Contact Centres – Why are they turning to the Cloud?

Published by Rodolphe Wilhelm, 10 Jul 2015

As Contact Babel’s report into cloud contact centre solutions is released, Bibi Bajwa, COO of cloud services provider Ormuco, casts an eye over the findings and looks at why companies are increasingly turning the cloud to meet their operational challenges.

 

This is an important and much-needed piece of research for contact centre buyers. Everyone knows that the cloud is the new big thing, but exactly what competitive advantages is it bringing to those who adopt it? What are the costs and the downsides, and how can these be mitigated? These are the questions the report seeks answer.

 

The drivers of cloud adoption

It is often assumed that reduced cost of ownership and the ability to favour operational over capital expenditure are the main drivers behind cloud adoption. Contact Babel’s survey respondents almost overwhelmingly reject this view however.

Exactly 90% of the contact centre operators surveyed said that the flexibility to add agents and change functionality quickly was important. Right behind that, 89% agreed that the need to improve IT systems was a factor.

Only 45% said that reducing capital expenditure was a focus, and a paltry 26% were attracted by the cloud’s pay-as-you-go pricing model. Of more interest were virtualisation and home working (47%) and the need to take some of the load off the internal IT team (54%).

What these figures show is that contact centre operators value the cloud model for what it can deliver in terms of operational flexibility, efficiency and new functionality over its financial impact. Why this should be the case can be perhaps be answered by the also recently published Merchants Global Contact Centre Benchmarking Report. It essentially boils down to the fact that the contact centre today is a much more complex environment, involved in more areas of the business and the customer journey, than ever before.

Ten years ago no customer interactions were digital, whereas now 35% are, and only 57% are voice only. Half of all contact centres now manage at least 8 different contact channels. 19% of agents are home workers, and 35% are multi-skilled. Whereas previously the contact centre often operated in isolation from the rest of the business, today 48% share customer intelligence gleaned from customer interactions across the whole enterprise – which means the quality of that data has to be up to scratch. Putting the contact centre’s increased strategic importance into context, 75% of senior managers believe that service is a competitive differentiator. This figure is up 22% in just two years.

So, if cloud solutions can deliver the functionality and flexibility required, why isn’t everyone jumping on board immediately?

 

The inhibitors of cloud adoption

The survey also asked contact centre operators what their main concerns were about the cloud. What’s interesting to see here is how these are different between those operators who have already adopted the cloud and those who have not.

Data security, perhaps unsurprisingly, is the top concern for both adopters and non-adopters. The number of those for whom data security is a worry drops considerably however, from 37% of non-adopters to 24% of adopters.

Data breaches are always a concern of course. As cloud providers, our very businesses depend on preventing them. Yet what these figures suggest to me is that fear of data breach is high, not necessarily that data breaches themselves are actually all that frequent. Clearly, cloud vendors have yet to adequately demonstrate how safe they truly are, even to their own customers.

The most cited inhibitor among those not yet using cloud was the difficulty of integrating with existing systems (62%). On the other hand, only 28% of those who had been through the process – and presumably successfully integrated a cloud solution with their legacy systems – reported this as a concern. In reality integrating a cloud solution with existing systems should be no more difficult than integrating them with an on-premise solution. In many cases it should be easier due to the technologies – web services, APIs – built into modern cloud contact centre solutions, and many come with out-of-the-box integrations for popular CRM and telephony systems in any case.

The other major concern was the danger of wasting investment on existing systems. This was reported by 35% of non-adopters and by 25% of adopters. Again, perception is worse than reality. Replacing legacy systems as they reach end-of-life and have fully depreciated addresses this concern. Many cloud providers – including my own – also offer buy-back schemes to offset customers’ potential losses.

 

Cloud usage and benefits

Whatever the perceived benefits and downsides of the cloud are reported to be, the fact is that cloud adoption is happening across the contact centre world with increasing speed.

Some 48% of contact centre operators now report hosting at least some contact centre functionality in the cloud. The most popular are call routing functionality (28%), CRM/agent desktop (22%), call recording (18%), and IVR/speech recognition (17%). The Merchants report says that 34% of operators are planning to invest in cloud solutions in the next year.

The vast majority of these appear more than satisfied with the benefits they are accessing from their use of the cloud. A whopping 82% say that they now have more powerful and extended functionality. 67% report a lower total cost of ownership than with CPE solutions. And 56% say that is now easier than before the make changes to their system.

What becomes clear from Contact Babel’s new report is that operational, not purely financial, challenges are driving cloud adoption. What’s more, those organisations that have made the leap report fewer concerns than those that have not, and overwhelmingly report that they are receiving the benefits they expected.

Given the increased pressures and workloads being placed on contact centres, and the ever spiraling complexity of the jobs they are asked to do, it’s not difficult to see what is driving contact centre operators’ needs for additional functionality, agility and scalability. As these are the benefits the cloud is proven to bring, we expect to see the trend of cloud adoption continuing for many years to come.

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