As the speed of development continues to increase, the seemingly simple question of which type of phone system to adopt gets harder and harder to answer. But how do you know what system is right for your business?
When it comes to office phone systems you have two choices – hosted and on-premise. In this article, we’re going to explore on-premise phone systems along with some common problems and solutions to help you make an informed decision about which system is right for your business.
What is an On-Premise Phone System?
An on-premise phone system is a traditional telecommunications system where you own and maintain the system. Using an on-premise system eliminates the need to rely on a third-party provider.
The most common type of on-premise phone system uses a PBX or Private Branch Exchange. A PBX system provides digital calls on a larger grid than a hosted system. This type of system allows you to connect to internal devices through an extension number.
Almost all businesses with an on-premise system utilize a PBX system.
The Problems with On-Premise Phone Systems
On-premise phone systems offer independence over hosted systems. However, there are some drawbacks to an on-premise telecommunications solution. Let’s look at some of the problems you might encounter when deploying an on-premise system, along with some resolutions.
1. Higher Upfront Costs
A high upfront cost is typically the most significant issue of an on-premise system. On-premise, non-hosted systems are paid for upfront as a capital expense for your business. Money needs to be paid in full for ownership of the equipment and any licenses.
If you like to own the equipment you use and have the budget, this is not an issue.
Even though a hosted system can offer tax advantages and free up cash flow with a lower up-front cost, an on-premise system is typically less expensive than a hosted system over the lifetime. If you can afford to expend the funds at the onset, you’ll save money in the long run.
Another option is to consider leasing your phone system. By leasing your phone system, you can take spread the cost out over an extended period just as with a hosted system but still retain ownership of your equipment.
2. Issues When Your System Goes Down
With an on-premise system, your staff is responsible for maintenance, repairs and upgrades of the system. Premise-based PBX systems are known as having a “single point of failure;” which means that if any part of the system fails, the entire system stops working.
This can be a problem if you don’t have the IT staff in-house for maintenance or repairs. It can pose severe workflow bottlenecks when your system goes down.
Including a service contract in your lease or purchase agreement is an inexpensive way to ensure you always have access to technical support. While not as convenient as having in-house staff to address problems, most dealers or leasing companies will either have a team of service technicians or can refer you to a service provider.
If you do have an IT team on staff, action can be taken right away, instead of waiting for a hosted provider to make a change.
3. Fewer Features for a Higher Price
Some on-premise systems offer fewer features than hosted systems. If you need an extensive feature set, an on-premise system may limit your options.
Many businesses don’t realize that an on-premise system can be fully customized to meet your company’s exact needs. And, because this system is hosted on-premise, you have complete control and flexibility over how it is customized; your IT staff can adjust the security and features of the system as needed to optimize it for your business.
Is an On-Premise Phone System Right for My Office?
Even with some of the downsides to an on-premise system, there are just as many reasons that you should consider adopting this system:
- One-time expense
- Customizable options
- Control over implementation and security.
Are you now leaning towards a hosted phone system? Check out our article breaking down the top problems with a hosted phone system!
Director of Marketing & Inbound Business Development