Contact Center Choices: CCaaS vs. Managed Cloud vs. On-Premises

Contact Center Choices: CCaaS vs. Managed Cloud vs. On-Premises

This blog was originally published by Telecom Reseller.

As call centers have evolved into contact centers serving multiple communication channels, legacy technology systems have increasingly faced maturity and obsolescence. Contact centers need to enhance the multi-channel customer experience by evolving with modern technologies, but today there are more choices for the decision maker. How do you decide among the options--a new on-premises system, a managed cloud service, or a CCaaS (contact center as a service) solution? Here’s a quick guide to cloud migration and eight selection criteria for identifying the approach best suited for your enterprise.

On-Premises vs. Managed Cloud vs. CCaaS: The Difference

1. On-Premises Contact Centers: This is probably what you have today--a premise-based contact center system managed and maintained internally. You paid for the hardware and software and have to manage it. Whether your system is up-to-date or needs some improvement, many enterprises have been working with the same vendor for years and may not have analyzed the market for a replacement.

2. Managed Cloud Contact Centers: A managed cloud contact center uses a “multi-instance” platform. The provider implements an instance of the same premise-based system in their own cloud data center environment. Each customer receives its own virtualized software instance on shared hardware. These contact centers offer a flexible and scalable alternative to premise-based contact centers. Benefits include:

  • Low Up-Front Costs: These are attractive to legacy enterprises that want to implement with low CAPEX and disruption.
  • Reusing Existing Software Licenses: If you want to or must continue with the same contact center vendor, then there may be financial benefits.

3. CCaaS: Contact center as a service uses a “multi-tenant” environment. All customers share a common (single) software instance deployed on the provider's own network service platform. Benefits include:

  • Flexibility: A business buys what it needs, when it needs it, and can change with seasonal load variations.
  • CAPEX-OPEX Exchange: This is an OPEX business model, not CAPEX model.

These definitions have caused confusion for two reasons. First, the terms have evolved and shifted over the years. Second, the term “cloud” can be applied to both approaches #2 and #3 above, so the term “cloud contact center” often needs more explanation.

On-Premises Contact Centers: Why Change?

So, why should you transition your contact center to cloud technology? Enterprises are increasingly moving away from premise-based communications infrastructure, because upgrades can deliver significant competitive advantages. The return on investment (ROI) can be very positive and total cost of ownership (TCO) can be lowered when compared to on-premises systems. For instance, one Masergy customer saved $2.9M after moving its global communications and contact centers to the cloud.

The following factors have a significant impact on overall costs:

  • Administration: Most of this is performed 24/7 by the cloud provider.
  • Deployment: Changes in the seat deployment and new or varied services are easily implemented at the customer’s request
  • Upgrades, Patches, Improvements: These are part of the service and are implemented for the customer, reducing the burden on IT staff.
  • Maintenance and Support: This is an ongoing part of the cloud service and does not require customer actions.

Additional benefits include:

  • Accelerated Upgrades: In many companies, IT is overworked, under budgeted, and because of this, new projects are delayed.
  • Simplified Security: Security is also an important aspect of contact center operations, and many choose to lean on the expertise of the managed cloud or CCaaS provider to relieve internal IT teams of these duties.
  • Reduced Real Estate and Energy Costs: Cloud technology eliminates the need for equipment, reducing real estate and energy costs.

Selection Criteria: Which Solution is Best for You?

The chart below provides eight factors for comparing the three types of contact center solutions. Use this chart when presenting your initiative for executive approval.

Selection Factor On-Premises Managed Cloud CCaaS
Cost per Seat High Lower Lowest
Customization Possible Possible Limited
Cash Flow High CAPEX
Low OPEX
Lower CAPEX
Higher OPEX
OPEX Only
Size/ Seat Flexibility Up not Down Depends on Software Used Variable Up and Down
Staff Requirements High Lower Lowest
Scale Limited Limited Change with Traffic Variations
On-Premises Technologies Software + Data Center + Access Network Software + Access Network Access Network
Ease/Speed of Implementation Slow Moderate High/Fast
 

Migrating to the Cloud: Three Steps for Preparation

In the end, modern technologies and providers should enhance your customer experience. Use this as an opportunity to improve customer satisfaction, first-contact resolution, holding times, and agent utilization. Preparation is an essential step for cloud migration readiness. When assessing the next version of your contact center, follow these steps:

  1. Evaluate your current operations. Determine how you engage with customers, the state of your employee engagement, and management practices.
  2. Outline your future business requirements and determine where you want to go. Specify your unique business objectives.
  3. Evaluate several cloud contact center solutions, focusing on the service experience, deployment practices, and case studies. Cloud migrations should protect the quality of the customer service and business continuity, be straightforward, and occur with few or no problems.

When the provider values the customer experience and has the staff and experience to deliver a seamless cloud migration, success will come easily.

Learn how Masergy helps contact centers design a seamless migration to the cloud.

About Gary Audin

Independent Communications Consultant, Delphi Inc.
With more than 40+ years of computer, communications, and security consulting and implementation experience, Gary Audin is a celebrated author and IT thought leader with regular articles published by Telecom Reseller, No Jitter, TechTarget, and Webtorials. Gary has operated and managed data, LAN, and telephone networks including local area, national and international networks as well as VoIP and IP convergent networks both in the U.S. and across the globe. As a trusted consultant, he has advised domestic and international venture capital and investment bankers in communications, VoIP, and microprocessor technologies.