Call Centers in the Cloud: Offering Savings and New Operating Models | Gaining Altitude in the Cloud

Posted On May 17, 2013

Migration to a cloud-based contact center model offers the potential to drive hard total cost of ownership (TCO) reduction and the flexibility to rework existing business models. And both cost savings and business agility are very timely for the contact center space, as more businesses continue to shift from a protectionist, recession-minded framework to actively looking to invest in customer relationships and growth strategies.

Recent Everest Group client work has demonstrated that TCO savings enabled by migration to next generation contact centers can be in the 20-30 percent range for some organizations. These cost savings are realized through several structures. Approaching a contact center as software-as-a-service (SaaS) provides optimal call center capacity in a pay-as-you-drink model wherein there is a dynamic and continuous balance of capacity and utilization. Converting the physical capacity of call centers and server space to a paid service in the cloud allows enterprises to shift expense from capital to operational. The digital nature of cloud contact centers can also reduce telecommunications costs, transforming expensive long-distance routing into the more cost effective Voice over Internet Protocol (VoIP) solution. Additionally, cloud contact centers shift the weight of software maintenance and feature development to the vendor.

Call centers have long taken the spotlight for their cost savings potential. The last decade has seen the popularization of outsourcing call centers to lower-cost geographies that offer savings in wages and capital expenditures. More recently, the technology landscape has sufficiently evolved for the next iteration of call centers – the contact center – to emerge. The contact center is driven by next generation technology that, through data enablement, allows for the retention and improvement of traditional voice service while embracing popular emerging communications such as email, chat, and text. While companies such as Liveops, Echopass, and inContact are on the forefront of the technology change, a wide range of legacy players such as Genesys, AT&T, and Avaya are also offering mixed solutions that embrace the move to cloud.

Data enablement provides a platform for several of the key features that define next generation contact centers. The data-enabled platform offers managers new levels of transparency of their contact centers, from high-level aggregations down to real-time, item-by-item granularity. The enabling tools include recording, quality monitoring, workforce management, talent management, surveys, and analytics. For example, a recent Everest Group provider client used cloud-based tools to more accurately forecast call volume and better manage utilization rates for its customers, and consequently improved its SLAs.

The benefits to the contact center workforce are no less substantial: increased automation, workflow scripting, security, and compliance management all contribute to a reduction in errors, reduction in cost, and, ultimately, an increase in customer satisfaction. No small part of next generation contact centers is the enhanced integration of today’s multi-channel communication environment. The fragmentation of communication through voice, text, chat, emails, etc., are all captured by cloud-based contact centers and refocused into simple, manageable, and transparent modes of communication for the workforce. For example, a buy-side Everest Group client was highly incentivized to move to a next generation IT platform for its call centers because the new technology in a digital environment allowed for future development of several services previously unattainable.

Many of the cost savings associated with next generation contact centers are rooted in virtualization and the ascension to the cloud. Converting physical call centers into virtual enterprises allows for decentralization of the workforce, which in turn provides access to pools of employees previously unavailable. The same phenomenon even allows for workforce sourcing to swing back domestically while maintaining cost savings. A key benefit of the cloud model is scalability; erratic call volumes, seasonal spikes, and disaster recovery can all be handled dynamically without down-time or volume-ceilings, and the pay-per-use element allows costs to reflect actual usage.

There are, however, several caveats that should be taken into account before certain cost savings can be realized. The cost of data-enabling a workforce must be balanced against the cost savings of closing physical locations, as well as against the increased revenue realized only through data enablement. For example, Everest Group recently conducted research for an enterprise in which the cost of maintaining call centers in other countries was less expensive than data-enabling the entire workforce. As a result, the firm recommend a phased approach wherein select call center workers were data-enabled, allowing them full use of the company’s new cloud platform to capture a new revenue source.

So, how can you tell which enterprises should shift to a cloud contact center model? Those that meet the following general criteria may be able to reap substantial savings:

  • Possess numerous or expensive physical call centers
  • Seek potential revenue from digital-based services
  • Have a highly centralized workforce
  • Desire to convert capital expenses to operational expenses

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