Hosted Phone Systems: The Problems You Should Keep in Mind

Today, businesses demand reliable technology more than ever, and a dependable phone system is crucial for efficient, seamless communication.

As bandwidth costs continue to come down, many companies are considering shifting to a hosted phone system. But is this system the best choice for your business? Let’s explore the most common concerns associated with a hosted phone system and some solutions that can help you decide if a hosted phone system is right for your business.

What is a Hosted Phone System?

A hosted phone system offers all the features of an on-site phone system but, as the name suggests, is hosted at an off-site location by a third-party, professional telecommunications services provider.

The Problems with Hosted Phone Systems

While there are many benefits to implementing a hosted phone system solution, there are several potential problems of which you should be aware. Here are the three biggest concerns we hear (and just as many resolutions).

1. Reliance on an Outside Organization

A hosted phone system is set up to be managed off-site by a third party, meaning any changes to numbers, the addition of users, or unifying communications will need to be handled by your provider. This can potentially be a point of frustration when you want something done quickly.

The Solution

If you’re considering a hosted system, interview several companies before signing on the dotted line. Ask your potential provider about their process for handling number changes, user additions, etc. How long does a change typically take?

Check out reviews of the company, and be sure to ask if they have any clients you could speak with to learn about their customer experience. Working with a qualified and respected provider will make this a non-issue; part of what makes for a great provider is their quick response time.

2. Inadequate Bandwidth Available

When it comes to a hosted phone system, it all boils down to your network and your bandwidth. If you don’t have enough bandwidth, you’ll experience compromised voice traffic, and the call quality will suffer.

Nothing is worse for your brand and your business than poor-quality voice communications. It’s unprofessional, frustrating, and can cost your business.

The Solution 

A great hosted phone service provider will thoroughly audit your network and bandwidth connectivity so you know your status upfront before selecting a system. You may need to bring in additional bandwidth to support your new system, and this cost should be considered when deciding to go with a hosted system.

3. Cost Structure

As a monthly recurring charge, the total cost of a hosted system over the lifespan of the phone system is typically higher than if you had purchased the system outright and hosted it within your office. There is also usually an installation charge for installing and setting up the system.

The Solution

First, a hosted system can save you from investing substantially in a new phone system.

And secondly, as a monthly recurring business expense, the costs of a hosted system are typically tax-deductible (but check with your accountant before purchasing!).

While the total costs over the system’s lifespan are usually higher, this tax advantage does help close the gap. Besides, adding phones or upgrading your system during your agreement period may be easier, so you have access to the newest technology. 

What Does it Boil Down to?

It depends on your business needs. Be sure to do your research to learn about other systems available to you and the crucial differences between them. As you go about doing your research, be sure to consider these questions:

• Is a monthly recurring cost better for my business vs. a one-time upfront cost?
• Are we comfortable housing our data off-site, or is on-site a better choice?
• What are our needs for customized features or settings?

Have an in-depth conversation with your prospective provider about your business goals, communications needs and cost so that they can help you make the right choice for your business.

Have we talked you out of a hosted phone system? Check out our companion blog Problems with Non-Hosted Phone Systems, so you can make a full comparison!

Cory Porteous
Director of Marketing & Inbound Business Development
Office Interiors