Understanding PBX Systems and Their Role in Business Communications

If you have been looking for the best business phone system for your organization there is a good probability that you have been overrun with information. There are more telecom options available now than ever before. A PBX phone system is one of your possibilities.

The major role of PBX in business is to streamline your Business communications. If your communication is one of the reasons why you are not heating the KPIs, then this is a sign that you should switch to PBX systems.

In this blog, we have dedicated a pool of information to give you a deep understanding of the PBX systems. It will help you see the whole point of having a PBX system in your business. We will also ensure that you know how to pick the best PBX system for your business. So let’s dive in!

A Quick Understanding of the PBX phone system?

The PBX initials stand for Private Branch Exchange System. As the name suggests, this is a private telephone network used within a company or organization. There are available on-premise PBX phone systems that run on your hardware as well as hosted or virtual PBX phone systems.

Using several communication channels like Voice over IP, ISDN, or analog, PBX phone system users can communicate both internally (inside their firm) and externally (with the outside world). Additionally, a PBX or PABX enables free conversations between users and allows you to have more phones than actual phone lines (PTSN). Additionally, it offers functions like call queuing, voicemail, call recording, and interactive voice response (IVR) menus.

Traditional PBXs usually have their own exclusive phones, making it impossible to use them with another system. This indicates that we either have system-lock-in (where we are tied to the same system because switching systems also requires switching phones, making it prohibitively expensive to break away) or vendor-lock-in (where we are tied to the same vendor because the phones can only be used with systems from the same vendor, sometimes only within a specific range of systems).

The IP PBX, which is based on Open Standards, has revolutionized the consumer telecommunications landscape as a result of time and technology. The significance of “IP” in this new era is that the Internet Protocol is used as the underlying transport technology for phone calls.

With a standard PBX, you are often limited to a maximum number of internal phone devices or extensions as well as a maximum number of external telephone lines (trunks). The PBX phone system’s users (phones or extensions) share the outside lines for placing calls outside the system.

By allowing for nearly limitless growth in terms of extensions and trunks and introducing more complicated functionalities that are more expensive and challenging to execute with a traditional PBX, switching to an IP PBX has several advantages and opens up possibilities. Due to this, let’s look at some benefits of having a modern business telephone System.

Embracing Change: Why You Should Consider Using a Modern Business Phone System.

We understand that the commitment and expenses that may come with adapting a modern business phone can sometimes be scary. That is why this section is here to assure of some benefits of modern business phone systems.

A small business’s essential demands might be met by a straightforward set of office additions. Voicemail and call transfer are examples of basic functionality. However, any size business would be deprived of the cutting-edge functions of a contemporary communication system. These can lead to more effective work practices and improved customer service. So here are a few top benefits of having a contemporary phone system:

• Minimal and Easy maintenance: Specialized servicing is needed for dedicated wiring and hardware. Modern phone systems can utilize the LAN infrastructure already in place because they link via the internet. The majority of system maintenance is done via a computer interface. Users can quickly add a second phone line, for instance.
• Cost Effectiveness: Although older phone systems have fewer capabilities, they are generally more expensive to maintain and operate in terms of monthly phone bills.



• Connect Online: Employing an internet connection enables organizations to access their phone system from anywhere, in addition to making PBX maintenance and support simpler. This makes bridging between different offices simpler.
• Mobility and Remote Work: Users can still handle their communications using a web browser or a cell phone even if they are not in an office. Users of a website or mobile app can dial an external number, answer incoming calls, or call a colleague’s extension. Additionally, they can set up call forwarding, transfer calls, and view caller ID. Some workplace phone systems can incorporate video and professional texting.
• Effortless Expansion: It’s also simpler to expand an IP phone system. It can be as simple as creating a user online, putting in a phone, and adding a new extension.
• Access to Features of a Call Center: System switchboards are no longer required. However, organizations may manage phone calls more effectively thanks to enhanced queue techniques, auto attendants, call forwarding rules, and online switchboard choices. To improve training and customer service, modern technologies enable supervisors to record calls, listen in on calls, or take over.
• Integration with Other Software: Cloud computing is becoming more prevalent in business software. For instance, an IP PBX can interface with CRMs. Businesses would be able to manage information and sync contacts from a single spot thanks to this.
• Contemporary Business Communications: Simple phone calls are still widely used. However, a lot of experts and clients now favor alternatives. These consist of social media, instant messaging, online conferencing, and video calls. Tools for all channels are now included in business telephone systems.

The True Origin of PBX

Computer networks are analogous to PBXs.

You may remember hearing a long time ago that there were not enough IP addresses for the internet. Someone would utilize a router inside of an office to give each device an internal address to get out of this jam. Then, whenever those gadgets communicated with the outside world, they would all use the same IP address. Routers for homes and businesses have significantly reduced the worry about running out of IPs and increased security.

