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Hosted PBX (Private Branch Exchange) is a great example of how the digital era has transformed the way businessescommunicate. Remember the clunky stationary phones that tied you to your office desk? Andhow it took a customer service call to dispatch a technician every time someone moved into adifferent office?Thankfully, cloud-based internet phone systems, which make hosted PBX systems possible, arechanging all that.Voice over Internet Protocol (VoIP) phone systems offer many advantages over their landlinecounterparts. Today’s employees expect their communications tools to work seamlesslywherever they’re working–in the corporate office, at home, or on the road. Workforcemobility is essential for survival. Hosted PBX provides both small and enterprise-levelcompanies a platform that is cost-effective, easy to set up, and can easily scale as yourcompany grows. This guide will explain what a hosted PBX phone system is, how it works, howit can help your business, and how to switch from a traditional PBX system to a hosted PBX.

1. What is hosted PBX?

Hosted PBX is a cloud-based, remote-operated business phone service. It is sometimes referredto as unified communications as a service, or UCaaS for short. Traditional PBX systemsrequire businesses to own and maintain their phone system through a call controller orserver. Hosted PBX systems deliver business phone solutions through their internetconnection to the cloud. The cloud connectivity makes it possible to manage and maintain thehosted PBX phone system virtually.While hosted private branch exchange (PBX) systems are tailored for businesses rather than home phone use, hosted PBXsystems are similar to the home phone systems that internet providers have offered foryears. They both provide communication through VoIP delivery. But hosted PBX systems offeradditional benefits that most individual residents don’t need.Hosted PBX DiagramHosted PBX Diagram

2. How does hosted PBX work?

Unlike traditional PBX systems, which transfer a signal by landline, hosted PBX phone systemscarry the user’s call signal across the internet digitally on their VoIP-connected device inreal-time. There is no noticeable delay. Here’s how it works:
  • Your business connects to your PBX host.
  • Users can make calls from their VoIP business phone, computer, or mobilephone.
  • The VoIP device converts an analog voice input into digital packets to forman audio signal.
  • The PBX system routes the call through the internet to the serviceprovider.
  • The audio signal is converted back to match the destination format so thatthe person on the other line can hear it.
  • The call is then delivered.
While it may sound technical at first, the call-processing mechanism is essentially the sameas it has been since the invention of the telephone. The main difference is that the hostedPBX call is delivered via the internet instead of over a copper phone line.

3. What’s the difference between traditional andhosted PBX?

We’ve just explained the technical details, but you’ll want to know the advantages of ahosted PBX system. Here are the tangible markers that separate traditional and hosted PBX.

Traditional PBX:

  • Requires on-site equipment and hardware that must be maintained in part by thebusiness.
  • Does not allow employees to connect on their mobile devices, restrictingworkforce mobility.
  • May not integrate with your other company software, like customer relationshipmanagement (CRM) tools.
  • Costs more than hosted PBX.

Hosted PBX:

  • Eliminates the need for on-site equipment or maintenance, freeing up space,time, and resources.
  • Automatically updates to the most current software versions available, savingthe hassle and cost of continually chasing upgrades.
  • Empowers employees by enabling them to work outside the office and stillconnect to a single phone system.
  • Delivers superior signal quality for your business and customers.
  • Merges with existing company software like CRM, giving your staff immediateaccess to customer information, thereby improving customer service.
  • Is less expensive than traditional PBX systems.

4. How can hosted PBX help your business?

Even a general overview clearly demonstrates how hosted PBX is better suited to your businessthan traditional PBX systems, but let’s take a more in-depth look at what you can expect to get from yourhosted phone system.

Features and benefits

Remote resolution

Neither budding small businesses nor enterprise-level organizations have time to worry aboutmanaging their phone system — which is exactly why the unified communication as a service(UCaaS) industry exists. By switching to a hosted PBX system, your business can enjoy themost up-to-date software without any installation on your end and can eliminate the time,spatial, and financial drains of bulky equipment and ongoing maintenance.

