The contact centre industry is at the vanguard of digital transformation. Our previous posts in this series looked at the tech trends that are reshaping the sector. One of the trends we mentioned was a move toward cloud-based call centres.
It’s an evolution of the industry that looks set to continue as we move deeper into the 2020s. A shift en masse from on-premises infrastructure to cloud-based would be a significant change in the niche. That’s why the topic of cloud contact centres and their growth deserves closer examination.
In this post, we’re going to explain the ins and outs of cloud-based contact centres; as well as their two main alternatives. We’ll also explore industry statistics to get an idea of where the niche currently stands. Finally, we’ll look closer at the prevailing trend in the industry toward the cloud, and what is driving it.
On-Premises, Cloud & Hybrid – What Does it All Mean?
Unless you’ve been on another planet for the past decade, you’ve probably heard of the cloud. It’s a phrase that’s infiltrated most areas of business and day-to-day life. Precisely what “the cloud” or “cloud-based” means depends on the niche or process on which you’re focussed.
In the world of contact centres, “cloud-based deployment” is one of three types of systems. The others are the traditional “on-premises” alternative, and a “hybrid” version. Before we get into where most contact centres are aligned, it’s vital to know what each one of the three descriptors means:
On-Premises Contact Centres
On-premises deployment of contact centre systems is the most traditional kind. An on-premises centre is one where all hardware and software get installed and run on-site. The equipment needed to operate all features of a system is present at the contact centre itself.
That hardware includes the data centres onto which necessary software gets installed. Typically, the centre operator will buy that software from a third-party vendor. They may, however, develop unique software solutions themselves.
Cloud-Based Contact Centres
When a contact centre is cloud-based, most of the infrastructure gets hosted online. Software, routing, networking architecture, and other critical elements get transferred to the cloud. That dramatically decreases the amount of hardware needed at the contact centre.
A cloud-based call centre doesn’t need data centres onto which to install any software. All the software gets accessed from external physical or even virtual servers. That’s whether the software is from a third party or is a proprietary solution owned by the centre operator. The centre itself may need little more than computers and headsets or desk phones for its agents.
Hybrid Contact Centres
As you may have guessed from the name, a hybrid centre is one that combines elements of the other two. Such centres blend aspects of cloud-hosting with features of an on-premises solution. For example, a hybrid centre may run cloud-based call reporting or recording functions. The centre’s main telephone PBX, though, may remain as an on-premises system.
Hybrid setups often get adopted by contact centres as a stepping-stone. They’re a half-way house towards transitioning from on-premise to the cloud.
Bonus Definition – Managed or Hosted Contact Centres
Another well-used term in this area is that of “managed or hosted” contact centres. This phrase often gets mistaken as meaning the same as “cloud-based”. It doesn’t. A managed or hosted solution is one provided or operated by a third party.
That third party leases or sells equipment or software to a centre for their operation. A managed contact centre, then, can be either on-premises or cloud-based. In the case of the former, the centre would lease all hardware installed at the centre. In the latter situation, all the software and solutions get hosted on the third party’s servers.
How Are Most Centres Aligned & Are Things Changing?
Go back ten years or more, and all contact centres would have been the on-premises variety. Today, things are very different. Cloud-based contact centres represent a significant proportion of the industry. They are not, however, in the majority.
In fact, the exact balance of cloud-based, hybrid, and on-premises centres isn’t easy to pin down. Different studies and research reveal varying figures. A recent State of Customer Experience Study found that 39% of centres asked had migrated to the cloud. A separate industry survey discovered that 23% of centres surveyed were cloud-based.
Source: Call Centre Helper
What both significant pieces of research agreed upon was the direction in which the niche is trending. You see, 53% of respondents to the first survey claimed they planned to move to the cloud in the next three years. Close to half of those in the second study (38% from 77%) who weren’t cloud-based, planned to move that way. That meant only 39% of those surveyed had no such plans.
