The Cloud in an Uncertain World

What place does the Cloud have when future economic conditions are so uncertain?

The rise in popularity and interest in Cloud-based solutions has been steadily increasing over the last 2 years. But it would be fair to say that post-GFC economic conditions have left many commentators wondering what the future will hold, and a certain level of uncertainty is being realised in the spending habits of many SME businesses here in Australia.

Given that the average 100 seat contact centre solution (with all the bells and whistles) could easily rack up a million dollar capital expense investment to buy on-premise, it is no surprise to see that that there are fewer such deals being transacted, and more executives are looking to the Cloud for a better alternative.

The feature set of cloud solutions are virtually the same as on-premise – we find that exactly the same sort of business challenges are being addressed, particularly to improve efficiency, increase revenue, improve customer satisfaction and overall business visibility. What differs is the acquisition and deployment model, which has its roots firmly in the Total Cost of Ownership. It’s one thing to change the upfront cost model – it’s altogether another thing to change the TCO over the life of the solution.

It’s timely to see a report released in the US this month by Frost & Sullivan which directly supports these findings. Their report entitled “Premise Vs. Hosted Contact Centre: Total Cost of Ownership Analysis” found that contact centres can lower the cost of their contact handling and workforce optimisation infrastructure by up to 43% over a five-year period by utilising cloud-based offerings, rather than installing equipment in their own facilities.

The authors analysed 12 contact centre configurations ranging in size from 50 to 500 seats, and across the full range of inbound and outbound functionality including IVR, chat, quality monitoring, workforce management and customer feedback. This range of seats fits nicely with the size of centres operating in Australia and it is worth noting that the report did find that the larger centres with more applications utilised saw a significant increase in savings – which of course makes sense when you consider the implications of “economies of scale”.

This makes perfect sense when you factor in very low start-up costs with virtual no equipment to buy, flexibility in usage and elimination of maintenance. Because the software items are constantly upgraded and maintained in the provider’s data-centre, companies are free from additional costs from their own IT departments.

A second business driver is time to market. In some cases, companies do not have the time to invest in bringing a new system in-house, a process that can take months, when they can be online with an on-demand application within a few weeks.

There are many organisations now migrating their business applications to the Cloud. CRM companies have been doing this for a much longer long time and now we are seeing marketing applications, social CRM applications and Finance & Accounting packages all migrating from their traditional place in the premise to subscription models in the cloud.

The contact centre is a mission-critical business unit, operating as a direct interface to the end-user customer of an organisation. In many cases, this business unit is responsible for also generating significant volumes of revenue. It is a dynamic business unit which needs to adapt quickly to changing market conditions. The very carriage upon which the interactions take place comes at a considerable cost.

With continuing pressure on the economy, uncertainty in the minds of the CFO, and imperative need to remain competitive in the market - all these factors make the On Demand, cloud-based Contact Centre a necessary consideration of the future.

- Michael Stelzer