The Private Branch Exchange uses the same strategy. It is a phone network that caters to employees, but when they dial out, everyone uses the same outbound channel. Employees share a limited number of business phone numbers outside but can use any extension internally.

Cloud-based Businesses can now manage phone calls differently thanks to PBX, which provides a substantial improvement over earlier restrictions. PBXs were previously proprietary and exceedingly challenging to maintain.

PBX systems have significantly changed over time. Voice over Internet Protocol (VoIP) technology is used to make calls, freeing users from dependence on their local telephone provider. SIP trunking can offer connectivity for a tenth of the price of analog lines.

By allocating various business phone numbers to various extensions, PBX systems enable IT leaders to preserve their current devices with an all-digital backbone. As an alternative, a fully managed phone system set up with a cloud PBX combines the best of both worlds.

Now let’s dive deep into how PBX Phone Systems work.

PBX Phone Systems: How Do They Operate?

PBX phone systems previously relied on intricate analog switches operated by phone operators. Modern systems send and receive digital signals from users using voice-over-IP (VoIP) technology. Voicemail-to-email and other cutting-edge PBX phone system functionalities can only be accessed with the help of VoIP technology.

Once the system has transformed an incoming call into a digital signal, it may be managed just like any other digital data. This is how platform-neutral solutions for converting and routing incoming calls to almost any device are obtained for digital PBX systems.

It costs a lot of money to maintain a non-hosted digital PBX phone system. Only highly qualified professionals can repair, maintain, or update these systems because the equipment might be pricey.

As a result, PBX systems do not have a universally applicable solution. Instead of making a significant upfront investment, businesses can use hosted PBX solutions through a managed service provider. Instead of needing to hire and train IT specialists for the job, the supplier provides PBX communication infrastructure as a service, and the company pays a monthly charge for using it.

How to set Up Your Telephones Network with a PBX

The Plain Old Telephone System, or POTS for short, is the name for the conventional telephone system. It is based on the tangled pair of wires that run from the building to the nearby phone company. 140 years later, POTS is still simple, dependable, and unchanged.

The Publicly Switched Telephone Network (PTSN) on the Integrated Services Digital Network (ISDN) protocol is used by telephone service providers to connect calls with other parties. A Verizon subscriber can call an AT&T customer using the PSTN, in addition to patching local calls over.

It might be expensive to provide phone service for a business. Even for just 100 lines, a typical traditional corporate phone cost can easily go into the hundreds per month.
Surely there is a better approach.

PBXs enable companies to operate internal phone systems while utilizing fewer phone lines from the phone provider. Voicemail, auto attendants, and recorded messages can all be managed by top PBX systems. Everyone in the company’s phone extensions is also included.

The Role of PBX Phone Systems: Why Use a PBX system in your Business?

Businesses that employ PBX gain advantages like enhanced calling features, greater connectivity, and security. If you’re still debating how to improve your communications, the following are a few reasons to get a PBX system.

• Access to Additional Security: PBX systems now include built-in encryption to safeguard all of your communications, even without a VPN, to gain superior security. The confidentiality of your business and customers is improved by this added security measure.
• Simple call transfer: Calls may be swiftly transferred between departments and people using PBX. You won’t have to hang up before transferring a call to someone else, say, who can give the caller the information they require.
• Access to Free Customization: Free customization is available with PBX, allowing you to personalize your phone system. Along with calls, instant messages, and conferencing over numerous devices, you may record greeting messages, add your own music, and even make bespoke apps.
• Access to additional call features: You can arrange online team meetings and streaming video conferences in addition to voice conversations so that your employees do not need to be on the same website.
• Get Access from anywhere: Mobile communication is possible with PBX thanks to its connectivity options, which include your desk phone, desktop computer, laptop, and mobile device. Traditional voice and video calls can be made from anywhere.
• Enables Remote Collaboration: Employers from different places can communicate with one another using the same PBX system. Your calls will be routed and forwarded via a single PBX system.
• Call Scheduling: Manage and finish calls according to a predetermined schedule. In the PBX network tree, you can establish your own rules and select the “branching out” orientation. To reduce costs, operators might either forbid or allow international dialing as needed.

Different PBX phone system types

PBX systems are the invisible heroes behind every call you make or receive within an organization, seamlessly routing your voice across networks. But did you know that PBX comes in various intriguing flavors? From the classic charm of Traditional PBX to the futuristic allure of Cloud PBX, each type paints a unique portrait of technology’s evolution.

Imagine the transition from clunky hardware to ethereal clouds, the fusion of traditional lines with digital highways, and the rise of open-source creativity. Join us as we explore the symphony of PBX types, where communication’s past, present, and future harmonize in a captivating dance of connections. Here is an exhaustive list of all PBX phone systems:

1. Traditional PBX System

These are famously known as analog PBX phone systems. They keep business phones connected and have been tried and proven for decades. They also enable call-making and call transfer between users within a given area. External phone lines can be used by analog PBX phone systems to make and receive calls.

