The compelling business drivers for the hosted contact center approach
1. The Compelling Business Drivers for the
Hosted Contact Center Approach
A Frost & Sullivan White Paper
Sponsored by:
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2. INTRODUCTION AND PURPOSE
This research paper discusses industry trends, business benefits and the value proposition
for hosted contact centers. It is written for contact center executives, managers and
decision makers who are evaluating the hosted platform as a viable alternative to on-
premise contact center infrastructure.
To assist organizations in determining if the hosted model is a good fit, this paper presents
Frost & Sullivan’s most recent trend data and enterprise considerations for a hosted
contact center solution.
INDUSTRY TRENDS
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. Based on our most current
research, Frost & Sullivan forecasts overall hosted revenues to grow at a compound annual
growth rate (CAGR) of 34.1% from 2009 through 2013. For small seat deployments (< 100
seats) alone, this aggressive growth is forecasted at an even higher CAGR of 41.3% for the
same period.
TOP CONTACT CENTER CHALLENGES
Frost & Sullivan recently surveyed over 300 Contact Center decisions makers, based
primarily in North America; specifically, those who manage, support or influence contact
center operations for their company.
Chart 1.0 presents a look into the top three challenges faced by contact centers in the
current economy.
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3. REASONS FOR SELECTING HOSTED CONTACT CENTER
Chart 2.0 below provides a window into the factors that motivate the adoption of a hosted
contact center solution, based on our recent survey of contact center decision makers. The
results clearly demonstrate that the primary drivers for companies to choose a hosted
contact center solution include no capital investment, pay-as-you-go expense, ease of
provisioning, and flexible scalability. These are followed by reduced system maintenance and
reduced IT budgets.
VALUE PROPOSITION DRIVING HOSTED ADOPTION
Financial Advantages
There are several factors driving the adoption of hosted solutions. The first is the ‘pay-as-
you-go’ financial model that allows business of all sizes to move away from high front-end
expenditures in favor of a more manageable operational expenditure approach. This
approach also simplifies overall cost management and business planning, making it more
favorable than a capital expenditure model. From a customer perspective, the low upfront
investment, instant access to cutting-edge technology and rapid results make the model
difficult to ignore.
Flexible Work Options and Virtualization
The primary driver is the trend towards flexible and decentralized contact centers that
offer the same level of control and visibility into agent scheduling, performance and
customer interactions as the traditional model. Virtualization allows companies to create a
central queue that includes agents in multiple centers and skills-based routing that ignores
physical location. Remote and at-home agents provide numerous benefits for contact
centers, including reduced seat costs, an appreciable elevation in employee morale (which
contributes to better customer experiences), an accompanying increase in employee
retention rates, and finally an expansion of the labor pool to include better-qualified agents.
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4. Enhanced Operational Flexibility
Expanding operations and adding agents can be accomplished easily and cost-effectively
using the hosted model. A major benefit of the hosted model is the ability to rapidly scale
either up or down to meet business demands due to business growth, unexpected and/or
fluctuating call volume from seasonality, new product introduction, sales promotions, etc.
With the hosted model, organizations can purchase technology ‘on-demand’. Utilizing
network automatic call distribution (ACD) functionality or intelligent call routing (ICR),
companies can consistently meet their average requirements and avoid over-provisioning to
handle peak periods. Outbound marketing campaigns can thus be tailored in the same
fashion and enterprise-level visibility brings fluctuations in call volumes into instant view. In
this way, hosted allows for business growth without disrupting or changing basic contact
center infrastructure.
Reductions in upfront capital expenditures and associated lower total cost of ownership
(TCO) are key drivers in this market. In this way, hosted contact center solutions continue
to offer an attractive and cost-effective alternative to premise-based solutions.
Access to the Latest Technology
Using a capital expenditure model, enterprises can try out new functionality without
spending a great deal of time and money. Hosted contact center solutions thus offer the
ability to trial new technologies with minimal risk and at a relatively lower cost of entry.
Hosted solution providers periodically undertake functionality upgrades thereby giving
subscribers the ability to attain the latest feature functionality with minimal effort and cost.
The service provider guarantees performance, reliability and support through service level
agreements with the client. Chart 3.0 and 3.1 below show the hosted contact center
technology features companies are using the most, as well as the features they plan to use
the most in the next two (2) years.
Chart 3.0 Features Currently Using Chart 3.1 Features Planning to Use
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5. Security Strength
A perceived lack of control over operations and the security of critical customer data in a
hosted environment continue to cause end-user concern. But the reality is that a well-
engineered hosting environment will have deeper security infrastructure in-place than many
companies could afford on their own. This is a significant advantage in being able to leverage
the financial investment that the hosted provider has made in security standards and
measures. In sum, tenant self- administration capabilities along with process/methodologies
with enhanced security options, have played a critical role in overcoming these
reservations.
Business Continuity Reduces Risk
Ensuring business continuity during outages, facility emergencies and inclement weather is
a critical requirement. The hosted contact center model ensures business continuity by
enabling agents to be connected to the technology platform and necessary applications -
from anywhere with Internet access. Even in an outage, companies maintain the ability to
service and sell to the client base, undermining what could otherwise be a disastrous
situation resulting in lost revenue, dropped calls and negative customer experiences.
Hosted contact center solutions eliminate the costly and time-intensive process of building
and maintaining a back-up site from which to take calls and deal with emergency situations.
Who should consider a hosted solution?
Frost & Sullivan believes that hosted contact center technology is shifting quickly toward
mainstream market acceptance. Larger enterprises are moving forward to take advantage
of hosted benefits; low up-front investment, minimal IT resource requirements, pay-as-you-
go pricing and robust feature suites.
