What is PABX System? A Comprehensive Guide

Is your business tired of using one-to-one dedicated phone lines to communicate? Do you have a company that is based in multiple locations?

If so, using PABX might be the solution you are looking for. 

Private Automatic Branch Exchange (PABX) is a privately run telephone network used, especially by large corporations, to facilitate communication. PABX systems allow multiple users to share a single phone line.

This article provides a comprehensive guide to the PABX system and highlights its workings, types, features, benefits, and drawbacks. 

Let’s get into it. 🚀

🔑 Key Highlights

• PABX systems help to manage internal and external calls efficiently, enabling seamless communication within organizations.
  
• PABX evolved from manual PBX systems to automated, digital, and VoIP technologies.
• The types of PABX systems include Analog, Digital, IP, and Hybrid systems, each with distinct features and advantages.
  
• Major drawbacks include High initial setup costs, reliance on physical infrastructure, integration challenges, and maintenance issues.
• Modern businesses are switching to cloud-based systems as they offer greater flexibility and features.

What is PABX system? 

PABX stands for Private Automatic Branch Exchange and is a telephone network that links external and internal callers using a switchboard. One of the exciting features it provides is that it does not need manual operation in the middle. 

This feature is used by organizations with large traffic based on multiple locations where users need to share a single phone line. A Private Automatic Branch Exchange telephone system manages essential features like call routing, call processing, voicemail, and other telephone functions. 

PABX enables companies to have multiple extensions under a single extension number, reducing the necessity for multiple landlines connected to the public network, which costs more.

A Private Automated Branch Exchange system can connect various devices within an organization, with each device assigned its extension number.

Evolution of PABX Systems

Before the advent of PBX systems, every call had to go through a public exchange, which was a hassle as every process needed a one-to-one dedicated phone line. To simplify communications, especially in large corporations, PBX systems were popularized in the early 1960s. 

Large businesses, including corporations and government agencies, quickly adopted PBX systems due to their cost-effectiveness and ability to improve communication. PBX systems started to change in the 1950s and 60s when new features like caller ID, voicemail, and computerized call routing were added.

Even though PBX systems solved a crucial problem, they were still inaccessible to the public. The exchanges within the system were completely manual, which led to many people opting against them until PABX systems were introduced in the 1980s.

After the Internet for the public was introduced in 1993, these processes started to gain popularity amongst the general public. The introduction of VoIP (Voice over Internet Protocol) broadened the application of PABX systems by allowing users to receive and send messages through the Internet. 

How does a PABX system work?

When PABX systems were first used, analog connections were used to join private networks with public networks. With the advent of digitization, businesses started to prioritize multiplex connections. A multiplex connection means that a phone can have at least 30 connections at one time. 

With further advancements, most PABX telephone systems started using VoIP systems. Nowadays, telephone services use IP protocol to connect public telephone networks and private phones. 

Modern PABX systems consist of a switchboard console, system hardware, and a computer with connecting wires. The current hosted PABX system uses Voice Over Internet Protocol (VoIP) to send and receive digital signal packets. The first step in this process is to convert an analog signal to a digital one.

The workings of a PABX system can be understood with the following step by step guide.

• Incoming Call

When the PABX system receives an incoming call, it identifies the call source and manages the call according to a set of rules or settings. The system initially manages and monitors the call. 

• Call Routing

The system transfers (routes) incoming calls to the appropriate destination based on the configured rules, including routing calls to particular extensions, departments, or external lines to ensure smooth call handling. 

• Automatic Attendant

The Automatic Attendant property in PABX allows you to pre-record a message to help callers through a menu of options, which routes the calls to the correct extension without the need for human intervention.  

• Extension Dialing

Extension Dialing in PABX systems refers to the feature where consumers can call short, internal numbers to contact colleagues. This feature is essential for quickening communication within the organization and eliminating the need for an external phone line. 

• Call Connection

After completing the call routing, the PABX system then proceeds to establish a connection between the caller and the recipient, which is an essential step in the PABX functionality, as it ensures seamless communication. 

• Internal Calls

Internal calls within a PABX system refer to calls made between components within the same PABX system. These calls bypass phone lines, and their overall cost is fairly low. 

