SMALL BUSINESS PHONE SYSTEMS OFFER BIG BUSINESS ADVANTAGES

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1 SMALL BUSINESS PHONE SYSTEMS OFFER BIG BUSINESS ADVANTAGES

2 Investing in a phone system is an important step for any small business. Your decision to sign up for small business phone service service should be based on careful consideration of the facts. This guide is designed to answer your questions about traditional and hosted PBX systems and help you compare vendors so you can make an informed decision when choosing small business phone service. What is a PBX? Traditional PBX, or Private Branch Exchange, systems transfer calls from a public switched phone network to a private one. Incoming calls get routed via a private switching system to phones within the private system. Callers placing outgoing calls from the private system enter a number, typically enter a code to access an outside line, and then dial the number they wish to reach. Modern PBX switches are digital, and have greater capacity than non-digital switches. Advantages of Small Business Phone Systems Except in the case of systems for very large corporations, robust PBX systems for businesses can now be contained within a relatively small unit that can sit on or under an office desk. PBX solutions come complete with the features most businesses use. They are also completely programmable, and can support even very complex functions. A PBX system will be somewhat higher in cost than some other systems, but many companies consider the flexibility of a PBX system to be worth the extra expense. Companies with fewer than 40 employees may find that a key system can effectively fill their needs. Key systems employ a central control mechanism known as a key system unit (KSU), which has features that regular phones do not offer, such as the ability to call other extensions within the same office, and a feature that keeps lines that are in use from being picked up by another party. Key systems are not as customizable as some other systems, but they do offer some flexibility. Both systems require a skilled technician to install and maintain the wiring and equipment. Existing wiring can be used, although existing phones will likely be incompatible, and new phones will be required. All inside and outside extensions must be connected to the PBX or KSU cabinet. Installation and wiring of these systems is complicated and can be very expensive. For businesses with fewer than ten employees, a KSU-less system may be ideal. KSU-less phones are less expensive than PBX and key systems, but still have many features that a small business needs. The technology that allows these phones to connect and communicate with each other is built into each phone, so they do not require a central cabinet.

3 KSU-less phones can be easily moved when a company relocates, as they are not permanently connected to the office wiring. KSU systems do have some drawbacks; there can be a problem with cross-talk, in which conversations overlap, or bleed into one another, and they are not sold by telecom vendors, so the buyer is responsible for installing, programming, and maintaining the phones. Most business phone systems come with the following standard features: Auto-attendant - a recorded message answers your calls and informs callers how to reach the department or person they are attempting to contact. Businesses with high call volume may rely heavily on this feature; others might prefer to have a live person take incoming calls. Conferencing allows three or more people to be on a single call. Conferencing features vary, so companies will need to consider, for example, how many people they usually have on a conference call when selecting options for this feature. Music-on-hold most systems allow for music plug-ins to be played when callers are on hold. Dial by name or dial by extension gives callers options to quickly connect with the party they are seeking. The phones themselves also have many standard features. Display phones, for example, feature a small screen that displays such information as the name and extension of an in-house caller, call duration, and caller ID, when available. Speaker phone capabilities are also standard on most newer units. Choosing a Phone System for Your Small Business The first in step in choosing a small business phone system is to assess your company s specific needs. Find out what additional functions and features are available with the solutions and vendors you consider. This will help you define a package that effectively addresses your company's unique goals and priorities. Here are a few key factors you will need to consider: Should You Choose a Premise-Based or Hosted PBX System? A key decision you will face is whether your business communications system will be hosted by a provider or installed at your location. Each choice comes with unique advantages. You will need to consider both your current and your future needs when making this decision.

4 Factors such as budget, company size and structure, and the availability of in-house IT resources should all be considered when selecting the ideal solution for your company. Hosted Phone System: With a hosted system, your communications services will be managed remotely, from your phone service provider s location. Telephony services can be offered either as PBX or over traditional PSTN (public switched telephone network). You will need to have a minimal amount of equipment, such as telephones and routing devices, at your site. One of the main advantages of choosing a hosted service is that it can be a completely managed service, reducing the in-house resources you will need to deliver the solution to end users. Some of the benefits you may find with a premise-based solution include: Predictable cost of acquisition More control over the purchase, installation and operation of the system Convenience of readily available in-house expertise Ability to incorporate future systems to accommodate your company s growth A managed solution can be best if you lack sufficient IT support staff. It can free you from the need to maintain equipment and manage a complex system, allowing you to focus on your core business processes. If you anticipate rapid growth in your company, however, a hosted solution could ultimately prove more costly than a premise-based system. On-Premise Solutions: Premise based phone systems can offer your company greater flexibility and control over your own applications and feature usage while still providing a carrier-class service with excellent voice quality and performance. Some of the benefits you may see from this type of PBX solution include: Easier growth management Fewer concerns about equipment obsolescence May require fewer resources to operate and maintain Lower, more predictable maintenance and operating costs Greater ability to customize phone system features