Traditional PBX systems’ underlying technology was created before the internet became widely used. Plain Old Telephone Service (POTS) lines are connected to the Public Switched Telephone Network (PSTN) using a straightforward copper wire as a physical basis.

Many contemporary features, including remote working options and multimedia services, are incompatible with conventional PBX systems. Additionally, physical equipment required by traditional PBX systems can be expensive, especially for small and expanding enterprises looking for an extensible phone system.

Traditional PBX systems are regarded to be highly dependable despite these drawbacks because they are not reliant on an internet connection.

2. Hosted PBX

An IP PBX, Cloud PBX, or Virtual PBX are other names for a hosted PBX. It frequently comes with a unified communications platform that enables you to connect and route both internal and external lines through a single system.

You may manage all of your staff members’ phones with a hosted PBX solution. Almost any device with an internet connection, including PCs, mobile phones, and IP phones, can utilize the system because it is hosted in the cloud rather than on a local server.

To finish, just connect any existing or new devices. From an online interface, you may change PBX functions including call forwarding, call transfer, call recording, voicemail transcription, call routing, auto attendants, interactive voice response (IVR), hold music, and more.

And the internet setup can be completed in a matter of minutes rather than days. All devices in this cloud-based PBX are under your direct management. You don’t need to rely on an outside consultant or in-house IT specialist to solve difficulties because maintenance is included in the monthly fee.

The majority of contemporary IP PBX systems include extra functions that landline systems do not. A VoIP PBX, for instance, can interface with additional communication channels like SMS or video conferencing, route incoming calls to mobile devices, handle lengthy conference calls, and connect to your company’s CRM software.

Even better, compared to an on-premise system, a cloud-based PBX is more affordable. You won’t have to spend time setting up and maintaining the network infrastructure, and its features are updated frequently.

Features of a Hosted PBX Phone

Business phone systems are distinct from mobile apps or home phones because of this hosted PBX functionality. Here are a few of the most beneficial characteristics.

• An automated attendant: This allows callers to press a certain number to have their calls routed to the appropriate person or division. As an illustration, the receptionist might say, “Press 1 for sales,” or “Press 2 for customer support.”
• Voicemail-to-email: Many hosted PBX systems offer voicemail-to-email in addition to regular voicemail service, which sends users of phone systems an audio file or transcript of the message left on their phone.
• Paging: An employee can utilize the paging system to record a message on their phone and distribute it to the entire team. The message can then be sent to specific employee phones or broadcast to all employees via a speaker system. With hosted PBX, employees can also use the presence feature to see if their coworkers are accessible or on a call.
• On-hold music: Hosted PBX systems give businesses the option to play hold music so that customers or clients don’t have to wait in silence. Some systems play music that has been pre-selected or created specifically for the company.
• Online management: Using this capability, you can control your phone system via a web interface. In addition to adding users and assigning phone numbers, administrators can also monitor call logs, make ring groups, and view monthly bills. Employees use the portal to access the business directory, check their voicemail, and set up call-forwarding routes.
• Call forwarding: When you don’t answer your office phone, calls might be forwarded to another number.
• Call recording: This feature enables users to record their calls for subsequent listening.
• Call queues: To handle simultaneous incoming calls, you can put them in a queue and wait for someone to pick them up.

Advantages of a Hosted PBX system

These are a few advantages of using a hosted PBX system:

Geographic flexibility: Cloud PBX systems are significantly more adaptable than conventional phone systems, providing advanced disaster recovery – that is, more adaptability and resilience than a conventional phone system in the event of a disaster, such as a network failure or a hurricane – and geographic flexibility that enables staff to make calls from anywhere, at any time. Any employee in your firm can easily work remotely thanks to this.

Unified billing: With cloud PBX, all of your phone service costs—including those for your phone system, features, applications, and maintenance—are invoiced at once.

Call transfer: With this feature, staff members can call their colleagues.

Budget-friendliness: Because cloud-hosted PBX systems, like digital PBX systems, do not need equipment or regular updates and maintenance, they are frequently more cost-effective than on-premises PBX systems. A cloud PBX system will cost roughly $2,000 in one-time phone costs.

Scalability: Cloud PBX systems can be expanded infinitely and are often quite flexible. Instant user addition is available. Normal setup and maintenance take little time and cause no downtime.

Customization: With cloud PBX business telephony solutions, you can include and exclude functions as you see fit. You can sometimes tweak cloud PBX solutions to better interface with your other platforms if you have an API.

Easy Installation: Implementing a hosted PBX system takes only a few minutes because you don’t need to set up an on-site phone network. On the other hand, onsite systems may require weeks to perfect.

