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Assessing the Risks and Rewards of Cloud-based Contact Centers

Posted by Paul Desmond

Mar 11, 2015

It may seem hard to believe, but cloud-based contact centers have been around for some 15 years now, according to the market watchers at DMG Consulting.  Indeed, it’s a market that is maturing – and the numbers bear that out.

While year over year growth is slowing in terms of percentages, the market is a healthy one. DMG expects the number of cloud-based contact center seats to grow by 20% in 2015, 18% in 2016 and 2017, and 16% in 2018, according to the 2014-15 edition of its Cloud-Based Contact Center Infrastructure Market Reportcloud contact center

Those numbers jibe reasonably well with predictions from researchers at MarketsandMarkets, who predict the market will grow from $4.15 billion in 2014 to $10.9 billion in 2019, which translates to a 21.3% compound annual growth rate.

But, as with all things cloud, while the rewards may be great, there are always risks to consider with respect to cloud-based contact centers. To help outline the risks and rewards, I talked with Jim Lagger, General Manager, Contact Center Solutions at Mutare Software, which provides solutions to help improve contact center performance. The company also partners with cloud-based contact center solution providers to offer services to customers, so Lagger is up to speed on available offerings.

Counting Up the Benefits of Cloud-based Contact Center Solutions

In terms of the positives about cloud-based contact centers, one big one is you’re always up to date with the latest technology. “As technology evolves and changes, you don’t have to worry about updating your on-premises solution to take advantage of the latest technology and applications,” Lagger says.

What’s more, you don’t need to dedicate your own IT resources to managing the contact center infrastructure. That’s a plus because contact centers use technology that may not be familiar to the IT folks who run the rest of your environment, including automated call distributors and the like. On the other hand, a cloud provider will understand the optimal configuration for your company.

The financial model is also attractive, given cloud services come out of a company’s operating budget. “That allows a business to retain their capital for other types of assets that may mean more to the business, whether it’s inventory or hiring,” he says. With a cloud-based contact center, there’s no need for companies to spend precious capital on expensive equipment and software.

Finally, a hosted solution is far more effective at dealing with any seasonal demands a company may have. A premises-based contact center has to be configured for the maximum capacity the company may need during the year, even though much of that capacity may be idle for a good chunk of the year. With a hosted solution, you pay only for what you use at any given time and can more easily scale up or down as demand warrants.

Assessing Risks with Cloud-based Contact Centers

In terms of risks associated with cloud-based contact centers, security is at the top, Lagger says – while noting the risks are not unmanageable.  Most companies keep customer data on their own premises, but will need a connection to the cloud provider to handle screen pops, data lookups and such. “That connection needs to be secured, with encryption on both ends,” he says.

Another risk has to do with how the contract is structured. Some providers have penalties if the number of seats falls below a certain number, or even if you need to significantly increase the number of contact center agents. The latter is to help the cloud provider pay for additional infrastructure to support the new requirements.

Such contract terms can be a problem if your company gets downsized, acquired or if you acquire another company, Lagger notes. For its part, Mutare only works with providers who share its philosophy that rate increases or decreases should be consistent, with no such penalties.

The final risk with cloud-based contact centers is more of a philosophical or emotional one: a perceived lack of control. “Many companies feel they’re losing something if they don’t have complete control,” he says. Similarly, IT may feel like jobs are at stake or that cloud services diminish their value to the company.  The counter to that argument, of course, is that using cloud services frees up IT staff to work on more strategic and rewarding projects.  

Topics: Voice, cloud, networking, Contact Center, Business Case, Adoption