Hosted or On-Premise: What’s the best contact center solution for your organization?
By Jeff Valentine, CEO, Callfinity
Many providers would like you to assume that choosing the right contact center solution is a matter of solving a simple mathematical equation. The truth is there are a variety of factors to consider when deciding between a hosted or on-premise contact center solution. Just because X saves you money or Y may yield better voice quality doesn’t mean that Z is the better option for your business. In fact, both options may be beneficial to your organization at different times.
Many businesses contemplating this crucial decision-making process assume that selecting a hosted or on-premise solution is an ‘either or’ proposition. Proponents of on-premise solutions will argue that if you’re concerned about call quality and security, a hosted solution isn’t the right choice for you business. On the other hand, hosted solution supporters will lead you to believe that on-premise solutions are expensive and require a substantial amount of resources to maintain.
But before you begin to assess which option is right for you, it’s important to realize that choosing one option over the other doesn’t necessarily mean you’re stuck with that particular contact center solution. Although cost-savings vs. call quality is a primary comparison point, this mentality fails to take one key factor into consideration… ‘change.’ Organizations change, they grow, and sometimes a solution that may be a perfect fit one day turns out to be a monetary drain several years down the road.
This holds especially true for new businesses. Brand new contact centers realistically can’t determine call volumes prior to selecting a contact center solution. It’s also likely that these businesses don’t have the extra capital to purchase an on-premise solution even if it may seem like the better choice. In this case, there’s no reason to delay the acquisition of cutting edge technology even if you feel an on-premise solution may be more suitable for your business. A hosted solution can act as a gateway to an on-premise solution once call volumes are analyzed and enough capital is freed up to make this purchase possible.
A hosted model may also benefit existing centers that have already invested in facilities and infrastructure. Although an on-premise solution is already in place, a hosted model may make sense when adding temporary agents during seasonal peaks. In this case, a hosted solution will relieve your team of the difficult task of updating the current infrastructure, especially if the changes aren’t permanent. It may also be a good idea to consider a move to a hosted solution in lieu of a shift in business model (e.g., a move to home-based sales reps).
If your company is downsizing, a move to a hosted solution may be an effective way to save money, especially when resources become limited. Downsizing often results in reduced headcount which may leave your business with a depleted IT team capable of maintaining an on-premise solution. Trying to maintain an on-premise solution with a crippled IT team can result in significant downtime. Since a hosted solution doesn’t require ‘on-premise’ maintenance, you’re free to focus on more important matters like agent performance and whether you should get the Pork Lo Mein or the Sesame Chicken.
Once you accept the fact that your decision isn’t set in stone, analyzing your current business needs will help you choose the best option for your organization… even if it is only temporary. While researching these options, you’re likely to hear a lot of cost, stability, security, and call quality comparisons between the two models. Most articles contend that hosted solutions are more cost-effective while on-premise solutions offer a higher level of stability, security, and call quality.
While some of these comparisons are valid, it’s important to realize that the hosted provider you select plays a huge role in whether or not your contact center will experience a loss of stability, security, and call quality. High-level hosted solution providers like Callfinity offer a level of security that far exceeds that of an enterprise solution. In almost all cases, an enterprise server room cannot produce the same level of reliability, security, and disaster recovery of a quality service provider with hundreds of clients.
Another misconception regarding hosted solutions is that they suffer from poor voice quality. Although enhanced call quality is frequently used as a reason to choose an on-premise solution over a hosted solution, this notion is often unfounded. Yes, you may experience some quality loss when using a hosted solution, but these cases are limited and the deviation is minimal and difficult to detect by the average listener. The good news is a quality provider can mean the difference between pronounced clarity issues and minor fluctuations in quality.
This is why it may also be a good idea to find a provider capable of point-to-point connections. Most hosted service providers can provide point to point connections but this process is usually quite expensive. Due to the high-cost of point to point connections, definitely steer clear of providers that adamantly promote that type of service. However, if call quality is a concern, at least make sure that your vendor has this option available.
But when all the data is analyzed, there’s still one primary reason to consider a hosted solution over an on-premise solution… cost. A hosted solution will undoubtedly save small to medium-size businesses a great deal of overhead. Smaller businesses with contact centers of 10 to 50 people are better served by a hosted solution. A Yankee Group analysis estimates that the cost of running a 25-agent contact center can exceed $369,000 over the first three years of operations for an on-premise solution compared with $266,000 for a hosted solution over the same period. The largest savings were in the areas of hardware/software, implementation and maintenance costs, technology upgrades, and IT staffing.
A hosted solution allows your business to focus on operational costs instead of worrying about capital expenditures. Relying on a hosted provider’s data clusters also alleviates the need to concern yourself with stability and call quality. If a problem arises, a simple call to the provider will result in an immediate fix. With an on-premise solution, a fix may be much harder to come by if your business relies on a small number of IT professionals to handle all technical issues.
For larger businesses, an on-premise solution is ultimately the better choice, especially if the contact center relies on an outbound dialer. In this case, large call volumes will result in substantially high usage rates, offsetting the initial cost savings of a hosted provider.
Even with all these elements to consider, the most important question you need to ask yourself is what’s advantageous for your business right now. If you’re a brand new contact center, your best bet is to spend as little money up front as possible. Choosing an on-premise solution requires jumping in both feet first and coming out of pocket for hundreds of thousands of dollars. On the flip side, a hosted solution allows you to burst out of the gate with a nominal setup fee and a monthly service charge while you take the time to assess whether on-premise is the best solution for your business.
With Callfinity, choosing the right contact center solution doesn’t need to be an ‘either or’ proposition. If you choose a hosted solution or an on-premise solution, Callfinity can easily migrate your data without a loss of functionality or stability. If cost is a concern, Callfinity can scale the model to fit your business and adjust pricing to keep you within your budget. And with a custom solution built to your specifications, you can be sure that all your systems work cohesively to coordinate your daily operations.
About Callfinity:
Callfinity provides the easiest to use telecommunications software, systems, and services to contact centers, service providers, and enterprises. Since 1999, over 270 customers in six countries around the world have selected Callfinity’s on-premise equipment and hosted services. For more information about Callfinity, please visit Callfinity’s Web site at www.callfinity.com or call (877) 897-2962 (USA) or +1 585-278-1940 (elsewhere).