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Thomas Han

June 25, 2019

IP PBX: Understanding IP PBX & Choosing the Right Provider

IP PBX systems are the modern phone systems of our time. Learn what an IP PBX is, how it works, and why you might want to consider using this type of phone system for your company.

IP PBX systems are the modern phone systems of our time. Because they are internet based, IP PBX systems eliminate the archaic issue of phone wiring, remove headaches for IT administrators, and add a boatload of new functionality.

Let’s dive into what exactly an IP PBX is, how it works, and why you might want to consider using this type of phone system for your company.

We’ll go over the following areas:

  • What is an IP PBX?
  • How an IP PBX works with devices
  • Advantages of an IP PBX
  • What to look for in an IP PBX provider
  • Challenges of transitioning to an IP PBX

What is an IP PBX?

IP PBX, or Internet Protocol Private Branch Exchange, is a type of business phone system that uses VoIP to connect telephone calls to the public telephone network. IP PBX systems can be cloud based, or a hybrid of a cloud based phone system and an on-premise PBX system.

On-premise IP PBX systems are installed on site, where the phone system’s functionality is programmed into the PBX hardware. Cloud based IP PBX systems, or hosted PBX systems, on the other hand, use software to store its functionality and require no hardware on-site. In either case, telephone users are connected via the internet to the IP PBX system for calling.

On-premise IP PBX = hardware
Cloud based IP PBX = software

Other common names for the IP PBX include VoIP PBX, hosted PBX, cloud PBX, and virtual PBX. Any way you spin it, they all refer to a phone system that’s powered through the internet.

To put it most simply, it’s an internet phone system.

Speak directly to a cloud PBX expert.

PBX, Then and Now

Ages ago, PBX systems were limited to companies with a large number of employees (and capital) for their switchboard operations and other “complex” features. This was done by running physical phone lines through a mix of different stations, and then through the PBX equipment, rather than purchasing individual landlines for each station.

Incoming calls to a company used to be answered by an operator and then transferred to the appropriate department. Eventually, human operators were replaced by automated attendants that managed the process of transferring calls to various extensions.

Today, the PBX system has gone digital. All the “complex” features that were powered by the traditional PBX equipment are still available, but now as a software service. This is what we call the IP PBX.

How an IP PBX Works with Devices

An IP PBX connects a PBX server with VoIP phones, providing the benefits of both call distribution and multi-device integration. Calls on an IP PBX system can be routed to different locations and devices all at the same time, as long as those devices and VoIP users are registered in the VoIP server.

This is one of the main differences of an IP PBX versus the traditional phone system. The IP PBX has no physical boundaries, as it connects to devices via the internet. This provides the added functionality of being able to use mobile devices, which is crucial for employees today.

The Advantages of an IP PBX

Let’s explore how an IP PBX benefits an organization in regards to cost, service, management, and functionality. Here are 11 of the advantages an IP PBX could bring to your company.

1. Mobile Device Integration

With an IP PBX, you can use your cell phone to make and receive calls using the same phone number and extension as your desk phone. This is done by downloading a mobile app, which fully integrates with your company’s IP PBX system.

The ability to use cell phones is possible because the phone numbers aren’t tied to a landline.

Telzio provides the ability to call from both your mobile device and your computer, with the included webphone and mobile app .

Not only can incoming calls be routed to employees on their mobile devices, they can also make outgoing calls from the app. With this capability, some companies forgo desk phones altogether. In addition, the mobile app provides a backup source in the case of a power or internet outage at the office.

How to prevent downtime on your phone system during an outage.

2. Simple Management

You can manage an IP PBX via an online dashboard, where you can configure and update your phone system without any technical training. Any questions can be quickly resolved via chat, and you can be on your way. Traditional phone systems are difficult to maintain and update, and usually require the assistance of expensive consultants.

Our internal communications are now much more efficient and Telzio’s user-friendly interface is much easier to use and manage as needed. Whereas before it was necessary to contact a technician for any little change, I can now manage everything right through my browser, and it goes live instantly. - Nathan Endow, IT Manager at Versa Products

How to set up a phone menu.

3. Price Consolidation

With an IP PBX system you can consolidate multiple phone systems and services into a single solution. In addition to managing multiple locations under a single account, you can also drop additional costs like SIP trunking, user licenses, PBX equipment, and maintenance fees.

Telzio provides an all-in-one solution for IP PBX systems with no user fees, no maintenance fees, and no hardware requirements. Since everything is maintained “in the cloud”, you don’t have to pay for services at every location. All your lines can be pooled into one plan for maximum volume savings. Even international numbers can be remotely managed under a unified system.

Learn more about Telzio's all-inclusive pricing.

4. Scalability

Online management and elimination of user license fees means scalability for your business. As your user count grows and feature demands expand, there is no additional cost to add lines or features from a contractual, management, or cost standpoint.

