The Hidden Cost Of Onsite Phone Systems

Many companies think they are making a good “investment” when purchasing an onsite phone system but often overlook the hidden costs.  It’s not just high upfront costs, which can easily be $50,000 or more in upfront equipment, but it is also another system for your IT Department to update, manage and maintain.  There are yearly maintenance fees and potential upgrade costs for new equipment. In the long run, an onsite phone system is an investment that rarely pays off and costs far more than the initial upfront costs.

Here are a few reasons why an onsite phone system is not a good investment for your business:

Onsite Phone Systems Hassles

In addition to the initial cost of purchasing the onsite equipment, there are often yearly maintenance and support fees that can equate to thousands of dollars per year.  It is not uncommon for customers to pay $7,000 or more per year in maintenance fees. Any changes, such as adding new users or moving someone within the organization, require scheduling, waiting and spending money for an onsite phone technician.  These simple changes typically cost several hundred dollars per change (thousands annually) and might be outside of the original budget for telecommunications expenses. Think about each time a new employee starts or someone moves to a new location; expenses add up quickly over time. Some companies have an IT resource that can make some changes. However, typically, internal resources are already spread thin managing other systems, software, and infrastructure.

Upgrade Costs

Besides maintenance and support, there can be additional equipment upgrade costs if you want or need new features.  An onsite system does not last forever. We’ve found companies who were faced with $20,000 expense for new equipment for minor system upgrades.  This can be after an initial “investment” of more than $100,000. Other companies have experienced end-of-life decisions with their onsite systems in a period of less than 5 years.

Traditional Telecommunications Charges

On top of managing an onsite phone system, there are monthly service charges and often long-term contracts required from a telecommunications service provider.  Many telecommunications companies typically have a list-price for monthly service, but then charge 20-40% more than their listed price due to hidden fees and other surcharges. Why does this happen?  The competitive nature of the telecommunications industry causes many providers to feel as though they can gain an advantage by listing a lower price.  The telecom industry is also known for lacking good customer service. With an onsite phone system, you are managing the onsite equipment and as well as dealing with a different provider for the service itself.  It can be a lot to deal with internally managing disparate systems, vendors and contracts. Everything is complicated and expensive.

UCaaS: A Better Solution

Unified Communications as a Service (UCaaS) provides a better solution to onsite systems for most customers.

Here are a few key advantages of UCaaS:

(1) All-in-One Solution — System, Service, and Support from One Provider

Unified Communications as a Service (UCaaS) is an all-in-one solution.  UCaaS providers, such as Level365, host your phone system plus handle all upgrades and maintenance as a part of the monthly service.  There are no upgrade fees or yearly maintenance costs. At Level365, the communications service itself is provided as part of the package. The monthly price per user is simple and straightforward through Level365, without any hidden fees and other charges.  Changes, such as adding a user or moving someone to a different location, can be managed online via the Web Portal or by contacting the Level365 support team.

(2) No Maintenance or Upgrade Fees

There are no maintenance fees with UCaaS providers including Level365.  Some companies charge yearly maintenance fees that can be thousands of dollars per year.  Maintenance and upgrades are our responsibility and included with the service. This saves your IT team time, money and hassles.  Another benefit of UCaaS is that since we host the service, we provide upgrades to the service in the form of new features. Additionally, our monthly subscription includes most of these upgrades.

(3) Lower Upfront Costs

With UCaaS, the cloud hosts your phone system. There is no onsite phone switching equipment, no maintenance, or upgrade fees. UCaaS providers host, maintain and upgrade everything for you, so you can focus on your business and not your phone system. The only upfront costs with UCaaS are the phones handsets, making upfront costs much lower than onsite systems.

(4) Simple Pricing

Pricing for UCaaS is a simple, predictable cost per user per month.  At Level365, service is provided without hidden fees so you can easily set-up a budget line item and stay within that budget each month.  Budgets are important for all organizations and let’s face it, no one likes going over budget and having to explain budget variances every month. Other providers often charge 20-40% more than their listed price due to hidden fees and other charges.  Level365 also provides one invoice for your organization with options for cost center breakouts to make sure funds are allocated correctly for each department within your organization.

(5) Scalable and Connectable

Unlike traditional phone systems, there are no system capacity issues. You can expand as you grow, without adding expensive equipment and only paying for active users. Traditional phone systems must be upgraded in multiples of 4’s, 8’s, etc. Adding one more employee can cost a lot if you have reached your traditional system’s capacity.  You can also scale down as well. Level365 does not lock customers into long-term contracts so you have the flexibility to make changes as your business ebbs and flows. The service is month-to-month with no required long-term contracts, so we deliver quality service or customers are free to leave with no strings attached. Other providers often require long-term contracts with termination fees.

➡️  Ready For More? Check Out Our “Ultimate Guide To UCaaS” now!

Learn more about UCaaS solutions from Level365 by watching this video, visiting, or calling 1-800-590-2568.

About Level365: Level365 offers a complete Unified Communications as a Service (UCaaS) solution with enterprise voice that is customizable and scalable for your business. Our service seamlessly integrates communication among desk phones, computers, and mobile devices to support remote teams and provide flexibility for on-campus staff. The UC platform extends beyond voice communications with Unified Messaging, Analytics, Presence, Chat/SMS, Cloud Faxing, CRM Integrations, and more.

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