Phone Systems buyer's guide - Telephone Systems


Communication is the driving force behind all businesses, small or large. Your telephone system is a key element in providing both effective communications within your organisation and to the outside world. 
The telephone is often the easiest way to reach your customers and suppliers. It should also be the easiest way for them to reach you. You want important business calls into your office to go to the right person and be answered within service levels that you define and can monitor. So you can see that a business phone system is one of the most important purchases your office can make.

The telecommunications industry is not renowned for communicating well with someone who wants to buy a telephone system. It uses its own unique jargon together with the tendency to talk about the exciting technology used rather than focusing on the benefits for your particular business. The result is confusing except for the most technically savvy purchaser.

There are many factors to consider when buying a business telephone system. For example, you need to get enough capacity for your current needs while planning for growth. You will need to understand the features that are available on modern phone systems and choose a phone system that supports all the features your business requires. And you will need the right telephone network services (provided by Telcos like Telstra or Optus) to deliver the solution you have specified.

Managing all of those factors while keeping costs down can be a huge challenge, but we can help. This Buyer’s Guide will help you understand the types of decisions you need to make by explaining:

  • What a telephone system is, the different types of technology available and their advantages and disadvantages.
  • The key benefits of today’s telephone systems and applications.
  • The relationship between manufacturers, telephone systems sales and service agent (also referred to as telephone systems dealers) and network providers.
  • What you should take into consideration when buying a telephone system.
  • The right telephone network services to get the most out of your telephone system and ways to reduce the total cost of ownership for the solution you have specified.

Types of Commercial Phone Systems

A business telephone system comes under many names: PABX or PBX system, key system, a VoIP or converged system or a hosted/Centrex solution. While the delivery technology differs for each of these products (although in some cases not significantly) as well as some of the features and applications, all of them provide the infrastructure to make calls to customers through the networks of carriers like Telstra and Optus, direct calls efficiently into your organization as well as optimizing the internal communication within your business. 
A fourth type of phone system uses Voice over IP (VoIP) technology to route your internal calls over data networks, instead of traditional phone lines. For some businesses, VoIP systems can provide significant cost savings and other benefits.
Read more in our VoIP Phone Systems Buyer’s Guide.

PABX or PBX systems

Traditionally PABX systems catered for companies with a large number of employees and provided more advanced functionality than key systems. PABX’s evolved from the telephone exchanges used by the telephone carriers like Telstra and Optus and required dedicated equipment rooms to house the central switching equipment. In line with developments in computer technology, the functionality of PABX has increased dramatically while the size of the main equipment has declined and are now rack-mounted with a company’s IT servers and associated equipment.

Key Systems

Key Systems were designed for companies with up to 50 employees. While a key system had all the core business telephony functions, they did not have some of the sophisticated applications such as ACD or hospitality. On the other hand, the proprietary telephone handsets used on key systems were easier to use with dedicated keys for common functions like hold and transfer and LEDâ??s to indicate incoming lines and if other users on the system were on the phone.
Today the difference between key systems and PABX is blurred with the major manufacturers offering digital hybrid systems which can be customized to provide either PABX or key system functionality as required and these hybrid systems meet the specific requirements of 99% of businesses. PABX still dominant the large corporate environment where more than 1000 extensions are needed and companies that require their telephone system to integrate with specific and complicated applications like large call centres or hospitality front-office applications. 

VoIP Systems

These systems use Voice over IP (VoIP) technology to route your calls over data networks, instead of traditional phone lines. Today you can purchase either pure IP systems that have evolved from the developments of IT companies like Cisco or converged solutions that have been developed by the leading manufacturers of telephone systems and allow you to use both the legacy networks of the telephone carriers (eg PSTN, ISDN) while also managing voice and data applications on the one network using IP technology.
See our VoIP Buyers Guide for more information.

Installation and After Sales Support for Telephone Systems
All telephone systems require professional installation and maintenance. For legacy connections, all outside telephone lines must connect to the KSU or PABX cabinet, as well as all internal extensions. For IP solutions the appropriate connections into your data network are necessary. Unfortunately, the network design for VoIP systems, and the configuring and wiring for legacy phone systems can be nearly as costly as the phone system hardware.

