What is the Purpose of PBX?

December 21, 2021
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If you have been looking for the best office telephone system, chances are good you’ve been flooded with too many options. Nowadays, you have more telephony options than ever, and one of the choices you have is a PBX telephone system.

What exactly is the purpose of a PBX phone system? Is it the best choice for you?

What is a PBX system

What is a PBX system?

PBX stands for Private Branch Exchange. A PBX system is an internal phone system for businesses and other entities. Subscribers of a PBX network can call each other using a telephone connected through copper lines. Common features of a PBX system include automatic call distribution (ACD), call transferring, call forwarding, call queues, voicemail, and automated attendant.

PBX may operate through either VoIP (Voice over Internet Protocol) or analog and digital telephone lines. With this type of system, the telephone line can be split into several lines making it possible for businesses to have multiple telephone devices. Even better, calls between users of the same company are free.

Types of PBX Phone Systems (1)

What are the Types of PBX Phone Systems?

Convinced that a private branch exchange (PBX) is the best option for your business? Great! But you still have more decisions to make. Look at the different types of PBX systems available for your business.

Analog PBX Phone System

Analog PBX has been around for decades. This is the traditional, on-premise telephone system that uses a public switched telephone network (PSTN). Both phone calls and fax transmissions are performed using physical telephone lines. Analog phone lines enable calls to be made and distributed anywhere within the network. It also handles both inbound and outbound calls with external phone lines.

Analog telephone systems were invented before the birth of the internet. For this reason, analog PBX cannot handle most of the modern-day features you see in advanced telephony systems. In addition, you might need extra jacks and phone wires to support more employees as your business expands. On a better note, analog PBX is self-contained so the connection won’t falter when the internet is down.

Read more: Analog phone system

VoIP PBX System

IP or VoIP PBX is a more modern version of the PBX system. It’s equipped with the same features as that of a traditional private branch exchange while also providing additional functions. It is a more cost-effective solution than analog telephone lines since it runs through internet protocol. The audio is converted into data which is then sent to the receiver using the internet. Once sent, it’s converted back to audio for the receiving end.

Maintenance of IP PBX is less complicated. It provides users access to a unified communication feature like mobility, teleconferencing, and instant messaging. None of which a traditional PBX is capable of supporting. Not to mention, IP systems can work beyond a single location.

Cloud PBX

Cloud or hosted PBX is a subcategory of IP telephone systems. It’s connected to a VoIP provider through the internet. It requires no on-premise device other than the internet router. Physical telephones become optional because IP systems can be installed on computers and even mobile phones. This is possible because everything that needs to be taken care of is handled by the service provider on its network. All inbound and outbound calls are directed by the service provider who can either send the audio by converting it into data packets or connect the call through a public switched telephone network (PSTN).

To set up a cloud-based PBX all you need is a strong broadband connection. This solution supports multiple phone devices at once and is equipped with functionalities both for telephone and mobile devices. Lastly, it offers many modern telephony features.

On-premises PBX

On-premise PBX still makes use of the voice-over-internet protocol to handle the business telephone system. But, in contrast to hosted PBX, the servers managing both inbound and outbound calls are established and maintained on the business premises. The features of onsite PBX telephone systems are nearly the same from provider to provider. It also uses an internet connection, supports multiple devices at once, and provides the same modern-day features. Much like the hosted option, it can also connect with both telephone and mobile devices.

The downside of on-premise systems is the hefty upfront cost for installing and maintaining the system. Businesses that opt to use this system need to have a designated IT team who will perform troubleshooting and maintenance.

However, it’s important to note that cost will eventually decrease over time. This is because it guards you against fee increases. After all the initial expenses have been covered, the overall cost will gradually decrease. The main upside of using this system is that businesses have the autonomy to retain their existing telephone provider and customize the system internally.


Benefits of a PBX System

Benefits of a PBX System

The advantages of a private branch exchange vary depending on the type of PBX system you use. For instance, a traditional system may be less expensive if your business’s scalability is rather static. One advantage of legacy telephone systems is that they can be counted on to continue working when other internet-based solutions are down.

