Home Biz Tech How Can a PABX System Help Small to Medium Sized Businesses?

How Can a PABX System Help Small to Medium Sized Businesses?


If you read the title of this article and the first question you asked yourself was “what is PABX?”, then you are not alone. Many business owners have no idea about PABX systems and how this type of communication system could work for their business.


What is PABX?

PABX stands for Private Automated Branch Exchanges and is a system commonly used by call centres and organisations with multiple lines. It provides a single number which can be accessed from multiple lines, both internally and externally.

So, when you call a customer support centre of a large business, your call most probably comes in through their PABX system and the next available customer support person answers your call.

What Types of PABX are Available?

There are four different types of PABX on the market: traditional, IP, hosted and virtual. It is worth remembering that you cannot use VoIP with the traditional PABX system, but you can with the other three systems.


Traditional PABX systems: These use landlines to make the call connections, and can be quite expensive to run and to maintain. The majority of businesses who install a PABX system will no longer use a traditional system, but will start with either an IP, hosted or virtual system. There are however, some businesses who still use these old systems, but they are being phased out and superseded by improved technology.

IP PABX systems: IP based PABXs are now extremely popular and provide an easy method of communications between staff who are distributed across satellite offices in different cities or across the world.  Connections are made via the internet, so each phone needs to be connected to the internet. This means that start-up costs can be quite high, but once installed, ongoing costs are much less than the traditional PABX systems and maintenance is lower as well.

Hosted PABX systems: These have become more popular than IP systems, because you don’t need to buy the hardware and store it on-site, thus eliminating the hefty costs involved in purchasing, installing and maintaining the servers. So, a hosted PABX system is just as suggested by its name – your PABX system is hosted off-site. All you need to do is to pay a monthly hosting fee and then you are good to go.

These systems are great for start-up businesses or small to medium sized businesses who don’t have the capital resources required to invest in their own on-site system. In fact, many large enterprises are also switching to hosted PABX systems, because it is cheaper and much easier to manage.

Virtual PABX systems: These are cloud based PABX systems, so are even cheaper than hosted systems. The problem at the moment with virtual PABX systems, is that they quite often offer fewer features than hosted systems. Some will only manage internal calls, not external calls coming into your business. Others do provide both internal and external PABX services, as well as voicemail and hold music – you just have to do your research.

Concluding Thoughts

PABX systems are just about vital for today’s competitive marketplace and if you are a start-up business, seriously consider a hosted or a virtual PABX solution, as these are by far the most cost effective systems available.