What is a PBX?

Ever wonder how companies could make thousands of people reachable via a single telephone number? The magic is all in Private Branch Exchange, also known as PBX. PBX is a remnant of the bygone era of switchboards and direct line connections.

A PBX (Private Branch Exchange), is the hardware and/or software system that powers an organization’s phone lines and routing functionality. PBX systems can be cloud based, on-premise, or hybrid of both.

A PBX system takes calls from main trunk lines and routes them, creating a private phone network for managing the hundreds if not thousands of calls that come into a company’s main number.

What is an IP PBX vs a Legacy PBX system?

Traditionally, PBX systems were physically located and maintained by each company onsite. This represented a massive investment in telecom infrastructure and could include servers, switches, routers, and other complex equipment. Thankfully, like most vestiges of the pre-internet era, all this changed with advances in cloud computing.

In essence, an IP PBX, or hosted PBX, is the same as a PBX sans the hardware infrastructure and costs associated with maintaining a physical, onsite private telecom network. By leveraging Voice over Internet Protocol (VoIP) technology, IP PBX services are able to switch, transfer, and route calls by utilizing virtual servers located in the cloud. This provides many advantages over the traditional, legacy PBX infrastructure.

Legacy PBX systems offer very little flexibility. Since all of the functions are hardware dependent, each call flow path requires some hardware investment.

Legacy PBX systems make it difficult for companies to change or modify their systems once they are deployed. This can be due to several reasons including lack of expertise within their own staff to the complexity of the hardware managing the network itself.

What makes IP PBX so great?

The answer to the question as to why a company would choose an IP PBX rather than an onsite hardware solution is simple – flexibility and cost.  

Telzio allows full customization of call flows, replacing numerous pieces of equipment that a company would have to pay to develop, deploy, and maintain.

Dynamic call routing, forked call flows, custom IVR menus, and even fax and text messaging (SMS) for multiple users are all managed through web-based portals, which are designed to be intuitive, easy to set up, and easy to modify.

Telzio IP PBX Call Flow

Telzio Call Flow

With the growth of the internet and more and more usage across all demographics, you might think that phone calls are slowly going the way of the dinosaur, but you would be wrong. 

Studies show that while many prefer to utilize online means to coordinate customer service requests, telephone customer service still produces the highest numbers in consumer satisfaction at 69% vs 55% satisfaction in email correspondence, according to Forrester.

This statistic tells us a few things. First, yes, the telephone is not the only way for customers to interact with companies. That being said, customer phone support is still the most effective, which makes it the most important facet of dealing with customers and clients.

Second, while email and other alternative means of communication are growing in user acceptance, those cloud-borne methods do not provide a real, human experience.

Over time, the need for having a strong, reliable, and flexible PBX that can be modified to meet changing customer service trends and needs will only grow.

Is IP PBX future-proof?

This is the last reason why IP PBX systems are the true wave of the future. Unlike a traditional system that requires a huge upfront investment in terms of time and money, IP PBX systems can be deployed almost immediately and cost is only driven by volume of calls. 

While most IP PBX providers charge per user, Telzio subscriptions are usage-based and include free unlimited users, so you don’t end up paying for more capacity than you need.

IP PBX systems allow companies to offload risk that they would have had to shoulder should they want a PBX system onsite, but still have all of the capabilities of such a system with much more flexibility. This also means that as technologies improve in the future, subscribers to services like Telzio will see continual improvements without needing staff or capital to upgrade hardware since we handle this development on our own dime. We pay, and you reap the rewards. 

Lata is part of the marketing team at Telzio, and uses her in-depth understanding of business VoIP to contribute education about VoIP phone systems to the Telzio blog. Her experience includes creating technical documentation and guides on complex telecommunication systems for Avaya and IBM. Currently based in Barcelona, Lata has a Bachelor's degree in computer science and Master's in English.