The world hasn’t moved entirely to the cloud yet, but depending where you look, it sure seems that way. As with any major shift in technology adoption, there will be winners and losers here, but the news is mostly good for contact centers. In this new landscape, there are opportunities not just for enterprises looking to get the most out of their IT spending, but also for service providers looking to grow new revenue by offering hosted contact center solutions.

There is a lot to consider here, and I’ll explore several themes around this topic in future articles. To get started, I’d like to examine some of the current realities that make hosting attractive for contact centers. Enterprises have been outsourcing and virtualizing their contact center operations for years, and the drivers are fairly universal – cost reduction, 24/7 support in a global economy, core competency focus, etc.

Various flavors of hosted exist, and while they do help address these drivers, there are other facets that merit further discussion.  Before addressing these facets, it must be noted that each variation of hosted plays to a distinct contact center scenario, meaning there is no cookie-cutter solution for businesses to follow. Enterprises that prefer a command-and-control model will opt for a private cloud where they get the benefit of hosting but at the same time, keeping the operation as close to home as possible. Other enterprises will recognize their IT limits, and adopt a hosted and/or managed solution with a trusted service provider partner. Yet other businesses will be driven more by economics, and choose a public cloud, even if it means potential compromises on reliability and security.
 
Regardless of which variation is chosen, hosted opens up the market for contact center solutions. Lower cost means that enterprises can expand – and more importantly – enhance their existing operations. Furthermore, these favorable economics create viable options for businesses that have never had a contact center, or had abandoned one earlier for whatever reason – and there certainly would be many.

When you add flexibility to the equation, the rationale for hosted becomes even stronger. By centralizing common IT requirements, contact centers could operate more economically, and right-size themselves as business conditions vary. This flexibility brings real value to businesses with cyclical or seasonal demand, as well as ad hoc situations that require contact center support such as a product launch, regulatory change, acquisition by another company, etc.
 
This is all well and good, but reflects an enterprise-centric mindset. Hosted contact centers must serve the business first, and they do this with more than just cost savings. With IP, SIP and standards-based technology, hosted offers unprecedented flexibility, scalability, and reliability. These elements translate into a more agile business, something everyone is striving for today. Not only does hosted provide cost efficiencies, but also business continuity. If you have lived through the recent winter extremes, you’ll know exactly what this means. Being cloud-based, hosted services will keep your contact center up and running, even if several regional centers are shut down by adverse local conditions.

While this may be enough to bring you into the hosted fold, I think the other side of the coin tells an even stronger story. Beyond the benefit to the business, the benefit to the customer is equally important, especially for contact centers, which really serves as the front door for most businesses. There are two related factors to touch on here to support this view; multimodal communications and heightened customer expectations.

We all know how Internet technology – and the Web itself – has changed the way we communicate inside our businesses. The same is equally true for customers, not just because they are using these tools in their own jobs, but also in their personal lives, where the palette is often richer than what’s available in the workplace. This is highly relevant for contact centers, since agents will typically be serving customers, not business peers.
 
The customer on the other end of the call is more likely wearing their consumer hat than their workplace hat, and that sets the table for their preferred modes of communicating. Their world has moved well beyond fixed line voice, and they will just as likely want to use chat, text, video, mobility, etc. – either to complement the phone or dispense with it altogether. Add to that social media, which is quickly becoming a bona fide tool in its own right.
 
The main thought here is that contact centers need to be multimodal and adaptable enough to address a variety of communications preferences. Hosted solutions do not offer much benefit for a single site contact center, but can add considerable value for multi-site operations, especially across broad geographies. In these scenarios, one of the biggest challenges faced by enterprises is providing a consistent experience across all locations.
 
For enterprises trying to protect a global brand, this consistency is essential. Much like the way McDonalds tastes the same the world over, true market leaders make it their business to deliver a consistent experience in all ways and at all times. A hosted contact center environment provides a centralized platform from which to do that, and is more flexible than premise-based solutions that can be difficult to manage across multiple sites, regions, time zones, broadband reliability, communications protocols, etc.
 
Perhaps just as important is the fact that customer expectations are higher now with all these tools at their disposal. Not only will they be more demanding in terms of how to communicate with them, but applications such as social media give them a lot of leverage to share their experiences, especially ones that don’t go well. With so many of these tools being new, you can be certain that many more are coming, and you should expect their menu of communications options will be ever-evolving. This speaks squarely to another key benefit of hosted solutions.

Premise-based contact centers will be hard pressed to keep up with the latest tools, let alone innovate with new applications of their own. Given that many new applications will be Web-based, hosted has an inherent advantage here. Not only is this the native environment for these innovations, but deploying them on a timely basis across all contact centers is much easier than in a premise-based mode.
 
I would extend this point by saying that some vendors are better suited than others to fully address these multimodal needs. In my view, this means vendors whose pedigree is rooted more in the worlds of VoIP, data networks, distributed architectures and cloud communications than that of telecom systems and premise-based solutions. Also, given the fact that service providers will end up hosting many of these solutions, it’s fair to say that the leading vendors will be equally at home with carriers as they will with enterprises.
 
Finally, all of these communications touch points create new potential for better quality support. When contact centers can communicate on the customer’s terms, they are much better able to meet their needs, as well as exceed them. However, these improvements can only be recognized and rewarded if proper metrics and analytics are in place. The basic challenge here is that today’s environment generates far more data about customer communications, and enterprises will not be able to leverage this without the right tools.
 
There are actually a number of factors defining this challenge. First, for enterprises shifting to hosted, there will be a need to have comparable metrics that match up with their premise-based analytics.  Another issue is the need to provide analytical tools that are easy for business level managers to both provision and use. Compounding this is the reality that most enterprises lack the IT expertise, resources and even will to develop these tools internally. All of this points to a hosted model where purpose-built analytics can be developed with all stakeholders in mind, and equally importantly, provided on a centralized basis for consistency across all operations.
 
In summary, as we move further along the spectrum towards Internet-based communication and cloud-based services, the case for hosted solutions gets stronger for contact centers. While many variations of hosted exist in this space, the key takeaway is that they will increasingly be better suited for the evolving needs of contact centers than the status quo of premise-based solutions.