Today's PBX generates the required signaling information for calls outside the organization, passing the connection through a voice trunk and up to the local telco's CO (central office). The obvious advantage is that it lets you avoid intra-office tariffs and reliance on a LEC (local exchange carrier) by aggregating calls into digital trunks. And it's easier and cheaper to manage one PRI or T1 than multiple analog lines from the local CO.
Over time, PBXs have evolved from monstrous electromechanical beasts to refrigerator-sized proprietary boxes to modern rackmounted chassis. Most of these devices run ACD (Automatic Call Distributor) applications that provide advanced call management for inbound calls. ACD apps can direct calls to hunt groups, for example, so if the first line is busy, a call will roll to the next one or to voicemail or a VRU (Voice Response Unit).
With VoIP (Voice over IP) modules now widely available for PBXs, you can upgrade a traditional PBX with VoIP and run your voice traffic over your IP backbone (see "2003 Survivor's Guide to Digital Convergence"). PBX vendors are also offering IP-only PBXs, which means you no longer have to install hardwired extensions when you add new users and handsets.
VRU/IVR: Talking Back