Dimensioning a Telephone System

When buying a phone system, a primary concern is to make sure that the system is the right size for your office. Knowing your requirements in advance will help you negotiate with vendors. There are two main factors that will determine the size of the office phone system you need:

  • Lines, or Trunks lines, indicate the total number of outside phone lines used by the company.
  • Extensions, refer to every device within the company that needs to connect to the phone system. Most of the extensions will be for telephones.

Fax machines, credit card terminals, modems, and any other equipment that require a phone connection must also be connected through the phone system.

Indicating the size of a phone system

One way of indicating the size of a system is as a combination of lines and extensions. For example, a 6 x 16 system accommodates up to 6 lines and 16 extensions. This approach is used predominantly on smaller key system products. Alternatively, most digital hybrid or PABX systems define size in terms of “ports,” where a port refers to the maximum number of connections that can be made to the system. Ports include outside lines and inside extensions, as well as phone system accessories such as voicemail or automated attendants.

Capacity and Planning

Even if a telephone system can handle your current business phone traffic, you should ensure that it can handle your future needs as well. The ideal system should be able to handle expansion in a very cost-effective manner. Most systems allow you to increase capacity by adding new cards that increase the total number of ports available while some smaller systems are expandable by simply adding another cabinet identical to the first. For planning purposes, you should allow 5 to 10% for organic growth so inquire about how much it will cost to add at least 10% more capacity. You should also look at capacity increases of 20% and 30% to get an indication of the incremental costs involved as they will vary with different systems. 

Basic Telephone System Features

Office telephone systems can be equipped with literally hundreds of features for switching calls and directing traffic. Market research indicates that most companies only use 5 to 10 percent of their telephone features. Instead of comparing features on a one-to-one basis, you should examine how your phone system is to be used. Limit your feature search and evaluation to only those options that will improve the workflow for your business.
All systems have the core features of hold, transfer, call pickup and paging through the phone or external speakers. However, the user interface for these features varies from system to system so when you have narrowed your selection to two or three vendors, make sure you have a live demonstration of the operation of these and other features you require. Bring along a heavy telephone user from the office as they can often highlight poor user functionality that is evident on some telephone systems.

Some of the other features that are standard in many systems and are of value to many organisations include:

An auto-attendant is the recorded message that answers your phones and instructs callers how to reach the person or department they are looking for. If you have a high volume of calls or provide after-hours support, this may be important – or you may value having a real person answer every call. If auto-attendant is relevant to your business, look closely at your needs as functionality varies significantly between products. 

Conferencing can minimise travel times for meetings but features vary widely. Consider how often your staff needs to make conference calls, and how many different people need to call in. If the conferencing features you need aren’t readily available, there are other options for conducting teleconferences that you can purchase separately.

Direct InDial 
The majority of business calls are from people we deal with regularly. InDial uses ISDN technology to allow individual staff to have their own dedicated number so that these calls can be made directly to their extension without going via reception â?? saving valuable time. In conjunction with voice mail, in dial provides significant benefits to most businesses. 

Least Cost Routing (LCR) 
This feature automatically selects the most cost-effective outside line for any number dialled from your office. For instance, to minimise your phone bill, you may have all your long distance calls with Optus, all calls to mobiles with Primus and international calls with another network provider. LCR will automatically pick the correct (lowest cost) carrier for each call type. 

Music-on-hold is fairly self-explanatory – in most systems you have internal music source(s) or simply plug in a source of music to your system. Find out more in our Message On Hold Buyer’s Guide.

Night/Holiday Service 
This feature automatically assigns a different ringing plan for after hours, weekends or holidays. This allows you options such as directing calls to a courtesy message that your business only operates during business hours or if you provide 24×7 support, calls could be automatically screened and directed to service technicians as required. 

Ring Groups
Many organisations have a single number for groups like accounts, sales or service. This feature allows calls to these organisational groups to be set up with different ring options for the phones within a group. For instance, all phones could ring or one phone could ring 3 times and if it is not answered the next nominated phone in the group could ring and so on.

