Contact centers have an ever-growing list of applications (routing, agent desktop, workforce optimization) that they use to meet and exceed customer needs. As companies try to keep up with these technologies, they must consider how they access them. Specifically, do they use an on-premises model, where they buy dedicated hardware and allocate IT resources to implement and manage it, or do they use services provided by a third-party, allowing the company to access contact center applications without dedicated hardware costs or IT resources?
Between March and April, Aberdeen surveyed 302 contact centers across the world regarding the top trends and best practices influencing their activities, including their contact center application delivery models. Data from this research reveals that almost two-thirds of contact centers currently use an on-premises model for their contact center technology infrastructure. To be exact, only 36 percent of contact centers currently use any form of cloud technology, including software-as-a-service (Saas), hosted, hybrid, and private cloud.
A trend analysis of Aberdeen's cloud contact center studies between 2013 to 2018 shows that adoption of cloud technology has continuously risen during this time, with varying paces each year. So, why are contact centers increasingly incorporating cloud technology within their activities? There seem to be five basic reasons:
1. The Cloud Offers Financial Flexibility.
The number one reason for 90 percent of survey respondents is financial flexibility. Specifically, this refers to converting fixed costs that are associated with on-premises technology with variable (and more predicable) costs that are associated with cloud technology. Costs are more predicable for cloud technology users. Unlike an on-premises model, where the technology investment is a sunk cost that the company incurs regardless of how often it is used, companies pay cloud contact center service providers based on how much they use their services. As such, when customer traffic decreases, companies can scale down and reduce costs. They can also scale up at times of increasing traffic, helping avoid unnecessary infrastructure costs.
2. The Cloud Increases Uptime Through a More Redundant Carrier Integration.
This refers to contact centers ensuring business continuity in serving customer needs. If a contact center experiences excessive downtime in service, it can't address buyer needs on time. This will inevitably frustrate customers and push them to look for other businesses that are more likely to cater to their needs without delays in service delivery. Research shows that 73 percent of contact centers cite increasing uptime through redundant carrier integration available through cloud contact center providers as the second top reason driving their investment in cloud technology.
3. Agents Have Access to Better Applications That Companies Couldn't Afford In-House.
The ability to provide agents with applications that would have otherwise been very costly was cited by 72 percent of respondents as a reason for preferring cloud technology. For example, a mid-sized contact center might want to add speech analytics to its activities to ensure compliance and improve customer experiences. With an on-premises model, it would need to invest in related hardware, hire employees with related expertise, or allocate existing resources with relevant knowledge to manage the application. This often requires expending significant resources that might burden a mid-sized contact center.
A cloud-based delivery model allows the firm to use speech analytics as needed. This, in turn, helps avoid any unnecessary costs and eliminates the internal resource requirements that would be needed to manage speech analytics. Agents can also benefit from a technology that can analyze voice interactions to prompt them about customer sentiment and help them better manage each conversation. This is true not just for speech analytics, but all customer care applications.
4. The Cloud Enhances Security and Compliance.
Traditionally companies have cited security and compliance as reasons why they prefer an on-premises deployment model. Seventy percent of cloud contact center users cite security and compliance as a reason to invest in cloud technology, showing that companies have largely overcome their concerns in this area and that they're becoming more proficient in controlling data in a cloud-based infrastructure. The ability to use a cloud contact center while ensuring the security of data and remaining compliant with relevant regulations is especially important for companies in heavily regulated industries such as financial services and healthcare, as well as those that do business in Europe and are impacted by General Data Protection Regulation (GDPR).
5. The Cloud Reduces Contact Center Reliance on IT and Frees IT to Focus on More Strategic Initiatives.
Since an on-premises deployment model requires in-house IT resources to manage the setup, maintenance, and updates of the contact center hardware, companies aim to reduce those IT expenses by moving to a model where a third-party provider manages the infrastructure. Research shows that companies recognize the benefits of relieving IT from managing contact center applications. Sixty-two percent say reducing reliance on IT helps the IT team focus more on strategic activities, such as building a single view of customer insights, that are needed to deliver omnichannel customer interactions.
If you struggle achieving desired results in any of the above areas, we recommend that you consider how cloud technology can help your business. However, it's important to remember that investing in any technology, including cloud, just for the sake of doing it will likely result in sub-par performance results. Hence, as you evaluate how cloud technology could help address your challenges in the above areas, we also recommend that you establish best-in-class building blocks to maximize your success. For insights on best-in-class capabilities needed to succeed in using cloud technology in your contact center, please read Cloud Contact Center: Customer-Centricity with Greater Agility and Less Cost.
Omer Minkara is vice president and principal analyst for contact center and customer experience management at Aberdeen.