Benefits of Hosted PBX Phone Systems

Owning a cloud-based PBX phone system has many benefits. Here’s a non-exhaustive list:

  •         Plug and go set up
  •         Better scalability
  •         Supports both on-premise and remote workers
  •         Has strong collaboration features such as teleconference, instant message, and screen sharing
  •         Requires no physical device or hardware to run the system
  •         Maintenance is more streamlined
  •         Easy to install and set up
  •         Rich in features that reinforce great customer support
  •         Can be integrated with other office apps such as CRM and other external systems
  •          A good option for small enterprises with little funds to spend on phone infrastructure

Benefits of On-site PBX

Some of the most common perks of using an on-premise PBX system include:

  •         Low operational expense
  •         Greater control since you own the device
  •         No need to pay for a monthly or annual license fee or subscription fee
  •         Better capability to figure out the system’s security level
  •         You get to keep in touch with the telephone provider


What is the purpose of PBX

What is the purpose of PBX?

A PBX or private branch exchange is a switching station for telephony systems. It contains several telephone system branches.  It transfers connections to and from one system to another which connects all the telephone lines together.

Businesses can choose to use a PBX system to connect their internal devices to external telephone lines. When they do this, they only need to lease a single telephone line whilst multiple devices are using the system. Each user will have their own desk phone with a distinct number. The number used in a PBX system is not the same as that of a phone number since it will vary depending on the business’s internal numbering system. To dial a number within the same network, you only need to type in a three or four-digit number. This is commonly known as an extension. This is used to direct the call to a certain department or person in the network. The extension may also be reached by an external caller. This means that customers who are calling the company may be redirected to a specific person simply by using that user’s extension.

Related: Parts of a Call Flow

Main Technical Roles of a PBX

The main technical functions of a PBX system include:

  •         Switching between multiple phone users 
  •         Ensuring that the connection between users is in place
  •         Properly ending the connection when a user hangs up or ends the call
  •         To take note of the number, statistics, and metrics related to calls made

Practical Functions of a PBX

  •         Offer a single number that third-party callers can use to reach certain persons/departments in the company
  •         Connects and transfer calls between internal departments and extensions
  •         Provides customizable business greetings when picking up calls
  •         Records and plays voicemails from third-party callers for all of the extensions
  •        Automates call answering services while providing a menu of options from which a caller can choose for redirection to a certain department or extension
  •        Redirects call to respective employees through the Automatic Call Distribution (ACD) feature
  •         Offers call management features
  •         Allows users to place callers on hold while waiting for a specific person to be available
  •         Plays customizable tunes, music, or commercial messages while a caller waits on hold

Related: Automated Answering Services

How does a PBX system work

How does a PBX system work?

As mentioned, there are three forms of a PBX system: analog, digital, or cloud-based. A traditional or analog landline system makes use of public switched telephone networks which are becoming rarer. A digital PBX system runs through the internet which offers stronger and more modern features at an affordable price.

Different PBX solutions function in different ways. For instance, a legacy PBX system uses copper phone lines to connect incoming and outgoing calls. Conversely, modern PBX systems may either use voice-over-internet protocol (VoIP) or digital lines in conjunction with analog phone lines. With a legacy or traditional private branch exchange, copper lines are connected to the onsite system, specifically the PBX box located inside the office. This PBX box is what allows inbound and outbound calls to be directed to specific telephone devices through a telephony switch. Each device located in the business site can also be connected to a few outside lines using the same PBX box. Those outside lines are commonly referred to as trunk lines.

Alternatively, an IP or cloud-based PBX uses digital data signals instead of traditional phone lines. Cloud-based systems offer intuitive functions. Contrary to traditional PBX with a limited number of intra-office extensions and external trunk lines, IP PBX provides its users with almost unlimited access to internal extensions and trunk lines. This system is more suitable for companies that are looking for greater scalability and adaptability.

Check out our other article: How does VoLTE Work

How is PBX used by industries

How is PBX used by industries?

Utilized as an office phone system or a private phone network, a PBX system is owned and managed by the company as opposed to the telephone provider. The vendor serves only as a supplier or service provider. The way companies use a PBX varies on their business sector and current workflow.