A sensible look at that and other data reveals a significant trend in the contact centre niche. Centres are increasingly turning to cloud-based rather than on-premise solutions. What’s more, many operators in the niche see the move as one they need to make sooner rather than later.
A vast majority of respondents to both studies planned to make the move within three years at the latest. What, then, explains this industry-wide migration away from traditional on-premises systems?
Have On-Premises Solutions Had Their Day?
As with most decisions, there are many factors behind the trend for contact centres to move to the cloud. A blend of the following benefits of cloud-based solutions push firms toward that type of system:
- Speed of implementation & upgrade
- Multiple site deployment
- Disaster recovery
You see, cloud-based systems are quicker and more straightforward to implement than on-premise counterparts. A contact centre can install and configure software swiftly to meet their needs or those of a new client. The State of Customer Experience study we talked about above, showed that 65% of cloud centres see the speed of deployment as the key benefit.
The ease with which centre operators can connect separate sites is also paramount. With a cloud-based solution, info and data are more readily sharable. Operators can manage interconnected centres wherever they are in the world. This cross-site connection was the most significant benefit of cloud centres as reported in Call Centre Helper’s survey.
Cheaper Cost and Flexibility
What’s more, many centre operators are choosing cloud-based systems to save money. There are often fewer maintenance costs associated with such a setup. Call centres don’t have to maintain or repair their own data centres, for example. Flexible licensing models from third-party providers can also drive costs down.
Crucially, it’s only with cloud-based solutions, too, that contact centres can offer home working, which is increasingly popular with the modern workforce. It fits better with their ideas of work-life balance. Cymphony and FM Outsource explained to us that home working was a vital part of their operations. We’re going to look at that particular trend in a later post in this series.
But for now, the final area to consider as regards the call centre industry trend toward the cloud is that of disaster recovery. This is a particularly interesting aspect of the broader picture. In theory, cloud-based solutions significantly outstrip on-premises alternatives in this area.
Source: Call Centre Helper
It’s far easier to keep a cloud-based centre running in the event of a significant problem. Imagine if an operator’s main premises suffers a power failure, for instance. With a cloud-based system, agents can log in from elsewhere and work as usual. This flexibility in the face of disaster was the reason cited by FM Outsource as to why they prefer a cloud-based solution.
Not Everyone Sold on The Cloud – Yet
As shown by the above graphic, Call Centre Helper’s study found that 25.9% of respondents agreed. They stated the belief that cloud-based solutions are even more reliable than on-site alternatives. The same research, though, displayed some fascinating contradictions.
Over 10% of those surveyed thought that cloud-based solutions were less reliable. Around a quarter reported the belief that reliability was about even. By far the most popular response (38.4%) was that respondents weren’t sure.
This uncertainty about the reliability of cloud-based systems is intriguing. Concerns over data security and other related worries are what fuel the doubt. That’s understandable given the relative novelty of cloud-based systems.
It also helps explain why centres adopt hybrid solutions as a stepping-stone. Implementing such systems helps operators overcome their uncertainties. They can make a small initial step as part of the move toward a fully cloud-hosted setup. That move, though, seems almost inevitable for any centre that wishes to keep up with its rivals.
The Future of Contact Centres – On Cloud Nine?
Modern contact centres are a far cry from those of little more than a decade ago. Advancements in tech are reshaping how centres work and how customers prefer to use them. One of the biggest drivers of change in the niche is the development of cloud-based solutions.
A significant number of modern contact centres are already cloud-based. But it’s not yet the majority. The trend in the industry, though, is moving away from traditional on-premises systems. Industry studies show that most centres are planning and preparing to make the leap.
There is a range of factors driving the trend toward cloud-based systems. Centre operators want the flexibility, speed of deployment, and cost-efficiency of the cloud. However, a degree of uncertainty is currently slowing the shift to full cloud-hosted systems. There’s little doubt, though, that the future of the contact centre niche is primarily in the cloud. centre niche is primarily in the cloud.
Originally published Jun 12, 2020, updated Jan 17, 2023