pbx phone system

What Is a PBX Phone System? How to Choose the Right One for Your Business

In today’s digital world, effective communication holds utmost importance. One of the most effective communication methods is the PBX phone system, which enables businesses to manage internal and external calls efficiently, improving their productivity and customer service.  

In this article, we will discuss the concept of PBX phone systems and things to know before deciding on an appropriate calling solution for a business.     


What is a PBX (Private Branch Exchange) Phone System?

PBX stands for Private Branch Exchange. It works as an internal telephone network for a business. A PBX phone system allows users to communicate internally and receive and make external calls using an internal line.   

A PBX phone system has features like call transfer, call forwarding, call queue, voicemail, etc. PBX phone systems work on VoIP (Voice Over Internet Protocol) or through analog or digital phone lines. 

With a PBX phone system, a physical line coming into the business can be divided into multiple lines that will allow the business to support more telephones, and the best feature is that calls are free amongst users.

Types of PBX

There are different types of PBX phone systems to suit all businesses. Here are some of the types:

1. Hosted PBX

Managing employees’ phones with a web browser is possible with a hosted PBX. It is located in the cloud and not on a physical server, which makes the system accessible from anywhere in the world from any device, like computers or cell phones, that has an internet connection. 

Hosted PBX systems are also known as cloud PBX systems, virtual PBX, and IP PBX. Installing a hosted PBX takes just minutes, and the online setup process is even easier. With this system, all devices can be controlled through the cloud-based platform.

Moreover, maintenance is inexpensive for PBX systems, and businesses don’t have to depend on any professional or in-house IT team to solve problems.

PBX systems offer features that are not available with landline systems. PBX can be connected to business CRM software; incoming calls can be received on cell phones and integrated with other communication channels, i.e., video conferencing or SMS.


2. On-Premise PBX

On-premise or on-site PBX is part of the traditional method used for generations, an automatic version of a manual switchboard. It is an in-house communication system to handle outgoing and incoming calls. 

The system needs an on-site server and manual wiring to each phone. This can result in heavy upfront costs and ongoing maintenance charges.

For modern businesses, on-premise PBX systems have become limited and expensive. The system lacks the features of a modern telephone for businesses. They are also prone to security threats. 


3. Hybrid PBX

A Hybrid PBX system combines an on-premise system with VoIP telephony. It uses the SIP trunking service to provide voice features. This multi-channel service can be used without changing PBX features. 

One of the advantages of this system is the ability to add more channels as and when the business grows. 

Hybrid systems are limited, requiring upfront setup, server space, and IT maintenance charges. Not many businesses can benefit from this system, but it’s a good option to transition legacy systems to VoIP technology.


Cloud based contact center

When it comes to multi-channel or omni channel customer service operations, a cloud based contact center could work very well.  

Be it email exchanges, voice based customer support, or, for that matter, social media responses, such a solution makes life easy for businesses looking to optimize and enhance their customer engagements.

Cost-effectiveness stems from its pay-as-you-go model, eliminating the need for upfront capital expenditure. Plus, its automated systems save labor costs, giving small businesses a competitive edge in the market.


How To Choose The Right PBX For Your Business

When deciding on the right PBX system, the business should examine the existing one. Businesses starting from scratch can opt for a hosted system because it is built for modern work. 

Investing in a hybrid system only makes sense for companies with an already existing on-premise PBX System. It will adapt its PBX hardware to VoIP, giving better call quality, security, and advanced features.

Here are some other things to keep in mind: 

Evaluate business requirements

Businesses should assess their communication needs. The number of employees, call volume, growth projections, and features required should be considered.

Flexibility and Scalability

The PBX system should accommodate the future growth of any organization. Scalability is important as it allows adding or removing phone lines. Flexibility is like integration with other systems, i.e., customer relationship management (CRM), which helps streamline businesses.


Before committing to any PBX system, businesses should consider upfront costs, maintenance expenses, and other fees. Cloud-based systems are more cost-effective, with fewer monthly expenses.

Reliable Customer Support

Reliable customer support is important to address any technical issues or enquiries effectively if anything goes wrong. 

All in all

Selecting the right PBX system is very important for any business. Whether the business uses a cloud-based PBX or an on-premise system, they will empower the business with increased productivity and seamless communication. 

Multiple factors like business requirements, budget, scalability, and customer support must be considered before choosing a system.