With hotels, for instance, a unified telephone system serves as the backbone of business processes. Although more and more customers rely on mobile devices to reach and communicate with hotel staff, business phone systems remain an integral part of hospitality operations. The telephone system is widely used all over a hotel from the front desk to the back office staff to each and every guest room.

The front desk is the main communication center of the hotel. A PBX system enables guests to reach front desk personnel and vice versa. In some instances, the guest’s information including name, room number, etc. is displayed for viewing by the front desk staff, allowing the staff to personalize their greetings. Such a system also enables the front desk to create automated reminders and automate menial and recurring tasks. Depending on the PBX system, front desk agents can automatically connect calls to certain technicians (like room service or housekeeping) by enabling the digital operator feature. This way, front desk agents can tend to other requests or inquiries.

The back-office staff is also key users of the telephone system. Departments such as sales and customer service must have an exclusive extension number. It’s also good to have access to digital voicemail so that voice messages can be transcribed to text and sent through email to the respective employee. Hospitality PBX also can take care of faxes, allowing your staff to collect hotel bookings from intermediaries. Lastly, employees can put up a “do not disturb” function so that phone calls are automatically routed to other staff.

Hotel guests benefit from having a robust telephone system in several ways. Obviously, they have the in-room telephone that offers a direct connection to the staff. Certain PBX systems also allow multi-lingual messaging. But what’s good about it is the ability to integrate with other systems. Legacy PBX only performs the most basic telephone features such as voice calls and voice messages. However, using a modern PBX enables hospitality companies to build a communication infrastructure that adapts to guests’ needs. For example, onsite communication systems can be extended to accommodate the guests’ mobile phones. Other practical integrations include inputting PMS codes from the rooms to automatically update the room’s availability and status. Lastly, billing can be automated using the telephone infrastructure.

Want to learn more about customer call flow? Check out our article: Customer Service Process Flow

How do you set up a PBX phone system

How do you set up a PBX phone system?

PBX systems are very easy to configure and operate, and also offer remarkable support. Depending on the PBX system you have, the installation and setting up process can be quite cumbersome. However, certain PBX providers offer installation support which helps with programming the system and alleviates some of the difficulty for your IT team.

Setting up an Onsite PBX System

Installing an on-premise PBX system may include the following steps:

  1.   Find an area in your office building where the key service unit can be installed. The key service unit (KSU) is the brain behind your telephone system. It will be connected both to the main telephone line as well as the individual phone units.
  2.   Mount the KSU to a wall using the mounting kit it came with.
  3.   Insert the circuit cards into the key service unit. The cards are usually used to power voicemail so each card usually has a dedicated slot. The slots can be seen on the side of the unit; however, some KSU devices require you to take off the casing before you can plug the card.
  4.   Plug the telephone cords to the service unit to connect the phone lines. This will enable the dial tone given by your telephone vendor.
  5.   Provide a telephone line to each of your staff’s devices to connect to the key service unit.
  6.   Turn on the KSU by plugging it into a power outlet. Make sure that the system lights are lit.
  7.   Power on your staffs’ devices and wait for the system light to turn on. When it is turned on, the device has successfully connected to the KSU.
  8.   Configure the telephone system by following the programming and set up guide given to you by your PBX provider. The guide should aid in coding the unit. The process for each PBX system depends on the vendor and the model you choose, so be sure to follow the instructions carefully.
  9.   Run a test to see if your PBX is working. Try placing and answering a call when the installation is done.

Setting up a Hosted PBX System

Setting up a cloud-based PBX tends to be much easier and less complicated. The drag and drop feature of many IP PBX systems enables anyone who knows how to open a computer to set up their very own system. Depending on your provider it may only take the following steps:

  1.   Acquire a VoIP-powered phone. This is optional since IP systems often come with a softphone that can be installed on a computer.
  2.   When you have your device ready, sign up with your provider’s system to acquire a telephone number. The step will vary upon signing up on the vendor’s system.
  3.   After getting your number, proceed to configure your dashboard and give your new call system a name.
  4.   Build your call flow system. The steps to be taken will depend on your provider. Generally speaking, you can drag and drop certain elements and connect them with one another. Since a hosted PBX is a live system, the phone system will be ready for use the moment you save the changes.
  5.   Connect your inbound phone with your hosted PBX phone. In doing so, your IP phone will ring whenever someone calls your inbound phone.
  6.   Register your physical phone with the system provider. When doing that, you will need your SIP host, SIP username, and SIP password. Each IP phone will have its own way of inputting the SIP data.
  7.   After registering, you can place and answer calls.

