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Category Report - Telephone Systems

Category Report

04 January, 2009 12:03

Telephone Systems contains the following data:
Telephone Systems Handsets
Telephone Systems IP PBX
Telephone Systems Hybrid

Telephone systems: making the right call

by Nick Booth

Phone systems used to be so simple. Now there are all kinds of systems and protocols, and there are hundreds of features to choose. The more choice you have, the greater the potential for getting it expensively wrong. The best advice is to approach phone system buying with a clear strategy: keep it simple. You need to brutally edit down your options and cut out all the unnecessary luxuries.

If you try to be too ambitious with your communications technology, you will end up wasting time and money. Our reviews of each system will judge how easily you can build on your initial purchase as your aspirations become more sophisticated.

Approach phone system buying with a clear strategy: keep it simple. You need to edit your options and cut out unnecessary luxuries. If you try to be too ambitious you will end up wasting time and money

You have three objectives: to save on the cost of buying a system, manage your communications more efficiently and stay in control of call costs.

Cost implications

There are three ways to tackle the cost issues, depending on how the purchase is financed. Each has its own pluses and minuses, in terms of time and money. Which is best for you depends on which resource (time or money) is most precious at the moment. Arguably you could get by using mobile phones only - this is a bit of a niche and only works for certain types of company.

Financing options

The first option is capital purchase, where you pay for a private branch exchange (PBX) switching system upfront; this can save money in the long run. Of course, that all depends on other factors. If cash flow is limited, then any large investment can be fatally expensive.

If you are a new start-up and envisage that your company will mushroom in size, but are uncertain of the shape the organisation will take in the next few years, then capital expenditure may not be appropriate.

On the other hand, a wisely chosen purchase could last a stable company up to ten years. Having made the investment upfront, you could be saving on rental costs for the next nine years. A 100-person law firm, based in one office, with a few homeworkers, would be wise to make a capital purchase. But remember, terms and conditions apply.

The next option is lease rental. This is where you spread the cost over the lifetime of the system.

There are pros and cons to these arrangements, and we would advise you to approach them with caution. These deals can include a lot of smoke and mirrors. Lease rent seems to give you the expense of renting, without the flexibility.

Pre-rental, your third option, appears to be more practical. Renting is attractive for companies that are more fluid. In order to enjoy the fluidity of paying a fixed fee (typically) per user, you are likely to need some kind of internet-enabled telephony, such as a hosted PBX or a SIP (Session Initiation Protocol) trunking system. These sound complicated, but basically you are using your internet connection to carry your phone calls. "If you have ten offices and you rent a managed service, you can get all your calls switched from one place so you save yourself the expense of hiring ten receptionists,: said Steve North, managing director, Strip21 All you need to do, in theory, is buy a handset and plug it into the internet network (via a port in either a PC, router or socket). The work of switching phone calls to the right person in the company is carried out by software on the internet, rather than software within the fixed PBX machine (which was the traditional way of switching phone calls). You can pay a service provider around £20 a month per user. This may sound expensive, but it gives you the ability to adapt easily to changes.

"If you have ten offices, and you rent a managed service, you can get all your calls switched from one place," said Steve North, managing director of telecoms operator Strip21, which sells hosted services via local dealers, "so you save yourself the expense of hiring ten receptionists."

Mobile pressures

These days, many companies pay for all their staff's mobile calls. This means they are effectively paying for two phone systems. While staff may like using mobiles, customers want the reassurance of phoning a company with a traditional PBX.

Companies like GoHello, for example, can publish a number that looks like it belongs to a traditional switchboard. In fact, all incoming calls are switched, via a software PBX on the internet, to a staff member's mobile.

It could save certain companies with a heavy mobile bias the cost of buying a phone system, while still giving them the reassuring respectability of an old-fashioned phone system.

Running costs

Checklist:
choosing a phone system

* Have you audited your current telecoms use?

* What are the pain points?