Why you shouldn’t pay per user for a VoIP phone system.

On-premise phone systems on the other hand, are extremely costly and time-consuming when it comes time to add a user or feature. Not only does it require extended contracts, it requires hiring telecom engineers or relying on the vendor to make the updates. This poses a significant cost burden for the company and a major time-waster for IT managers. With an IP PBX, changes can be made instantly online, and there is no additional cost to add users.

5. Upgraded Contact Center Features

Most organizations who upgrade from on-premise to an IP PBX will also gain a lot more contact center features right off the bat. Telzio includes several features out-of-the-box, including:

**Live Reporting from Telzio displays call activity in real-time,so you can monitor your call center calls, agents, and queues as they are happening. In addition to these ready-to-go features, Telzio offers an API and integrationsfor further customization. Contrary to an on-premise PBX, the IP PBX enables you to integrate different business applications with your phone system, such as Slack, Zendesk, Salesforce, Google Drive, etc.

Telzio IP PBX Call Center Live Report

It has been incredibly helpful to integrate TelzioZendesk with . We’re now able to better track our customers’ buying experiences and optimize our customer service processes. - Nathan Endow, IT Manager at Versa Products

Here are 5 ways to improve your customer support.

6. Softphone Capabilities

With IP PBX systems you have the option of IP phones, mobile devices, and softphones. A softphone is a virtual phone that you can download onto your computer, enabling you to use your business phone number from anywhere you have internet.

Telzio offers a web-based browser phone, which doesn’t require any installation at all. Users can simply log into to find the virtual dialpad to make and receive calls, texts, and faxes.

Softphones are popular for call centers and sales teams that experience high volume calling. It enables easier navigation between applications and faster dialing. By upgrading to an IP PBX, you can also give your teams the option of softphones.

7. Hot Desking

Among the abudance of features and flexibility the IP PBX adds to your business communications platform, hot desking is one of them that may come in handy for modern office setups.

Hot desking is the ability for one working station to be occupied by different users. With a hot desk, the desk phone is stationary but each different user can log into the phone and use their own extension on it. IP PBX systems easily allow for this. What’s more, a user can even unplug their desk phone, physically move it to another location, plug it in, and continue to use it just the same.

With a traditional PBX, this would just not be possible without a ton of work. It would require extensions to be completely rerouted and repatched to the new desk or office location.

See a list of IP PBX features.

8. Easy Setup

IT managers are especially thrilled by the easy setup of IP PBX systems. In terms of deployment, there’s no comparison. Whereas a traditional PBX requires extensive technical knowledge and experience with phone systems, an IP PBX can be deployed by even non-technical staff, such as an office manager or an administrative assistant. A traditional PBX system can take weeks or even months to configure. An IP PBX can be fully deployed within hours, even for large organizations.

Because the IP PBX is internet based, the setup process is also internet based. Creating hunt groups, adding extensions, and recording automated menu greetings are all done through an online interface.

Telzio's user-friendly call flows enable anyone to customize PBX features in minutes.

Of course if you have special integrations or customizations to implement, you’ll need a developer to work with the [VoIP platform’s API](

9. Enhanced Reliability

With a hosted PBX system, you assign the responsibility of maintaining your telephone infrastructure to experts whose main focus is the PBX. Transitioning to an IP phone system takes your PBX from being a piece of hardware located in one location, to software that is backed up across multiple locations. By distributing your phone system over multiple redundant locations across the globe, the chances of downtime are not only much lower, but the ability to resolve the issues are also much faster.

Rather than employing an in-house or outsourced team to manage your phone system, you can rely on an entire organization of experts who are managing it 24/7. With automated monitoring systems and telecom engineers working around the clock, an IP PBX from Telzio is more reliable than an on-site PBX.

Read about Telzio’s Commitment to Reliability.

10. Less Clutter

Excess wiring - it’s a fire hazard, it’s confusing to deal with, and it just doesn’t look good. Luckily, tangled wires are a thing of the past with an IP PBX.

For the minimalist, this is one of the most attractive things about IP PBX systems. An IP phone system lets you link desk phones to a computer network port, and a softphone can be used on any computer. What’s more, most VoIP phones have a PoE feature, enabling them to pull power from the ethernet connection. This means that extra phone cables are not required to power or connect different devices.

What is the best VoIP phone for a small business?

11. Vendor Flexibility

With PBX hardware, you’re locked in with a vendor and don’t have the option to look elsewhere for maintenance and upgrades. This means that you are at the mercy of a vendor’s high prices and annual maintenance fees.

IP PBX systems are based entirely on an open SIP standard. You can choose and change up any SIP hardware or software device paired with any SIP-based IP PBX, VoIP service provider, or PSTN Gateway. A traditional phone system on the other hand, requires purchasing extension modules to add features; a pricey and ongoing cost with hardware.

