What Is a PBX Phone System?

A PBX (private branch exchange) system allows an organization to manage incoming

and outgoing phone calls, as well as internal communication. A PBX is made up of
both hardware and software that connects to communication devices such as telephone
adapters, hubs, switches, routers, and telephone sets.

Modern PBXs have a wealth of management features that make communication easy and
more effective within organizations, boosting productivity. Their sizes and
complexity vary, ranging from very expensive and complex large-scale corporate
communication systems to basic plans that are hosted on the cloud for a low monthly
fee. Simple home-based PBX systems offer basic features as an upgrade to existing
traditional phone lines.

PBX Functions
As mentioned, the functions of a PBX can be very complex, but these are the
essential features:

Use of more than one telephone line in an organization

Management of outgoing and incoming calls
Splitting of one single phone line into several internal lines, which are
identified through three- or four-digit numbers called extensions, and switching
calls to the appropriate internal line
Internal phone communications
VoIP (voice over internet protocol) calling, which has a tremendous number of
features and enhancements over traditional telephony, the most prominent being the
cost savings
Quality interface with customers through features such as call recording,
voicemail, IVR (interactive voice response), etc.
Automated responses, which automatically direct users to the most appropriate lines
through voice menus
A PBX system allows all departments of an organization to be reached from a single
phone number. This saves the company money because it requires only a single phone
line.

The IP-PBX
PBXs changed a lot with the advent of IP telephony (VoIP). The newer IP-PBXes use
the internet to channel calls. IP-PBxes are usually preferred because they offer a
wealth of features. With the exception of old, already-installed-but-still-working
PBXs and those chosen because they are inexpensive, PBX systems nowadays tend to be
IP-PBXes.

The hosted PBX

Today, you don't have to invest in the hardware, software, installation, and
maintenance of an in-house PBX, especially if you are running a small business and
the cost of ownership would be greater than the benefits. Numerous online companies
now offer hosted PBX service for a monthly fee that doesn't require you to pay for
hardware other than your telephone sets and router. These services are cloud-based
and delivered via an internet connection. Hosted PBXes have some disadvantages �
they're more generic, with fewer options to tailor the system to your precise needs
� but they are quite cheap and don't require an upfront investment.