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Buy a New Telephone System or Upgrade the Old One – 5 Major Questions You Have to Ask!


By Steve Norris

At some point, every business will inevitably face the necessity of evaluating new business telephone system technology. Does it make more sense to upgrade the old system, or should I buy new? That is one loaded question that requires a loaded answer.

The initial step in determining the best option for your company is to lay out the reasons you are considering a new option in the first place.

  • Is there a feature your current system lacks that you feel you must have?
  • Has maintenance been a nightmare and an ever increasing cost?
  • Are parts increasingly hard to find?
  • Is the voice mail going out?
  • Are you getting dropped calls?
  • Are you running out of capacity?
  • Are you moving?
  • Do the phones look so old that they do not properly represent the professionalism and the desired image of your company?
  • Are you faced with buying additional station cards, line cards, PRI cards, etc, and not sure it is worth it?
  • Do you do so many Moves, Adds, and Changes that you know your phone system service guy on a first name basis?
  • Do you want to implement VoIP?
  • Are you trying to connect offices together?
  • Do you want to implement remote users with phone access off the switch?
  • Has lightning struck? (No joke, this can cause major damage without surge suppression/protection)
  • Are your phones, phone cords, buttons, etc wearing out or looking worn?
  • Are you making your own labels?
  • Is the product no longer supported by the manufacturer or local vendors?
  • Has the manufacturer gone out of business?
  • Has the trained installer in your area folded up shop, and were they the only ones available to support it?
  • Do you have to look on eBay or Google to find replacement parts?
  • And many, many more……

There are a myriad of reasons that companies evaluate new telephone system technology, and different companies will view each one of those reasons with varying degrees of importance. One company will clearly state that something such as image means nothing to them – using yellowing plastic handsets and worn keypad buttons, while for another; image means everything to their clientele. One company may be able to handle the occasional downtime inconvenience that comes along with aging equipment, while another’s losses and frustration level during a few minutes of downtime will far outweigh any benefit of maintaining a questionable infrastructure.

So how do you choose the correct route for your company?

In an era where one wrong financial purchase of a substantial amount can either cripple an organization for years or affect one’s job security, or a right one will help the company flourish and impact a promotion, there is no simple decision making method. The challenge for any decision maker or researcher of technology purchasing options is to justify the new expense against the cost effectiveness of upgrading the old equipment. Here are FIVE key questions you have to ask when making your decision:

1. How much is it costing me to keep the telephone system I have right now?

This includes maintenance agreements or contracts, service calls for repairs during the last year, cost of replacing failed or failing parts, costs for moves, adds, and changes, cost of failing voice mail or digital/analog/station cards, and the valuable time/lost productivity of personnel affected by downtime, time researching purchase of old or refurbished parts, ordering, coordinating, etc. Certainly these activities take key personnel away from vital income producing activities for your organization, and it represents a hard dollar cost or loss of productivity whether you recognize it or not. On the other hand, your system may have been trouble free for years without a service call, and has been 100% reliable and cost effective. You may not even remember the company who installed it because it’s been so long since you’ve had contact with them. Most likely, you will fall somewhere in between. Quantify it with hard numbers and data.

2. If I am moving, how much will the move cost me?

Often, the cost of the move is so labor intensive, an organization would be better off installing a new system at the time of the move. Remember, when moving a system, there is the cost to “de-install” the existing system, label it, pack it up, move it, and then to “re-install” it at the new location. It costs just as much labor to install an old telephone system as it does a new one, so the financial case for a new system is often a strong one when considering the rapidly depreciating value of old electronics. The cost of moving a system could easily surpass the value of the system itself. Combine this with the inevitable questions of why you are moving in the first place, and there may be additional equipment, phones, capacity, or voicemail ports that need to be added to the existing system to have it adequately meet your needs at the new location. Buying new parts piecemeal after the initial install almost always cost more than when buying them new as part of a package, and all of those costs must be taken into consideration.

