Basic Telephone InformationHow to Choose an Office Phone System

The 411 on Office Phone Systems

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Office Telephone systems are a fundamental necessity to your company’s productivity. As hot as the Internet is, the telephone is often the easiest way to reach your customers, clients, and partners.It should also be the easiest way for them to reach you. You don’t want anyone calling your business only to have calls routed incorrectly, to get disconnected, or to be faced with a bewildering array of automated options.There are many factors to consider when buying a telephone system. For example, you’ll want to coordinate your purchase with other equipment that you already own or may need to purchase, such as a voice mail or messaging on-hold system, phone headsets, toll fraud equipment, or tabletop conferencing equipment.Or if you’re a very small firm, you may not need a full-blown phone system, but still require something more sophisticated than single or multi-line phones.

Types of Office Phone Systems

There are a few different major types of office phone systems on the market: Key systems (KSU), Private Branch Exchange (PBX), and KSU-less. The type of system you choose will depend primarily on how many stations (working phones) you require.

Key systems are typically used for offices of less than sixty (60) stations. Prices begin around $200.00 per station.

These types of phones use a central control unit, called the Key System Unit (KSU), to provide features that are not available with ordinary phones. For example, a central unit typically allows users to make calls to another in-office extension, and prevents other users from accidentally picking up a line that is being used.

Key systems require professional installation and maintenance. All outside telephone lines must connect to the KSU, as well as all inside extensions. Unfortunately, configuring and wiring these phone systems can be nearly as costly as the phones themselves.

For a company of more than sixty employees there are PBX systems. The configuration of a PBX system is totally programmable, so PBX systems can support the most complex features. But watch out – prices start at around $500 per station.

More recently, the distinctions between the key and PBX systems have become relatively blurred. Many key systems include features that were once available only on PBXs, and some systems operate internally as either a key or a PBX depending on the software that is installed. The term “hybrid” is often used to describe systems that resemble both key and PBX systems.

And for the smallest firms (ten or less employees) there’s KSU-less, which generally cost around $130.00 to $225.00 per phone. KSU-less phone systems are designed to provide the features of a small phone system in a decentralized manner. These phones contain proprietary circuitry that allows them to communicate without requiring a central cabinet.

KSU-less systems are not permanently wired into your office. These phones can easily be unplugged and moved to a new location, or sold. This flexibility allows you to treat a KSU-less system much like any other business machine, rather than as a permanent investment in your premises.

Make sure any KSU-less system you are considering is compatible with the type of telephone wiring used in your office. The system should also be able to work with telephone accessories such as answering machines and modems.


Sizing an Office Phone System

When buying a system, a primary concern is to make sure that the system is the right size for your office. This means understanding the size constraints of the system.

In the case of key systems, system size is usually indicated as a combination of “lines” and “extensions.” Lines indicate the total number of outside lines used by the company, while extensions refer to every phone within the company. For example, a system might accommodate up to 12 lines and 36 extensions.

In contrast, most PBXs define size in terms of “ports.” Ports indicate the maximum number of connections that can be made to the system. This includes outside lines and inside extensions, as well as accessories such as voice mail or automated attendants.

Even if a system can handle your current phone traffic, you also need to check that it will be able to handle your future expansion needs. The ideal system should be able to handle such expansions in a very cost-effective manner.

Check which items will need to be purchased or replaced as your needs grow in order to get a good sense for your future costs.


Digital vs. Analog office phone systems

Most newer and more expensive phone systems communicate via digital technology. This means that sound is transmitted as bits of data rather than audio waves.

Theoretically, digital transmission has many advantages over analog transmission. Digital signals are less affected by interference and line degradation, meaning that digital lines have virtually no static or hiss.

However, most businesses make outgoing calls over regular analog lines. This means that even a digital phone system must convert signals back to analog waves whenever a call leaves the office. Because very little sound degradation occurs within the smaller confines of an office, analog systems actually sound about the same as their digital counterparts.

The main reason for buying a digital system is that these systems tend to be better equipped to connect with accessories such as voice mail or caller ID.



Office telephone Systems can be equipped with literally hundreds of features for switching calls and directing traffic. However, dealers estimate that 95% of system features are never used within a company.

