When deciding how to manage your business phone system, you'll often hear about two main options: hosted VoIP (Voice over Internet Protocol) and on-premises phone systems. Hosted VoIP means your phone service is delivered over the internet by a third-party provider, with the equipment and software managed off-site. On-premises systems, by contrast, involve physical phone hardware and servers located right in your office, which your IT team or provider maintains.
Why this matters for Canadian SMBs
Choosing between hosted VoIP and on-premises phone systems affects more than just call quality or features. It can impact your business continuity, cybersecurity, and staff productivity. For example, hosted VoIP systems depend heavily on your internet connection. If your internet goes down, so does your phone service, potentially causing missed calls from clients or suppliers. On-premises systems may keep working internally during an outage but require more upfront investment and ongoing maintenance.
Cybersecurity is another key consideration. Hosted VoIP providers typically handle security updates and compliance with Canadian privacy standards, which can ease your internal burden. However, you need to trust their security practices and ensure your network is protected against hacking attempts. On-premises systems give you more direct control but require your IT team to stay vigilant about patches and secure configurations.
A typical scenario
Consider a 50-person Canadian consulting firm that recently switched from an on-premises phone system to hosted VoIP. Initially, they appreciated the lower upfront costs and easier scalability as they hired more staff. However, during a severe weather event, their office lost internet connectivity for several hours, and their phone service went offline. Because their hosted provider didn't offer automatic call forwarding to mobile phones, they missed important client calls. Their IT partner worked with them afterward to set up backup options, such as failover internet connections and mobile call routing, to reduce future risk.
What to ask your IT provider
- How does the phone system handle internet outages? Are there backup options like failover connections or call forwarding?
- What security measures protect the phone system from hacking or eavesdropping?
- Does the provider comply with Canadian privacy laws and industry-specific regulations?
- What support and maintenance services are included? How fast is response time for outages or issues?
- Can the system scale easily with your business growth or changes in staff?
- What are the costs involved, including setup, monthly fees, and any extra charges?
Common pitfalls to avoid
- Ignoring the quality and reliability of your internet connection when choosing hosted VoIP.
- Overlooking the need for proper cybersecurity controls on your phone network.
- Failing to test failover or backup options before a real outage occurs.
- Not verifying the provider's compliance with Canadian privacy regulations.
- Choosing a system that doesn't integrate well with your existing IT infrastructure or business applications.
Ultimately, the best choice depends on your business's size, budget, IT resources, and risk tolerance. A trusted managed IT provider or advisor can assess your current setup, help you weigh the pros and cons, and design a phone system that balances cost, reliability, and security. Taking the time to ask the right questions and plan for contingencies will help keep your communications running smoothly and protect your customer relationships.