* Is your business generated by incoming calls? Or do you mostly make outgoing calls?

* Have you analysed your last phone bill?

* Could you economise in any areas - such as overseas calls, or landline to mobile calls?

* What are your needs in the near future? Do you plan to expand? Do you need to add extra offices?

* How could telecoms make your business more efficient?

* Could people work from home?

* Could sales people have conferences, rather than face-to-face meetings?

* Do you spend too much time managing the phones?

* Which is your most precious commodity at the moment: time or money?

* Once you know your needs, look for a reputable supplier

* Does your supplier offer a full portfolio: buying, leasing, renting, mobiles?

* Have you checked supplier references?

Managing the moves and changes in a company is a major running cost of a phone system. If people can just plug themselves into the network, and the phone system automatically finds them, this could be a massive economy. Then again, if your company is relatively static, that £20 per month might be more than you need to pay.

"The problem with hosted services is that they are not always the economy they promise to be," said Chris Fargher, director of consultant Liberty Bell. "You only have to buy the hardware, but if the cost of a server and the handsets runs to around three and a half grand, you might be better off spending another thousand or so and owning your own phone system."

It is difficult to choose the right phone system because you need to match all the variables with those of the service providers. "Ideally, you should not choose a phone system," said Fargher. "Your phone system should choose you."

Selection process

Getting the right system depends on finding the right supplier. To be fair, there is little to choose between many of the major brands. They are all pretty good at their jobs, and packed with features (most of which you will never use).

The major difference is that some of the entry-level PBXs, while immediately affordable, might not be able to provide the breadth of features needed if the company expands.

For example, if a three-branch estate agency buys a bottom of the range system for, initially it might not want or need unified messaging as an option. But when the company has more branches, and wants to rationalise communication between the rental experts in each branch, the PBX may not be able to provide this feature, even as an add-on.

The slightly more expensive SME systems, from the likes of Avaya, Alcatel and NEC, offer greater possibilities. This is because these companies originally supplied systems for big corporations, and their offerings for smaller businesses are a cut-down version at a more economical price. There are more upgrade options but, of course, they represent a bigger investment.

Specifying phone systems

It is a bit like buying a PC: you pay for the hardware but it is the software that makes all the difference to the business. With a PC you work out what you want to do, then get as much memory and processing power as the budget will stretch to. It is the same with telephone systems.

Make sure the handsets have a long lifetime. NEC has some impressive new handsets that can be upgraded. This means the handset can be upgraded when you need a better display or more keys, and there is no need to throw the old one away.

Functionality

Ironically, renting a phone system does not always give you more flexibility. Owning a PBX means you have a greater choice over the functionality. If you look at the reviews of different systems, you will see each system has a wealth of features. You may want to take advantage of some of these, but your hosted service provider may not offer them. On the other hand, there is a lot to be said for simplicity. Owning equipment means there are more options over handsets - depending on requirements from cordless (DECT) handsets to basic analogue models.

"With hosted services you only have to buy the hardware, but if the cost of a server and the handsets runs to around three and a half grand, you might be better off spending another thousand on your own phone system," said Chris Fargher, director of consultants Liberty Bell If you outsource telephony to a hosted service provider, to some extent you are tying yourself in to them entirely. They are the people who grant access, via the internet, to the public switched telephone network (PSTN). If the service provider goes down (and it has happened) they take you down with them.

If you own a PBX, there is the flexibility to use different phone operators. If you make lots of international calls, you can use least cost routing (LCR) to route calls through the cheapest phone operators for particular countries.

Call charges

Since around 90 per cent of the cost of a phone system is the cost of the call charges, according to analysts at MZA (www.mzaconsultants.com), you should pay most attention to the nature of your outgoing calls, and which supplier is best suited to deal with them.

Beware phone tariff deals that sound cheap, but do not actually fit your company's call profile. A deal that caps all calls at 10p, no matter how long, sounds good. But if the sales force makes thousands of outgoing calls that only last fifteen seconds maximum, you are paying way over the odds for the majority of calls. One company only discovered this when they received their first bill. It was even worse when they realised they were locked into a one-year contract.

