VoIP vs Traditional Phone Systems

Living in the digital era, we’re all accustomed to instant communication.

Whether it’s an update on the news, a WhatsApp message or a notification from Facebook, we settle for nothing less than hyper-efficient messaging – and your business deserves nothing less.

Organisations of all sizes are now recognising the importance of leveraging Voice over Internet Protocol (VoIP) to achieve seamless connectivity that will help them unlock their full potential.

Although the traditional phone system fulfils its objective effectively, digital technology has made businesses vastly more interconnected with superior ease.

The VoIP phone system dates back to 1973, but it’s only recently that it has become a near-mandatory asset for all savvy business owners looking to communicate more effectively and ultimately gain an advantage over their competition.

In this article, we’ll break down what VoIP is, how it compares with the traditional phone system and how adopting VoIP technology can benefit your business.

What is VoIP and how is it different from the traditional phone system?

Simply put, VoIP is a digital innovation that allows you to make calls via the internet instead of a telecommunications provider. This means that you’re able to make a VoIP call from any device at any location, providing that you have access to the internet.

Conversely, traditional telephony uses landlines to connect calls.

Within the traditional phone system, businesses can use either a private branch exchange (PBX) or a public switched telephone line (PSTN).

Although these two models both operate using landlines, they differ in functionality.

PSTN operates on one line for one conversation only, using one phone number – hardly ideal for businesses that want every employee to have a phone at their desk.

This cumbersome way of connecting staff with clients or even with one another makes many organisations who still rely on landlines opt for the PBX model.

Instead of sharing one line, PBX enables employees to use one phone number and quickly transfer calls to one another on local lines, providing a vastly more efficient way of communicating.

How does VoIP work?

Since VoIP operates digitally, your voice signal needs to be translated into a format that can be transported through the internet.

This process works using a program called codecs.

When using VoIP, your voice is compressed into digital packets for transmission and are then turned back into their original audio form once they arrive with the receiver.

By contrast, traditional telephony uses copper wires to transmit messages from point A to B. It’s the physical phone line system that most of us have grown up with – and it’s beginning to be seen as a rather outdated model.

How can VoIP benefit my business?

1. Reduce costs 

One of the main benefits VoIP offers to businesses is that it can be extremely cost-effective.

In contrast, using a telecommunications provider can be expensive, even extortionate, especially for firms having to make frequent international calls.

Not having to face up to expensive phone bills at the end of each month is a simple and effective way to reduce overhead expenses.

2. Increased flexibility & mobility

As well as providing a more cost-effective solution, VoIP enables businesses to integrate software programs such as remote conferencing, email and e-fax over the internet through the telephone.

To put it simply, an employee using VoIP can speak to somebody on the phone while using other important applications.

Telephone conversations can be taken anywhere as long as there’s access to an internet connection. This freedom allows employees to make calls on the move, which is especially important for those required to travel a lot to attend corporate events.

In contrast, the traditional phone system restricts staff to making calls from one location – the office.

3. Easy to install

Installing VoIP requires minimal technical aptitude.

Setting up a traditional telephone system is tedious and will most likely require a technician to appropriately install and safely separate its cables.

Additionally, cables from traditional telephony can create a lot of clutter, also increasing the chances of a fire hazard with all the electrical wires.

Opting for VoIP frees up space, is easy to install and safer to operate.

4. Voice quality

Providing that you have a strong internet connection with good bandwidth, VoIP systems offer greater sound quality compared with analogue phone lines.

Since the introduction of full fast fibre, IP networks have been able to transmit audio at a greater speed with more audio clarity.

VoIP & Remote Working

Covid-19 has led to a rapid shift in businesses having to work from home and rely on digital software and technology to maintain productivity.

For many businesses, this has actually been a blessing in disguise.

A decrease in both on-site technology spend and in-house expenses such as electricity bills have awakened businesses to a more cost-effective model of flexible working which comes with an increase in employee satisfaction.

Staff being able to spend less time and money getting to and from work creates a happier workforce.

Gartner recently conducted a study that involved interviewing 317 different CFOs during the Covid-19 pandemic, and their research suggests that remote working will become increasingly the new normal, even when lockdown restrictions are completely removed.

So what relevance does this have to VoIP?

Well, given that the entire remote working model is sustained by VoIP, there’s likely to be a rise in demand for this technology.

Switching from traditional telephony is fast becoming a mandatory requirement for organisations looking to adapt to a more agile business model.

Final thoughts

The increasing reliance on VoIP technology for effective communication is already phasing out traditional telephony.

VoIP offers businesses an opportunity to become more responsive, flexible and efficient – all by simply switching to an easier, more tech-savvy form of communication.

By contrast, the traditional telephone system uses a more cumbersome way of working that stifles flexibility.

Businesses can now operate globally with fewer restrictions and greater efficiency, and the recent forced switch to remote working due to the global pandemic has only shed more light on the value of VoIP technology.

Thanks to VoIP, businesses are still able to maintain high levels of productivity despite working from home.

This is a trend that is likely to grow even after restrictions are lifted, suggesting an even greater demand for VoIP technology to be on the horizon.