To host or not to host — that is the question

If the network is the application, it might help explain why the contact centre industry is moving away from premise-based systems and towards hosted solutions.Today’s contact centres contribute to strategic goals, help manage relationships and generate revenue along the way. As a result, buyers of contact centre solutions demand systems that deliver more return on investment than ever before, with fewer risks.
That’s why hosted solution providers use their expertise in all communication areas — phone, e-mail, fax, chat — in one package. Customers don’t have to build, maintain, or upgrade hosted systems.
Initial capital costs for premise-based solutions are hefty, says Roberta Fox, senior partner with the Toronto-based telecommunications consulting firm Fox Group.
“Our group has worked on multimedia call centres. They are complex to install and maintain.”
Fox says her office has a contact centre system.
“Frankly, I’d rather not have the equipment here,” she says, adding that hosted solutions weren’t available when Fox Group bought its system.
Small- to medium-sized businesses want the return on investment, but scaling large solutions is not cost-effective.
Kevin Hayden, director of integrated contact centre solutions at Telus, says the call centre market is substantial.
“Seventy-five per cent of Canadian call centres are under 50 seats.”
“Small companies need the technology, but they don’t have the ability to house it themselves,” adds Michael Hall, manager for the Richmond Hill contact centre solutions provider Computer Talk Technologies, “so they go to a provider for hosting.”
Hosted call centre systems are generally less daunting for companies that are new to the experience.
“(It’s) a more cautious approach. Buy five seats of a call centre and see if it gives benefits,” Fox says.
Hayden says one of his clients in Western Canada opted for Telus’s CallCentreAnywhere (CCA) instead of building something from the ground up.
“They never had a call centre before. They were overwhelmed by the challenge of building one,” he says.
Solutions such as CCA and Computer Talk’s ice3 reduce configuration questions by employing a graphical user interface, he says. If the product meets customer requirements, “we get the call centre running in days,” Hayden claims.
Non-technological issues could also prove difficult. In Fox’s call centre implementation, “the prohibitors were the (relationships) between IT and telecom.” With a hosted solution, the vendor delivers it for you. “That negates some potential organizational issues,” she says.
Managers who fret when IT projects exceed their budgets favour the cost certainty of hosted call centre contracts, which clearly define services and operating costs. Sometimes, “it’s more defined in these types of relationships than it (would be) internally,” says Fox.
Having to modify and upgrade premise-based systems annoys some firms.
“Every time we make a change, we either do it or have our service people do it,” Fox says. “It’s a matter of making the time to get it done.”
Sometimes a crisis shows a system’s shortcomings. Hayden recalls the Canadian Red Cross experience late last year. “When the tsunami hit Asia, (the Red Cross couldn’t handle) the incoming flood of calls.”
Hayden believes hosted call centres are more scalable than premise-based systems: “We can now expand capacity on demand for a specific customer,” he says.
Hall says there will continue to be a market for premise-based installs. “Generally, larger clients with large call centres run their own centres because they want more control, they have the infrastructure and they have the talent.”
Imagination and unusual needs may call for pared-down systems too. Earlier this year, Hall’s team implemented a dairy producer organizations fourth annual promotional contest, the Bovine Phone Line. The contest runs for 70 days each spring, during which time callers play a game with an intelligent voice response (IVR) system. The only time employees got involved was to contact winners. While not a call centre, “it’s an example of a successful hosted application,” says Hall.
The success of any application depends on several factors. Hall explains: “If you’re only replacing one person, your ROI is spread out over a longer period of time than if you were to replace 100 people.”
Fox sees this ROI firsthand.
“I have staff doing other things that are more productive for the business.”