Market musings

Tips on Shopping for Your First Business Phone System

by Sasha Viasasha
February 1, 2018

Shopping for your first business phone system? Don’t despair!

It can be frustrating when it seems like there are endless options but none that are ideally suited to your business needs. Having more options are generally better, but when you have too many options with no context on which ones matter most, shopping can become a headache. This guide simplifies the market and narrows down your options with 15 questions to ask before contacting phone service providers.

Do you need a professional phone system?

In the Internet Age, it became possible to start and run a business without a professional phone system, a desk phone, or even an office.

Maybe you started out with just a smartphone and a laptop, slowly adding a few employees or remote workers as your business grew. Using smartphones with some free apps and cloud-based software can be all many businesses need when they first start up.

As they start to scale up, most businesses find they need to add on some essential professional phone features to manage and control business communications. For example, employees in the field need to reach each other and transfer calls easily. Customers need to be greeted professionally and resolve their issues promptly. Office managers need to know how to contact any employee immediately, even when away from their desks. 

 Missed calls, voice mails that are never returned, and unprofessional customer experiences on the phone can damage your professional reputation. 

However, finding the right solution takes time, patience, and attention to detail. For most busy professionals, shopping for a business phone system for the first time can be pretty overwhelming. Not only are there quite a few types of phone service to select from, each company offers a variety of plans and features sets, making the decision-making process potentially quite complex.

To complicate matters, companies that are purchasing their first business phone system are typically handling a host of other complex and time-sensitive tasks, such as:

  • Signing a new office lease or moving into a coworking space
  • Interviewing employees or sourcing talent and building a team
  • Taking out loans, acquiring funding and creating a budget
  • Implementing other IT systems and training on new software

In this context, finding the time to research business phone systems can be challenging. However, it’s well worth it to investigate your options thoroughly and to proceed at your own pace. Finding the right solution might require a little creative thinking and patience as you sort through the options.

4 categories of phone system considerations

There are four categories to consider, each with its own axis:

  1. From land lines to VoIP
  2. From on-premise to hosted
  3. From desk phones to smartphones
  4. From ownership to contract to pay-as-you-go subscription models

Don’t think of each category as an either-or choice, but as a graduated scale. For example, in the category “From land lines to VoIP” many businesses are using both in various percentages. Some businesses use a traditional toll-free land line for their main office contact line for customers, then internally communicate over VoIP for specific teams or with remote workers. Think about mixtures not opposites.

From land lines to VoIP

This is the traditional phone service with a local server, hardware, programming, etc. It can be expensive and requires a staff of tech experts to set up. If anything goes wrong, you may need a telecom specialist to come in, which can be costly. Adding, deleting and moving workers all require additional IT resources.

The cost, setup time and an ongoing need for IT support are the biggest drawbacks. On the plus side, the sound quality is reliable because it doesn’t depend on your network. There are usually far more features than you need for a young, growing company. 

From on-premise to hosted (cloud-based PBX/VoIP/SIP phones)

Over the past two decades, hosted Voice over IP (VoIP) has taken over as the default phone system for forward-looking startups as legacy land lines disappear. Future Market Insights (FMI) projected that by 2020, there will be approximately 204.8 billion business VoIP subscribers around the world. 

On-premise means that all the hardware is maintained locally by your company. The cost of maintenance and upgrades by IT specialists can be overwhelming for a growing business. Hosted means the provider maintains the hardware and the PBX capabilities have been digitized into telecom software running in the cloud and delivered over the internet.

VoIP operates using various protocols like Session Initiation Protocol (SIP) or Skinny Client Control Protocol (SCCP). The biggest downside is that it can be complicated to make simple changes and voice quality is impacted by traffic on your local network. In addition, because competition is fierce among providers that offer virtually identical services, many require contracts of 24-months or more, with substantial penalties for early termination.

From desk phones to smartphones

Increasingly, employees prefer using their own smartphones over company desk phones, even when sitting at their desks. KPMG Canada is one of the many firms that have eliminated desk phones completely at employee request. Of the companies that still have desk phones, many employees end up just forwarding calls from their desk phones to their smartphones using Find me/Follow me features.

