Business Phone Systems: Everything You Need to Know

Finding the best business phone system in 2019 for your company can be daunting, because there are a lot more options today than there were 20 years ago. The reason for that is, technological advancements have sparked VoIP companies to emerge, providing businesses with a long list of options for business phone systems ranging from VoIP resellers to programmable VoIP services. In between those, you have out-of-the-box business VoIP services like Telzio, that provide a proprietary, feature-rich VoIP platform that fit for most small and medium sized businesses. 

Deciding on the best business phone system for a company is not as simple as it may have been decades ago, when the only options available were landline telephones combined with physical PBX equipment. As costly as those options were, we can now compare them to modern business phone systems and appreicate the value that come with VoIP and cloud PBX options. 

To help you with your search for the best business phone system for your company, we’ve created this guide to help you gain a clearer understanding of on-premise phone systems, cloud phone systems, and hybrid phone systems

In this article, we’ll answer the following questions:

  • What's the difference between a business phone system and business phone service? 
  • What are the different types of business phone systems and their value? 
  • What is the best business phone system for my company?

Without getting overly technical, let's get these questions answered so you have everything you need to know to make a knowledgable decision when it comes to choosing the best business phone system for your company. 


Business Phone System vs Business Phone Service 

As a small business, you may be contemplating whether you need a full on business phone system, or if the regular business phone service from your local service provider is sufficient. 

Before you assume that you don’t need a business phone system, let’s understand what each entails. 

Let’s start with business phone service

What does business phone service do? Well, it provides you with the basics - a business phone number, desk phones, maybe a fax machine, voicemail, and the ability to make and receive calls. If you run a brick and mortar shop, you’ve probably subscribed to business phone service from the local provider that services the area. 

Luckily these days, the local cable provider is not your only option when it comes to business phone service. 

The limitations with business phone service are clear - you don’t get “advanced” functionality like phone extensions, a phone menu greeting, automated routing, hold music, schedule-based routing, mobile capabilities, and the list goes on. 

The most advanced feature you might be able to get with a traditional business phone service is call forwarding; that’s only if you contact the service provider to set it up for you, and possibly at an additional fee.

Another major drawback of getting business phone service through your local provider is that you’re limited to local phone numbers. Without the ability to utilize a toll free number for your business, you could be limiting yourself to a limited geographic market. 

Telzio provides international phone numbers from dozens of countries that you can use from any location. 

You might be thinking - basic phone service is good enough for me, I don’t want to pay for more features because it’s not worth it. 

Here’s where you may want to re-think it. 

You may actually be able to save money by switching over to a business VoIP system, in addition to using it as a tool to gain more business.

Let’s dive into business phone systems, and how they differ from business phone service. Business phone systems provide all the things you get with business phone service plus, lots of other great features that could benefit your business and even help grow your business. How so? 

With features like business SMS for example, you could open up communication with a whole market of customers that you previously weren’t reaching. According to our data, 47% of small businesses today have SMS implemented into their communication strategy. Read that again.

Nearly half of businesses are texting with their customers.

In order to grow and even maintain sales, you have to stay competitive and evolve to changing customer demands. Telzio makes it easy to text with customers via the online dashboard and via the mobile app. 

Business SMS

Another key feature you get with business phone systems today that you don’t get with business phone service - mobile capabilities.

With a VoIP phone system from Telzio, each of your employees can download the Telzio Mobile App on their cell phones, and make and receive calls and texts from the app using the business number, separate from their personal cell number. This means you don’t even need desk phones anymore (optionally), but more importantly, your team can manage customer calls from any location. 

Telzio Mobile App

One of the biggest annoyances with landlines is busy signals. With internet-based phone systems, or VoIP systems, busy signals are a thing of the past. Because of the physical limitations of landlines, if you want to be able to handle more than one call at a time without the next caller getting a busy signal, you have to purchase rollover lines

VoIP enables you to handle essentially an infinite number of calls on a single line. This capability is also called simultaneous calling. If everyone is on the phone, additional incoming callers can be placed in a phone queue with hold music and on-hold messages, or re-routed to a voicemail or a different department. 

Companies of all sizes can take advantage of business phone system features to more efficiently handle a company’s communications, including but not limited to customer service and sales calls, distributing calls to remote employees, texting, and even virtual faxing (for those who are still obligated to fax due to the industry). 

With its obvious limitations, traditional phone service could be costing your business more than it is saving. It’s worth exploring the starting cost of a VoIP phone system, which includes all the professional features mentioned above. 


Types of Business Phone Systems

There are three main types of business phone systems, depending on whether the PBX is physically located on site or not. The term PBX generally refers to the phone system itself, or the “machine” that powers the various features (extensions, routing, etc.). The PBX can be a physical piece of hardware located on-site, or it can be hosted in the cloud by a hosted PBX service provider

As such, the three types of business phone systems are: 

  • On-premise phone systems
  • Hosted phone systems 
  • Hybrid phone systems

Let’s dive into each one of these. 


On-Premise Phone Systems

You can think of on-premise phone systems as traditional phone systems. Traditional phone systems are located on-site. Before the emergence of VoIP, this was your only option. The PBX hardware is physically located on-premise, typically in a server closet along with other networking equipment. To the everyday person, the PBX system can be recognized as a stack of metal boxes and a giant entanglement of wires.

It may look a little something like this...

pbx system

The rectangular box contains the telecommunications system hardware, which connects to the business phones across the office through extensive cabling. The cables component of your on-premise phone system is necessary to connect calls from the PBX out to the business phone lines.

