In-House PBX+SIP Trunking vs. Hosted VoIP

What’s the Smarter Phone System Investment?

When it comes to making wise investments, organizations need to borrow a page from the consumer playbook and “get the most for the least.” This doesn’t necessarily mean getting the cheapest price. It simply means that businesses need to assess their needs, conduct marketplace research, evaluate potential solutions, and select the one that delivers the most long-term value.

However, just like consumers, sometimes businesses can mistakenly head in the other direction: getting the least for the most. And since this unfortunate fact doesn’t come to light until after a purchase decision is made, businesses in this situation are forced to absorb the excess costs or purchase a replacement. Either way, it’s costly, time consuming, risky and frustrating.

Here’s what the above has to do with business VoIP phone systems. Some businesses are led to believe that they’ll get the most for the least by purchasing a low cost in-house PBX system, and then purchasing relatively inexpensive SIP trunks (these are telephone line trunks delivered over IP using the SIP protocol, and are necessary for an in-house PBX system to function).

Yet, like some ideas that sound good in theory, this is typically NOT a wise money-saving strategy. Here are the key reasons why:

  • Deployment Costs

One of the primary cost advantages of a VoIP phone system vs. a conventional landline hosted system is that businesses can use a single voice/data network vs. purchase separate networks.

However, this is often not the case when using an on-premise PBX with SIP trunking. To prevent data network degradation— and angry end users — many businesses are obliged to purchase a separate internet connection. This can cost anywhere from hundreds to thousands of dollars a year, depending on the number of users.

  • Training Costs

It goes without saying that a VoIP phone system will only generate efficiencies and advantages if people use it! However, end user training isn’t included in the on-site PBX+SIP trunking strategy. Businesses must purchase this separately from a consultant or telecommunications firm.

However, this isn’t a cost category with hosted VoIP phone systems. Training is included in the package, because a phone system that isn’t being used properly and fully isn’t an asset — it’s a liability.

  • Support Costs

Perhaps the only thing worse than having unhappy IT staff, is paying for unhappy IT staff. Yet that’s the scenario that many businesses face with on-site PBX+SIP trunking, because instead of completing the tasks in their job description, IT staff are bogged down and held back by endless support requests, software upgrades, configurations, and so on.

As such, businesses must pay higher labor costs (i.e. their IT staff is less productive and/or they must hire additional IT staff), or they must purchase a pricey maintenance contract.

With a hosted VoIP phone system, all support — including handling end user inquiries and performing system upgrades/updates — are covered by the off-site Solutions Provider. And since hosted VoIP phone system deployments use managed routers, many system configurations and changes can be made remotely when the business is closed.

  • Electricity Costs

On-site PBX systems need greater computing power, both for regular operation and for cooling. They also need larger uninterrupted power supply (UPS) units to run the system in the event of a power outage. This translates into hundreds or thousands of dollars a year in additional electricity costs.

With a hosted VoIP phone system, power requirements are minimal. Only Power over Ethernet (PoE) switches and modems/routers need power, along with a relatively smaller network of uninterrupted power supply units.

The Bottom Line

When businesses do the math and add up all of the costs of ownership — both direct and indirect — they typically arrive at a surprising conclusion: the money they expected to save by going with on-site PBX+SIP trunking is not just offset by the added expense, but eliminated. In other words: they would have achieved their goal of “getting more for less” by choosing a hosted VoIP phone system from day one!

To learn more about your options, and to get a clear and accurate understanding of the REAL costs of on-premise PBX+SIP trunking, contact the DigitalPhone.io team today at (336) 560-4400. Your consultation with us is free.

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