On-premise PBX systems are a traditional approach to business telephony. In this setup, the entire telecommunication infrastructure is housed within the company’s physical premises. While cloud-based PBX has been much preferred by larger businesses, on-premise PBX is far from being outdated.
Let’s explore why it remains to be a trusted option for smaller and medium-sized companies so you can decide whether it’s the right fit for your business.
A Closer Look at On-Premises PBX Systems
As its name suggests, an on-premise PBX phone system is located in your office or business premises. It’s a private telephone network, which means you’re always in control and any user can communicate internally and externally. It consists of hardware like servers, switches, and telephones that facilitate communication through traditional phone lines or Voice over Internet Protocol (VoIP).
Unlike cloud-based telephony, where the infrastructure is managed off-site by a third-party provider, on-premises PBX systems are maintained by the business itself. Users can take advantage of various features such as call routing, transfers, recording, queueing, and more.
What Can On-Premises PBX Do for Businesses?
On-premise PBX allows businesses to manage calls using traditional phone lines, Voice over Internet Protocol (VoIP), or a combination of both. This makes them versatile and customizable, especially for growing businesses that want to retain their older telephone wiring and find upgrading to a completely cloud-based PBX expensive. Below are other functionalities of on-premise PBX phone systems for small to medium-sized businesses:
Cost Efficiency
Businesses can manage internal calls without incurring charges from external carriers. This significantly reduces costs.
Enhanced Security
All data is stored on-site, so businesses have greater control over their sensitive information. They don’t have to rely on a provider to safeguard their data and they can implement security measures themselves.
Stability
On-premise PBX is ideal for organizations with unstable internet connectivity. This ensures that communication remains uninterrupted even during internet outages.
Integration
These systems can integrate with existing infrastructure and business tools, including customer relationship management (CRM) software. This increases productivity and streamlined communications across all devices and platforms.
Some Disadvantages to Consider
While on-premise PBX offers several advantages, it might not be suitable for some businesses. Here’s when and why this can be the case:
High Costs
The most significant disadvantage of on-premises PBX systems is the initial investment. For this setup to work, businesses need to purchase hardware, software, and possibly even hire IT personnel to manage it. Additionally, expenses for ongoing maintenance and upgrades can add up over time. These costs can be difficult for smaller businesses that are yet to find their footing.
Specialized IT Expertise
On-premises PBX systems require a certain level of technical expertise to set up, manage, and maintain. Smaller businesses without an IT team may find this challenging. On the other hand, cloud-based telephony systems are often managed by the provider. That’s one less thing to worry about.
Risk of Downtime
Since on-premises PBX systems rely on physical infrastructure, vulnerabilities are much more likely. Issues like loss of internet, power supply failure, and hardware malfunction can disrupt operations and cause downtime until repairs are made. It’s critical to invest in backup systems and recovery plans.
Need for Space
On-premises systems require physical space within the office for servers and related equipment. This can be challenging for smaller businesses, such as retail.
Questions to Ask
The reality is cloud-based telephony has emerged as a popular PBX choice. But on-premise PBX systems are still holding their ground. Here questions to ask yourself when deciding between the two:
- What’s my budget?
- Does my IT team have the resources and skills to manage a phone system?
- What’s my company’s projected growth?
- What is my business’ existing telecommunication infrastructure?
- What PBX type best supports remote or hybrid work (if applicable)?
These questions will hopefully help you make a more informed decision.
Choosing the Right On-Premise PBX
For companies considering investing in a PBX phone system, understanding the full scope of your options is key. Do you want more customization and flexibility over hardware and software? Do you want to integrate your existing system with features that on-premise PBX provides? Businesses with high call volumes and complex requirements must be forward-thinking and consider future growth plans as well.
Kital is here to help you weigh the pros and cons of on-premise PBX against your specific needs and capabilities. Consult our team today.