Market musings

Why Hosted Business Phone Systems Are Stuck in the Dark Ages

by Nina Quasebarth
January 31, 2017

Technology has always been an enabler for small to medium-sized businesses (SMBs). Advances such as the personal computer, mobile card readers, and e-commerce have created new possibilities for business. However, in many ways, the business phone system is still a remnant from the past.

There have been advances in business telephony, but the business model for the office telephone system has remained largely unchanged for decades.

Renting a centralized phone system often creates more problems than it solves. Hosted business phone systems promise to free businesses from the hard-wired bonds of the office private branch exchange (PBX), but even hosted business phone systems can be expensive, and they have limitations. When looking at the needs of growing companies with mobile workforces and limited budgets, it can be hard to justify the expense and complexity of these old legacy systems. However, a phone system is still critical to doing business, even though the infrastructure has shifted to mobile devices.  

Cutting the cord 

Cutting the cord can save companies thousands of dollars, while increasing the usability. Small businesses can now turn their smartphones into a high quality business phone system that has all the firepower of the more expensive cloud PBX and VoIP solutions, with none of the hassles. 

This can save you thousands of dollars and IT headaches over time. But it also can improve productivity and customer experience.  Harnessing the power of an enterprise-class business phone system on your mobile phones means more calls get answered, more conversations can happen, and more deals get closed.  

The evolution of hosted PBX

The PBX telephone system has been with us for decades. It started out as a replacement for the old manual switchboard system and has evolved over time, adding features such as voicemail, call waiting, teleconferencing, caller ID, and other features we have come to take for granted.

In the late 1990s, PBX phone systems started to take advantage of Internet technology, ultimately evolving into Voice over IP (VoIP). VoIP offers the added advantage of sending digital signals over the company’s computer network. With VoIP, the telephone system became part of the network infrastructure. There was no additional wiring, and everything could be serviced by the IT department. Now the business phone system could support other IP-driven capabilities such as video conferencing, chat, and file-sharing.

Once the business phone system migrated to IP, there was no longer any reason to maintain the telephone system in-house. Rather than purchasing and maintaining computerized switchboards, companies could use virtual hosting, renting telephone services from cloud-based telephone providers just as you would access any other cloud-based service. Adopting hosted business phone systems freed organizations from having to rent costly and complex telephone hardware and still provided access to features such as voicemail, faxing, conference calling, and call logs.

Many SMBs are discovering that they don’t really need an on-premises phone system for their business.

More employees are working outside the office, and hosted PBX systems have “follow me” features that allow calls to be rerouted to employees’ mobile phones. As one business professional explained, his in-house PBX system was costing half his monthly office rent, but he was able to close the office and dismantle the phone system by having employees work from home using hosted PBX to reach them on their mobile phones.

Mobile phones replace hosted phone systems

Hosted business phone systems do bring companies one step closer to telephone freedom, but if you are going to support a mobile workforce, do you even need a hosted phone system or any business phone system at all? Using a hosted business phone system may allow you to maintain a professional phone presence, but you still have to pay to maintain the phone service as well as paying for mobile phones to receive calls. Wouldn’t it be better to eliminate the middleman?

Technology comes to the rescue once again as new wireless telephone applications are coming to market. It’s now possible to create a virtual business telephone system without the expense of a hosted telephone service. All you need is the right mobile software and a smartphone.

Corporations are already realizing the benefits of smartphone technology. A recent study by Cass Information Systems reveals that 60 percent of IT professionals report an increase in adoption of BYOD (bring your own device), enabling employees to use their own smartphones for work. Eighty-five percent of those surveyed said they have at least some BYOD users, and 36 percent said they have 1,000 or more BYOD users.

The reason so many businesses are extending the business phone system to employee devices is because the market has demanded it.

Consumers are increasingly using their smartphones for various activities, including work, and the only way to control use of personal smartphones for business is by embracing BYOD. One study found that eighty percent of people worldwide use their smartphones to access the Internet, and by 2018, eight in 10 users will access email from their handheld devices, including company email. In fact, the average consumer checks his or her phone 45 times each day according to that same study. Businesses are taking advantage of this mobile-phone madness by using BYOD to keep employees connected to the office and productive.

BYOD support doesn’t require a hosted phone system. In fact, fewer companies are reimbursing employees for business-related phone use; they know employees will use their own phone anyway. What we are seeing is an organic business phone system evolve based on personal smartphones. With new technologies like the three-minute phone system, it's simple to take the next step and turn employee smartphones into a centralized business phone system.

Smartphones are going to increasingly become core to business communications, and as more companies embrace BYOD, they are going to keep looking for ways to reduce their telecommunications costs. Maybe it’s time to finally let go of hosted business phone systems.

Are you looking into business phone system options for your business? Read more about the important decision factors to consider when weighing PBX vs. VOIP with our free ebook below. Or sign up for a free trial and check it out for yourself!

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