5 A disadvantage of on-premise solutions is that they can require a significant initial investment. They can also involve a greater commitment in the way of support and service contracts. Cost The most common pricing model is feature-based pricing, in which you are charged according to the amount of features you need. A different pricing model is used for on-premise and hosted solutions. To avoid unforeseen costs, be sure you obtain a complete breakdown of the price and have a clear understanding of all fees. You might ask, for example, if on-site support visits are included in the contract. Evaluate the total cost of ownership (TCO) with each provider. Each vendor will attempt to demonstrate that their service comes with a reduced TCO. This can be confusing, so be sure to get all your questions answered. The price you will pay for your phone system depends on such factors as how many employees will be using the system, the technology of the solution you choose and the delivery model, whether premise-based or hosted. In addition to the regular license fee and implementation costs of a small business phone system, there are other expenses to consider when planning your phone system budget. These can include supporting software costs and training costs as well as infrastructure and integration expenses. Be sure to ask a few different vendors for details regarding their pricing, and compare these carefully before making your choice. Choosing Your Vendor Diligently investigate the companies you are considering. Begin by narrowing your list of provider options with a thorough check of each vendor s reputation and performance record in regard to reliability, quality, customer service and overall feature set. Here are some key factors to consider when evaluating phone system vendors: Does the vendor cater to the needs of small businesses? Such a provider may be more adept at meeting the unique needs of smaller companies. Ensure that the vendor is financially stable and able to commit to a long term business relationship. Of the vast number of providers in the communications industry, some operate with a significant amount of venture capital funding, which could eventually put these companies in the position of having to sell to repay their debt. Others may be operating on an extremely limited budget; some of these companies fail each year. Performing due diligence regarding a vendor s financial health may save your company from having to face such situations in the future.

6 Look for a vendor with a clear commitment to continued improvement in services and feature offerings. A good provider will adapt with the ever-changing IT environment to provide the optimal communications system for your business. Choose a provider who can demonstrate expertise in applications you may eventually need, such as video conferencing, direct inward dialing (DID) number, toll free numbers and calling cards. A vendor s capacity to handle all types of applications can be a direct reflection of the maturity of the company and their range of expertise and experience. Take advantage of any opportunities to tour the company s facilities and meet the people who will be monitoring your network. Most reputable companies will welcome your visit. This will help give you an overall picture of the investments the company has made, as well as their level of customer service. Obtain documentation regarding the company s service resolution procedures to ensure that you are choosing a provider with adequate disaster recovery capabilities. This is an area where some providers cut corners, especially those in the start-up or rapid growth period. They may not have sufficient resources to deploy services at multiple data centers, and they could have single points of failure in their hardware, software or network. Establishing a resilient platform entails a significant initial expense for the vendor, but it is vital if a company is to provide its customers with the golden standard of 99.99% uptime. Inquire about the vendor s answer seizure ratio (ASR), which is a measure of the number of calls properly terminated. This number can provide insight into the quality of the routes the provider utilizes; a good ASR is a good indicator of quality service. Finally, make sure you read the service level agreement (SLA) carefully. Give full attention to the details, including those in fine print, to gain a full understanding of the provider s recovery timescales and customer service standards. Choose a provider that will work with you to create a customized, service-specific SLA for your company. Selecting the best communications provider for your company can seem daunting but it is important to take the time to choose wisely. InsideUp has made the process much simpler. We invite you to take advantage of our unique platform that allows you to fill out a simple form and receive up to five custom quotes--based on your company s needs--from top, pre-qualified vendors.

7 Glossary Automated call attendant: An automated system designed to answer and route incoming calls; guides a caller through the options of a voice menu. Automated call distribution: A specialized device for handling and routing large volumes of incoming calls to designated stations in a predefined order Basic three-way conferencing: Allows a number of users to have a telephonic conference meeting CAGR (Compound Annual Growth Rate): The year-over-year growth rate of a figure Call accounting: Application that records and captures call data placed to or made from the telephone system Call flip: Transfers a call from a landline to a mobile phone without any interruption Call forward: Redirects incoming calls to a specified number Call hold: Enables the user to put a caller on hold while a second call is answered or made Call park: Places a call on hold, allowing anyone to dial an extension and pick up the call Call pick up: Takes a parked call off hold Call queuing: A method of handling calls until they are answered Call recording: A feature to record a conversation or a conference call Call transfer: Directs a call to an extension without routing to the central switchboard