Instead of comparing features on a one-to-one basis, you should examine how a phone system is used. Limit your feature search only to those features that will improve the work flow in the office. This will allow you to focus on the real differences between systems for your office environment.

Although having the right features is important, even more important is making sure the features are easy to access. Because most employees devote very little time to learning how to use a phone system, it is very important that the most common functions be extremely simple and intuitive to use.



Virtually all office phone systems require the assistance of a dealer for programming and installation. As a result, finding a good dealer can be the most important part of the purchase, since any phone system you choose needs to be properly installed for optimal performance.

The most important consideration in choosing a dealer is the number of installations completed with your system. A dealer who has installed many of the same systems will be much more familiar with the problems that can occur.

Ideally, the brand you are considering should be the best selling brand sold by the dealer. Knowing that the dealer is committed to the line, you can be assured of a long-term source for service.

You should inquire about the dealer’s specific installation experience. Ask about the size of the companies involved, and what options or features were added. Also make sure to obtain a list of references, including several completed in the past year, so you can ask about their experiences in detail.



KSU-less office systems generally cost between $130.00 and $225.00 per phone. Comparable key systems generally start at $250.00 per phone, including installation.

The savings from buying KSU-less phones can quickly exceed $1,000.00 on a typical eight-phone system. But keep in mind that this option is really only best for firms of 10 or fewer people.

While the smallest systems may cost a few thousand dollars to install, the price tag for more complex models can quickly climb to tens of thousands of dollars. Phone system prices vary based on four factors:


Factor one: The Central Cabinet

The central cabinet is what controls and oversees the entire phone system. This price differs between systems, and rises as cards and accessories are added to a system. A small central cabinet can cost as little as $3,000.00, with the price increasing considerably for larger systems.

Factor two: The Actual Phones

Most systems can be equipped with several different types of phones. The least expensive sets may cost less than $100, but can make accessing features very difficult.

On the other end, some “executive phones” sell for many times the standard price. These phones can make using the system slightly easier, but are more often just a significant source of profit for the dealer.

Factor Three: Wiring and Installation

It can be very inexpensive to install wires in an unfinished building. However, installing wiring through already finished walls can quickly add up.

Factor Four: Everything Else

This includes training, programming, service, and future modifications. Pricing is usually based on the time these tasks will require, and can often be the most flexible portion of a bid.

Sometimes, it is best to compare the hours that will be spent completing training/ programming/ service tasks with the price tag for the service.


Buying Tips

Consider used phone equipment for your office. One good way to save money is to buy used components such as phones or cards.

Check voice mail compatibility. If you expect to use voice mail with your phone system, make sure that any phone system you are considering is capable of working with a wide range of third-party voice mail systems. By keeping your options open, you will minimize the chance of getting stuck with an inferior or overpriced product.

Get extra wiring installed. To avoid rewiring down the road, you should request that plenty of wiring be installed when the system is first purchased. A good benchmark is to ask for at least double the wiring you currently need. While this will add to the cost of installation, it will really only be a fraction of the cost you will face if wires need to be added later.

When to Shop and Buy.

Shop for a dealer’s advice at the beginning of the business quarter when sales targets have just been set, and make your purchase at the end of the quarter when you can get a much lower price.

Look into phone line rates before selecting a system. Many local phone companies charge different rates for phone lines that connect a key system versus phone lines that connect a PBX, even though both have essentially the same functionality. Check rates beforehand to see if this may affect your buying decision.

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Basic Telephone InformationHow to Choose a Phone SystemThe 411 on Phone SystemsHome Network Telcom Wiring Diagram What do you need? What about voice mail? Do you need to re-cable? Where do you start?First and foremost, understand your company’s current and long-term communications needs — not just the number of telephones and lines your business requires, but what challenges your employees and customers face every day communicating within your company.Remember, your phone system offers the first impression you give to anyone interacting with your business. Ask your customers what they think; they are an invaluable source of information. Survey your employees; they use the system every day, and will be able to tell you about some of the problems they face. Look at the facility; do you need to re-cable? If so, how will the computer system fit into your overall wiring plan? These types of questions need to be answered.One of the most frequent mistakes in buying a communications system is underestimating the potential for the future. If you buy a system not designed for growth, you can practically throw away your investment.For companies to effectively compete they must be able to understand and invest in the new information technologies. With this concept in mind, many companies are developing a long-term “technology plan.” This mean you will need to integrate voice communications into your LAN or desktop PC, employ unified messaging bringing e-mail, fax mail, voice mail, Internet mail, video mail, etc., to your desktop. Intelligent links to the public telephone network will be a must in the next two years.


