Study: ‘Cloud-based’ solutions lower call centers’ costs

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Call centers can lower the cost of their contact handling and workforce optimization infrastructure by up to 43 percent over a five-year period by using cloud-based offerings rather than installing equipment in their own facilities, according to a new Frost & Sullivan report titled “Premise vs Hosted Contact Center: Total Cost of Ownership Analysis.”

The study, commissioned by cloud solutions provider inContact, analyzed 12 call center designs with sizes ranging from 50 to 500 seats and in functionality from different telephony systems such as ACD, IVR, chat, outbound dialer, quality monitoring, workforce management, customer feedback, agent hiring and eLearning system.

The analysis of total cost of ownership (TCO) concluded that hosted call center services significantly reduce TCO over premise-based systems in both three- and five-year scenarios for all 12 designs analyzed.

“Overall, call centers could save on costs of systems and applications, implementation, maintenance and upgrades, and hosted per-agent, per-month fees. The pay-as-you-go hosted pricing model of this technology allows call centers to eliminate in-house hardware investment as well as related IT infrastructure, maintenance, and upgrade expenses that go with premise-based infrastructure,” inContact Country Manager Junie Pama said.

“Compared with cloud-based solutions, traditional premise-based infrastructure requires an upfront capital investment that can easily exceed $1 million, maintenance contracts that are typically 15-25 percent of the purchase price, ongoing expenses, and equipment replacement every five to seven years,” Pama added.

The study also found that the larger the call center is, the higher the savings are with the hosted model. Over five years, 100-seat centers averaged 23 percent savings, 250-seat centers averaged 34 percent savings, while 500-seat centers averaged 43 percent savings. In addition, more money is saved as more call-center applications are hosted in the cloud. In a 100-seat contact center, for example, the five-year savings jump from 9 percent for a hosted ACD to 23 percent for a full-function, nine-application hosted system.

“This study not only validates the financial benefits of a cloud-based contact center infrastructure, but also clearly demonstrates that the appeal of the hosted model is not limited only to small businesses without the resources to purchase and maintain on-premise equipment,” said Paul Jarman, CEO of inContact. “The fact that the TCO increases as the number of seats grows will be a strong driver in the enterprise market, where we are already seeing significant traction for our own cloud-based contact center offerings.”

“The Philippine call center industry is projected to bring as much as $7.38 billion in revenue this year, a 15-20 percent increase from last year’s revenue of $6.15 billion, according to the Contact Center Association of the Philippines (CCAP). We hope it can grow further with the help of the cloud-based solutions that are now available in the country,” Pama said.

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