8 Call wait: Sends the user a tone or a light indicating that another call is waiting Caller ID: Displays identification (number, name) of the caller Communication service providers: Solution providers such as CSPs (Commerce Service Providers) and ISPs (Internet Service Providers) that offer e-commerce solutions and Internet access to customers CTI (Computer Telephony Integration): This technology helps combine telephony with computer systems. Computers handling calls in call centers or customer care departments are CTI implementations. Here, computers take incoming calls and route them appropriately depending on the call number and caller ID. CTI has replaced traditional PBXes with advanced systems capable of handling incoming calls, outgoing messages, faxes and online communication. Digital switching: Switching facility that establishes and maintains a connection, under stored-program control, to route binary-encoded information between an input port and an output port Do not disturb: Ability to ignore all incoming calls; it can be achieved by keeping the ringer on mute mode or by keeping the phone on busy mode Direct Inward Dialing (DID): Customized phone line allowing internal users to directly call within the organization without seeking help from front-desk personnel. Although callers outside the company can access a DID line via a central telephone number, enterprise users cannot call from outside, as DID does not offer a dial tone. Find me/follow me: An extension of call forward feature; call is forwarded to multiple numbers in a specified sequence Hunt Groups: A group of extensions that are organized in a specific order to process some particular calls

9 IP PBX (Internet Protocol Private Branch exchange): Companies in which VoIP is the primary means of exchanging voice conversations use an extended form of PBX known as IP PBX. IP PBX performs all the functions of a traditional PBX such as handling conference calling, transferring calls, connecting employees to the network using extension numbers and more. The key difference is that in the case of IP PBX, voice transmissions are not sent via normal phone lines, but in the form of voice packets over a data network (Internet). IP PBX systems are available as hardware and software. ISDN (Integrated Services Digital Network): Developed by the CCITT (Consultative Committee on International Telephony and Telegraphy), a component of the TSS (Telecommunications Standardization Sector), ISDN is the standard for integrated multimedia transmission. ISDN offers much higher data transfer speeds than those achieved with traditional telephone wires. Such high speeds enable easy transmission of voice, image and data. It requires the subscriber as well as the service provider to replace their modems with ISDN adapters. IVR (Interactive Voice Response): IVR allows callers to interact with an automated computer system without the intervention of customer care operators. IVR saves customers the time they would have spent waiting for customer care representatives, particularly when the representatives are extremely busy. Moreover, companies can successfully use smart IVR systems to perform tasks such as billing, booking tickets, determining account balance, finding stock prices and more. KTS (Key Telephone System): Refers to the private enterprise telephone system consisting of as many as 130 multifeature lines and/or telephone equipment. Installed within the business premises, a KTS may function in combination with a central PBX or independently. Local telcos: A local exchange telephone carrier Packet switching: With this method of data transmission, messages are divided into packets before they are sent. Each packet is then transmitted individually and can follow different routes to its destination, where all the packets are recompiled into the original message. PBX (Private Branch exchange): A PBX is a telephone switch or switching device that is owned by a business. It connects all phones owned by a business to the PSTN (Public Switched Telephone Network).

10 QoS (Quality of Service): A method of performance assessment and maintenance of network and telecommunication services. With QoS, services can be guaranteed to a certain extent. Bandwidth and system uptime, for instance, are key measures of network quality. PSTN (Public Switched Telephone Network): The worldwide interconnected public circuit-switched telephone networks; also referred to as POTS (plain old telephone service) ROI (Return on Investment): Percentage of profit or revenue generated by a specific investment SIP (Session Initiation Protocol): A standard signaling protocol used for creating, modifying and terminating voice, video and data conferencing over packet-switched networks. VoIP systems incorporate SIP at the application layer to successfully integrate IP telephony with other Internet services. Some of the features of VoIP managed by SIP include call setup, routing, authentication, authorization and communication with different service providers. SMB (small and midsize businesses): Companies with as many as 100 employees are classified as small businesses. Companies with 101 to 500 employees are considered midsize businesses. TDM PBX (Time Division Multiplexing Private Branch exchange): Interconnects analog/digital telephone extensions to one another as well as to the outside PSTN network Traditional cable companies: MSOs (multisystem cable operators) that operate and own local cable TV systems UC (Unified Communications): A communications system that includes three or more of the following elements: voice, unified messaging, video, mobility, Web/data collaboration, conferencing and presence management UM (Unified Messaging): Integrates the delivery of diverse data including voice mail, , fax and video to one inbox that can be accessed from a variety of devices. Unlike a multimedia , UM also integrates voice mail from a telephone with other forms of messaging. Recipients can access messages from various devices such as computers, cell phones and conventional telephones. Voice mail box (and voice mail features): A system that receives and manages telephone messages from callers when the call is not received.

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