Business Telephone Systems:

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1 Business Telephone Systems: A Buyer's Guide Visit Corporate Telecomm at for more Learning Guides and additional resources.

2 Page 2 Business Telephone Systems Introduction A business phone system is one of the most important purchases your business can make. The telephone is often the easiest way to reach your customers, clients, and partners. It should also be the easiest way for them to reach you. You don't want your important business callers to be routed incorrectly, disconnected, or faced with a bewildering array of automated options. There are many factors to consider when buying a business telephone system. For example, you need to get enough capacity for your current needs, while planning for growth. You'll want to ensure compatibility with other equipment you already own, and you may need features such as voic , messaging onhold, headsets, or conferencing equipment. Managing all of these factors while keeping costs down can be a huge challenge, but Corporate Telecomm can help. This Phone System Guide will help you understand the types of decisions you need to make, how to choose a business phone system, and how to find a phone system dealer. Types of commercial phone systems Up until recently there have been two major types of commercial phone systems on the market: key systems, and Private Branch Exchange (PBX) systems. The type of system you choose will depend on how many lines (telephone numbers) and stations (extensions or telephone sets) you need and what features you require. It should be noted that since about 2007, the majority of business systems being deployed are now IP Telephony (IPT) systems. IPT systems have features and capabilities found in traditional key and PBX systems. Finally, hosted voice over IP or VoIP systems are being offered by a number of providers. For some businesses, IP Telephony systems can provide significant cost savings and other benefits. Read more in our VoIP Phone Systems Guide and our Hosted VoIP Systems Guide, both of which are available at

3 Page 3 PBX and key systems If your company has more than 40 employees, or if you need advanced functionality, PBX systems are the best solution. You may know PBX systems as the massive telecom cabinets used by huge companies. While that still can be the case for large installations, the technology has progressed to the point where a powerful PBX for a company can sit unobtrusively on a desk. Most PBX systems come standard with all the features you might want. In addition, they are totally programmable, so they can support the most complex implementations. You'll pay a premium for this flexibility, but in many cases the price difference between PBX systems and less adaptable solutions will be smaller than you might expect. In the 5 to 40 employee range, key systems are more typical. This type of phone system uses a central control device called the key system unit (KSU) to provide features that are not available with ordinary phones. For example, a central unit typically allows users to make calls to another in-office extension, and prevents other users from accidentally picking up a line that is being used. Modern key systems also come standard with most features a business would expect but in some cases they are less customizable. While there are technical differences between key and PBX systems, the distinctions to a user have become relatively blurred. Many key systems include features that were once available only on PBXs, and some systems operate internally as either a key or a PBX depending on the software that is installed. The terms "hybrid" or simply 'communication system' are often used to describe commercial phone systems that resemble both key and PBX systems. Both key and PBX telephone systems require professional installation and maintenance. All outside telephone lines must connect to the KSU or PBX cabinet, as well as all inside extensions. You will almost always be able to use existing phone wiring. Don t expect to continue using existing phones, however. Unless the phones you have are relatively new, they probably won't be compatible with the central unit and you'll need to purchase new handsets because each manufacturer's telephone sets are proprietary to their particular phone systems. Regardless of the size of your company or the type of phone system you select, make sure you investigate what different vendors can offer your business.

4 Page 4 Sizing an business telephone system When buying a business telephone system, a primary concern is to make sure that the system is the right size for your firm. Knowing your requirements in advance and understanding the size constraints of a system will help you negotiate with vendors. There are two main factors that will determine the size of the system you need: Lines. Also called trunks, indicate the total number of outside phone lines used by the company. Lines also include digital services such as ISDN/PRI or T1 Voice circuits. Extensions. Extensions are needed for every device within the company that connects to the phone system. Most of the extensions will be for telephones. However, fax machines, credit card terminals, and any other equipment that requires a phone connection must also be tallied. Most new systems define size in terms of "ports," which indicate the maximum number of connections that can be made to the system. This includes outside lines and inside extensions, as well as phone system accessories such as voic or automated attendants. Even if a business telephone system can handle your current phone traffic, you should be sure that it can also handle your future needs. The ideal system should be able to handle expansion in a very costeffective manner. Traditional key and PBX systems allow you to increase capacity by adding new cards (sometimes referred to as modules, cabinets etc) that increase the total number of ports available; some systems are expandable by simply adding another cabinet identical to the first. For planning purposes, inquire about how much it will cost to add more extensions, making sure to specify different amounts, e.g., 10 vs. 20 vs. 50 more extensions. Learning the exact method of expansion is not important what is important is that expansion is easy and affordable.

