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


    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.

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