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Types of Phone Systems

business.com editorial staff
business.com editorial staff
business.com Member
Updated Mar 30, 2020

There are three basic types of business telephone systems: KSU, PBX and VoIP. Learn which one is best suited for your business.

  • Business phone systems offer features that help manage call volume and routing to employees.
  • Business phone systems are usually available as three types: KSU, VoIP, and PBX. Each has advantages and disadvantages.
  • Confirm that the business phone system provider is reliable with high customer satisfaction rates and quick technical assistance turnaround times.

Business phone systems

Business phone systems provide companies large and small with a way to manage their inbound and outbound calls. Business phone systems offer features that are significantly different than residential phone systems. The phone system must be designed to handle multiple calls at once and also the capability to transfer calls within the organization.

Today, business phone systems may include the following features:

  • Multiple lines: Permitting multiple lines allows employees to switch between calls to better manage times of high call volume.

  • Auto attendant: A business phone line can offer auto attendant to greet callers and route the person to the right employee.

  • Visual voicemail: Voicemail systems for business phones can do more than just store recorded messages. The system can transcribe the voicemail and send it directly to email or text message.

  • Conference calls: Meetings can be scheduled by phone with multiple callers participating in the conference call. This feature is a must for organizations with remote employees.

  • Call forwarding: Calls can be forwarded to another number as needed. The calls may also be forwarded to an email address.

  • On-hold messages: Record a message that lets those on hold know that his or her call will be answered as soon as possible. You could also play music over the line for the caller.

  • Handset support: Modern business phone systems should be compatible with wired and wireless headsets.

As you look at each feature provided by business phone system retailers, consider the manufacturer too. Confirm the company has a solid track record with good client reviews and readily available customer service if a problem with the system arises. The size of the organization determines how many lines to choose for your business phone. Smaller organizations can usually work well with two to four lines.  

There are three basic types of business telephone systems: KSU, PBX, and VoIP. For each of these systems, there is a hosted (cloud) and a nonhosted version. Let's take a closer look at how they differ.

Key system units

The most basic phone system is the key business telephone system that uses the key system unit (known as the KSU). This type of system is only suitable for small businesses with no more than 40 employees working as phone operators, due to the limitations of the number of phone lines incorporated into it. 

It's an easy-to-use system, relatively comparable to a home telephone system. It has all the basic features a business will need; however, it lacks portability and flexibility. It uses a central switching device – the key system unit – to manually determine the phone-line selection.

The variation of this system is called KSU-less, which has the same phone capabilities as the basic system; however, it is portable and flexible, as it does not use the central switching unit, and it's entirely wireless.

KSU-less has some serious limitations, though, as it only allows for approximately 10 phone operators, and it's not sold commercially – it must be requested from a phone-system provider. The KSU-less is an ideal system for a very small business that doesn't intend to expand its workforce. It's not that suitable for small businesses looking to grow.

Private branch exchange

Another type of system is the private branch exchange system (known as PBX). This is a more advanced system than the KSU and KSU-less systems, and as such, it has more features. It uses programmable switching devices, allowing for the automatic routing of incoming calls.

This type of business phone system is suitable for a company with 40-plus employees, as it's a much more automated system. Another major advantage of the PBX system is that it features an uninterruptible power supply, allowing a business to remain functional for some time, even without electricity.

A modification of this system is the hosted PBX. The only difference with this system is that the programmable switching devices are no longer installed on premises – it's hosted by a telephone provider. The main advantage is the ability for a business to avoid some installation and maintenance costs involved with the standard PBX system without losing any of the advanced features it initially has to offer.

Voice over Internet Protocol

The latest telephone innovation offered for businesses is Voice over Internet Protocol (known as VoIP). This is the most advanced system by far, allowing a potential client and phone operator to communicate with each other even if the two are in completely different countries. It works with the use of both the internet and a computer. However, this also makes it the most costly system, with the cost determined by the number of employees needing to use the system. The main benefit of this system is that all functionalities can be accessed via a computer.

Similarly to the previous system, the VoIP system can also be hosted, offering the same advantages as the basic VoIP system, with less installation and maintenance involved for the business using it, as the service provider hosts the main telephone system.

Image Credit: chainarong06/ Shutterstock
business.com editorial staff
business.com editorial staff
business.com Member
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