Will ‘the cloud’ take over the contact centre market?

According to Managed Service Providers Biz, by the year 2014 over 70 per cent of the contact center systems will have been based in the cloud. In this estimates, Darren Pine indicates that running an on-demand contact centre system is more cost-effective than buying an in-house one. Should we be careful with trusting such predictions or is it a worldwide tendency that will soon become a fact in Poland?

If the argument proves to be true, a substantial change in contact centre systems purchase preferences is to be expected. Companies will decide to purchase fewer in-house contact centre systems and will transfer their existing solutions to the cloud. Considering the advantages of SaaS, this may become a fact very soon and Poland may be one of the leading countries in creating the new proportions of ‘buy’ and ‘hire’ (in-house vs. on-demand).

Systems in the cloud

Software-as-a-service, Communications-as-a-Service, and on-demand are all IT systems delivered in a form of a service. This means that their users do not install the software on their servers or work stations, but only use a system which is delivered directly from the provider’s server. In IT terms, by saying ‘a cloud system’ we mean a system which is not found in-house, but one that is used remotely and based on the provider’s server and datacentre. The access is gained though an IP network. Users receive login and passwordand start to work. They do not need to invest in hardware, infrastructure, licence, maintenance, but only pay for using the system. E-mail is an example of a cloud system: we have access to the mailbox, emails and we can use it anywhere in the world, but we do not own the system managing emails or servers on which it is installed.

Cloud solutions are best put to use where easy access (at any place and time) to a certain system (functionality and data) is required. Online stores are open 24/7 and can be reached from any place at any time. Global hotlines are not different: it does not matter where we call from and what time of the day it is, we will always be served. The contact centre system, with the use of the ‘follow the sun’ scenario, will make sure that we are put through to a consultant who is currently in the time zone where there is daytime.

Cloud gets support from IT and financial specialists

The advantages of cloud solutions should not be limited to just practical aspects such as easiness of use and access from any place at any time. It has also been financial and IT specialists who advocated the introduction of the cloud. From the point of view of financiers, there are  CAPEX/OPEX benefits. IT service is included in costs of running the business ( not as an investment, which can only be only amortised). For IT staff  –  cloud gives reduction in day-to-day work ( they do not need to take care of the system, its administration, upgrades, trainings, etc).

Cloud for call centres

As a result of the above mentioned and other crucially important reasons, the cloud has a potential to take over the call centre industry. An on-demand contact centre is adapted to call traffic changes. It is frequently observed that call centres such as hotlines and telemarketing departments experience seasonal changes in call traffic (high in peak season and low in off-peak time). Such changes can also take place on a daily or monthly basis. What is more, having an efficient hotline is critical to any business and there are sometimes situations when it has to be staffed by more personnel than usual . However, these situations are rare and buying a licence ‘just in case’ and using them sporadically seems to be a waste of money. On-demand solutions are cost-effective and do not burden your business with unnecessary expenditure.

In Poland, a growing interest in the new model of work is currently being observed: working from home. Thanks to on-demand solutions, remote agents just log into a virtual call centre without necessity to install any software. Such an occupation can be treated as a full-time job combining household duties with those of professional nature or just a part-time one. A cloud-based contact centre allows an employer to manage a decentralised team as well as adjust human resources to their business needs. Changing costs summed up at the end of the year are lower than regular expenditure.

Contact centre in the cloud: cost reduction and financial benefits

More and more financial specialists make claims that a monthly invoice is more cost-effective than amortisation. As a matter of fact, there are many more benefits:

• Absence of maintenance costs. IT system providers charge an annual maintenance fee which amounts to 15 to 30% of the licence value and must be added to the total IT expenditure. Theoretically, companies can decide to opt out of that service but they do not normally do it as it guarantees security and stability. In the case of the cloud there is no maintenance cost as it is included in the total fee for the service.
• No upgrade costs. Upgrades allow access to the current version of software and are necessary as well as costly. On-demand system upgrades itself free of charge.
• Fewer staff required in the IT department. At least 2 full-time IT specialists are required to maintain a contact centre system operated by 100-200 agents. They need to be employed on a permanent contract, which means a salary, tax money, and health and pension contributions. These are non-existent within the cloud as it is the provider and their team who administer the system.
• Real use expenditure. One month the system is used by 10, the other 100 or 1000 agents: you only pay for is the real use of the system.
• Lack of investment expenses. There is no need to purchase servers, gates, licences, ports, etc. Start-up costs with the cloud are minimal and adding users is easy and bears no cost whatsoever.
• Lower cost of outgoing calls is an advantage worth elaborating on in a separate paragraph.

Outgoing calls costs in cloud

A single on-demand contact centre provider with multiple clients generates much larger call traffic than a separate user (even a large scale one). It is much easier for such a provider to negotiate call rates. What is more, most of the top providers employ Low Cost Routing mechanisms which automatically select the best rate for a particular number. This brings additional savings.

Managing virtual call centre in cloud

The contact center system manage the traffic and agents. The system records every break, every admin task moment, every unanswered call, etc. The call quality can be assessed online or offline and monitoring takes place in real time. Whereever managers and agents are, they can work in the cloud system.

Polish cloud

Poland, with modern and highly developed SaaS compliant telecommunication infrastructure, is open to new technologies. Polish bandwidth is perfect for the cloud and voice transmission. Archaic switchboards are not an issue as they are virtually non-existent (a paradoxical advantage of living behind the iron curtain). When there is a need to replace or build telecommunication infrastructure, the choice is simple – IP.

Cloud systems are perfect tools when market competition is to be taken into account. What needs to be considered and learnt is the new look on the cloud philosophy: its security and stability. It cannot be treated as a new form of leasing. When buying a traditional IT solution a full cost of running an in-house system must be considered, not just the licence and hardware. What we need to look at is the organisation as it is today, as it will be tomorrow, its focus and the direction it will take. We must decide whether developing an in-house IT structure is what we actually need. What kind of investments will bring the actual return?  Will the equipment purchased today be necessary or sufficient tomorrow?

On-demand solutions offer so many advantages that they become serious competition to the traditional in-house model.  Is the proportion of 70% to 30% the one we should expect to see within the next three years? It seems that the proportions will fluctuate, so the most successful solutions will be the ones available in two models: in-house as well as on-demand.