• Call Management Features

The PABX system offers Call Management Features such as call forwarding, call waiting, voicemail, and conference calling. These features ensure effective communication and enhanced flexibility within the system. 

• Outgoing Calls

Calls made outside of a PABX system are often referred to as Outgoing Calls. For those calls, the system manages the dialing process, access to external lines, and potential specific phone numbers.

• Billing and reporting

PABX systems include billing features to monitor call usage, patterns, and cost. This feature helps an organization check its financial state and enables better decision-making. 

• Integration

Often, businesses are not satisfied with the features offered by the PABX systems, which can integrate other business applications, such as CRM software and email systems. Integrating other features allows for the management of customer communication and data. 

Types of PABX Systems

Private Automatic Branch Exchange (PABX) comes in various types. The users can choose which ones they prefer based on their requirements. Each type may offer a different business communication feature that solves a specific consumer problem. 

Following are some of the most common types of PABX systems: 

I. Analog PABX systems:

They employ regular Plain Old Telephone Service (POTS) to communicate. Even though they are not as popular as the newer and more advanced systems, they ensure excellent speech quality. They are reliable and provide features like hold, mute, redial, and speed dial. 

Analog systems link phones by sending signals through copper wires and a series of physical switches. Once a connection is established, the data is transferred without fear of loss. 

Pros: 

• Simple to use
• Low Installation Cost
• Highly Reliable
• Easy to Integrate
• Less vulnerable to cyber threats

Cons: 

• Low Scalability
• High Maintainance Cost
• Limited Features

II. Digital PABX systems:

They were introduced in the 1970s as a better version of analog systems and gained quick popularity among the public. The major difference between Digital and analog PABX systems is that they use digital signals instead of analog ones. 

Digital PABX systems use digital signals and offer additional features like advanced call routing and automated attendants. They are easy to reprogram and provide more reliable voice transfer. 

Pros: 

• Enhanced features
• Highly scalable
• Cost efficiency
• Data management
• Integration

Cons: 

• Expensive Installation
• Complexity
• Management
• Hardware Dependency

III. IP PABX systems:

Unlike Digital and Analog PABX systems, IP PABX (Internet Protocol Private Automatic Branch Exchange) systems do not need a dedicated voice network. These systems use computer networks to transfer voice.

IP PABX systems that use a computer network to transfer voice are often referred to as VoIP (Voice over Internet Protocol). Since the advent of IP PABX systems, digital and analog systems have been limited to specific uses only. 

IP PABX systems provide the top features of Call Waiting, hold, transfer, Parking, Paging, and recording.

Pros:

• Centralized Management
• Cost Effectiveness
• Advanced Feature Integration
• Scalability

Cons: 

• Potential Downtime
• Dependency on Internet
• Initial Setup Cost
• Maintenance Issues
• Security Risks

IV. Hybrid PABX system:

Hybrid PABX systems combine the best of all the other systems and offer features of both analog and digital systems. This allows the organization to use these systems to adapt to its needs. 

With the increase in communication needs, organizations can’t solely rely on one system. They have to adapt according to circumstances, which is where Hybrid PABX systems come into play. 

By sacrificing some flexibility, Hybrid Systems offer a wider range of features, which is enticing to many organizations today. 

Pros: 

• Adaptability
• Reliability
• Gradual Cloud Migration
• Enhanced Features

Cons: 

• Limited Flexibility
• Higher Costs
• Difficult to maintain

PABX vs PBX: What are the differences?

In simple terms, PABX and PBX share many similarities. PABX is nothing more than an advanced version of the PBX phone system. As the full forms indicate, the major additional functionality in PABX is automation. 

