What Is a PBX: Definition, Types, Benefits for a Business

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If you’ve been looking for an optimal phone system for your office, there is a chance that you’ve come across the term “PBX.” If you’ve also been thinking “what is a PBX?”, this article’s just for you.

What Is a PBX System?

PBX is short for Private Branch Exchange. The term describes a private telephone network used within a company, allowing employees to make calls internally and externally. Such a system utilizes different hardware components (sometimes software as well) to provide instant connectivity.

PBX systems came to replace traditional physical phone lines (PTSN), allowing more phones to be included in the network and free calls within it. On top of that, new systems now include plenty of advanced calling and routing functionalities, such as transfers, queues, interactive voice menus, and more.

These telephone systems are specifically designed to meet the needs of modern businesses and can be customized depending on the company.

What Is an IP PBX, and How Does It Work?

An IP PBX can be described as a more evolved system. Traditionally, PBXs had their own proprietary phones, which tied them to a specific location. But now, with an IP PBX, it’s possible to break away from the existing system and vendor and re-use the hardware.

The system consists of:
  • A server
  • Phones
  • A gateway

The client registers with the server, and when users want to make a call, they’ll use the IP PBX to establish the connection.

There is merit to saying that an IP PBX is VoIP-ready—it’s not reliant on legacy PSTN lines and is moving towards VoIP. We’ll cover the topic of “what is VoIP PBX?” and other related points shortly.
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Types of PBX Phone Systems and Their Features

Before integrating a PBX system into your company, research the different variants based on their mode of operation. This will ensure that you have the right system to communicate seamlessly.
Analog PBX, or legacy PBX
Uses regular telephone lines for calls. The only meaningful difference between this system and other land-based phone systems is the PBX box. What is a PBX box? It’s a piece of hardware that enables incoming calls to be directed to phones within the premises. So, your company will technically accept calls from the box and forward them via legacy phone lines. 

The system is straightforward, with no advanced tech involved. However, it involves substantial upfront costs because each line must be laid and paid for individually.

Benefits of a PBX System

With the types of systems out of the way, let’s look at key benefits that all types of businesses can enjoy.

  • Centralized Control
    You won’t have to deal with numerous phone numbers. Your clients, business partners, or vendors will need to know one number, the rest of the routing tasks will be done internally. Also, if one line is occupied, the rest of the system will still be available for calls.
  • Flexible Call Routing
    No matter where you or your employees are, you won’t miss a call. Here are just a few possibilities in which a call is forwarded to the next person available (or to the right person):

    1. If one staff member is away from their desk
    2. If the call for a certain line is failing
    3. If the call was picked up by the wrong department
    4. If a customer needs help in another language
  • Automation
    Remain accessible to other people even during busy hours. Suppose you receive a large volume of calls; in that case, you can enable the automation feature and improve the caller’s experience. These functionalities can be set up in advance. For example, set up an auto-attendant to greet the caller and ask them to “press 1 for sales,” “press 2 for customer support,” etc.

Can a Small Business Benefit From a PBX System?

The final section of this guide will cover the specific benefits that a PBX brings to SMEs. Consider these as additional benefits on top of the ones listed above. 
More Cost-Effective
Equipment-intensive systems and landlines are expensive to buy and install. Even if you already have the cabling, equipment, and infrastructure needed for an on-premise phone system, it also won’t be cheap to maintain. 

With a PBX, especially off-premise varieties, you just connect to the third-party systems. For example, Selmo’s virtual PBX allows you to dial directly from your browser, which saves not only money but also time for integration. Besides, a subscription is much cheaper than a set of landlines.
Lets You Work From Anywhere, On Any Device
You’re not tied to the local network in your office. As mentioned, a virtual system can be accessed remotely. As long as you have a stable internet connection, you’ll be able to receive and make calls wherever. 

Or imagine one of the phone lines failing—this will mean that the phone number (or the phone extension) will be unavailable. That will not be the case with PBX phones.
Gives You More Insights With Call Analytics and Real-Time Data
A PBX system can provide you with advanced calling solutions to analyze data, make decisions, and share information about your calls.

You can listen to conversations between your sales representatives and prospects, measure average call statistics, or pull data about callers in real-time. All of the data will be displayed in your dedicated workspaces.
Integrates With Other Software You’re Already Using
In the spirit of advanced data analytics and connectivity, you can consolidate even more information in one place. Other systems utilized for your business processes, like CRMs and ticketing apps, can be merged with your calling software.

For instance, the next time a caller reaches out, the CRM app will bring up all their past interactions with your company.
Facilitates Scaling and Expansion of Business
As your business grows, you may need to expand your team and move into a bigger office. But a PBX grows with your company without requiring extra hardware and infrastructure. 

In some types of systems (pay-per-seat), you may be charged a higher subscription, but it’s nowhere near the price of laying new lines and buying new phones. Save the resources here to expand your business more productively.
Hopefully, you’ve selected the type of PBX that will satisfy all of your telecommunication needs. As long as you make the right choice, you’ll be able to enjoy all the business benefits mentioned in the article. 

And remember: efficient communication is the foundation for your operational efficiency and revenue.

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