Contact centers can lower the cost of their contact handling and workforce optimization infrastructure by up to 43 percent over a five-year period by utilizing cloud-based offerings rather than installing equipment in their own facilities, according to a new Frost & Sullivan report, "Premise Vs. Hosted Contact Center: Total Cost of Ownership Analysis." The study was sponsored by inContact a provider of on-demand contact center software and contact center agent optimization tools.
Study authors analyzed 12 contact center configurations ranging in size from 50 to 500 seats, and in functionality from ACD-only to a full-function ACD, IVR, chat, outbound dialer, quality monitoring, workforce management, customer feedback, agent hiring and eLearning system. The analysis of total cost of ownership (TCO) for both three- and five-year timeframes concluded that hosted contact center services significantly reduce TCO over premise-based systems in both three- and five-year scenarios for all 12 of the configurations analyzed.
The study also found the larger the contact center, the higher the savings with the hosted model. Over five years 100-seat centers averaged 23 percent savings, 250-seat centers averaged 34 percent savings and 500-seat centers averaged 43 percent savings. In addition, the study found the more contact center applications hosted in the cloud, the more money saved. In a 100-seat contact center, for example, the five-year savings jumps from 9 percent for a hosted ACD to 23 percent for a full-function, nine-application hosted system.
A pay-as-you-go hosted pricing model that eliminates in-house hardware investment, as well as related IT infrastructure, maintenance and upgrade expenses, drives the savings, according to the research. Premise-based infrastructure requires an upfront capital investment that can easily exceed $1 million, maintenance contracts that are typically 15-25 percent of the purchase price, other ongoing expenses and equipment replacement every five to seven years. All of the study's TCO calculations take into account the costs of systems and applications, implementation, maintenance and upgrades, and hosted per-agent, per-month fees.
"This study not only validates the financial benefits of a cloud-based contact center infrastructure, but also clearly demonstrates that the appeal of the hosted model is not limited only to small businesses without the resources to purchase and maintain on-premise equipment," said Paul Jarman, CEO of inContact. "The fact that the TCO increases as the number of seats grows will be a strong driver in the enterprise market, where we are already seeing significant traction for our own cloud-based contact center offerings."