Tracking Calls (SMDR) 
SMDR or Station Message Detail Recorder provides details of all telephone calls, both internally and externally, made from every phone connected to the system. When used with Call Accounting software, It provides a tool to analyse the calling patterns within your company to identify operational inefficiencies and to reduce overall call costs.

Toll Barring/Class of Service 
With this feature, you can limit access to international, long-distance or mobile calls to staff who require such access as part of their jobs. If the class of service is important, have a good understanding of what your requirements are as some products provide more sophisticated implementations than others.

Speed Dial Directory 
All systems have the capability to store 100s of frequently used numbers. Most products allow you to associate an alphanumeric name with the number so you can easily find using dial by name directory service. With caller ID, some telephone systems can display the name of the calling party if their number is in the speed dial directory. A feature to look for is whether the phone system allows you to import your phone directory from applications like Excel as this can save a lot of time in both setup and management of your speed dial numbers.

Basic Telephone Handset Features

The selection of your telephone handset is important as it is the interface to the functionality of the telephone system. Most manufacturers have a range of telephone handsets that are differentiated on the basis of:

Number of fixed and programmable keys for line and extension appearances or for commonly used features. These keys often incorporate multi colour LED to identify status of calls on their own or other handsets or if a feature has been activated. The fixed functions usually include the commonly used hold and transfer keys

The LCD display which usually provides information on calls in progress such as the name and extension of an internal caller, the duration of call, and in some cases, caller ID. It often provides an interactive menu to access the telephone system features. There are now phones with large LCD displays

Speakerphone capability. Speaker phones can be half-duplex, which means that only one person on the call can be heard at a time, or full-duplex, which lets both parties talk simultaneously, like a regular phone. Some phones also have a ‘listen only’ mode for speakerphone, which is useful for monitoring a conference call or while on hold.

Although having the right features is important, even more critical is making sure they are easy to access. Because most employees devote very little time to learning how to use a phone system, you should make sure that using the most common functions is extremely simple and intuitive and this is why the selection of the telephone handset is so important.

Advanced Phone System Features

For companies who make more extensive use of the phone, modern corporate phone systems offer some significant benefits.

Automatic call forwarding helps both your employees and your callers. By routing incoming calls to wherever your employees are, whether on the road, working at home, or at a remote location, automatic forwarding increases the likelihood that callers reach the person they need. Callers do not need to make a second or third call. In addition, your employees avoid having to return to an overflowing voicemail box.

Automatic Call Distribution (ACD) offers any working environment the capability to both optimise service incoming callers receive while at the same time maximising staff productivity. ACD distribute calls within a group so that the first available agent takes the call. If no agents are available the call can be held in a queue with a comforting message that their call will be attended to shortly. A group supervisor can also access real-time information on how the group is operating including the number of calls in queue, average queuing time and total incoming calls received.

ACD functionality is ideal for departments that operate as an incoming call centre such as accounts, telephone sales or technical help desk. Many telephone systems provide this functionality as standard. There are also more sophisticated call centre applications that integrate with the telephone system and are designed for specific needs of larger call centres. These applications include functionality like more sophisticated reporting, remote agent working and call routing to agents based on their skill levels.

Computer Telephony Integration (CTI) refers to any industry standard that allows non-proprietary computer software applications to interface with the telephone system. The Microsoft TAPI standard is a commonly used CTI standard. The applications range from windows based system administration tools that enable intuitive management of your telephone system features without the need to call a service technician to sophisticated call centre applications. The key thing for the user is the value the CTI application brings to your business.

Networking refers to the capability of telephone systems at multiple sites to be linked so they operate as one virtual system with common features. For instance, a call in your Melbourne office could be transferred as easily to an extension in your networked Sydney system as to another Melbourne extension. Other benefits of networking are sharing of resources like voice mail or receptionists between sites a significant plus where there are a number of small branch offices. Today networking is IP based usually over a WAN. Some manufacturers claim their products can network with other vendors products using standards like QSIG but the features supported are less than for networking between products from the same manufacturer. 

