• May 2, 2005
  • By Coreen Bailor, (former) Associate Editor, CRM Magazine

Hosted Applications and VoIP: Ready for Contact Centers?

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With most technologies early adopters must first test drive the solution, smooth out the rough spots, then get substantial ROI before they even begin to consider a deployment. Hosted applications and Voice over Internet Protocol (VoIP), for instance, are two of the latest solutions capable of slicing costs and helping to deliver grade-A service. Some contact centers have added them to their schema and are seeing impressive results, but the question remains whether these technologies are ready for the enterprise market. Much of the promise of hosted apps is based on allowing organizations to swiftly deploy contact center solutions while sidestepping installation or maintenance outlays. "There's an ROI that you can calculate, and that ROI has to deal with lowering your capital costs and lowering your ongoing operating costs. You don't need as many IT people for the care and feeding of the system," says Steve Kowarsky, executive vice president for contact center solution provider CosmoCom. "Going to a hosted model is one very good way to virtualize your entire call center operation, and once you've virtualized you have gained in both efficiency and flexibility." VoiceLog, a third-party verification provider, turned to hosted services provider EagleACD to go virtual. "We didn't need any switching equipment--that was provided through the hosted provider, and the fact that it was using VoIP gave us more flexibility in setting up the agents and the routing to the agents," says Jim Veilleux, president of VoiceLog. There is a value in hosting, but some analysts are skeptical: "Applications seem to always pop up as the perfect solutions for the smaller company when the economy turns down, and then seem to fall by the wayside as soon as the economy gets better and [they] can buy systems," says Joe Outlaw, principal analyst for contact center solutions at Current Analysis. Still, he says "hosting for call centers will find a niche in some companies." VoIP is a favorite among outsourcers, and according to a Yankee Group Research report, outsourcing is one of the cases where it makes sense to deploy VoIP. Additional cases cited in the report are home agents, distributed branches, and network simplification. As with many other new markets, however, mainstream customers tend to need more hand holding than early adopters, says Art Schoeller, senior analyst at Yankee Group Research. "Early adopters tend not to be good references for the mainstream customers. Mainstream customers need a lot of reassurances, a lot of explanation, a lot of education, and they need a fair amount of things ironed out." Outlaw contends that VoIP is mature enough for enterprise consumption, but that companies are not deploying it in large centers for reasons including infrastructure costs and scalability of some of the switching systems: "You're seeing mostly IP contact centers going into smaller sites." Daniel Hong, CRM analyst at Datamonitor, agrees that the technology is mature enough. It is important to note that ultimately all contact centers will move to a pure-IP network, he says, but for now contact centers that use IP differ from one implementation to another. "Today, contact center functionality is not jeopardized whether the endpoint is circuit-switched or IP, but without question contact centers need to prepare for an inevitable evolutionary leap to IP."
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