OperationsPrepping for Budget Season: Preventing Phone Systems From Breaking the Bank

Prepping for Budget Season: Preventing Phone Systems From Breaking the Bank

There’s more happening in the fall than football. Budget season is looming, and it’s a time when everyone goes to the mat to decide what to cut and what to purchase in the new year. When looking at line items, it’s good to take a look at phone system capabilities.

If a hotel phone system is more than 10-15 years old, it has likely been costing a property more than it delivers. While a hotel’s phone system is critical to its infrastructure, it has traditionally taken a back seat to other capital expenditures. However, when putting old equipment side by side with cloud communication phone systems, the costs for maintaining, upgrading, or retrofitting old equipment are exorbitant by comparison. For instance, hoteliers that retrofit old systems to ensure their phone systems are up to current FCC mandates could spend 80 percent of the cost for converters alone.

Managers of properties that have a phone system that is 15-20 years old are likely experiencing ongoing degradation. Component failures can result in thousands of dollars for parts and labor. PBX systems and the parts to fix them have gone up extensively over the past six years and are becoming more challenging to obtain.

Aging voice equipment may already be showing signs of failure, and a property may be experiencing frequent service issues that are disrupting daily operations. A property communication system is a critical component of infrastructure. The new year is the time to rethink old budget strategies regarding phone systems.

Still purchasing hardware?

Leasing business equipment has been a standard practice for years. Even still, old PBX systems continue to linger in the industry, limping along while requiring an average of 25 service hours a month, not including parts.

The expense of maintaining an ongoing service contract continues to grow as this aging technology fades into the past, following the way of the rotary dial phone and house operators. Several years ago, vendors provided upgrade paths so that old technology would integrate with cloud technologies. Those who chose this path and took advantage of reduced rates to upgrade old equipment now find the expense of maintaining such equipment an ever-increasing budget item.

Overspending on communications equipment?

Property owners with older hotels must budget for ongoing replacement equipment. In doing so, they are likely overpaying to keep the old equipment running, which can be upwards of five times the cost of installing new equipment. When a hotel loses access to critical features such as the voicemail system, replacement costs can be upwards of $3000 or more. And while it may be tempting to repair each failing component, the overall costs for ongoing repairs (or adding new features) will be more than buying a new cloud communication system.

Leveraging technical advancements such as remote support, ongoing remote updates, and chat and texting features should be part of monthly cloud communications contracts. This includes critical FCC requirements such as direct 911 dialing and the addition of the Suicide Hotline. Innovative features are automatically pushed to a cloud communication system as soon as they are available.

Deciding to host a hotel phone system in the cloud may seem daunting, but in today’s cloud-driven business world, it is the evolution of telecommunications that now provides time-saving, efficient, and less expensive solutions for hoteliers worldwide.

For example, there were capacity limitations with older systems. Cloud systems are designed for almost limitless scalability and can treat multiple locations as one office. They allow management to easily add or manage a front office or multiple hotel locations. The benefits of connecting offices/home offices to the same phone system include sharing a centralized receptionist and using extension dialing between remote geographic locations.

Compliance requirements and regulations mandated by the Federal Communications Commission (FCC) are rapidly changing, and the implementation of these regulations is ongoing. Like SaaS software, cloud communication systems receive ongoing automatic software upgrades via the cloud. If a hotel still has an old PBX system, implementing compliance for a Suicide Hotline or spam calls, for instance, would be costly and expensive to update.

Hoteliers know the needs of today’s guests are ever-changing. The demand for high-speed internet, communication via mobile devices, remote check-in, and digital key cards are all trends requiring upgrades or total hardware replacement within older hotels. The PBX is no different.

Joseph DeCiantis
Joseph DeCiantis
Joseph DeCiantis is co-founder/managing director for Think Simplicity.

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