What is Cloud Phone Systems? The Ultimate Guide

Unless you have been living under a rock, you must have come across a buzzword in the business communication technology ecosystem- cloud phone system.

But what is it? 

A question that presents itself every time someone talks about corporate phone systems efficiency, especially enterprises.  

To answer the question— Cloud-based phone systems are the new age business telephony software that replaces the traditional phone lines while offering more flexibility, efficiency, and features at lower rates. 

These cloud calling solutions eliminate the need for installing outdated on-premises phone systems, making them ideal for businesses of all sizes.  

This guide will explore everything you need to know about cloud phone service, from its benefits to selecting the right provider. 

What is a Cloud Phone System? 

A cloud phone system, aka hosted phone system or cloud-based phone service, is a cloud calling system that uses the Internet to transmit calls. Unlike its predecessors, it doesn’t rely on traditional phone lines, reducing the need for physical network infrastructure.  

Its software exists and operates on cloud based servers, using Voice over IP (VoIP) technology. It is compatible with mobile phones, computers, tablets, and even traditional office landlines.

Benefits of Cloud Phone Systems 

Cloud phone systems offer numerous benefits that can significantly enhance business operations. By adopting this technology, you can enjoy improved cost-efficiency, flexibility, scalability, and advanced features that traditional phone systems cannot provide. 

Let’s look at some of them: 

1. Cost-Effectiveness 

These hosted phone systems operate on a subscription model, significantly reducing upfront costs and maintenance costs like traditional phone systems. You can save on infrastructure expenses too, with predictable monthly fees making budgeting easier. 

Read our blog here: VoIP Vs Landlines

2. Flexibility and Remote Accessibility 

With cloud based phone systems, employees can handle calls from anywhere with an Internet connection. This is crucial for remote or hybrid work setups, ensuring seamless communication regardless of location. 

3. Scalability 

It can easily scale with growing businesses. Adding or removing users is straightforward, letting the hosted VoIP phone system adapt to your communication needs without significant investments in new hardware. 

4. Advanced Analytics 

Cloud systems often come with detailed call analytics, providing insights into customer interactions and team performance. These analytics help you optimize operations and customer services. 

How Cloud Phone Systems Work?

Cloud hosted phone systems uses VoIP technology and cloud infrastructure to facilitate communication. Here’s a quick breakdown of how they work: 

VoIP Technology 

• Digital Conversion: VoIP turns analog signals for speech through digital data packets using digital conversion. 

• Internet Transmission: The cloud system sends these data packets over the Internet to the recipient’s phone system. 

• Decoding and Playback: At the other end, the packets are transformed into their original analogue signals to guarantee clear audio transmission. 

Infrastructure Based on the Cloud 

• Remote and Hybrid Work: Cloud business phone system enables seamless communication for remote and hybrid teams, ensuring employees stay connected wherever they are.
• Customer Support: Features like inbound call routing software, IVR, and CRM integration improve customer support by allowing efficient handling of customer queries.
• Sales Enablement: With features like mobile accessibility, VoIP voicemail to email, and call analytics, sales teams can maintain productivity on the go.
• Retail and Service Industries: Real-time communication and feedback management enhance customer experience in retail and service sectors. 

Crucial Features of Cloud based Phone Systems 

Your cloud phone service features play a vital role in enhancing your operations at multiple levels, by addressing several key aspects. While each industry benefits differently from its features, here are some that are found in demand commonly across the market. 

Choosing the Right Cloud Phone System Provider 

Selecting a cloud telephony provider that aligns with your business needs is crucial. To avoid service and business interruptions, consider the following factors while choosing a phone system provider for your business: 

1. Scalability 

Choose a provider that allows easy scaling as your business grows, ensuring minimal disruption. 

2. Features and Functionality 

Ensure essential features like call forwarding, voicemail-to-email, and mobile app integration are included to meet your communication needs. 

3. Reliability and Uptime 

Pick a provider known for excellent uptime and minimal downtime to avoid disruptions. 

4. Ease of Use 

A user-friendly interface facilitates quick adoption and management of the system. 

5. Customer Support 

Ensure 24/7 customer support is available to resolve issues promptly. 

6. Cost and Pricing Structure 

Compare pricing options to find a solution that fits your budget, considering both pay-per-use and flat-rate models. 

7. Security 

Strong security measures, including end-to-end encryption, are vital to protect sensitive business communications.

8. Integrations 

Look for providers that offer seamless integration with existing tools like CRM and productivity software. 

9. Mobile and Remote Accessibility 

Ensure the system supports mobile devices and remote access for flexible communication. 

10. Reviews and Reputation 

Review customer feedback to gauge the provider’s reliability and reputation in the industry. 

Implementation Guide for Cloud Based Phone Systems 

Here is a step-by-step guide to help you implement cloud phone system in your company:

Step 1 – Select a Plan and Provider

Choose a provider that meets your business’s needs, considering scalability, features, and pricing. 

Step 2 – Configure System Settings 

Customize settings such as voicemail, auto-attendants, and call routing to align with your workflow. 

Step 3 – Connect Devices

Set up phones, laptops, or tablets to connect to the cloud system, ensuring functionality is tested.  

Step 4 – Train Your Team 

Provide training to ensure employees understand how to use the system effectively, maximizing productivity. 

Addressing Challenges with Cloud Phone Systems 

Businesses can face several challenges when implementing cloud based phone system, mainly due to their limited resources and expertise. Here’s a list of some of the challenges they can face during implementation. 

• Internet Reliability and Bandwidth Issues 

• Integration with Existing Systems 

• Vendor Reliability and Support 

• User Adoption and Training 

• Scalability Concerns 

• Limited IT Expertise 

• Security Concerns 

Out of these challenges, there are a few that are quite detrimental to operations. They are: 

Internet Reliability and Bandwidth Issues 

Why: Cloud business phone systems rely on stable Internet connections, and poor-quality connections can disrupt cloud communications, giving birth to multiple challenges. Issues like missed call solutions, poor customer service, and operational inefficiencies impact their performance and customer satisfaction scores. 

Troubleshooting this challenge 

• Ensure your Internet service provider gives sufficient bandwidth for voice data, alongside other business operations. 

• Configure your routers to prioritize voice traffic over other data types to reduce latency and jitter. 

• Have a secondary Internet connection as a failover to maintain service during outages. 

Limited IT Expertise 

Why: Growing businesses often lack the technical resources to manage and troubleshoot sophisticated hosted phone system. Without proper IT support, issues may go unresolved, leading to prolonged downtime, which can affect day-to-day operations. 

Troubleshooting this challenge 

• Engage and coordinate frequently with your cloud phone service provider to handle the setup, maintenance, and troubleshooting. 

• Leverage vendor-provided training and 24/7 support services to equip your team with basic troubleshooting skills. 

• Select a hosted phone system that has an intuitive dashboard to simplify viewing and managing routine task.

Security Concerns 

Why: Cybersecurity threats lead to many detrimental issues, damaging your resources and limiting your capability to recover from them. Such security-threatening incidents can lead to high customer churn rates, regulatory penalties, and revenue loss. 

Troubleshooting this challenge 

• Use services that offer end-to-end encryption for voice and data. 

• Implement VoIP firewalls and Virtual Private Networks (VPNs) to secure communications. 

• Keep your systems updated with the latest security patches and firmware. 

The Wrap Up 

Cloud based business phone systems are a transformative solution, offering cost savings, scalability, and advanced features. By selecting the right service provider and addressing potential challenges early, you can maximize the VoIP benefits, enhancing communication and productivity. Embracing a cloud based phone system is a step toward modern and efficient business operations.