Why Small & Medium Businesses Need a Hosted Phone System

Abhilash Khalkar
6 min readDec 4, 2020

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Image Source: Stratosphere Networks

Phone services used to incur a major expense for organizations. Traditional PBX systems utilized an array of expensive equipment and performed as private internal networks for organizations. This system permitted the employees to utilize a restricted number of phone lines. This traditional system needed constant up-gradation and maintenance, which kept the monthly costs, piling up.

To attain success, a reliable, robust, and flexible phone system is essential to businesses. With advancements in technology, an increasing number of organizations are installing a cloud-based communications system, in place of their traditional desk phones.

A majority of the things today have their cloud. Cloud-powered managed services, disaster recovery, and backup among others are some examples. One major cloud application, which many organizations need to be on the lookout for and adopt is, hosted PBX. Cloud PBX is a service based on cloud technology wherein the vendor network hosts the software and hardware. The mobile phone in such a cloud phone system employs internet protocol (IP) to connect to the vendor.

Having a hosted phone system has become mission-critical for medium and small businesses to ensure their smooth functioning, and head towards strong growth. A hosted phone system empowers your employees to communicate with colleagues and customers efficiently via their preferred devices. A hosted PBX can assist immensely in the sales & marketing function, which will thus help you in enhancing your brand image and increasing your customer acquisition rate. A hosted phone system thus acts as a business intelligence tool for organizations and helps them in improving their profits and scaling up their business. These benefits give a critical competitive advantage to medium and small businesses.

Cloud phone systems have valuable features in abundance unlike traditional systems and incur low costs as well. A majority of small and medium businesses have to keep their costs to a bare minimum and run a tight ship. Installing a hosted phone system helps small and medium businesses to decrease costs, improve performance, and increase productivity.

Even though the benefits of a cloud PBX are immense, small, and medium businesses often find it difficult to make significant investments for technology up-gradation. These organizations hence, need to conduct thorough research regarding the benefits of their initiative, before investing. Organizations need to ask the right questions, to gauge which hosted PBX system is appropriate for them.

A majority of the organizations have discarded their traditional expensive communications system, and with it the high maintenance costs as well. Almost every business function in an organization can reap the benefits of cloud technology. Hosted phone systems unlike traditional systems, utilize voice over internet protocol (VoIP) which is employed by an outside service provider. This kind of technology-driven phone system has various beneficial features. Here are some of the benefits of a hosted phone system:

Reduced costs

A Cloud phone system enhances the business operations of an organization and helps them to reduce costs. Cloud PBX systems have a cheaper cost associated with them as compared to the legacy systems and are easy to install and operate. The most significant cost reduction is in the non-involvement of equipment charges.

When organizations choose to switch to hosted PBX systems, several costs aligned with legacy systems begin to disappear. For instance, the local phone company does not need to be contacted now and then for extra lines, since the phone systems now run on an internet connection. With only incremental expenditures, cloud phone systems can control unlimited phone numbers. Since the hosted PBX system is maintained and monitored remotely, the costs associated with support are also reduced drastically. The hosted PBX system has no additional charges for long-distance calling, and the rate for international calls are also very low.

Improved flexibility

Cloud phone systems enhance employee productivity by providing advanced features. The automated attendant function is one such added advantage, which improves employee productivity. This function enables a virtual receptionist that greets and routes callers to the appropriate mailboxes and provides business information to them, round the clock. Small and medium organizations can utilize this function to create a call routing process matching with their business processes.

Cloud PBX system’s additional features include the ability to seamlessly remove, move, or add extensions and hassle-free call forwarding. The hosted phone system can be managed by utilizing a web browser or a mobile application. Functions such as advanced conferencing and voicemail over the internet are also some of the added benefits of a hosted PBX.

Hosted phone systems assist an organization to improve the impact of its marketing efforts. For instance, informing about promotions and changing the music on hold, engages, and encourages the customer to wait if there is a delay.

Enhanced scalability

Traditionally, a frequent visit from a support person of legacy systems was required, to add employees in the system and make other adjustments. These tasks were often tedious and required a lot of time to get accomplished. Today’s hosted phone systems unlike traditional systems can help in easy scalability. The system can be extended to multiple offices, access can be provided in new offices, and employees can be added, moved, or removed with very little effort.

While operating a cloud PBX system, maintaining and adding extra extensions can be done with basic knowledge regarding the systems. Small and medium businesses can thus employ a hosted PBX system for easy scalability without the need for heavy investments.

Reduced maintenance

In the times of traditional phone systems, an outage of the system was a major issue that companies had to deal with. An outage in those times required calling the vendor and waiting for a technician to work on the issue. Such an outage and the related downtime adversely affected an organization’s performance and reputation. The new age hosted phone systems are maintained and managed by the vendor and hence there is little to no downtime. The worry regarding additional costs for repairs and breakdown is long gone, and also there is no requirement from the customers/ clients to hire a technician to manage the system.

Hosted PBX systems often have an in-built redundancy, which ensures that the backup kicks in when a certain part of the system fails to keep the services running. In case of a breakdown, the service provider handles the concerning issue, without the requirement of the additional cost.

Efficient support

Amongst the array of benefits provided by cloud PBX systems, the hand-on support has garnered high value from numerous organizations. The installation of a hosted phone system is easy and simple, and most tasks are taken care of by the company staff. The staff also guides the customers through the entire process and the to-do list in case of an emergency.

Changes to the system can be made immediately without the need for on-site visits since a professional working at a remote location provides the support for software and hardware. Upgrades to the system can be done seamlessly without any hassle and do not cause any disruption of the service.

Hosted phone systems, unlike traditional systems, provide high security. The system consists of remotely located advanced software, which continuously monitors the system to detect, and potential issues.

Final thoughts

Over the past few years, hosted phone systems have become an integral part of numerous organizations. With the benefits of cost savings, low maintenance, excellent support, reliability, and flexibility, hosted phone systems have empowered businesses to concentrate on their core competencies without the concern for managing phone systems. These systems improve productivity amongst the increasing number of mobile workforces and enhance the communications between employees and clients.

The phone systems for business purposes are no longer a means for simply receiving and making calls. These hosted phone systems arm employees to communicate efficiently and effectively with customers, via their preferred device. This factor has given organizations the flexibility to scale up and deal with clients and consumers seamlessly. The hosted phone system market has grown drastically in the past few years and is expected to reach new highs shortly. The boom in this market has also caused the uprising of numerous vendors, which has made choosing one all the more difficult.

Cloud PBX systems have been at the forefront in driving the expansion of new-age communications systems in the 21st century. Hosted phone systems have made it possible for organizations to save on thousands of dollars, and instead opt for cloud-based systems with a low cost.

Numerous businesses today have opted for hosted phone systems, and the number is expected to grow significantly over the next few years. The previous concerns from skeptical organizations, regarding the connection and service of hosted phone systems, have been subsided by the advancements in technology.

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Abhilash Khalkar
Abhilash Khalkar

Written by Abhilash Khalkar

Abhilash, a serendipitous writer, aims to create an impact in this world with his writing. He enjoys espressos, as should all right-thinking people.

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