Tech Peak » What is IP PBX software and How Small Businesses Can Leverage It?

What is IP PBX software and How Small Businesses Can Leverage It?

by marypeck
IP PBX software

Voice Over Internet Protocol (VoIP) has transformed the business landscape with greater connectivity and convenience for communication and collaboration. The global market for VoIP is expanding dramatically and is expected to be worth $194.5 billion by 2024. Small and medium-sized businesses are also investing heavily in IP PBX software, a product application of VoIP to enhance their customer service. IP PBX phone systems are accelerating the pace of digital transformation through value-added functionalities for business communication.

The IP PBX system is the first step to implementing unified communication for businesses. If you have been rethinking how to upgrade your business phone system, this blog hands you all the essential information on new-age IP PBX software. Let’s delve into the definition, types, and advantages it provides for small businesses.

What is IP PBX software?

An IP PBX system is similar to a traditional private branch exchange system with greater capabilities. It facilitates voice communication over the internet along with added collaboration aids. With features like call routing, screen sharing, call transfer, call parking, etc, this telecommunication system successfully cuts down guesswork in internal business communication. Moreover, it can be further used for external communication by integrating with SIP trunking or hosted servers.

IP PBX software is a well-known software-as-a-service (SaaS) product that serves as a central piece of the VoIP phone system. It can be configured on smartphones, IP phones/softphones, desktops, laptops, tablets, etc. This eliminates the need for investing in infrastructure, wiring, and hardware, unlike conventional landline phone systems.

Types of IP PBX software

When switching to an IP PBX phone system, the next most important choice is the nature of the phone system which can be classified into the following.

  • On-premise IP PBX system: 

All the servers are installed within the office premises. While it does provide greater flexibility for employees, compared to the landline system, the maintenance and technical issues have to be taken care of on-site. It requires an in-house IT team for resolving any technical issue.

  • Virtual phone system:

It comes in the form of IP PBX software and does not require any on-premise infrastructure. All the data is stored on servers provided by the service provider. Businesses do not require a dedicated IT team as the service provider offers technical support. It facilitates communication within the office premises unless integrated with SIP trunking.

  • Hosted IP PBX system:

This phone system is similar to virtual IP PBX software. The only difference is that the phone system is integrated into cloud technology. It offers greater mobility and flexibility as employees can access, use and manage it from anywhere, anytime. Such a phone system allows communication within and beyond office premises.

Let’s sum up the categorization in the form of a chart.

Parameter On-premise IP PBX  Regular IP PBX Hosted IP PBX
Technology used VoIP VoIP + SIP trunking (optional) VoIP + Cloud
Infrastructure Physical onsite server Softphones/ internet-connectable devices Internet-connectable devices
In-house IT team Required Not required Not required
Communication boundaries Can be availed only within office premises Can be availed only within office premises (without SIP trunking) Can be availed from anywhere
Security Greater security as servers are installed on-site Excellent security with security compliances Security depends on service provider security compliances and choice of cloud server


7 Benefits of IP PBX software for small business

IP PBX solution is the latest business communication tool that has driven over 15% accelerated growth for SMBs. Small businesses can utilize this phone system to achieve seamless business communication and collaboration. Here are 7 ways how the IP PBX phone system supports small businesses.

1) Cost-saving opportunities

The call costs are automatically reduced when you switch from a landline to an IP PBX system. Moreover, it eliminates the cost of wiring and hardware. It also reduces operational costs as well as maintenance costs. The service provider takes care of all the technical aspects that enable businesses to save the expenses of hiring IT professionals. Therefore, small businesses can save significantly by switching to an IP PBX phone system.

2) Ease of scalability

Unlike the traditional phone system, you do not need to wait for days to add a new user. Small businesses in the growth phase can leverage the IP PBX system to expand their communication capabilities within hours or even minutes. It provides businesses the flexibility to scale up or down as per their business requirements. All you need to do is notify the service provider or do it yourself through a specified web interface.

3) Greater employee productivity

An IP PBX software implements automation of certain mundane tasks so that the employees can focus on their core duties. With third-party integrations, especially CRM integrations, employees can easily access the right information when required. It not only makes the lives of employees easier but also eliminates the information siloes boosting overall productivity.

4) Improved customer service

While the traditional PBX system limits the functions to internal communication, the IP PBX system opens up the scope of integrating external communication. An IP PBX software integrated into the cloud or SIP trunking enables businesses to execute outbound and inbound calling. It provides businesses the opportunity to serve customers through the same solution they use for organizational communication.

5) Remote work capabilities

An IP PBX solution is also called a modern business communication phone system as it provides employees the mobility and flexibility to work from home or anywhere. As most businesses are adapting hybrid and remote work models, this tool comes in handy to aid communication and collaboration among teams. A hosted IP PBX system is the best choice in this scenario.

6) Enhanced security and privacy

Businesses are realizing the growing importance of data security and privacy. Therefore, when handing over the business communication responsibility to a third-party vendor, it is crucial to look into the security they provide. Most IP PBX software providers ensure security compliance along with multiple security measures such as encryption, regular security audits, etc.  It raises security standards so businesses can protect their business and customer privacy.

7) Greater reliance on data

Data has become the key driver for strategic decisions. An IP PBX software comes with advanced data analytics and reporting features so that businesses can leverage data-driven insights to improve their product, workflow, and customer service. With analytics, it becomes simpler to evaluate employee performance in the light of KPIs. Therefore, it helps businesses drive efficiency by empowering them with data-driven actionable insights.

Also Read: VoIP Software Market Revenue To Cross $30,000.0 Million by 2025

Limitations of IP PBX phone system

There is no denying that just like every other system, IP PBX software has some limitations.

  • Uptime depends on the internet and power supply
  • Call quality can become inferior in case of low internet bandwidth or unstable speed
  • Adoption issues may occur as it requires a few technical skills
  • Extra expenses may follow if more add-on features are included
  • The package may include features that your businesses may not require

Tailoring IP PBX solution for small businesses 

An IP PBX phone system is an affordable and scalable solution that enriches businesses of all sizes. However, when it comes to small businesses, the wide range of features may seem to be an excess expense. It is essential to understand your business needs and choose a service provider who can tailor the solution for your business. HoduPBX is the best IP PBX phone system that caters to the needs of small businesses to the T. Visit our website to check out more about HoduPBX.

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