Four reasons why on-premise PBX will stay - for good

Four reasons why on-premise PBX will stay – for good

Many businesses have embraced digital convergence by replacing the traditional Telco supplied on-premise PBX with a digital PBX.  The positive benefits of the new features and functions of the digital business telephone system and sharply reduced call costs have proved too good to miss.  In many cases businesses have been able to reap the benefits of a digital business telephone system by moving to an external hosted solution managed by a service provider and moving away completely from the traditional Telco.  

There is a current debate going on about if it is better to use an on-premise PBX or an outsourced service provider.   There is no definitive answer, other than that for small businesses outsourced makes better economic sense, and on-premise is better for large business.

However, having said that, there is a bit of a sting on the tail, which ensures that on-premise PBX installations will still be around for many years to come.

The four main reasons are:

  1. Availability

    Availability

    Externally hosted business telephone systems are reached using a communications line, often an Internet connection.  If this line fails for any reason, then both internal and external phone services are lost.   For a digitally connected business, reliant on its connections to current and prospective customers, loss of connectivity, particularly to the call centre could be business threatening.   At the very least, if new or existing customers cannot contact the business, there will be reputational damage and lost sales.

    There are also potential problems in contacting external business partners, for example suppliers and delivery agents.

    If, in addition, internal communications within the business are disrupted because internal callers cannot contact each other, then normal day to day operations will be compromised and customer service levels adversely affected.  For example, delays in on-line order processing will knock-on to delivery delays and dissatisfied customers.

    Non-customer facing operations are also affected.   The inability to download call information from the PBX will affect the gathering of sales and marketing information.

    Some businesses have adopted a hybrid solution, where internal calls are routed over the internal business network without needing to go via the hosted PBX.

  2. Call Quality

    Call Quality

    Because hosted systems are reached over an Internet connection and managed by a third party, there is little or no control over call quality.  On-premise systems on the other hand allow you to manage call quality yourself.   Usually, on-premise networks and PBX systems prioritise data traffic, leading to higher voice quality.

    There is nothing more frustrating and irritating to callers than to have dropped and low quality calls.  Again, reputational damage.  At worst, you could note incorrect information leading to poor decision making.

  3. Safety and Security

    Safety and Security

    Many businesses requiring confidential communications are wary of hosted PBX solutions.  They fear that calls could be recorded or otherwise monitored without their knowledge and confidential information or intellectual property stolen. 

    Encryption of calls is a possibility, but this requires both ends of the call to be aware that encryption (sometimes called scrambling) is in use.  In some jurisdictions encrypting voice communications is unlawful.  In any event, with a hosted solution, the service supplier will need to implement the encryption, thereby reducing its effectiveness as a security measure.

    An on-premise solution is needed to mitigate this risk. Your information can be secured against unauthorised tampering and access. 

  4. Multimedia Integration

    Multimedia Integration

    The traditional PBX allowed businesses and customers to interact using simple voice technology.   Nowadays that isn’t enough.   Businesses want to have a fully integrated communications environment linking multimedia, social media and voice communications, often operated on a web platform.

    Larger businesses need to integrate their call centre, email and texting into their communications platform.  They also need to extract incoming and outgoing data from the PBX to develop and manage sales and marketing strategies. 

    That is only possible with an on-premise PBX.  The costs and communications requirements of using these technologies on a hosted platform are likely to be uneconomic in comparison with an on-premise solution.

Overall, while the prospect of moving to a hosted PBX solution is enticing, there are several issues that need to be carefully considered before fully outsourcing your communications platform.   On-premise PBX installations are here to stay, at least in the larger business.

3CX: A PBX System that doesn't break the bank

3CX: A PBX System that doesn’t break the bank

The case for moving to Voice over IP (“VoIP”) telephony is undeniable.  Cost savings, flexibility, and additional functionality are all major benefits of making the move.  However, for some organisations the cost of acquiring and installing a full-blown VoIP PBX System makes the move uneconomic.  There are alternative ways of having a VoIP PBX System that are easier on the budget, and not just by using some fancy financial footwork.

One way is to turn capital expenditure into operational expenditure by moving to a hosted PBX environment. 

In this scenario, you move your telephony to a third party who manages and maintains your PBX System on their equipment, on or off your premises. The only potential one-time costs of the move are any infrastructure upgrades and the supply of appropriate handsets.  In most cases, the handset costs can be included in the hosting charges.

A second way, is to install a software only IP PBX.   The current award winning market leader is 3CX.

Which should you choose?

3CX handsets

If you are budget constrained, then a solution like 3CX is a realistic alternative to a hardware based solution.

 In slightly more technical terms it operates to industry standard SIP and VoIP gateway protocols. It runs on-site on a standalone server or in a virtual machine environment.  It also supports an on-site or hosted cloud environment.

3CX operates on both the windows and open systems platforms, so will easily fit into your existing environment.   It supports most industry standard handsets, and with the SIP option for windows, android and iOS it can support most popular smartphones.  As an added bonus, it also supports a desktop softphone application, ideal for call centres and handsfree environments.   Want video-conferencing? 3CX supports group sessions of up to 25 participants.

The cherry on top is its ability to integrate with many popular CRM applications, Microsoft Office and Google. Many users state that the “no vendor lock-in” policy is a blessing, in that it allows users to choose virtually any handset, provided of course that it conforms to industry standards.

3CX System

How big can it get?  3CX claim to support an unlimited number of extensions.

Pricing is based around functionality and integration it will support.  If you need integrated Call/Contact Centre  or integration with more than Outlook and the Office 365 address book then the standard version is not for you. You need the Pro or Enterprise version. 

Any downsides. Not many, though some users say it is better to choose the version one up from the one you think you need.  Upgrades are costly.

The principal one-off cost is network readiness.  VoIP needs a minimum quality of network cabling, in technical terms, Category 5e or better.   Any VoIP capable network segments that do not meet this requirement will need to be upgraded or replaced.  Obviously, all places that you need a handset need a network point.  That may mean new cable runs.

The second part of network readiness is providing power to the new handsets.  This can be over the network, in which case all your network switches need to have Power Over Ethernet (“PoE”) capability.

The alternative is to have an adjacent power point for a power brick wherever you have a handset.   The two solutions are not mutually exclusive.  Part of your network could be PoE capable, and part using power bricks.  Note though that both shouldn’t be used on the same handset.

You may need to replace existing non-PoE switches or install new power circuits.

Also note that both onsite and hosted solutions need connectivity to your existing telephone system wiring for those extensions having equipment that does not support IP, for example some older fax machines, modems and alarm lines. Don’t rip the cables or frames out when installing the new IP cabling.

Service provider network audit

These costs need to be included in your budget calculations. If you are choosing a hosted solution, your service provider should be able to carry out a network audit for you and advise you of the potential cost of creating a VoIP capable environment.  

If you are going it alone with a solution like 3CX, make sure that you have considered all the potential one-off costs you might encounter.  It may be prudent to use temporary IT specialist support to prepare your network and install the solution, particularly if you are installing it in an existing virtual machine or cloud environment.

The advantage of the off-site hosted solution for the budget conscious is that instead of incurring capital expenditure in buying new equipment you are paying a monthly fee for the service.  In addition to the cash flow benefit, in some places there are also tax advantages in using operational rather than capital expenditure.  

In either case, the cost will be balanced by a substantial reduction in call charges.

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