SME Technology Briefing: Business Telephony Systems


The advent of instant messaging, social media and mass-market video conferencing now easily accessible to consumers and businesses alike, overlooking the importance of a stable phone system is a common mistake made by small business owners.

Thankfully, the increased availability of high-speed internet connectivity, powerful mobile devices and a reduction in the form-factor and cost of hardware allows small businesses to invest smartly in cost effective phone systems allowing SMEs a unprecedented level of connectivity and flexibility.

Types of business telephony

Business phone system can be broadly categorised into 5 types:

Virtual phone systems – Think of your old, traditional switchboard, but modelled completely in software and capable of creating a virtual phone system by using a mixture of mobile phones and landlines.

Voice over Internet Protocol (VoIP) – VoIP phone systems draw their connectivity from the Internet.

Self-hosted VoIP – The business pays for the VoIP hardware required and hosts it in their own premises.

Cloud-based VoIP – Removes the requirement for any hardware (other than IP phones) on site and moves the switchboard element to the service provider’s servers.

Dedicated phone lines – A traditional phone system utilising copper wires and, usually, hardware-based central switchboards.

Considering the information above SMEs looking for a business phone system need to ask three questions:

  1. Do we need full phone system that includes physical office telephones or could our business and employees function using their mobile phones?
  2. Do we need physical devices, is our internet connection sufficient to support a VoIP system?
  3. If VoIP is a feasible, who would host the equipment – our business or an external hosting provider?

In response to these questions, SME owners need to consider exactly how you expect to use the phone system and what you need to do with your. For instance, are employees always based in one place? How many employees need to be actually connected?

The lines between office phone systems and other elements of business communications are blurring. This has led to the emergence of powerful unified messaging systems, which tie together different communication tools.

A good unified messaging system could be very flexible automatically diverting calls to your mobile when needed or displaying data from your corporate CRM system when a customer calls.

Assess the volume and type of calls your business makes and receives and consider about how much growth you anticpate in the near future and longer term – this will allow you to choose a system that can cost-effectively scale with your business’ growth.

Virtual phone system

Virtual phone systems connect a business phone number to one or many mobile phones and landlines. Software is set-up and configured for call-forwarding, queuing and phone tree feature. Virtual phone systems are ideal you are a sole trader or run a business that consists of remote workers.


  • No expensive equipment required
  • Simple to set up and maintain via one piece of software
  • Offers the professionalism and configurability of traditional phone systems at a fraction of the cost


  • Service providers may insist on a 12-month minimum contract making switching providers difficult
  • Outbound calls will still be at the expense of the landline or mobile
  • Some lower-cost systems can suffer from poor call quality

VoIP phone system

VoIP phone systems work by using your Internet connection to provide your business phones with connectivity, rather than traditional copper wires. VoIP phone systems are suited to SMEs allowing a mixture of on-site and remote based workers whilst retaining the features of a sophisticated phone system at a cost effective price.


  • Offers significant cost savings over traditional business phone systems
  • Easy to set up
  • Highly portable
  • Wide range of low-cost phone hardware available


  • Relies on your internet connection
  • Sound quality sometimes suffers depending on the bandwidth available

Self-hosted or cloud-based?

You may gain peace of mind by a self-hosted phone system since the hardware is entirely within your control. The manner in which you host your VoIP phone system will depend on your budget and space you have available for telephony equipment. A cloud-based VoIP will be quicker to deploy and easier to scale as your business grows.

Dedicated phone lines

Suited for businesses where there is poor internet access and/or are large enough to have in-house technical staff and space for hardware infrastructure required. Utilising traditional copper telephone lines, dedicated phone lines are typically supported by the local or regional phone company.


  • Tried and tested technology
  • Reliable and non-reliant on your internet connection
  • Most business premises have pre-existing copper phone infrastructure


  • More expensive than the new virtual and VoIP alternatives
  • Maintenance requirements can be costly
  • Scalability is often limited or only available at significant cost to the business

Traditional small business phone system

For small businesses, VoIP and virtual phone systems should be the first options, but if you have a poor internet connection, it is worth also assessing the types of traditional phone systems available which may be you:

‘Key’ systems – Consist of one or more telephone lines coming into your business with every connected telephone ringing when someone calls. Suitable for businesses with up to 5 employees and cost on average between £10 – £25 per month per phone line dependent on the features needed.

Switchboard systems – A switchboard, also known as a ‘PBX’, offers more capability by routing calls to particular extensions, enabling voicemail and allocating spare lines to outgoing calls. Entry-level switchboards typically cost from £150 and are available in both hardware and software form.

Outsourced phone systems

Outsourcing the processing calls completely to an external party such as virtual receptionists, will free up valuable time. Essentially you outsource you calls to a call centre which deals with all incoming calls for you and routes them through to your own number when needed.

Ideal for seasonal businesses or sole traders, this service allows small businesses and start-ups to provde a ‘big’ company telephone service to their customers.


Advancements in technology have brought solutions previously reserved for large corporations to the masses making the the benefits of virtual telephone systems and VoIP hard to ignore.

This advance has also introduced a features which can speed up your business processes and increase customer satisfaction:

Special phone numbers – free, low-cost or premium rate

Call forwarding and voicemail – enabling employees to forward calls onto one another and leave messages

Instant messaging – an alternative to email when quick messages need to be exchanged

Conference calling – without the need for an expensive third-party system or hardware

Interactive voice response (IVR) systems – automatically answer calls and direct them appropriately

You might also like

This website uses cookies to improve your experience. We'll assume you're ok with this, but you can opt-out if you wish. Accept Read More