5 Page 5 Business telephone system features Business telephone systems can be equipped with literally hundreds of features for switching calls and directing traffic. Vendors like Corporate Telecomm estimate, however, that most companies use only 10 percent of their telephone features. Instead of comparing features on a one-to-one basis, you should examine how your phone system is used. Limit your feature search and evaluation to only those options that will improve the workflow in the office. Some of the most popular features that are standard in many business telephone systems include: Auto-attendant is the recorded message that answers your phones and instructs callers how to reach the person or department they are looking for. If you have a high volume of calls, this may be important or you may value having a real person answer every call. Typically auto attendant systems are now a part of voice mail systems. Conferencing features vary widely. Consider how often your staff needs to make conference calls, and how many different people need to call in. If the conferencing features you need aren t readily available, there are other options for conducting teleconferences that you can purchase separately. However, these are expensive, so make sure your core system can support your conferencing needs. Music-on-hold is fairly self-explanatory in most systems, you simply plug in a source of music which plays only music, or a combination of music along with messages promoting your company. You can help callers find the people they need with dial by name, dial by extension, or dial from directory services. Phone sets themselves have more standard features, as well. Display phones have a small screen that shows information such as the name and extension of an internal caller, the duration of call, and in some cases, caller ID. Speaker phones are familiar fixtures in many conference rooms, but are also now standard on most new handsets. Speaker phones can be half-duplex, which means that only one person on the call, can be heard at a time, or full-duplex, which lets both parties talk simultaneously, like a regular phone. Some phones also have a listen only mode for speaker phone, which is useful for monitoring a conference call or while on hold.

6 Page 6 With more feature-rich business telephone systems, voic is sometimes included as part of the package. However, voic can be purchased as an option if not included. If you already have a voic system, talk to your vendor about its compatibility with the system you are considering, however most are not compatible. Although having the right features is important, it is even more critical to make sure those features are easy to access. Because most employees devote very little time to learning how to use a phone system, you should make sure that using the most common functions is extremely simple and intuitive. CTI and advanced features For companies who make more extensive use of the phone, modern business telephone systems offer some significant benefits. Automatic call forwarding, also known as follow me anywhere, helps both your employees and your callers. By routing incoming calls to wherever your employees are, whether on the road, working at home, or at a remote location, automatic forwarding increases the likelihood that callers reach the person they need. Callers do not need to make a second or third call. In addition, your employees avoid having to return to an overflowing voic box. Call convergence enables your corporate phone system to handle phone calls, voice mail, , instant messages, video conferences, faxes and other types of communication. Computer telephony integration (CTI) covers a wide range of applications that connect your computers to your corporate phone system. One example is one-click dialing for an outbound call center. Employees can use their contact management applications to place calls without dialing the number manually, reducing errors and time per call. Other CTI applications handle incoming calls: in conjunction with caller ID, calls can be routed to the correct representative before they are even answered. And callers account information can be displayed automatically when an employee picks up. CTI applications themselves are usually sold separately from phone systems. If you are interested, you should investigate what CTI applications are marketed for the software you use, and then make sure the corporate phone system you choose is also compatible. Most high-end corporate phone systems are CTIready.

7 Page 7 For businesses with the highest call volumes, automatic call distribution (ACD) can really increase productivity. ACD manages incoming calls to maximize efficiency and reduce call answer times. It also tracks per-call and per-employee statistics, allowing you to improve your call center s responsiveness. While ACD is extremely valuable for large call centers, most small businesses probably will not see much advantage to it. Business telephone vendors Virtually all office phone systems are bought through vendors who handle not only the sale, but also the installation and programming. As a result, finding a good business telephone vendor is the most important part of the purchase, since any telephone system you choose needs to be properly installed for optimal performance. Important considerations in choosing a vendor include: The number of installations the vendor has completed with your system. A vendor who has installed many of the same systems will be much more familiar with the problems that can occur. Ideally, be weary of vendors who seem to offer any and all brands for two reasons; First, by offering too many systems the vendor may not be able to be proficient in any one of them and second the vendor may not be authorized by the manufacturer of the system to sell and support it. Knowing that the vendor is committed to a particular manufacturer, you can be assured of a long-term source for service. Often, a demonstration of different office phone systems can clarify what solution is best for you. Some vendors will ask you to come to their office, and others will visit your site. Either is fine, but visiting your site also allows the vendor to get a better sense of your existing infrastructure and communication needs. Inquire about the vendor's specific installation experience. Ask about the size of the companies involved and what options or features were added. Also obtain a list of references, including several completed in the past year, so you can ask about their experiences in detail. Ongoing support of your business telephone system can range from being important to absolutely critical, depending on your business. Vendors will provide a combination of warranties: the manufacturer s guarantees of their hardware (typically one or more years) and vendor-provided service level agreements (SLAs.)