3. Hybrid PBX

An on-premise PBX system is modified for VoIP telephone use via a hybrid PBX. It provides voice service for your company’s PBX system using SIP trunking technology. It is possible to use this multi-channel voice service without altering other PBX capabilities. You can add more channels as your business expands without having to run the necessary wiring for an on-premise solution.

For businesses that can’t afford a total redesign, setting up a hybrid PBX with a reputable SIP trunk supplier is a worthwhile solution. With the same hardware, it gives your PBX unprecedented scalability and cheaper communication costs.

Hybrid systems are nevertheless constrained by an on-premise PBX’s requirements despite these advantages. They demand upfront setup expenses, server space, and recurring IT support fees. Few firms would profit from installing a new hybrid system, even though it’s an excellent alternative for converting a legacy system to VoIP integration.

4. On-Premises PBX

An internal phone system for taking incoming and outgoing calls is called an on-premises PBX. It is the conventional approach that has been employed for many years and is simply an automatic switchboard.

The manual wiring of each business phone and an on-site server are necessities for on-premise PBX systems. As a result, each line incurs a relatively high upfront cost of about $1,000 in addition to sporadic continuing maintenance (consulting) costs.

Previously the only choice, on-premise PBX systems are now both expensive and limiting for most enterprises. Landlines, the technology upon which PBX systems were based, are becoming less and less useful. Additionally, a typical PBX system lacks many of the sophisticated functions that a contemporary business telephone system offers.

Additionally, they are more susceptible to security risks. The FCC claims that certain phone scams prey on unsuspecting employees by employing outdated PBX systems to relay costly international calls.

Are we getting the most value out of our PBX each year, as a business owner? Are we handling it too expensively? On-premise PBX systems are expensive to maintain, scale, and configure in terms of depreciating assets.

How to Pick the Best PBX Type for Your Company

The best place to start when choosing a PBX system is by taking a look at the one you already have.
Organizations having an existing on-premise PBX system may benefit from investing in a hybrid system. By doing this, you can upgrade the call quality, security, and advanced features of your PBX hardware by adapting it to VoIP.

For companies who are beginning from scratch without a phone system, a hosted system is an obvious solution. PBX for remote work contains tools for remote work, nearly indefinite scalability, and is designed for current work.

Businesses can save their telecom expenditures by 60% by using a hosted PBX or hybrid system with SIP trunking. Through 2031, the market for cloud-based communications is anticipated to increase at a compound annual growth rate of 13%. It is a cutting-edge solution that is assisting in modernizing communications for small businesses.

The following are some of the things that you should consider when choosing a VoIP provider:

Additionally, you need to consider the business side of it all. Some of these factors will help you decide if your business is actually fit for the PBX system that you have chosen. These include:

1. Your Workplace Environment

An on-premises PBX system will be beneficial for you if you only have one office. However, you should use a cloud PBX solution if your staff frequently operates remotely or on the field. Additionally, on-premises PBX systems work better for larger firms whereas cloud PBX solutions are better suited for small to medium-sized businesses.

2. Strength of Your Business

Examine your understanding of telephony fundamentals, the level of expertise of your IT personnel, the systems you’ll need to integrate, and the availability of a reliable internet connection to determine which PBX phone system your company needs. For instance, running a cloud PBX system requires a dependable high-speed internet connection, whereas running a traditional PBX system merely requires phone lines.

3. Budget

Your Budget PBX systems will cost you money upfront and over time for installation and maintenance. For instance, on-premises PBX systems cost you hardware, installation, and licensing expenses, and frequently need to be replaced after a few years. Cloud PBX systems, on the other hand, mostly require monthly subscription payments. Furthermore, VoIP PBX advantages include free line addition and removal, whereas analog setup requires a physical installation and additional fees for additional lines. So determine the cost of a PBX type and whether your business can afford it.

4. Needs of Your Company

Since cloud PBX systems provide more PBX features than on-premises models, you should choose one if you require sophisticated capabilities like call reporting, video conferencing, mobile extensions, and CRM integration. However, if all you require are common call capabilities like call transfers, ring groups, and auto attendant, an on-premises PBX solution will work just fine for you.

Your Take Home:

Whatever PBX you select, you should make an effort to ensure that it satisfies the requirements of your business. In the past twenty years, there have been significant changes in the way we work. Your PBX ought to keep up with you, right?

One of the key lessons from this is that you shouldn’t make your decision just on the basis of a business phone system’s sticker price. Make sure you take into account the flexibility, usefulness, and limitations of general communication elements.

Determine the growth trajectory and scope of internal and external communications at your firm. You are the only one who truly understands your industry.

The bottom line is, Private branch exchange systems will help your organization flourish by enhancing business communications. However, you must select one that is appropriate for your company, taking into account both your special requirements and the features offered by the various PBX varieties. But do not allow yourself to do this alone; Allow Telco ICT to guide you in this.