Workforce mobilization

Whether they’re on-the-go sales members, mobile warehouse managers, or a customer-supportstaff member who works remotely, modern-day employees are no longer restricted to theoffice. As the trend toward a remote working environment continues, enabling your team towork on the move may prove an essential part of your company’s growth. Hosted PBX allowssales members to take calls from anywhere instead of having to call customers back and risklosing clients, and it can send calls to supply managers on both their desktop and mobiledevices to ensure messages are delivered. Increased mobility makes for happy employees andmore satisfied customers.

Platform consolidation

Traditional PBX requires multiple communication platforms to keep all departments connected,which can sap corporate efficiency. Choosing among the various video conferencing tools,messaging systems for desktop communication, and email can be a headache, not to mentionexpensive. With hosted PBX systems, you can stay in touch with your team with statusupdates, video conferencing, audio conferencing, voicemails, emails, or team text messaging, allfrom a singleplatform. With all your communication channels in one place, you’ll be able to keep everyoneon point.

Improved reliability

VoIP phone systems not only deliver a unified communications platform, but they also reducethe risk of dropped calls. Ooma’s hosted PBX systems boast multiple redundancies and routeto seven datacenters worldwide(San Jose, Chicago, Vancouver, Toronto, London, Tokyo, and Melbourne), ensuring your callsare dependable no matter where they are made. As a result, your signal reliability won’t behindered by high internet traffic or susceptible to local outages and disturbances. Everycall counts in today’s business world. Catch them all to maximize your profits.

CRM integration

Whether you’re using Salesforce, Zendesk, or some other software, chances are you’re alreadyusing at least one hub to manage your customer data. Traditional PBX functions as its ownentity, neither providing nor receiving feedback from CRM resources. This means customersupport staff must spend valuable time tracking down information, like phone numbers andaccount records, before they can offer any help. Hosted PBX systems can be integrated into existing CRMsoftware, giving support representatives and sales members the data they need tosolve customers’ problems sooner and become more productive.

Improved customer support

Customers expect and deserve quality customer service. Traditional PBX offers customerslittle more than the frustrating option to leave a voicemail if the person they’re callingisn’t available. Hosted PBX systems deliver call center solutions gearedtoward improving customer satisfaction. Skills-based routing directs customers to the personwho is most likely to help them and increases first-call resolution rate. If callers getdisconnected and call back, intelligent reconnect can automatically transfer them back tothe person they were talking with or move them up to the top of the queue. Innovativesupport solutions like these will make customer experience an asset, rather than spark asocial media nightmare.
While this list is not exhaustive, it offers a solid overview of the values of a hosted PBX.

5. What is the future of hosted PBX?

Both the popularity and capabilities of hosted PBX systems are expected to soar along withtechnological advances. The 6-yearCompound Annual Growth Rate of hosted PBX platforms from 2018–2023 is forecasted tobe 14.9%, with a market share that is likely to increase. Here are a few reasons cloud-basedbusiness communication systems should penetrate the business phone market even further:
  • Asia-Pacific startups. As Asia-Pacific countries develop,new businesses will sprout up— and these startups won’t have the spare capital or spacefor traditional PBX phone systems. As a result, hosted PBX use is likely to spreadglobally, translating into greater market value and more data center ubiquity — andimproved signal reliability will spread along with it.
  • Market segmentation. Hosted PBX is useful for any companyrelying on a business phone system, and the uses for the technology are as diverse asthe industries that employ it. Healthcare, technology, finance, and government are justa few examples. But any industry that depends on rapid response times and qualitycustomer service is a good candidate for hosted PBX systems.
  • Remote workforces. COVID-19 necessitated greater use ofremote work and that trend is likely to continue. Remote work can not only be offered asa benefit to today’s modern workforce, but an increasing number of companies are hiringemployees across multiple states — and even countries — and asking them to telecommute.To maintain organizational unity, employers will have to create a digital environmentthat feels enough like a workplace to keep everyone connected. If businesses are goingto go digital, hosted PBX will have to be part of the solution.
As much as these trends show the expected rise in hosted PBX usage, they only account forcurrent economic conditions. The digital transformations that could follow unexpectedtechnological breakthroughs make the technology even more exciting, leaving the onlyquestion left to be answered: “How does my company make the switch?”