Operator Console is the terminal designed for the receptionist or operator in your company. Key features of Operator Consoles is the capability for easy answering and transferring of calls. This can be done by providing add ons to handsets that provide multiple dedicated line and extension positions keys, an effective solution for officers with up to 50 employees. In larger environments or where the switchboard is very busy, dedicated operator consoles are the best to deliver the professional and efficient service to create the right image for your company. Today most dedicated Operator Consoles are PC based with headset and use the standard point and click operation to deliver incoming and internal calls to the correct person. They include features that:

  • Show the status of each extension on the system including if they are on a call or if diversions are set
  • Provide visibility of all calls on hold with notes
  • Transfer direct to mail box
  • Various more sophisticated hold and transfer functions to assist the efficiency of the busy operator

A Voice Mail system acts as a corporate answering machine, recording messages from people both inside and outside a company.
Voice mail systems use centralized recording equipment to record, store, and playback messages. Each user has access to an individual mailbox, which they can customize greetings for and keep private any messages left. Some voice mail products allow you to save fax messages as well.
These systems are sized according to the number of ports or connections that are established between the phone system and the voice mail system. Having more ports on a voice mail system means more people can simultaneously leave or pick up messages.
Compared to written notes, voice recording allows longer and more complex messages to be accurately relayed. The ability to leave detailed, private messages frequently means that callers can relay information without the need for a return call. This is especially useful when you consider that half of all calls are for one-way transfers of information.

Messages can also be accessed from outside the office and you can even have voice mail SMS your mobile of a voice mail message on your extension if you are out of the office.

Voice mail systems also guarantee a common messaging platform within a company. Features such as broadcasting allow employees to send messages to multiple people at once, allowing a voice mail system to serve as a central messaging centre for a workgroup or the entire company.

Automated Attendant is also provided as part of most voice mail solutions.

Voice mail can also be integrated with your computer network so that your voice messages and fax messages appear on and can be accessed from your Outlook Inbox, sometimes referred to as Unified Messaging. 

Most voice mail solutions are now telephone system integral as the cost of proprietary voice mail has plummeted in the last few years

Wireless Mobility is similar to providing your own mobile phone network within your office environment. The more mobile users (eg your IT support technicians or warehouse staff) within the company or those who have to be accessible at all times are provided with a wireless handset that is paired to their handset at their desk. Calls can be answered at either phone. Signals are provided by wireless base stations which allow automatic handover to another base station when a user moves out of range. Popular applications are in large retail outlets, large industrial, hospitality and hospitals.

Applications and Integration

Sophisticated telephone systems support various software applications, which boost communications in specific business cases such as Call Centres, Hospitality and Manufacturing.

Organisations willing to enhance their service delivery and take productivity to another level can also integrate their telephone system with most known business software packages such as Customer Relationship Management (CRM) and Enterprise Resource Management (ERP). For example, a telephone system and CRM integration solution will enable superior customer service delivery.