Open for bids

Once you have an understanding of the needs of your organization, you can start your search for the proper equipment.

The bid process can become very time-consuming. Get at least three bids and no more than five. When looking at equipment, I suggest making what I call a “platform” decision first. A platform is defined as a system that can integrate with many systems such as voice mail, LANs and e-mail, video conferencing etc.

This platform must be digital from the system right down to the telephone set. This platform must also be “open,” meaning it’s a system that can be hooked to a computer or computer system that will house customized programming. Make sure that any system you are going to consider meets these requirements.

All phone systems have a multitude of features. Always ask the vendor what a certain feature will do for your company, not just what it does. Certain must-have features include: ISDN PRI/BRI enabling multi-media, mixed voice and data communications, multiple T-1 lines, caller ID services, computer telephone integration (TAPI/TSAPI) and remote maintenance of the system.

Equally as important as the equipment you choose, will be the vendor who designs, implements, trains and supports the system. Vendors’ representatives should be able to take the information you give them regarding your company’s requirements and address these issues with their equipment and feature applications. They should also become very familiar with your business before they ever quote a price.


Most Important Business Tool

Remember, you are investing in your most important business tool. Deal only with reputable companies with proven track records. Ask for many references, not just the few they give you. Also, ask for ones with several years of service history with that company.

Inquire about the experience level of the representative who will be consulting you. How long has he been employed with the company? Visit your prospective vendors’ facilities. Meet the people who will be implementing your system. Ask about their technical staff’s abilities. Are their technicians certified by the manufacturer of the equipment you are considering? What are their quoted response times if you need service? Do they have adequate inventory locally in case of a major system failure? How in-depth is the training they will provide for you? This is the company that you will be entrusting with your communications needs for the next several years. Check it out thoroughly.

Finally, determine what the system will cost. Look at your costs for five-years. What will the maintenance costs be? Factor in reliability — if your system continually goes down, what will that cost in lost revenues and goodwill? As your company grows, what will the upgrade costs be?

Some manufacturers of telephone equipment sell direct to the end-user, often the only source for service and equipment. Others sell their products through authorized distributors, which generally offer several choices. Make sure your bidding vendors provide you with a post-installation price sheet for equipment you may add later.

Factor in how well each system manages your network costs, such as hone lines and long distance charges. It may be that a more expensive system can save you money on your network costs and thus cost less during a five-year period. Do not just look at the upfront cost. The cheapest price may cost you and your company the most over the long run.

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Basic Telephone InformationHow to Choose a Phone SystemThe 411 on Phone SystemsHome Network Telcom Wiring Diagram Background On Office Telephone SystemsIf you’re looking for a telephone system for your business, you may already be overwhelmed in the process. Telephone systems are expensive, complex pieces of equipment that can have important differences among competing brands. It can be difficult to understand which of the features are functions are in fact the most important ones, and it can be easy to buy the wrong system. This short, concise guide was put together to give you the background and insight into how phone systems work so that you can find the best telephone system for you and your company.


Features and Services to Look for in Office and Business Phone SystemsThe first place to start when looking for a telephone system is to consider the capacity that you will need. This is not always as easy as it sounds, as you have to take into consideration call volumes, call patterns, and potential future growth. It is important to understand the difference between lines and between extensions. A line is just like your home phone line- it allows for one conversation at a time. An extension is the actual physical phone set that rests on each desk. A phone system allows for sharing of the lines among employees, so that each employee does not require his or her own separate line. When a call comes in or someone wants to call out, the extension ‘grabs’ one of the lines for the duration of the call. When the call is terminated, the line is then available for other users.To explore the capacity question with an example, let’s say that you have 10 employees. If these employees are in a call center or otherwise on the phone much of the time, you may want capacity for around 10 lines- maybe more depending on how you will handle overflow traffic. On the other hand, if these 10 employees use the phone sporadically, it is very unlikely that they will all be on the phone at the same time. Therefore, you wouldn’t need 10 lines. Remember that regardless of the number of lines, you will still need the same number of extensions, or phone handsets.Telephone systems have a set capacity both for the number of lines that can be handled, as well as the number of extensions that can be managed. Many telephone systems have the ability to add to this capacity, and this is critical if you think there is any chance that your company will need additional capacity in the future. Additional capacity is usually added by installing additional components to the telephone system as well as getting additional handsets. However, the hard part is balancing the need to conserve money now and the need to have sufficient capacity so your company doesn’t need to spend significant money later to replace an overtaxed telephone system down the road.


