Traditional phone vs hosted PBX – how do they compare for business?

February 1st, 2021 - Get new posts sent straight to your inbox, click here. Heidi Kraak


Businesses today need voice communication systems to be scalable, cost-effective and reliable. However, it’s unlikely you’ll find those qualities in legacy telephone infrastructure.

Like many elements of business, voice communication technology is increasingly migrating to the digital space. New, cloud-based hosted PBX phone systems boast a plethora of benefits for businesses seeking to lower costs and improve functionality.

While emerging technologies such as AI chatbots and webforms are becoming popular methods of communicating with customers, an Invoca study showed 52 per cent of participants became frustrated when they were not able to speak to a real person when they contacted a business, with 18 per cent of respondents becoming ‘angry’. Clearly, businesses can’t replace voice communication with AI – human interaction still plays a key role in building trust with customers.

However, legacy phone systems fail to meet the needs of the remote workforce – something that, despite the overall easing of lockdowns in Australia, does not appear to be disbanding in 2021.This is one of the many ways new voice communication technologies can help businesses.

Voice communication will continue to play a crucial role in customer relations and meeting the mobility needs of businesses into the future. Investing in cloud-based voice communication systems should be a priority for businesses seeking to remain relevant, flexible and competitive.

What is a hosted PBX system?

PBX stands for Private Branch Exchange. These systems allow businesses to circumvent the costs of each user having their own line to the telephone provider. Hosted PBX systems operate on cloud technology through an internet connection. SIP Trunks are used as a digital version of a traditional phone line, allowing businesses to make local and international calls over their internet. Conversely, traditional PBX networks facilitate communication via legacy phone lines.

A hosted PBX phone system provides businesses with an amazing level of control and flexibility, while also saving the expenses and limitations of traditional phone systems.

Why your business should invest in hosted PBX

Hosted PBX systems are the way of the future. There’s no question that legacy equipment is rapidly becoming outdated and will likely become unsustainable to maintain in the coming years.

However, hosted PBX has enough benefits to warrant attention in its own right without relying on the inevitable demise of legacy systems. Here are some reasons your business should consider investing in Hosted PBX systems:

1 – Scalability

The rise of the remote workforce was a defining feature of 2020. When lockdown set in, companies that hadn’t already invested in hosted PBX phone systems may have struggled to ensure their staff had access to secure voice communication services from home – legacy phone systems require the user to be at their desk, in the company office. Hosted PBX systems allow users to access voice communication via a range of devices including mobile phones, tablets and laptops. This means users can access voice communication remotely or on-the-go.

Additionally, hosted PBX phone systems can easily adapt to the changing needs of the business. Businesses can rapidly deploy voice communication to new sites, as long as there’s an internet connection. Additionally, depending on the provider, it’s unlikely businesses will need to concern themselves with maintenance or upgrades – the provider will take care of everything.

2 – Costs

Implementing a hosted PBX system generally requires significantly cheaper startup costs when compared to legacy models. Costs will vary between providers and will also be determined by the needs of the business. Typically, call costs are included within a VOIP data package, meaning businesses can generally expect the same bill every month.

Comparatively, legacy systems are costly to install and expand, and require costly upgrades and maintenance. Typically, legacy phone system pricing operates on a flagfall system – businesses will be charged a base price and will incur additional charges on top of that, depending on usage.

Additionally, the need for expensive hardware can be circumvented with hosted PBX systems – a business that already has office equipment will only need to cover monthly VoIP (voice over IP) costs – even if a business does not have handsets, computers can be used as softphones.

Contrastingly, legacy systems are costly to install and expand, and require costly upgrades and maintenance.

3 – Redundancy

Legacy phone systems rely on copper lines that are vulnerable to inclement weather, power outages or hardware failure. As hosted PBX systems are generally managed externally, any provider of substance will be well prepared for disruption with automatic failover options.

If a business relies heavily on voice communication, any kind of disruption could cost the businesses substantially – not just in terms of dollars, but also in customer satisfaction. Businesses can easily avoid these disruptions with hosted PBX systems.

4 – Functionality

Hosted PBX systems can open up a whole new world of capabilities that legacy systems cannot begin to compete with.

Feature-rich call management features, for example, allow businesses to log into a portal that lets them tailor the system with ease or create customised call flows. Other features include establishing company and individual voicemails, on-hold music, extension-to-extension transfers (including transfers to mobiles), and virtual receptionists. Additionally, night-switch capabilities allow businesses to divert after-hours calls to a mobile or play a pre-recorded message.

If you’re ready to invest in a phone solution for your business, click here.