To Buy or Not to Buy

You are considering installing a new telecommunications system. Like many business owners or managers, one question may be haunting you: Am I about to spend thousands of dollars on a system that will soon be outdated?
Today, it seems that technology becomes obsolete faster than you can purchase it. This is becoming more and more true of communications systems, as they are experiencing dramatic advances in technology, such as the growth of IP Telephony. Not just telephones any more, today's systems offer many applications that allow for more efficient business management and operation. As a business owner or manager you want to consider this fact when evaluating telecommunications systems.
In fact, the best alternative may be not to buy such a system. That is not to suggest not installing new equipment, but instead that you consider not only what type of system to install and what type of vendor will install it for you, but also the method of ownership and management of that system.
A brief history of telephone system ownership:
For decades, the only option for American businesses had one option when it came to their telephone systems was to rent it from the telephone company. Private ownership of business telephone systems, much less individual telephones, was not allowed. Various decisions in the courts and by the FCC in the 1960's and the 1970's paved the way to private ownership of telephones and business telephone systems. In the years since, businesses and organizations purchased their such systems in droves. Many would finance their purchases through leases, bringing the cost of the equipment down to a smaller monthly cost. This monthly cost was generally much lower than the previous cost of rental.
Unfortunately, along with ownership of telecommunications equipment comes the associated cost of ownership. If equipment broke down, it had to be repaired or replaced. If it became obsolete, it had to be upgraded or replaced. As new technology was introduced, from voice mail to computer integration to digital phone lines, new phone systems had to be installed that could utilize that technology.
Hosted Solutions.
Many who were concerned about the rising cost of ownership began considering alternatives to having in house telephone systems. One such alternative was the hosted solution. There have been many variations of hosted telecommunications solutions over the years, from Centrex solutions offered by many telephone companies, to privately owned Hosted PBX services, to the more recent Hosted VoIP (Voice Over Internet Protocol) services offered by many Internet companies today. The way a Hosted system works is that the host company would have the switching equipment in their own facilities, and all the subscribing organizations need worry about is purchasing the telephone sets.
For many, this was an attractive alternative as there was no need to purchase or manage expensive control units, cards etc. The hosting company took on most of the risk of ownership and provided many phone system like features to their subscribers. There was no need for software or hardware upgrades, no repair costs. All that was needed was to plug in the telephone and let the hosting company be responsible for the rest.
There are a number of disadvantages to the hosted solutions. This generally is a much more expensive option with more limited options as far as features and capability. Organizations normally need to pay for special phone lines or data connections to connect their phones to the hosting equipment. The slightest changes in services or features usually result in a fee, and standard features such as paging or music on hold or call accounting are often difficult or impossible to add. More advanced features are rarely available. On top of that, if circuits between the hosting company and an organization's facilities go down, that company would lose all local, long distance, and even internal communications.
The Managed Telecommunications Alternative
Many leading telecommunications company have developed a new model that is designed to offer businesses and organizations the features and capabilities that come with ownership, but with the protections and peace of mind that many found in the hosted options. Businesses today can now opt for a Managed Telecommunications service that allows them to consistently keep up with technology while eliminating most of the associated risks.
The way a managed service works is that for a regular monthly fee, the management company provides the equipment on the premises of the subscribing organization. This allows the full set of features and functionality that businesses prefer. The end result is that the hosting company takes responsibility for the equipment. If software needs to be upgraded, or if there is a hardware failure, the management company is responsible to take care of those issues without additional cost to the subscriber. The management company monitors the networks and equipment to ensure there are no problems, thus ensuring greater performance and quicker response in the event of any equipment problems.
Instead of buying expensive cards and equipment (or having to replace the system) when a business expands, there is only an increase in monthly fees that is much more proportionate to the growth experienced. In fact, some management options allow for equipment to be completely replaced with brand new equipment if the system becomes obsolete or if its capacity is completely outgrown. Additions, moves, and changes are all included in the management plan.
In short, for a regular monthly fee, the management company agrees to provide and manage whatever telecommunications equipment is required to help a business operate as efficiently as possible. The management company assumes all the risk of ownership while providing the functionality that a business would expect to have when they own their own equipment.
One benefit normally not available through ownership or through the hosted option is administration of the communications system without additional cost. In fact, even when businesses administered their own systems there were often company resources (particularly labor costs) involved. With most managed options, such administration is provided as part of the service.
An internal employee charged with administering a phone system often doesn't understand the subtle nuances of telecommunications management such as the relationship between a boss and a secretary or what all the different options are in routing calls to various groups. Experience is generally limited to that of one organization. By contrast, a management company can draw upon the experiences of hundreds and even thousands of businesses, giving them access to new ideas and new ways of looking at things. You benefit from this experience because new ways of doing things can be brought into your business that may never have been considered without that experience. Such experience with other organizations can be a tremendous asset to a subscribing business.
Today's Rapidly Advancing Technology
Several years ago, a phone was simply that: a phone. Today, it's more than just a phone system. Communications systems are applications that can integrate with other systems and with your computers. This convergence of voice and data allows your organization to become more and more efficient and focus even more on doing the things you do best. This technology is improving at a tremendous pace, a pace that is difficult for an individual business to keep up with. Today's systems have a greater risk of obsolescence and can be harder than ever to manage and administer.
Because of this ever advancing technology, your business may be best served by working with an organization that not only provides equipment, but manages it for you and takes away much of the risk of ownership. Such a company will often offer different tiers of management, allowing you to custom fit the available options to the unique requirements of your business. You may find that a managed option can give you the best of both worlds: The reliability and functionality of on site equipment, and the peace of mind and lack of risk that previously was only available through hosted options.