3. Do I need features that I don’t have right now? Is not having them costing me?

This is a biggie! What features are available on the market that you wish you had? What would it mean to your company if you did have those features? How much would it save you? Would it impact your professionalism? Would it impact your efficiency? Would it impact your average customer hold time? Would it retain customers? Would it give you more effective management tools? Would it allow you to increase your average sale? Many new business telephone systems can be cost justified simply by implementation of new production enhancing capabilities that you may not currently have. Let’s name a few:

Automated Attendant

Unified Messaging

Enhanced Voice Mail

Desktop Faxing Applications

Call Accounting

ACD groups

Call Reporting

Call Recording

Voice over IP

Networking Systems together

Remote Locations


Call logging

Bluetooth or wireless Headsets

Wireless phones

Wi-Fi phones

Skills Based Routing

Computer Telephony Integration

Screen Pops

Advertising on hold

Web interface to do your own moves, adds, and changes

…….and on and on…….

Any number of those applications or functions could pay for themselves many times over in the right organization. It will be up to the one evaluating the options to determine the actual benefit, and to assign those benefits hard numbers.

To pick an example: If the current system did not allow you the ability to make your own moves, adds, and changes on your own, and you had to pay a $125 service call every time you made one, that could be a major expense. Some organizations have high turnover rates or play what is commonly called “musical cubes” in the office. (Move spaces after someone leaves) If the organization had the need for three (3) such calls a month, they could easily spend $375 (3 x $125) each month on MAC (Moves, Adds, Changes) charges. If the new system allowed you to conduct your own MAC’s without the service call cost, you literally could save $375 a month, and perform the changes at YOUR convenience. That is only one feature. Chances are there are several available cost effective features that can and will improve an organization’s productivity, and that will justify the cost of a new system based on current quantifiable cost savings alone. Your task will be to identify the time saving or cost cutting features and assign them a dollar value.

4. How much will the upgrade cost to the old system, and are the features available I want and need?

This is a tricky one. Your current system may very well have the abilities through software and hardware upgrades to accomplish what you want done, but will it be cost effective? Call accounting software made today has so many more features and costs so much less than it did just five years ago, that it would be silly to install an old call accounting package on an older system. Does the system have the ability to do VoIP? Maybe, but at what cost? Did I have to add a special card, upgrade the CPU, and then buy special routers, bring in my data guru, etc to hook it all up and make it work? Or will the new system have the capability built in, plug and play, ready to go? Is the old call logging software cost effective anymore? For some of these options, DEPENDING on the application, it is a question of technology advancements and cost effectiveness. Would you buy a five year old computer for your office today? Are you still running any five year old computers in your office at all? Why or why not? The same answers you give to that question may very well answer your question on whether you should buy certain old applications for older phone systems. This will apply to some features and not others. In many cases it will make no sense to retrofit your Volkswagen to be a Motor Home, or your Oldsmobile to be a Ferrari. In some cases, it will make perfect financial sense. Price carefully and evaluate feature, functionality, and ongoing manufacturer support. Your answer will present itself with adequate research.

5. What do I Want? What does the Boss want? What do we Need?

This is the fifth question that cannot be overlooked no matter how hard you try. It is one thing to say I NEED that to run my business, and it is quite another to say I WANT that. We don’t always buy only what we need. We also buy what we want. We buy what is convenient, and what is cool. We sometimes need to buy what we can afford. Depending on who is making that final decision, the financial case for new or old system equipment one way or the other may actually have less impact than you might think. It may simply come down to this: What does the boss want? And why?

The balance between needs, wants, and final decision making criteria is a delicate one, but one that must be found in order to make the best overall decision for the organization.

Remember five questions while researching whether to go with a new business telephone system or to upgrade your existing telephone system:

1. How much is it costing me to keep the telephone system I have right now?

2. If I am moving, how much will it cost me?

3. Do I need features that I don’t have right now? Is not having them costing me?

4. How much will the upgrade cost to the old system, and are the features available I want and need?

5. What do I Want? What does the Boss want? What do we Need?

As always, consult with your local telecommunications professional to consider your many options.

Steve Norris is a Texas based Independent Telecom Agent for over 80 carriers nationwide, and specializes in multi-location businesses with advanced infrastructure needs. In addition to representing carrier services with his company Telephone Guru, he also represents high end business telephone system solutions. Over 90% of his clients are able to implement new technology at little or no cost with his proprietary TeleTAP solution. Visit him on the web for Telecom Broker Services and for Business Telephone Systems.


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