When it comes to business communications, the modern employee has a plethora of options in the form of chat, email, fax, phone call, video-conferencing, and more, that are accessible on any device (laptop/desktop/tablet/smartphone) of their choice. Ever wondered about the technology that has made communicating so convenient!
Well, it all boils down to the phone technology an enterprise uses. However, the technology should be one that evolves and meets the dynamic communication needs of your business. There are primarily two strong contenders:
- VoIP (Voice over Internet Protocol)
- PBX (Private Branch Exchange)
Both technologies have their unique benefits. A thorough understanding of both PBX and VoIP, their pros and cons can help you decide which among the two best meets your unique business needs. So, let’s get cracking!
Decoding PBX
In the traditional phone systems or the PBX calls were delivered through public switchboards, where operators manually directed them to the correct recipient. These PBX companies hired their own operators, purchased telephone lines, switchboards and rented it out to enterprises. By the 1970s, superconductors backed automated switchboards eliminated the need for a human operator making PBX systems affordable. They now came with added features such as extension dialing, hunt groups, and call forwarding.
As telecom and computer technology evolved, PBX systems that operated like desktop computers dominated the market. These new systems enabled companies to add features like hold music and additional phone lines. However, these new switchboards were only available in 16-line units, forcing companies to buy more lines than required. This made the new improved PBX a costly investment.
With the advent of the internet came the IP PBX, a more modern and automated version of PBX with internet connectivity. The IP PBX system is a much more affordable option that saves overhead costs and provides advanced features, making it a valuable investment for both SMB’s and large enterprises.
Decoding VoIP
VoIP came on the scene in the 1990s. This new technology channeled calls through the internet’s data network. This is how VoIP delivers calls:
- VoIP converts analog calls to digital signals
- The digital signals are then converted into Internet Protocol (IP) packets/data packets
- The IP packets are converted back to phone signals, and a telephone on the other end receives them
As the internet evolved a VoIP was not restricted to an IP PBX equipment. It enabled communication between computers, phones, and IP phones. The new cloud-based VoIP opened multiple channels of communication by enabling users to do video chats, share data, messages, and more from anywhere, as long as the device they used had internet connectivity.
It enabled companies to integrate their communication systems with existing applications such as CRM systems. This integration opened endless possibilities and translated to higher employee efficiency, productivity, and business growth.
Making the choice
We live in a world that thrives and stays connected on the internet. You may think VoIP would be the obvious choice for most businesses, not really. Both PBX and VoIP have their own merits, understanding those will help you decide what is best for your business.
| Benefits | VoIP | PBX |
| Cost-effectiveness | VoIP does not require expensive hardware, installation, in-house IT support, and maintenance. International and long-distance calls do not require additional expense. Most VoIP services are subscription-based, enabling companies to keep a check on the costs. | A PBX system involves equipment and hefty installation costs. Besides, companies need to have a full-fledged in-house IT support team to manage and maintain the system. However, if you have a large team, IP PBX systems keep costs low in the longer run. |
| Flexibility | VoIP enables employees to stay connected from anywhere, using a device of their choice making communication seamless. It is a great option for companies with remote workers, and employees who need to travel extensively. | Both traditional PBX and IP PBX require specific hardware/desk phones. As a result, employees are tied to their desks making it less flexible in comparison to VoIP systems. |
| Scalability | With VoIP it is easy to add new telephone lines as your business grows, or moving locations, etc. | Adding new lines as the business grows means investing in more hardware, and installing additional infrastructure for scaling up. Not exactly convenient to scale with a traditional PBX system. |
| Quality and Reliability | VoIP works on the internet, which in turn depends on fibre optic cables that are efficient enough to eliminate any glitches ensuring great sound quality. VoIP service continues uninterrupted even in bad weather conditions or power outages. | In the case of IP PBX systems, low bandwidth, and weak internet can hamper voice quality. Traditional PBX on the other hand uses copper wires for data transmission ensuring good call quality. However, bad weather, power outages totally shut the system. |
| Features | VoIP comes with a host of features such as conference calls, call waiting, hold, call forwarding, voice to email, IVR, integration with any existing systems, and more. | PBX systems come with a limited feature set such as call hold, waiting, etc. |
Deciding between VoIP and PBX
- Present setup and budget: If you already have an IP PBX or PBX system in place and it serves your purpose you may want to stick around with it. If you are starting out new, VoIP may be your best bet. Installing a PBX system is an expensive affair, VoIP involves almost no upfront investment.
- Reliable Internet: Though both VoIP and IP PBX systems rely on a strong internet connection, IP PBX can function through traditional phone lines too. If you do not have access to a strong bandwidth and reliable internet, investing in VoIP is futile.
- Work culture: If you are a company with a sizable workforce operating remotely then VoIP is your best friend.
Both the systems (PBX and VoIP) have their own benefits. However, if cutting-edge features, reliability, flexibility, mobility, and cost-effectiveness is your priority then VoIP it is! If you are a company handling low call volumes, with a small footprint, and basic features suffice, then PBX would serve your purpose. I hope you are equipped with enough information to make your choice. To know more about PBX and VoIP write to me sales@hodusoft.com
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