Top 5 Reasons IT Directors Stay with an On-Premise Phone System

What to Look For in an IP PBX Provider

If you’re considering hopping aboard the IP PBX train, you’ll need to consider what an abundant, qualified VoIP provider looks like. When shopping for an IP PBX, here’s what you want, and don’t want to have in a provider:

  • Proprietary infrastructure developed and managed by the provider in-house. You do not want to end up working with a VoIP provider who is licensing a system from a third party vendor and does not have full control of the platform. Look for a VoIP company that has an in-house development team and has built their VoIP platform from the ground up. Learn about the Proprietary VoIP Platform by Telzio
  • Continuous enhancements and new features. You want to make sure the VoIP provider has been regularly adding new features to the system. Technology in the voice space is continuously improving, and if the provider is not focused on innovation - this is a huge red flag. Not only is security and reliability an issue here, but you also want to be sure you can easily take advantage of modern features as communication trends in the workplace continue to rapidly evolve.
  • Transparent pricing. Far too often, telcos use manipulative sales tactics to bait customers. You don’t want to end up paying 30% more on your bill than you were quoted originally. This often happens when the sales rep you were initially speaking to closes the sale and then hands you off to a different department, and it no longer becomes their problem. Ask about contracts, termination, taxes, porting fees, user licenses, and fees for additional features like call recording, voicemail transcription, and on hold music and messages.
  • In-house customer service. One of the most common reasons customers end up switching providers is due to poor customer service. If you’re a small business, you should make sure that there are no minimum requirements to get the level of customer support you need. Read customer reviews, but be aware of the difference between paid reviews and legitimate customer reviews.
  • BYOD (bring your own devices) capabilities. Be sure that the provider you purchase your phones from do not lock your phones so that you cannot use them with a different provider. While you can usually flash the firmware and reset the phone back to factory settings, this is a hassle you don’t want to deal with, particularly if you have hundreds of phones. Look for a vendor that enables you to bring your own device, and provides auto provisioning on devices for easy setup and management.

The Challenges of Transitioning to an IP PBX

Despite all the clear advantages, management still may be hesitant to do an overhaul of your phone system. We get it. Large investments have been made on the old PBX, you’ve had it for years and some people don’t like change, and while it has its issues - it’s not completely out-of-service, yet.

Let’s go over three common concerns, and how to address them.

1. Transitioning Costs

If you’re currently running an on-site PBX system with analog phones, you’ll want to invest in new IP phones for the organization. While you could use ATA adaptors to keep the old phones running, it’s not recommended. You still have to purchase the adaptors, and you won’t get the full benefits of an IP PBX.

Depending on the number of users you have, purchasing new IP phones for the entire organization could be quite high. There are a few main ways to mitigate this switching cost:

  • Lease the phones
  • Finance the phones
  • Deploy softphones (or a combination of desk phones and softphones)
  • Use the Telzio WebphoneMobile App and , which is included at no extra cost

You have to think of it as investment. IP phones can easily last for more than 10 years. The beauty of IP phones is, the firmware (software of the phone) can be automatically updated and will continue to get upgrades over time from the phone manufacturer at no cost to you.

Besides the optional purchase of IP phones, there are no other hard costs associated with deploying an IP PBX. With Telzio, there are no setup fees, no porting fees, and no downtime on your phone numbers during the transition process.

Sign up for a free 30 day trial with Telzio.

2. Training Employees to Use a New System

In addition to easy deployment, no training is needed on the user end. The basic functionality of using a desk phone is the same. How to transfer a call, how to put someone on hold, how to conference in another person - these are all the same, if not easier. The added benefit is the capability to do this all online with the use of a webphone.

Those who want to stick to using a traditional-looking desk phone will not notice the difference. Those modern users who opt for the app, will have no problem navigating the dashboard and using the mobile app as easily as their native dialpad.

3. Developing Custom Integrations

If you need to develop a custom integration that’s not already available out-of-the-box from the IP PBX provider, you will need a developer who can build the integration via APIs.

The integration you need may be simple enough that you don’t need to do any custom development, and can use an application like Zapier to integrate your platforms.

The Final Choice

Customers look for companies who are up-to-date with their technology. The technology you use (or don’t use) says everything about who your company is. How many times have you researched vendors and immediately been turned off because their website looked like it was from the 90s? It's a reflection of a business as a whole. Your communications platform is no different.

Choosing the right phone system is one of the most important decisions that you will have to make for your company. In this age of rapid digitization, failure to get on board with the latest communications technology can greatly compromise operations, and leave your company behind in the competitive business world.

Speak to one of our experts today to learn more about how an IP PBX could work for your business.

Request a demo.