But there are some minor differences between the two. To understand how they differentiate from each other, let’s look at the table below:

Aspect	PBX (Private Branch Exchange)	PABX (Private Automatic Branch Exchange)
Definition	A telephony system is used to connect internal phones and manage external calls.	Advanced version of PBX with additional features of automation for call management and routing
Automation	Fully manual or semi-automatic with a lot of human intervention	Fully automated with minimal to no human intervention needed
Technology	Mainly utilize older analog or early digital technologies.	Modern digital and VoIP technologies are used.
Cost	The initial cost is low, but the higher maintenance cost	Initial setup costs are higher comparatively, but the maintenance costs are lower
Installation	Physical hardware and wiring needed	More flexible installation options, including cloud-based solutions
Features	Has basic features like call transfer and voicemail	Includes advanced features like voicemail to email, call forwarding
Flexibility	It is less flexible and more difficult to adapt to new technologies	Highly flexible and easy to adjust to new technologies and business needs
Scalability	Requires significant upgrades to expand	Easily scalable and can be easily upgraded or expanded
Call Management	Basic call routing and call handling are manual	Advanced call routing and automated attendant
Maintenance	Higher maintenance is needed because of older technologies	Less maintenance is required as newer technology is used

Features of a PABX System

Because of the features it provides, PABX systems are opted by a lot of organizations. Here are some of the most common features offered by those systems: 

A. Call Routing

Call Routing within a PABX system is a feature designed to manage incoming calls efficiently and send them to the appropriate destinations. A key feature PABX provides is Automatic Call Distribution (ACD), which helps by distributing calls to various departments based on criteria or the caller’s demands. 

PABX also provides Interactive Voice Response (IVR) and Time-Based Routing, which allows businesses to handle calls based on the time of day.

B. Automated Attendant

The PABX system’s major advantage over PBX systems is the integration of the Automated Attendant, which reduces the need for human intervention. This feature answers incoming calls with a pre-recorded message and offers a menu of options for the caller. 

This system also transfers the call to appropriate departments without needing manual attendance. 

C. Extension Dialing

In PABX systems, Extension Dialing refers to the feature that allows users to contact distinct groups or individuals in a large organization. The users are provided with dedicated extension lines, which would enable internal and external callers to reach the employees quickly. 

D. Voicemail

The voicemail feature in PABX allows callers to leave messages when the receiver is not available. Personal voicemail boxes help users access their message system, allowing them direct access or via email.

PABX systems also have a voicemail-to-email feature. This feature sends the audio files to the email accounts of the users. 

E. Queue Management

In PABX systems, the queue management feature helps to handle multiple calls by placing them in a line until a receiver is free to receive them. It reduces wait times and offers features like wait time computation and call prioritization. 

F. Caller ID

PABX systems allow features related to Caller ID, which enable the system to display information about incoming calls on phones that have Caller ID enabled. The data about the caller is transmitted between the first two rings, allowing the users to know about the callers. 

G. Conference Calling

This feature allows users to host multiparty calls. A conference calling feature is crucial for meetings and collaborative work. PABX systems also have features for scheduling calls and sending invites to all participants. 

Additionally, this feature allows users to record these calls for further reference or documentation, which helps facilitate better follow-up. 

H. Call Forwarding

This function within PABX systems provides users with flexibility in managing incoming calls. There are two types of call forwarding: Unconditional and Conditional. 

Unconditional call forwarding redirects calls to another number but Conditional call forwarding only allows calls to be forwarded based on specific conditions. 

I. Call Recording

As the name suggests, this feature helps to record phone conversations. These conversations can be checked for further purposes, such as training, and quality control. Recorded calls can also be called back later to solve issues like routine assessment, and discipline keeping.

J. Call Transfer

The PABX system allows a Call transfer feature, where an active call can be moved from one extension to another without ending the call. This will improve communication and efficiency. Additional options like playing music on hold and providing prompts during transfer are available during a call transfer. 

Benefits of using the PABX system

1. Cost Reduction

PABX systems reduce the overall cost of operation through automation and the use of VoIP technology. This makes communication cheaper compared to traditional phone systems. 

PABX systems simplify operations and lower costs by stopping the need for complex wiring. They also enable connectivity across different areas.

2. Scalable Architecture

In PABX IP systems, Scalability is the ability to grow and accommodate increasing demands. As the business grows, the PABX system allows users to add more lines, extensions, and hardware without significant adjustments or troubles. 

PABX IP can be scaled with software, but traditional systems may require additional hardware. 

3. Improved Communication

PABX systems also improve communication by adding features like Automated Attendants and Call routing. Additional features such as Voicemail to Email and Call transfer help users improve communication. 