With PBX hardware comes the downsides of any hardware, including the risk of damage from wear and tear and natural disasters, and the need for a technician to be physically on-site to maintain it. The PBX equipment needs to be stored in a safe place, such as in a secure closet that is specifically built for this purpose, to ensure its proper functioning and protection.

Maintaining an on-premise phone system is a job for someone with the technical know-how and experience to manage the particular type of PBX system. This becomes critical during downtime or when a change needs to be made, because it requires that a phone technician or a skilled IT professional make their way on-site to address the issue. 

So why do some companies today decide to stick with on-premise phone systems? Maybe some business owners prefer sticking to what is familiar. One question to ask yourself and the decision-makers at your company is whether there is a technology plan, and how important that is to the longetivity of the organization. 

Top 5 Reasons Owners Give for Staying with an On-Premise Phone System

A hard truth for owners to accept is that they’ve made a decade’s worth investment towards their current on-premise business phone-system, and it’s difficult to let that “investment” go. The key is to accept that it’s no longer an investment, but rather an antiquated system that’s sacrificing productivity and costing more over time. Continuing to hang onto that investment, ends up being more costly and detrimental than switching and upgrading to VoIP. Ultimately, it’s prudent to weigh all of the pros and cons that come with hanging onto an on-premise phone system, and consider the best business decision from a holistic approach. 

Is there a time when an on-premise phone system makes sense? 

Not often. There can be situations in large enterprises where maintaining an on-premise phone system is feasible at least for the short term. In these cases, the organization has a full-time staff of telecom engineers dedicated solely to managing the phone system. However, circumstances in which this strategy makes sense are rare. Even the largest universities and global corporations who have a full-time team of telecom engineers are actively moving away from hardware, and into hosted solutions. 


Cloud Phone Systems

You may have heard of cloud phone systems as VoIP phone systems, virtual phone systems, hosted phone systems, and a variety of other names. Generally speaking, these terms are synonymous and all refer to internet-based phone systems.

Cloud phone systems come with significant benefits, which explains the astounding growth of the VoIP market from $20 billion in 2018 to a projected $55 billion by 2025. This is no coincidence. 

A common misconception is that because internet-based phone systems are hosted off-premise, they’re not as reliable as on-site PBX hardware. Consider this - cloud phone providers like Telzio use the world’s more secure data centers and multiple failover servers that are located across multiple continents. If one system fails, the other takes over. If a natural disaster strikes in one location, a replica of your phone system on another continent has already taken over. 

Hosted phone systems do not require any additional equipment. Even desk phones are optional. VoIP desk phones plug directly into your internet network, without the need for other devices or adaptors to make it work. Your entire phone system (even across multiple locations) is stored and managed online. This means administrators can manage the phone system remotely,  so you get all the latest best of the best features without needing to download any additional software or worry about its physical maintenance.

Some of the features you get with a hosted phone system include: 

Telzio's modern, web-based dashboard makes management easy. 

Telzio Cloud PBX Dashboard

See a list of VoIP features.

To sum it up, the main benefits that come with using hosted phone systems are that they offer flexibility, much more functionality, and competitive pricing.

Related: 5 Benefits of Using a VoIP Phone System


Hybrid Phone Systems

A hybrid phone system is a mixture of an on-premise phone system that ties in VoIP phone service for routing calls. It is a combination of a traditional analog phone system and a hosted phone system. Some companies with an existing system may opt for a hybrid solution to get the value of VoIP while maintaining their PBX investment. 

With a hybrid phone system, maintaining the local PBX equipment is still your responsibility, but the call routing capabilities are managed by the VoIP service provider. 

One advantage that comes with using a hybrid phone system is that it allows you to maintain your telephone system exactly how you have configured it to work, and there’s no need for deployment of another system. 

With a hybrid phone system, an organization can also still support its analog phones. So, if your company has invested a substantial amount in PBX equipment and analog phones, a hybrid solution would be worth looking into. 

Hybrid phone systems essentially pave the way for the transition from a traditional analog phone system to VoIP, and is a strategy used by many enterprises. 

Related: Hosted PBX vs SIP Trunking - What's the Difference?


Could Telzio be the best business phone system for your organization?  

As mentioned above, Telzio is an out-of-the-box VoIP solution specializing in cloud phone systems for businesses of all sizes. Telzio makes transitioning from an on-premise phone system to a fully hosted phone system cost-effective and seamless, with zero downtime on your business phone lines. 

A one-stop-shop, Telzio eliminates the need for additional SIP trunking services, hardware, and licenses. By simply subscribing to a plan based on your company’s overall usage needs, you get all the functionality, upgrades, and users included at no extra cost. 

In addition, Telzio is flexible enough to work as a hybrid solution, if you are not ready to completely cut ties with the PBX equipment you’ve already invested in.

You may find it tedious to compare the various VoIP providers, so here’s a quick overview of where Telzio differs: 

  • A proprietary VoIP platform with a focus on innovation 
  • Five star rated customer service 
  • Unparalleled uptime and reliability 
  • Transparent, scalable pricing

Next, sign up for a free, no strings attached 30-day trial. Regardless of your size, you'll be assigned a dedicated account manager to guide you through any questions. If you're not ready for a trial yet, just reach out and talk to our VoIP experts for honest, unbiased advice. 

Sign up for a free 30 day trial now.


Related: 7 Questions You Must Ask When Shopping for a New Phone System

Thomas is part of the marketing team at Telzio and develops thought leadership content in the areas of cloud computing and unified communications. With an education in electrical engineering and background in software development, Thomas has a strong technical understanding pertaining to cloud networking technologies, trends, and practices.