• September 1, 2015
  • By Leonard Klie, Editor, CRM magazine and SmarCustomerService.com

Contact Centers Continue Cloud Migration

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Although the number of contact centers using purely cloud-based technology is small, most vendors today report "very significant growth" in their cloud deployments, ContactBabel noted recently.

According to the research firm's latest data, at most solution providers that offer multiple deployment methods, interest in and implementation of cloud technologies is significantly outpacing on-premises solutions. Even among those vendors where this isn't yet the case, expectations are that this will happen in the next two to three years.

The firm concludes in the report that "the logical progression is towards an industry entirely provisioned by cloud-based solutions," particularly as vendors address the issues of security, control, functionality, risk, and cost. It expects to see, for example, vendors moving to per-hour or even per-minute billing that directly reflects the amount of technology usage.

"The trend is toward virtualization," says Steve Morrell, managing partner at ContactBabel and author of the report, titled "The Inner Circle Guide to Cloud-Based Contact Center Solutions."

"Cloud is now a credible option to take," even for operations as critical as the contact center, he adds.

By the end of 2014, 46 percent of multisite U.S. operations were running as truly virtual contact centers, and among smaller firms with fewer than 50 seats, more than half are using some cloud-based contact center systems, according to Morrell. Agent desktop software was by far the most common technology hosted in the cloud, at 31 percent, followed by call routing (23 percent), call recording (21 percent), and workforce management and interactive voice response systems (at 17 percent each). Other functionality in the cloud includes automated outbound dialing, speech analytics, email management, knowledge base, and reporting and analytics.

This move to the cloud is largely driven by the need for more flexibility, a benefit cited by 82 percent of respondents to the survey. In addition, 78 percent of respondents cited a cheaper overall total cost of ownership, 64 percent cited more powerful extended functionality, and 53 percent said the cloud made it easier for them to make changes to their systems.

According to the research, the payback with cloud-based solutions typically comes within 12 months, although many produce savings in as little as three to six months.

The ability to have agents work from home has also been a major contributor. In the U.S., 43 percent of contact centers now employ some at-home agents, but that number is expected to climb to 74 percent by 2017, according to ContactBabel’s research. In the United Kingdom, the proportion of agents working from home has risen by more than 140 percent in the past four years.

Contact center outsourcers, government contact centers, and seasonal operations have been quick to adopt cloud-based solutions, the report notes. Cloud-based solutions are finding their way into even the most risk-averse verticals, such as financial services and healthcare, ContactBabel’s research found.

Among the 54 percent of firms not running cloud-based contact centers, data security is the largest consideration, cited by 48 percent of respondents—even as cloud vendors have security in place that surpasses the security tied to most on-premises deployments, Morrell says.

Other concerns included difficulty integrating with existing systems, a lack of reporting, and a loss of internal control.

In other parts of the world, Internet connectivity has hampered adoption of cloud-based contact centers. Frost & Sullivan recently found it to be a considerable issue in Australia, for example. As the country moves to address this, though, Frost & Sullivan predicts the market there for cloud contact center solutions will surge at a 35 percent compounded annual growth rate through 2021.

ContactBabel's report also notes that small and midsize firms are more likely to adopt cloud-based solutions in one clean sweep, while larger firms evolve their contact centers to the cloud piece by piece.

But not all organizations are right for the cloud, according to Morrell. On-premises deployments are more suited toward companies with more predictable traffic, stable head counts, a single facility, complex routing and reporting requirements, and deep integrations with back-office systems.

In many cases, the decision to deploy solutions in the cloud or on premises is as much about company attitudes, cultures, and commitments to IT resources as it is about costs. Companies will need to look at current and expected staffing levels and potential impacts to call handling times, first-call resolution rates, and other key performance metrics, Morrell says.

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