New advances in the telecommunications field like VoIP phone systems have proven that they can save money for owners of small and medium-sized businesses. But those wanting to make the change to VoIP may be vacillating over the decision to go with hosted VoIP or VoIP PBX. These tips may make the decision clearer for some still on the fence.

Technology Matters

High-speed Internet is the only thing needed to start taking advantage of VoIP savings. Larger businesses with an on-site IT department can make a seamless transition to VoIP PBX. Even those businesses without an in-house IT department can install the system and contract with an independent IT company to manage it. However, making the switch to hosted VoIP still makes sense for businesses with small IT departments or those who rely on outside providers for their IT services.

Choosing a hosted VoIP makes sense for many companies because it’s readily affordable as an additional business expense. The set-up is minimal; the software is downloaded and telephones with IP capability are installed. The host provider will usually assess the needs of the business and set up the appropriate features. In addition, most service representatives are available during the transition to assign telephone extensions, set up call trees and voicemail, and make sure that all employees have necessary access.

The bandwidth for a hosted VoIP system may need to be increased because a provider remotely managing the system will require additional resources. The service rep can make the necessary arrangements with IP providers to upgrade a company’s Internet options. While this may cost a bit more, the savings from the new system will still be worthwhile.

Long-term Solutions

At some point in the future, a company using a hosted VoIP system may decide the real savings lies in implementing VoIP PBX. This can be common when a company leases resources or equipment. The deciding factor may depend on the status of a company’s operating budget as opposed to its capital expenditures. Hosted VoIP belongs in the category of operating expense while a VoIP PBX system falls under capital expenses.

Pros & Cons of Hosted VoIP Systems

Pros

• Low start-up costs are attractive to businesses on limited operating budgets.
• Minimal ongoing maintenance fees.
• Fewer company resources are expended with outside management of the telecommunications system.
• Ease and efficiency of transitioning the phone system.

Cons

• If the VoIP provider goes belly up, the business will have no telephone service. This can be avoided by choosing stable providers with a proven industry track record.
• Customizing features can be more of a challenge.
• Although this varies with providers, additional fees may be required if new features or users are added later.

Pros & Cons of VoIP PBX Systems

Pros

• The on-site IT management provides the business with a higher level of control over the uses and features.
• Easily customized to the specific needs of the business.
• Relative ease in adding users and features without contracting with an outside provider.

Cons

• Initial start-up costs are higher for set-up and hardware.
• If a move becomes necessary, relocating the server can be quite burdensome.
• Diverts IT resources to dedicate a system operator, increasing payroll costs.

Improving the bottom line of a business can be as simple as assessing its telecommunication needs and finding a system that incorporates the money-saving features it requires with the technologies it demands.