The latest adaptation to the new mobile workforce is a phone system deployed across a mobile network, sometimes referred to as a virtual PBX solution. Mobile-only phone systems condense the essential features of a PBX, such as transferring, conferencing, call log data and an AI auto-attendant, onto an app that can be downloaded on each employee phone in a matter of minutes.

Like VoIP, there is no hardware for the company to buy and the simplicity of implementation makes it ideal for growing businesses. Some companies transition by leasing desk phones that are actually Bluetooth docking stations. Employees plug in their smartphones to use a traditional handset, scroll through the call log or launch conference calls.

There’s no doubt that the future of work is mobile. Juniper Research reported that there were 2.9 billion smartphones in use in 2016, with 1.6 billion 4G LTE subscribers and 771 mobile operators investing in LTE networks in 195 countries. Greater flexibility and better quality voice are the top drivers of mobile adoption at work as new technologies like 5G come online.

From ownership to contract to pay-as-you-go subscription models

In the past, owning business tools was considered an asset. Now, global competition and rapid market changes favor companies with more digital assets, positive cash flow and greater agility.

Just as leasing made prime commercial real estate affordable for smaller businesses, the software as a service (SaaS) business model made it possible to run a company with few physical assets. Originally, phone companies and mobile carriers tried to hold onto customers by raising switching costs. That meant long term contracts with high penalties for changing service providers.

Today, a better customer experience is the way most successful firms retain customers. Pay-as-you-go subscriptions, with lower costs for longer terms is the default business model for SaaS providers, and contracts are out of touch with the fluid nature of modern business.

Feature fatigue

For a small business, it can be even harder to find a phone system with the right fit because so many business solutions are not designed for the way a small business operates and grows, especially the Age of Disruption.

One of the biggest problems that small businesses face is “feature fatigue.” Academic researchers found that tech devices shoppers for tech devices tend to favor solutions with a large number of options, but after purchase they put more weight on the usability of the device. They had purchased features that they didn’t really want or use.

More features are more attractive, but end up being counter-productive for employees trying to use the tech on a daily basis.

In the study, 56% of buyers said that they were overwhelmed by the complexity of the tech they bought.

Some registered anxiety just by looking a list of features, and this was true regardless of how much technical expertise the user had.

15 questions about your new phone service

Before you contact phone system vendors for your first business phone system, narrow down your options with the following 15 questions:

  1. Does your team really need desk phones?
  2. Does the system you are considering integrate with your employee mobile network?
  3. Do you have the IT resources to maintain telecom equipment or would a  hosted solution be more practical?
  4. Does it makes sense to commit to a 24 month contract or should you use a pay-as-you-go subscription service?
  5. Will your business operate better with contractors, remote workers, activity based workers (ABW), etc., or in a more traditional office space?
  6. What are the bare essentials your team needs to communicate better? Ex. AI auto-attendant, hunt groups, local numbers in various cities and countries, easy transfer, visual voicemail, integration with your customer relationship management (CRM) system, etc.
  7. Is the phone system easy to set up and use by average users?
  8. Does it scale as needed or is there a limit to how many users you can have?
  9. How difficult is it to add/delete/update user information?
  10. Does your phone system present a professional image to customers and partners who call?
  11. Are the costs sustainable despite periods of variable income?
  12. What are the hidden costs, like IT expenses to customize the service?
  13. Is support readily available to prevent a loss of service or correct errors?
  14. How will the phone service provider keep up with rapidly changing technology?
  15. Can you get a demo or a free trial before you decide?

The best time and place to grow your business

The year 2018 is a great time to start or grow your business, with the World Bank reporting that 119 economies improved their local regulatory business framework over the past year. New Zealand tops the list of best places to do business in the world and Australia ranks in the top 10 countries for starting a new business. The companies that are growing intelligently and sustainably are those that stay mobile, keep it simple and only pay for what they use. 

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