Is a Hosted Contact Center Right for Your Company?

Apr 07, 2015

Frost & Sullivan recently invited select companies to participate in a new and unique thought leadership forum – our Virtual Think Tank (VTT). The executives that contributed their opinions and insights. They hail from a wide variety of name-brand companies:

Freddie Berberena,
Head of Service Center Operations, Bloom Health
Gibbs Jones, Senior Vice President, Customer Experience, Suddenlink Communications
Darren Kunkel,Director of Product Management, West Interactive Corporation
David Murdock, Director Customer Care Support, Windstream Communications
Alex Stecyna, Senior Manager, Customer Care Desktop Experience, Vonage
Mark Stevens,
Vice President, Customer Care, Kobo Inc.

In today’s environment, the lifespan of contact center technology is short. Enterprises are looking for balance; sorting out the right technology and the right platform. Companies are looking to lay out a new technology strategy model in the contact center. Among the themes discussed were:

  • Defining a ‘hosted’ contact center (HCC)
  • Bringing new channels and language support into the customer communication mix
  • Factors driving the move from premise to hosted
  • Things to look for in a hosted technology partner

How do we define a hosted contact center?

Changing consumer behavior is forcing organizations to re-define the customer interaction experience. The supporting technology that enterprises use to shape the new customer experience paradigm, continues to evolve. This includes front-end IVR, back-end integrations, CRM and other customer-centric databases.
Frost & Sullivan defines a Hosted Contact Center as a network-based service, where a service provider hosts a contact center technology platform and leases out functionality, applications, and features to end-users using a Software-as-a-service (SaaS) pricing model. End-users typically pay a usage-based fee on a per-agent-per-month basis for the service. Vendors that participate in the North American hosted contact center market can be broadly classified as:

  • Application service providers (ASPs). SaaS offerings are their core business
  • Telecommunications service providers (TSPs). These essentially are telecom carriers that offer hosted contact center services as an adjunct to the sales of network services offering
  • Outsourcers. For these service providers, hosted services are a complement to their agent-services offerings
  • Systems integrators. This group includes SaaS applications as part of broader enterprise outsourcing initiatives
  • Technology platform vendors. Many also sell premises-based offerings Sample companies include Cisco, Avaya, Aspect, and Genesys

Bringing New Channels & Language Support into the Customer Communication Mix

To kick-off the discussion, our panelists talked about how their organizations view hosted contact center technology.

Alex Stecyna from Vonage opened the dialogue by saying, “Our objective is to look how to be more pliable and more flexible. This will allow us to grow with our new products and services and bring that multi-channel conduit into the customer communication mix and really look to leverage what has been built out there. We require out IT team to be more focused on the things that are core competencies in our organization.“ Mark Stevens from Kobo adds, “For me, part of the challenge in being in a thin margin business is doing battle with companies like Apple and Amazon. We have to be lean and we have to be very innovative. How do we handle eight languages of support today? I have in-house sites, outsourced sites and European sites. I also have centers in Asia and South America, so for us hosted telephony is a must.”.

Factors driving the move from premise to hosted

So many companies attempt to cobble together an in-house hosted solution for their contact centers. On this note, Freddie Berberena from Bloom Health chimes in with, “Obviously we highly support the idea of having hosted contact centers. We look at it as a much cheaper solution and alternative to standing up our tools and bringing them in-house. Having it hosted is easier to maintain and it really allows us to do what we are really good at. We are not a technology company - we don’t host these tools and have no desire to do so.”

Mark Stevens from Kobo says, “With our business being as seasonal as it is, we need something that we can “own,” or lease. We want the ability to scale up or down over the course of ten days or a week. This means multiple languages, multiple geographies and multiple TFMs. So for us we would be sort of lost without it.” One of the early selling points of hosted contact center services was the cost advantage—a company could procure the infrastructure for a small contact center at metered pricing, paying just for what was used rather than for a complete center. But competition based on cost encourages commoditization and a race to the bottom. To combat this, vendors are trying to move up the value chain; wooing enterprises that are willing to offload significant seat counts, numbering in the hundreds or even thousands. For those enterprise clients, security and reliability is paramount, more so than the cost per seat of application delivery.

The panel had some strong opinions about the importance of working with an experienced technology partner. Many companies operate in a ‘hybrid’ environment while transitioning from premise-based applications to a fully hosted platform.When asked the question about partnerships, Freddie Berberena spoke right up with, “We look for partners that we are going to challenge us. They are also going to challenge us since they want to grow and get better with us. We’re not looking for companies that are big and huge; so set in their ways that you have to cut through a lot of red tape to get something done.

Darren Kunkel from West interactive talks about the strategic position of contact centers by saying “We really believe that step one in our experience is defining whether or not your contact centers are operational or strategic – it’s that simple. That is really critical and almost cliché, but it is such a vital step to look inwards.” David Murdock from Windstream tags onto the comment by admitting, “You know, we now have to take a look back. Even though we are entrenched and have invested in some of these [premise] technologies, we have to step out and decide that we need to be strategic versus operational.”

The perspective continues with Alex from Vonage adding, “We do have some facets of our technology that are hosted and some that are in-house. I can say I don’t view hosting, as providing a competitive advantage. You have to ask, ’… does it make sense for your business model depending on what you are trying to do and where you are?”

The call center industry is undergoing significant technological, economic and social changes. Calls can be routed to any contact center or a remote knowledge agent anywhere in the world via a thin-client Internet browser.
Frost & Sullivan believes that the hosted contact center market is moving quickly out of the early adopter stage, with immense growth potential for the future. The market has enjoyed rapid growth rates over the past couple of years to meet the need for customer service, help desk support, technical support and product sales.
The hosted market is currently experiencing a high degree of competition, with industry participants vying to capture greater market share and even greater wallet share from existing clients. End-user education on the benefits of hosted contact center solutions is essential to drive greater acceptance and uptake. Adoption has been increasing over the last 3 years, as end user education grows and acceptance in the market begins to rise.


Michael DeSalles


DeSalles has 25 years of contact center operational experience. He combines this with 10 years of research and analytical expertise in: Emerging trends, convergence, collapse and disruptive technologies in the contact center industry; Insight into site management, supervision and agent development; Customer care outsourcing; Skills based routing; BPO Near shore deployment; Home based agents

Add Pingback
blog comments powered by Disqus