the call is placed into a queue to await the next available connection. The more agents needed, the more telecom lines are needed. Because a traditional PBX system uses physical phone lines, it is managed as a separate entity from the company’s local network and Internet connection.

An IP PBX uses Session Interface Protocol (SIP) to route inbound calls from a business’ local, toll-free, or even international number. Inbound SIP allows any broadband Internet connection to act as your “phone line.” An IP PBX system “packages” the voice on a call as data and sends this data through your network, using the Internet as its vehicle. A call that is placed into the queue is not awaiting an open line; rather the packaged data of that call is transmitted to the next available agent.

An IP PBX system is not bound by physical phone lines. Depending on an SMB’s needs, it doesn’t even need to be bound by location because an IP PBX system can either be on-premise or hosted in the cloud.

An on-premise IP PBX is part of a business’ existing local network, like any other server. It integrates with existing systems (such as CRM) and is managed by IT staff. However, on-premise IP PBX requires a strong network infrastructure. A hosted IP PBX system, on the other hand, is delivered via the cloud. A third party manages the IP PBX, including set-up, maintenance, upgrades, and bandwidth. This allows for a smaller staff at an SMB. The third-party guarantees call quality and uptime.

Examine What is Most Important to Your Business

The question of traditional vs. IP PBX does not fit neatly into which is the “faster” or “cheaper” option; nor is there a clear-cut recommendation of one system being “better.” The decision will be based on business needs—choose the system that capitalizes on the features that provide the most value.

• Cost. To the SMB, the cost is arguably the most heavily weighted consideration. Traditionally, IP PBX solutions have touted cost savings as their main advantage. Lower start-up costs and low per-call costs make it appealing to an SMB. Traditional PBX systems require a higher up-front investment but are usually more cost-effective over the life of the solution.
• Call quality. There is a perception that traditional PBX systems deliver superior call quality. However, advances in technology have virtually eradicated any differences in quality between the two. While traditional PBX call quality may not always be superior to IP PBX, it is often more consistent and predictable.
• Management. A traditional PBX is a system separate from a company’s local network and Internet connection. This separation provides reliability during network outages or power loss. However, it also requires staff that is specially trained on its configuration, maintenance, and installation of additional lines. IP PBX systems are part of a company’s local network and offer both on-premise and hosted solutions which can provide greater integration with existing company systems and more intuitive management for existing IT staff.

While one solution is likely to emerge as the clear choice for your business, you can be assured that both IP and traditional PBX solutions are solid, time-tested voice technologies that will fulfill your SMB’s need for voice contact.

Learn more about voice solutions for any sized business and discover the approach that’s right for you. Or find out how you can improve customer service, boost productivity and reduce costs with our end-to-end 3CX IP PBX solution. To get your business started on making the switch contact us today!

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