VoIP vs PBX: 8 Key Differences, Advantages & Disadvantages

Effective customer communication is integral to the success of any business. Hence, choosing a platform to enable your communication needs is one of the most important decisions you’ll make for your organisation. The decision eventually comes down to these two phone systems for most businesses: PBX vs VoIP.

In this post, we’ll highlight the key differences between the two, so you can make an informed decision.

What is a PBX Phone System?

A PBX phone system is an analogue phone system that physically connects each phone in your organisation to the exchange network. All calls are routed via wires and analogue phones. 

What is a VoIP Phone System?

A VoIP phone system allows you to make and receive calls over the internet. Unlike traditional phone systems like PBX, no boxes and wires are required in VoIP. Analogue signals are converted to digital packets and then transmitted over the internet.

PBX vs VoIP: Which phone system is better for your business?

Here are some of the major differences between the two:

1. Flexibility

VoIP Phone systems offer greater flexibility and ease of use than PBX phone systems. You can add/remove agents, make changes to your call flow, etc, within a few minutes. In PBX, these changes can take up to days, if not weeks.

2. Scalability

VoIP phone systems allow you to scale at ease. There’s no need to worry about the costs or the effort involved in adding more agents or setting up a new office – everything is taken care of by your VoIP provider. In PBX, however, you’ll need to set up and buy expensive equipment for each additional employee. It’s both time consuming and exoensive.

3. Cost-efficiency

VoIP calls cost less than PBX calls because they are transmitted over the internet. It also saves the cost required to own and maintain a separate channel for voice communication. Overall, VoIP beats PBX hands-down when it comes to cost – businesses can realise cost savings of up to 50% with VoIP as compared to PBX.

4. Remote-ready phone system

VoIP phone systems enable agents to make & receive calls from anywhere, as long as they have access to the internet. PBX phone systems, on the other hand, require your agents to be present on premises. So, despite all the extra cost when it comes to PBX, you’re left with a phone system that’s unable to meet the challenges of today’s world.

5. Integration with CRM/HelpDesk software

VoIP phone systems can easily be integrated with your CRM or HelpDesk software. The integration makes it easy for your agents to personalize calls, and they don’t have to switch between dashboards to dial a number. It also helps you access all your data in one place, and improve tracking & analysis. This integration is extremely difficult with on-prem PBX phone systems, and not possible at all in some cases.

6. Bulky components

PBX phone systems are infrastructure-heavy. They require bulky on-prem components to make it work, including specialized phones. VoIP phone systems, on the other hand, don’t require any special equipment. All you need is a smartphone/a laptop and a reliable internet connection to get started.

7. Maintenance and upkeep

PBX phone systems require constant maintenance and upkeep. This makes the whole affair costly and effort-intensive. When it comes to VoIP, you don’t need to worry about maintenance- all of that is taken care of by your VoIP provider. This frees up resources that you can then invest in growing your business.

8. Flexible phone options

You can make and receive VoIP calls over any smartphone or laptop. All you need is access to a reliable internet connection. However, the same is not possible in case of PBX phone systems — you’ll need to buy specialized phones for communicating via a PBX.

Future-proof your business communication with VoIP

A PBX phone system has many advantages, but it comes up short on many fronts. Businesses are increasingly moving to VoIP to future-proof their communication system. This shift is especially relevant in times like these when enabling remote work is critical to business continuity. If you’re looking for a way to enable your agents to work remotely, you can book a consultation slot with us and we will help you set up a remote business phone system in no time!