Telephone System Dealer selection

The majority of office phone systems are bought through dealers who handle not only for the sale but also for the installation and programming. Some manufacturers do employ their own sales and service staff to look after larger customers with specialized requirements from their telephone system but for most businesses finding a good business telephone system dealer can be the most important part of the purchase since any phone system you choose needs to be properly installed for optimal performance.
The most important consideration in choosing an office phones dealer is the stability of the business and their product expertise. On purchase of a telephone system, you are entering into a long term business relationship with the dealer that with ongoing service and add ons to the system as you grow and your business needs change, should extend for the life of your new telephone system number and perhaps the life of your next system! So spend some time looking at the dealers’ operations, company structure and history to make sure they are right for you.
Product expertise relates to both the ability of the dealers’ sales team to understand your business needs and suggest the optimal telephone system solution as well as their technical ability to deliver a stable, working telephone system as specified. Established dealers tend to specialise in one or two products as the cost of training, spares and the complexity of today’s products makes it uneconomic to support more products. You don’t want to be the guinea pig the dealer learns about a product on so make sure you understand the dealer’s product credentials well. 
The first part of the buying process is to narrow your search to 2 or 3 different brands based on your own personal criteria (eg recommendation, current product). Arrange appointments at your premises with the sales reps from at least two different dealers who represent your preferred product and service your required locality (link to dealer locality map). We find that visiting your site allows the dealer to get a better sense of your existing infrastructure and communication needs.
Once you have proposals from the dealers which should cover all equipment costs including options, installation and service charges plus finance options and a recommended telephone company for the network services, shortlist at least two and arrange a demonstration of the shortlisted phone systems at the dealers’ premises. The dealer will be able to simulate most of the features they recommend and you will have a chance to inspect their offices and meet the dealer principals. Even if the demonstration is at the manufacturer or distributors premises, you should visit the dealer’s premises before signing a purchase order. 
Inquire about the dealer’s specific installation experience. Ask about the size of the companies involved and what options or features were added. Also obtain a list of references, including several completed in the past year, so you can ask about their experiences in detail. When it comes time to your installation, make sure the office phones dealer sends experienced technicians to conduct the implementation.
Depending on your business, ongoing support of your phone system can range from being important to absolutely critical. Vendors will provide a combination of warranties: the manufacturer’s guarantees of their hardware (typically one to three years) which covers hardware only not the dealer labour costs and dealer-provided service level agreements (SLAs.) An SLA specifies how quickly the dealer will respond to a problem with your phone system – 4 hours is fairly typical for major outages during business hours. If your business needs 24 x 7 coverage or shorter response times, expect to pay extra for these premium service levels.

Some other questions you may want to ask:

  • Who will install the system particularly if there are multiple systems in different locations?
  • The dealer or a subcontractor?
  • If it is a subcontractor, how is this relationship managed by the dealer?
  • Who will provide training? What will training include?
  • Does the dealer have remote maintenance capabilities?
  • What changes can we make ourselves to avoid service calls?

Considerations when buying a phone system

Telephone System Costing

The watchword when buying new telephone systems is the total cost of ownership (TCO). Buying new phone systems purely on price can easily get you into trouble: more reliable, expandable systems do tend to cost more per user upfront – but the savings you will see in the long run make it worthwhile. In addition to being able to add more users as your company grows, you should find out how easily your office telephones can be upgraded as new phone system features and technologies are released.
Estimating costs for a completely new phone system is very difficult: costs can quickly climb into the tens of thousands of dollars. See what recent telephone- users paid for their phone systems.

Phone system prices vary based on five factors:

The Base System

The central base system, or cabinet, controls and oversees the entire phone system. This price differs between systems and rises as cards and accessories are added. A small central unit can cost as little as $1,000, with the price increasing considerably to the tens of thousands of dollars for larger systems. The base system will be the main limiting factor for your phone system both in terms of features and expandability.

The Actual Phones

Most systems can be equipped with several different types of office telephones. The least expensive sets may cost less than $100, but can make accessing features very difficult or provide less than optimal sound quality. Most mid-level handsets sell for $200 to $300 per unit.
On the other end, some “executive phones” sell for many times the standard price. These office telephones can make using the system slightly easier, but are often just flashier. Receptionist stations are also more expensive, but they bring important features for the person at the centre of your new telephone system. Most businesses will buy a mix of models.

Phone System Add-Ons

The cost of voice mail, any applications and some of the advanced features can be significant contributors to overall cost.

Wiring and Installation

Most phone systems are initially quoted assuming backbone cabling is in place. Once you have selected a dealer get him to review the cabling infrastructure and provide a quote for any cabling work required. You can obtain a comparative quote from cabling contractors but unless the difference is significant, the benefits of one-stop shop usually make the dealer the preferred option. Be aware that installing wiring through already finished walls can be expensive so if this is a greenfields site, build plenty of growth into your cabling plan as it will save money down the track.

Everything Else

This includes training, programming, service, and future modifications. Pricing is usually based on the time these tasks will require and can often be the most flexible portion of a bid. Sometimes, it is best to compare the hours that will be spent completing training/programming/service tasks with the price tag for the service.

Do you need help with your telephone systems?

Whether you require a new phone system or an upgrade, we are willing to help you make the best choice.