Read more: Why is Call Flow Important

Does PBX require the internet?

Both VoIP systems and IP PBX are significantly dependent on your internet connection. Before you can integrate any of the two aforementioned systems, you must first ensure that you have enough bandwidth. The signal also needs to be strong enough to handle all inbound and outbound calls.

If the internet is a problem, perhaps you could do with an IP PBX. With this system, you can leverage gateways to your phone line to utilize the system. However, fast internet would still be a strong asset.

Further Reading: How to Connect Phone to Ethernet


Which is better, PBX or VoIP

Which is better, PBX or VoIP?

Private branch exchange (PBX) and voice-over-internet protocol (VoIP) are just two different ways of achieving the same end result – to place and answer telephone calls. Legacy telephone systems have been serving businesses for decades and are mainly used by companies that want an exclusive communication system. VoIP is a more recent discovery and needs the internet to function. When choosing which system is better, it helps to consider the advantages and disadvantages of both systems. Most system benefits are contingent on your situation and end goal.

System Connection Protocols

The major distinction between the two systems is the way they connect users. Essentially, a PBX system includes a manual control panel, a computer server, and several telephone lines which are connected to a public network. The individual telephone lines are connected to a switch system that distributes calls to each line. A VoIP system is significantly more simple. It merely transfers sounds and only requires a good internet connection and a device, which could be a computer or a VoIP phone.

Potential Equipment Options

Another important difference between PBX and VoIP is the type of device you can use to place and answer calls. Legacy PBX systems can only handle standard analog devices. These devices can either be corded or cordless for hand-less interactions. With IP systems, you have several equipment options. You can use an IP-powered desk phone to replicate the experience of traditional phone systems. Much like the traditional option, VoIP phones can be wired or wireless. Another option is a softphone. Depending on your provider, you might get a complementary softphone when you purchase their product. This is basically an application you can install on a computer or a mobile device, allowing you to place and answer calls.

User-Friendly Configuration

In terms of calling experience, IP systems have better configuration capabilities than PBX. Since IP systems are running directly from a computer, programming is much easier even with a lack of technical knowledge. Regardless of whether you are working with a small-scale system or a bigger-sized program, anyone from the team can make changes using the online interface. IP systems can be configured to direct calls to one or several numbers based on a given condition. Call transfers can be made depending on the incoming number, time of the day, or day of the week. The system can also be set to allow voice-to-text transcription. A traditional PBX, one that isn’t powered with VoIP, may be able to route calls. However, it doesn’t have the flexibility that VoIP offers. Configuration for PBX systems is done by an administrator with strong knowledge of the system, instead of individual users.

Factors Affecting Performance

Since IP solutions are run through the internet, your system is restricted to the amount of bandwidth given to you by your internet provider. Additionally, cable connections are often shared by more than one user, which can badly affect the call quality if there is a high number of simultaneous connections. In many cases, IP systems are affected by several factors over which users have no control. Conversely, PBX systems are used solely by a single entity so there’s no need to worry about external conditions. The overall performance of a PBX system is only contingent on internal factors including the number of individual users and the number of lines.


Something to Keep in Mind

Something to Keep in Mind

Although traditional PBX systems have served businesses and continued to evolve over the years, Unified Communications as a Service (UCaaS) is the future. These systems utilize IP technology allowing users to place and receive calls from anywhere in the world using the internet. The good thing about UCaaS is that it supports multiple communication channels. Contrary to traditional phone systems where the main focus is to make calls and advanced features incur added cost, UCaaS combines several if not all modern-day functions in one app. This means you will only pay one subscription fee. Both small and large enterprises are better off with the scalability, convenience, and cost-efficient capabilities of IP systems while still maintaining excellent-grade security. 

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