On the other hand, hosted telephony can be great if your company makes thousands of internal calls. Branch to branch calls are free with hosted telephony. Certain hosted providers offer SIP trunking - this lets the PBX place voice calls over the internet. Using SIP trunks (voice calls over the internet) can cut the cost of renting (ISDN) phone lines and the cost of running calls over them.

SIP

There are two major advantages of SIP trunks. The first is flexibility over phone numbers. For example, if an online book shop wanted a phone number in every town in the UK, and a number for a ‘shop' in New York, it is possible. This can be a very powerful, and at the same time, cheap, marketing statement. On the other hand, if an organisation changes location, companies like Gradwell can transfer the old phone numbers. This saves a small fortune in continuity and avoids the cost of reprinting stationery and relabelling vans.

Quality of service

One of the big questions about internet telephony or VoIP (Voice over IP) is the quality of service. If the sound quality of phone calls plummets every time there is contention on the broadband (as someone in the company downloads a video off YouTube), this will detract from the professional brand image of an organisation.

Some telcos, such as Stripe21, claim it can guarantee the necessary quality of service. "We can do anything you would expect from a traditional PBX, but the set up is a lot less painful, and we are more flexible," said North.

Ultimately, the veracity of any supplier can only be checked by asking for references of customers with a similar set-up. Then the most important task is to establish whether your telecoms consultant really understands your business.

Many companies only sell a limited range of products, and will try to shoehorn you into fitting their technology offering. The message to buyers is research the market and always check out the small print before making a decision.

Case study: Yo Sushi overhauls telecoms with Swyx system

YO! Sushi has 35 restaurants in the UK and with ambitious plans to open 15 outlets in the next year, the company decided to review its telephone system and replace an unmanageable, ageing set-up.

Individual outlets handle their purchasing locally; administration, payroll and pricing are handled by the head office in London.

The old legacy circuit-switched telephony system was designed to work autonomously and could not be integrated into a single managed solution, creating headaches for YO! Sushi IT manager Billy Waters. He said: "A typical restaurant would have two lines for the telephony, one for the fax, two for credit card processing, plus an ADSL line.

"The on-going costs of the line rental and telephony maintenance were becoming a significant overhead," said YO! Sushi IT manager Billy Waters"As the key systems became older they became more and more support-intensive. Every time there was a problem or we needed to reconfigure an extension it required a site visit from a third-party maintainer. The on-going costs of the line rental and telephony maintenance was becoming a significant overhead.

"We had rolled out an IP network to all our restaurants to encompass our EPoS and credit card services, and we wanted to leverage this investment to accommodate our telephony traffic as well. Our telecomms partner GP Network Solutions introduced us to Swyx, a unified communications solution that was based purely on IP and could be integrated directly into our servers located at head office."

YO! Sushi conducted a full review of a number of IP telephony products before making the final selection. Waters said: "There are a number of IP-based products on the market, however what we liked about the Swyx solution was that it is based on software licences rather than hardware.

"In an expanding operation such as ours, rolling out new users would be very straightforward and could be handled centrally without third-party support. It was very easy to use, and options such as teleconferencing, auto attendant and script editing features were included within the basic price making it very good value for money."

The flexibility of the system allowed YO! Sushi to bring its telephony in-house, integrate inbound calls with its customer database and maps package, and route calls using a non-geographical number to the London call centre.

"We have dramatically reduced our telecommunications costs, improved overall efficiency and had the added bonus of saving yet more money and protecting our brand values by bringing our call centre operation in-house."

System specifications and data files

To view the latest models, detailed system specifications and recommendations, please select Data tab and choose Telephone Systems Hybrid, Telephone Systems IP PBX/VoIP or Handsets.

Alternatively, the data charts are available as a PDF download. See link below.