The cost of the telephone system will always be a balance of capacity and other features that we’ll go over next. Telephone systems can usually be purchased outright or leased, and some companies will buy back your current phone system as a credit on the purchase of a new telephone system. Some telephone system dealers will even agree to buyback your new telephone system down the road at an agreed-upon price as a hedge against future expenditures. Some telephone dealers will give you the option of purchasing new or refurbished telephone systems. Refurbished systems will of course cost less, and can even be leased just like new telephone systems.

Repairs to and configuring of the phone system (re-routing lines, setting up new extensions, etc.) is to be expected over the life of the phone system, which brings up two additional considerations- warranty and service. All new and many refurbished telephone systems come with some warranty, and just like any other purchase, reading and understanding the fine print of the warranty is very important. You might find different guarantees and replacement policies for different components of the system, such as the system itself and the handsets attached to the system. You will also want to find out who will be servicing any repair work, and what sort of response time you can expect.

Telephone systems are usually sold through dealers, who are usually certified to install, service and repair the select manufacturer’s models. Your choice of dealer may depend on the geographic distribution of your company. If you have multiple locations, you might want to find a dealer that has locations in the same cities so that you can just have one vendor and economies of service and scale for service of your system.


One of the latest advances in telephone system technology is the IP-based telephony. IP telephony has been around for several years and is a proven and readily available technology, although adoption across the board has not been overwhelming. IP-based telephone systems are digital (although not all digital telephone systems are IP-based, and forget analog forever) systems that become part of your network and use IP technology to route and process calls. They also offer additional flexibilities by allowing users to move extensions without having to re-program the telephone system and to change settings on a computer rather than via a menu on the handset. There are other advantages to IP telephony, and the decision to use it often comes down to cost, specific advantages it brings the company, and the technical expertise of the telecom department and/or IT staff.

One of the most common features of any phone system is voicemail. Virtually all phone systems have some sort of voicemail capability, which may or may not be included in the cost of the telephone system. For your purposes in researching telephone systems, consider voicemail as a totally separate feature to be evaluated alone. In other words, don’t just assume that ‘OK, the system has voicemail, I’ll take it’. Depending on how voicemail is used at your company or would be used, you will want to make sure that the voicemail component you choose is robust enough to handle those needs. Users get very accustomed to how their voicemail works and can create an uprising if a new voicemail system lacks any of the features that they’re used to (call forwarding, broadcast, etc.)

For the purposes of this guide, the above features and components are the biggest ones to consider and should give you a good start in your buying process. Once you start getting into the details of telephone systems, you will realize that there are hundreds of potential features, like hunting, music on hold, paging, etc., that are just too numerous to get into here. Just stay focused on the features you think will be needed and/or used, and don’t be dazzled by all the cool things the telephone system ‘could do’.


How to Find the Best Phone Systems For Your Office

The process for buying a telephone system starts, of course, with your needs. After reading this short guide, you should have a general idea of what your needs are, and some questions to keep in mind when shopping. The next step is searching for a dealer online or in your area, ideally one that sells many different models of phone systems and has certified techs to install and service the respective systems. There is traditionally a lot of margin in the cost of telephone systems, so you may want to consider speaking with a couple telephone system dealers to negotiate with. This not only ensures that you’re getting competitive quotes, but can also put you in a situation where one of the dealers will give you a better discount to earn your business. Finding the right system can be complex, so be prepared to take a lot of notes and get into significant detail about the system, the cost, the installation and all of the other features mentioned above. The more attention you pay to this process, the higher the likelihood that your company will find the right system.