8 Page 8 An SLA specifies how quickly the vendor will respond to a problem with your business telephone system 4 hours is fairly typical for major outages during business hours. If your business needs 24 x 7 coverage or shorter response times, expect to pay extra for these premium service levels. Some other questions you may want to ask: How long has the vendor been in business? Is the vendor a licensed contractor? Does the vendor carry appropriate insurance? Is the vendor authorized by the manufacturer of the system(s) they are offering? Who will install the system the vendor or a subcontractor? Who will provide training? What will training include? What are the costs associated with service and maintenance? Does the system provide backup during a power failure? Does the vendor have remote maintenance capabilities? What changes can we make ourselves to avoid service calls? Pricing for office telephones The watchword when buying business telephone systems is total cost of ownership (TCO). Buying purely on price can easily get you into trouble: more reliable, expandable systems do tend to cost more per user up front but the savings you will see in the long run make it worthwhile. In addition to being able to add more users as your company grows, you should find out how easily your phone system can be upgraded as new features and technologies are released. Comparing offerings from multiple providers is a good way to find solutions that fit your company's requirements. Estimating costs for a complete phone system are very difficult: costs can quickly climb into the tens of thousands of dollars.

9 Page 9 Key systems and hybrids can range from $350 to $1000 per user, depending on the features you select. For larger PBX systems, prices start at around $800 per user, but usually wind up more in the $1000 per user range. There are significant economies of scale: very small offices will find it hard to stay under $1000 per user for any system, and companies with 100 or more employees save considerably. Prices for business telephones vary based on a number of factors: The base system: The central base system, or cabinet, controls and oversees the entire phone system. This price differs between systems and rises as cards and accessories are added. A small central unit can cost as little as $1,000, with the price increasing considerably to the tens of thousands of dollars for larger systems. The base system will be the main limiting factor for your phone system both in terms of features and expandability. The actual phones: Most systems can be equipped with several different types of phones. The least expensive office telephones may cost less than $200, but can make accessing features very difficult or provide less than optimal sound quality. Most mid-level handsets sell for $200 to $300 per unit. On the high-end, some "executive phones" sell for many times the standard price. These phones can make using the system slightly easier. Receptionist stations are also more expensive, but they bring important features for the person at the center of your telephone system. Most businesses will buy a mix of office telephones. Telephone system add-ons: You'll also need to purchase accessories such as voic , music on hold, and CTI applications if they don't come built in to your system. These features can easily tack on hundreds of dollars to your purchase. Many manufacturers sell equipment bundles that can save you quite a bit. These typically include the central control unit, several office telephones, and voic . They are sold in varying sizes your vendor can help you choose a bundle and then add on any other equipment you need. Wiring and installation: Installing wires in an unfinished building is fairly inexpensive. However, installing wiring through already finished walls can add quite a bit to your total cost. If you're in a location with existing wiring, make sure you have the dealer inspect it so you can re-use it if possible. Everything else: This includes training, programming, service, and future modifications. Pricing is usually based on the time these tasks will require and can often be the most flexible portion of a bid. Sometimes, it is best to compare the hours that will be spent completing training/programming/service tasks with the price tag for the service.

10 Page 10 Phone system buying tips Ask other businesses how they did it. If you can, talk to several other business owners to get a feel for pricing, vendors, and options. If you like the way a phone system works at another business seek out the owner and ask them what they use and how much it cost. Demo the system. Test the system before you buy. Pictures and feature charts are insufficient for a purchase that will be used extensively by every person in your office. Some areas to assess: check how phones feel in your hands, see how easy it is to access extensions and voic , and evaluate phone and speakerphone quality. Check voic compatibility. Make sure any phone system you are considering is capable of working with a wide range of third-party voic systems. By keeping your options open, you will minimize the chance of getting stuck with an inferior or overpriced product. Get extra wiring installed. Avoid rewiring down the road and request that plenty of wiring be installed when the system is first purchased. A good benchmark is to ask for at least double the wiring you currently need. While this will add to the cost of installation, it will really only be a fraction of the cost you will face if wires need to be added later. When to shop and buy. Shop for a vendor's advice at the beginning of the quarter when sales targets have just been set, and make your purchase at the end of the quarter when you can often get a lower price. Consider IP Telephony of VoIP phone systems. VoIP is perfect if your business is distributed (e.g., you have telecommuters working out of their home offices). This is a large part of the future of phone systems, and you might do well to get started with it now. It can really help to keep you connected and hold your overall costs down. Conclusion Purchasing a business telephone system is not an easy task. However, if you partner with the right vendor one who has experience not only with telephone systems, but also understands your business, the project can be much easier. Corporate Telecomm has been in business for over 30 years and can certainly assist you in your next system purchase. We can be reached at (800)

11 Corporate Telecomm This document is prepared by Corporate Telecomm as an educational service to our clients and prospective clients. Best efforts have been made to insure accuracy; however, Corporate Telecomm shall not be liable for any errors or omissions. Questions or comments can be directed to Corporate Telecomm (800) Copyright Statement All material in this document is, unless otherwise stated, the property of Corporate Telecomm. Copyright and other intellectual property laws protect these materials. Reproduction or retransmission of the materials, in whole or in part, in any manner, without the prior written consent of the copyright holder, is a violation of copyright law.

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