6. How do you convince your company to move to ahosted PBX?

Proposing a switch in your business phone system to a C-suite executive can be daunting. Keepin mind that board members and executives think in terms of statistics and growth, so speaktheir language when pitching a transition from traditional PBX. Use this strategy to guide you through theprocess:

STEP 1: Planning

Before you approach your C-suite executives, do your research. Compare all the costs involvedin keeping your traditional PBX versus moving to a hosted PBX system. Gather feedback fromcustomer support and sales members that shows how your current phone system might be drivingclients away. Do customers complain about long hold times and difficulty connecting with theright person? Share this information with your execs, and they may jump on board faster thanyou expect.

STEP 2: Rehearsal

Aside from being a hassle, logistical speedbumps create downtime and cost valuable resources.Some SaaS products may result in delays and steep learning curves, but Ooma’s cloudcommunication customer support consultants can commit to your company’s successfultransition and ensure that implementation takes place without disrupting daily operations.Ooma provides an assigned guide — also known as a Success Hero. Ooma support includescall-testing to make your customer service team feels confident, and video call rehearsalsthat prevent embarrassing lag in front of your board. Your Support Hero will take everymeasure to make your hosted PBX system fully functional. After all, that’s what hosted PBXis all about.

STEP 3: Briefing

Keeping your board and team in the know about your transition is key. Informing staff ofupgrade timelines and software transitions is as simple as a brief for most smallbusinesses. Larger organizations can assign this role to their IT managers and call centersupervisors. No matter your company’s size, the transition to hosted PBX will be muchsmoother if everyone is on the same page.

STEP 4: System launch

Once all needs have been identified and the entire team is informed of the change, all that’sleft is to make the switch to your new hosted PBX system. Your Success Hero will take youfrom start to finish. Depending on your business, it may be less disruptive to youroperations if the launch is conducted on the weekend or at night.No matter what time of day you make the switch, the important thing is that every member ofyour team, from the top down, understands how hosted PBX will optimize your businessoperations. From a worry-free platform and a more mobile workforce to customer supportimprovement and CRM integration, hosted PBX delivers a low-cost, modern-day solution tobusiness communication. Ooma brings teams together and empowers each member so that you canspend time building your business. Contact our consultants today, and we’ll showyou what hosted PBX systems can do for your business.

Fluidly move between the office or the road using Ooma unified communicationssolutions.

Talk to an Ooma Enterprise unifiedcommunicationsexperttoday.

Call 866-467-6935

2021 Visionary Spotlight Awards Channel Vision Winner

Ooma received a 2021 Visionary Spotlight Award in the hosted PBX category from ChannelVision for our Continuous Voice technology.

Continuous Voice, a feature of Ooma Connect, provides a wireless internet backup for VoIP phone calls to improve audio quality and avoid dropped calls if your primary internet fails.

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Key Calling Features
Unlimited Calling in U.S., Canada, Mexico, and Puerto Rico
Low International Rates
911 Service
FREE Number Transfer
One FREE Toll-Free Number 500 minutes of inbound calls per month 500 minutes of inbound calls per month 500 minutes of inbound calls per month
Main Company Number
One Direct-Dial Number Per User
Easy Installation
Administration and Support
User Management Portal
Multi-site Admin and Management
Bulk CSV Upload for IP Phones
24×7 Customer Support
Call Management Features
Virtual Receptionist
Virtual Receptionist with Unique Greetings, Menus and Actions
Analog Fax Machine Support
Call Park
Call Park for Desktop App
Music On Hold
Transfer Music
Extension Dialing
Extension Monitoring
Call Forwarding
Virtual Extensions
Voicemail
Call Transfer
Flexible Numbering
Company Directory
Call Logs
One Conference Bridge per User
Forward Calls During Device Outages
Virtual Fax
Distinctive Ringtones
3-Way Calling
3-Digit Extensions
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Intercom
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Paging Groups
IP Phone Paging
Enhanced Call Blocking
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Hot Desking
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Shared Voicemail Boxes
Call Screening
Mobility Features
Desktop App for Windows Yes (without calling)
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Voicemail-to-Email Audio Files
Extension Dialing to App
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