If more extension lines are required, the PABX system offers an infrastructure that can be scaled according to the needs. This feature will help the organization adapt to changes. 

4. Additional Features

PABX systems offer several advanced features to improve performance. Some of the major features provided by the system are Voicemail, Auto-attendant, Call Routing, Conference Calling, Speed Dialing, Call Forwarding, and Caller ID.

Having these functions improves user experience and seamless integration of communication.

5. Integration

With PABX systems, users can connect to other software using APIs. The software that can be added to the systems can be CRM systems, AI chatbots, or other communication tools. 

This feature improves the workspace by improving streamlined communication and automated processes. 

6. Centralized Control

In PABX systems, Centralized Control allows managers to efficiently manage multiple phone lines and communication functions from a single outlet, facilitating network management across various sites.

7. Enhanced Security

PABX systems offer strong security measures for data transmission, which enhances security. Users can also implement firewall protection to block unauthorized access and filter incoming traffic. 

To ensure complete enhanced security, it is also important to use PABX systems from reputable providers. 

Drawbacks of using the PABX system

I. High initial setup cost

Even though the cost of operating the PABX system is lower than that of other traditional systems, setting up the system can cost a bit more. This drawback is a major disadvantage as smaller organizations might not be able to afford the set-up cost.

It is said that the average cost of a PBX phone system is $1000 per user.

II. Reliance on Physical Infrastructure

Another major drawback of PABX systems is the fact that they are heavily dependent on physical infrastructure. They also require dedicated hardware, installation space, and heavy maintenance. 

Setting up a PABX system is hard and requires hard labor and trained people to set up the systems initially. Any hardware failure can also result in downtime. 

III. Difficulty in integration with newer technology

Compatibility issues and outdated infrastructure pose a dangerous threat to PABX systems. They can make integrating newer technologies within the system difficult. These issues also harm communication and other general functionality, reducing the system’s efficiency and scalability. 

IV. Ongoing Maintenance and Support requirements

With more complex technologies come much harder maintenance issues, and with PABX systems, any problems arising might take a long time to fix. 

It is also harder for a layperson to solve arising issues, and trained personnel are needed to fix them. 

V. Potential Downtime

As the PABX system offers a highly complex infrastructure, any minor mishaps within the system can result in downtime. Fixing the issue might take some time. 

Large organizations with massive daily traffic can’t afford downtime, as even a small amount of lost time can result in big losses. 

Upgrade from Old PABX to Cloud Telephony: Choose us

Although PABX technologies provide a wide range of features, businesses should upgrade to cloud telephony to adapt to changes over time. 

Cloud telephony is a system that uses internet-based technology to deliver telephone services. It allows businesses to handle voice communication through cloud infrastructure instead of traditional phone systems. 

Are you looking to switch to Cloud Telephony? Look no further than Dialaxy. It’s the top choice for all your cloud telephony needs! 

Dialaxy stands out as the best provider of cloud telephony services integrated with more than 100+ exciting features catering to all of your communication demands. Our intuitive interface, effective call management tools, and features regarding contact center make us the trusted source for many top organizations, and your business can be next. 

FAQs

What Type of PABX is used in most companies today?

The majority of businesses today use IP-based Private Automatic Branch Exchange (PABX) systems, often known as VoIP (Voice over Internet Protocol) systems or IP-PABX systems. These systems are much more flexible and have more features than their traditional counterparts. 

What is the difference between SIP and PABX?

SIP (Session Initiation Protocol) manages multimedia communication sessions, while PABX (Private Automatic Branch Exchange) manages internal communications. SIP can also be integrated into PABX.

What are the components of a PABX system?

Here are the components of a PABX system: 

• Telephone Sets
• Voicemail System
• Call Management Software
• Trunk and extension lines for internal and external communication
• Networking hardware
• Add-ons (Call forwarding and conferencing)

Do people still use PABX?

Yes, large businesses still use PABX to manage their communication. Traditional systems have been replaced by systems integrated with VOIP.

Is PABX analog or digital?

PABX systems can be analog or digital. Analog systems use traditional telephone lines, while digital systems handle more complex features like voicemail and call forwarding.