Businesses that operate on multiple sites could potentially be overspending on their telephony. Traditional, on-site telephone systems can prove costly due to the installation itself and maintenance of the hardware. However, a hosted telephony service significantly reduces those issues, saving time and money.

Nearly all businesses require a telephone system, with some businesses dependent on their phone system to achieve round-the-clock communication.

Traditionally, a PABX (Private Automatic Branch Exchange) system was used - a physical device which connects all phones within a site to the PSTN (Public Switched Telephone Network) and allows functionality such as call transfers, voicemail and other advanced features.

For small businesses operating on a single site, a PABX system is perfectly adequate and relatively cost-effective. However, multi-site organisations will require a PABX at every site, from the biggest office, to the smallest, which can result in significant hardware costs, not to mention the installation and maintenance costs.

Additionally, each PABX will require a connection to the outside world via analogue or ISDN lines, which will themselves carry a monthly charge. All things considered, a PABX system is not a cost-effective solution for multi-site business, but there is a better solution.

Hosted IP Telephony, or ‘VoIP’, provides the full functionality of a traditional telephone system without the need for an on-site PABX. Instead, the system is hosted by a provider off-site and is delivered to the business via an IP (internet protocol) network.

Good VoIP providers will utilise IP as an alternative to ISDN or analogue lines so that telephony, data and internet can all be delivered to a business as part of a converged network. This eliminates the need for multiple networks, offering significant reductions in capital expenditure and reduced maintenance costs.

As well as the cost benefits associated with a hosted VoIP system, there are are also substantial benefits to be gained in regards to business continuity. Telephony solutions hosted on-site are vulnerable to an array of potential problems, from power outages to physical damage, that could effectively cut off connectivity to the outside world. A hosted service will protect a business from this issue by diverting calls to an alternative location, meaning business continuity is not dependent on a single site

As mentioned above, a hosted telephony solution can offer a business a number of savings as the need for hardware, multiple networks and maintenance is all but eradicated. And there’s more.

A typical business will grow over time, introducing the need for greater volumes of staff and multiple office locations. With a traditional PABX, the expansion of a business needs to be scoped in advance and implemented in a way which reflects that estimated future growth. The problem with this is that businesses will pay for the capacity that they may not need for years to come. There’s also the hidden upgrade costs which can come as an unwelcome surprise.

Hosted VoIP providers on the other hand should offer a fixed ‘pay as you grow’ plan, enabling the solution to scale with the business when needed, meaning that no unnecessary expenditure is incurred on resources that aren’t currently in use.

There are also operational benefits to be enjoyed from a hosted VoIP solution. With a traditional PABX system any changes would have to be carried out by an specialist. But with a hosted service any changes or updates to the system can be carried out via a web portal, from any PC with an internet connection.

Hosted VoIP is an expanding market and it’s not hard to see why so many businesses are starting to utilise the service. While traditional telephony methods serve a purpose, there is no comparison with the cost and operational benefits associated with a hosted VoIP service.