A phone is just a phone… until it’s not.
For most businesses, their phone is their primary point of contact with their customers. If your phone goes down, your business is cut off from current and potential customers, and you are at the mercy of the telecom while you wait for your service to be restored.
But what if there was a better way? A more reliable way? A way that could provide more reliable service, more features and lower your monthly phone bill all at once?
That’s just what upgrading your phone system from analog to VOIP can do. I know, it sounds like a wild idea to suggest that you could both improve the quality of your system and lower your cost… but it’s true.
How does a VOIP office phone system work?
A VOIP phone system is any phone system that transmits its data over an IP (internet protocol) rather than through a traditional analog phone line. Before we can dig into exactly how a VOIP phone system works, we first need to determine which kind of phone system we are talking about.
There are two primary types of VOIP phone systems used by businesses around the world: hosted (cloud) and non-hosted (on-premise) systems.
A non-hosted (on-premise) phone system uses a piece of equipment called a PBX (public branch exchange), which is installed within your office. The PBX is the equipment that gives you features such as extension dialling, voicemail-to-email and conference calling (among others). When you choose to go with an on-premise system you own all the hardware; it’s yours to buy, sell, upgrade, discard and maintain as you so choose.
Alternatively, a hosted (cloud) system can provide all the same features as a PBX but is hosted in the cloud by a third-party vendor. In this case, you don’t need to invest in buying as much hardware upfront, instead, you pay a monthly recurring hosting fee and any changes you need to make to your system (ex. adding or removing users and numbers) will need to be done through your vendor.
We know that choosing between a hosted or non-hosted system is one of the hardest decisions when buying or upgrading a phone system, so we wrote a full piece comparing the pros and cons of each option but here are the primary benefits of each type:
Cloud phone system pros:
- no upfront cost for equipment (only installation/set up)
- fixed monthly fee
- flexibility to expand or reduce your system and add or remove features by adjusting your monthly rate
- not relying on local infrastructure improves reliability
On-premise phone system pros:
- own and control all equipment
- re-configure your system without needing to coordinate with your vendor
- data is stored on-site rather than in the cloud
- the total lifetime cost of the equipment is generally lower than cloud systems
Regardless of whether you choose a cloud or on-premise phone system, all VOIP systems use SIP (Session-Internet-Protocol) lines. At their most basic level, SIP lines, or SIP trunks, are merely conduits that use the internet rather than traditional physical phone lines to connect you with the broader world.
What are the benefits of using phone systems with SIP line technology?
SIP lines offer a host of benefits over a traditional analog phone line. Financially, businesses that move to a phone system using SIP lines rather than analog phone lines will often reduce their monthly phone bills by as much as 30 percent.
SIP lines are financially more efficient because they are considered a shared resource, meaning that each unique phone number your business has does not require a phone line. You only need a SIP line for each simultaneous connection would want.
For example, a typical SME with ten employees would require ten traditional phone lines, one for each employee with a phone. On the other hand, unless they are in a business where all their staff are on the phone at the same time, they will only require six or seven SIP lines.
Since SIP lines connect through the internet, they can provide long-distance calling for typically a fraction of a traditional long-distance calling plan.
Their internet connection also enables a variety of unified communication methods and features that a traditional phone line cannot match. Unified communication is the idea of unifying all your means of communication, both internally between employees, and externally to customers and suppliers into a single unified solution.
By using a phone system that leverages SIP lines rather than traditional phone lines, you can unify all your communications within one system, be they voice, video or text-based communications.
How much does an office phone system cost?
As you can imagine, how much a new phone system is going to cost your business can vary quite dramatically depending on just how many phones and phone lines you will need.
However, by breaking down just what factors into your final price, we can come up with a pretty accurate estimate that you can use to budget for a new system.
From our experience, you should budget approximately $350 per desktop phone you require, but if you want an advanced or wireless phone, your price could be as much as double for each handset.
You also need to account for either the upfront cost of a PBX system or the recurring cost of a hosted system. The average PBX system typically costs approximately $4500 depending on the configuration.
To put this price in perspective, let’s look at a pretty typical SME with ten employees. They want ten handsets and one PBX to run their system, so they should budget a total of $8000 for the full system.
When should I look at upgrading my phone system?
There are a few situations where buying a new phone system or replacing your existing phone system might make the most sense for your business.
The first situation is quite straightforward; you are moving to a new office space. When starting fresh in a new office, it only makes sense to take the opportunity to upgrade your telephony capabilities at the same time. Since you are starting with a blank slate in the new space the cost to remove an old system is eliminated, and the cost to move to a new system is the lowest it will ever be.
The second situation involves recognizing that your current phone system is no longer meeting either the needs of your business or the needs of your customers. Perhaps your current provider is difficult to reach when your system needs servicing. Or maybe your system is too old and outdated to handle the features your employees now demand. In either case, an upgrade is in order.
Finally, upgrading your phone system might be an excellent decision for your business if you are interested in reducing your monthly phone bill. After switching from a traditional phone system to a phone system using SIP lines, our customers save upwards of 30 percent, on average.
When is it a bad idea to upgrade my phone system?
Why would you ever not want to upgrade your phone system? As with many things, the primary reason our customers give when opting to delay replacing their phone system is financial.
To put a new phone system into your office space can be a considerable initial expense to swallow and this turns off many businesses. If your phone system is only a couple years old or the monthly cost savings won’t be able to recover your initial investment, then you may indeed be better off keeping your existing system.
Nervous about upgrading your phone system?
Upgrading your phone system is a big decision; for many small businesses, your phone is your direct line to your customers (and potential customers). If your phone isn’t working, neither is your business… so if it isn’t broken, don’t try to fix it, right?
In the video below, we explore the four questions and concerns that our customers are most worried about when considering replacing their phone system and how they may or may not be a viable risk to your business.
Test if a new phone system is right for your business
You’ve evaluated the pros and cons of a new phone system, but how do you know it’s the right call for your business? Will it truly reduce your monthly phone bill? What will be the ROI over the next two or three years?
In our years of selling phone systems, we have found only one method that will definitively answer whether an upgrade will deliver a positive ROI for your business. That method? A third-party audit of your phone bill.
We have conducted thousands of these phone bill audits, and we would love to help you complete one well. We offer this service completely free; all we charge is a few minutes of your time to review the results together. Are you interested yet? Book your complimentary phone bill audit today!