Frost & Sullivan also maintains that there are a number of important questions that need
to be asked of a potential hosted contact center service provider before taking the plunge
into a hosted model. Critical areas include vendor experience, customer references,
technical platform, security issues and the deployment time.
What types of companies would benefit from a hosted contact center solution?
• Enterprises with limited capital budget or IT resources for upgrades/expansions
• Businesses needing to rapidly expand and contract for peak seasons/traffic/campaigns
• Enterprises growing through merger and acquisition activity
• Organizations considering best-of-breed customer enablement management tools
• Multi-site, multi-sourced contact center organizations
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6. • Enterprises with remote agents or considering remote agents
• Emergency response organizations
• Businesses needing a disaster recovery plan
• Organizations requiring an interim solution while evaluating long-term capital alternative
THE WEST INTERACTIVE SOLUTION
The current state of the U.S. economy has left many companies starved for financial
resources to expand contact center operations. The latest launch of West’s hosted contact
center (HCC) solutions offers organizations a chance to lower costs and exert greater
control over its workforce and technology. This suite of technology and services allows
companies, of all sizes, to provide higher quality and more efficient customer service
delivery. Core components of West’s hosted contact center solution include:
• Standards based Inbound and outbound IVR platform with large enterprise scale
• IP and TDM telephony management and delivery
• Experienced in-house professional services staff to deploy and optimize speech self service
applications
• Intelligent call routing w/ CTI
• Softphone technology both PSTN and IP
• 100% voice call recording
• Real time administration and monitoring
• Real-time voice of the customer feedback (driving first call resolution)
Additional elements:
• Agent desktop to enable multi-channel contacts to include voice, email and chat via a single
sign on.
• Workforce management
• Enhanced Quality management to include voice and data.
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7. CUSTOMER EXAMPLE
Objective: Rapidly Create an Enterprise Hosted Contact Center Solution that
Improves Customer Care and Reduce Costs
One of the nation’s leading wireless communications providers needed to quickly
implement a contact center solution that would fix their current call routing issues and
service volume fluctuations. Their existing system used an antiquated routing methodology
that required toll-based calling to each of their call center sites. This current process left
the client with inefficient use of resources, no real-time visibility to call volume and agent
performance, and no consistent reporting throughout their six call center sites. As a result,
the client was challenged to manage volume spikes, resource inefficiencies and increasing
operational expenses. The client needed a solution that did not require a significant capital
expenditure to improve their existing system.
Having established an enterprise-wide customer strategy aimed at driving improvements in
experience, while managing operational efficiency, the client developed a roadmap that
called for a customer-centric approach, requiring the integration of all call flow activities
into a single, manageable, virtual call center platform with tracking of interactions from
end-to-end. In addition to driving consistency within a unified, plug and play solution, the
client needed to better manage real time contact center performance while creating
competing service groups tied to a clearly defined scorecard.
Faced with these challenges, the wireless company turned to West Interactive to achieve a
virtualized hosted contact center. West Interactive was chosen for multiple reasons, which
included:
1. Proven entity with track record of implementing Hosted Contact Center solutions.
2. Flexibility of a hosted solution coupled with Speed-to-Market
3. Scalable, integrated platform tied to competitive cost of ownership
4. Competitive pricing that allows for more robust features and functionality.
5. Telecom and technical core competencies
6. Tool sets allowing enhanced call center performance management
7. Ability to easily integrate with the client’s current technology.
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8. THE WEST INTERACTIVE SOLUTION: A COMPREHENSIVE AND COST
EFFECTIVE HOSTED SOLUTION
West Interactive’s experienced team of professionals worked closely with the wireless
company to determine the most effective solution based on their aggressive timelines.
Within less than three months, Business and Functional requirements were developed. After
a review of the current technology, West Interactive quickly developed a hosted solution
that included Network ACD, allowing for intelligent call routing. This led to full CTI
integration at all call center sites. Additionally, toll-based calling was replaced with Voice
over IP using a Multi-Protocol Label Switching (MPLS) network that provided lower
transport costs, more efficient use of network resources and the ability to layer on
additional services. West Interactive also created a real-time executive dashboard with
enterprise-level reporting. This provided the client with consistent in-depth reporting,
allowing the company to make quick and informed decisions regarding agent resources and
call-center volume. The client benefited with cost savings due to virtualization and the
visibility produce by enterprise routing. This resulted in using less agents and resources to
monitor calls. The West Interactive solution also included the services of Analytics and Voice
of the Customer surveys. By combining these services into the hosted solution, the
wireless company is able to provide superior customer care and increase their ability to
resolve customer issues in less time, using fewer resources.
THE RESULTS: A FULLY HOSTED SOLUTION IN RECORD TIME
West Interactive’s hosted contact center solution made an immediate impact for the client.
This hosted solution had an expedited implementation that was fully integrated within less
than five months. The immediate benefits that the client experienced include:
• Service tied to consistency of experience across contact points
• Value based methodologies that drive the customer experience
• Readily available customer insight that guides business intelligence
• Easy and rapid augmentation of contact center landscape in diverse geographies
The solution successfully combined inbound call routing for all six call center sites and the
company added two additional call center sites soon after implementation. The client
experienced an immediate impact in call handling time. With intelligent call routing, call
handling time decreased by 20 seconds; allowing the company to focus more time on
additional customer care with customers. The client also experienced immediate benefits
with Enterprise Level Viewing from the real-time executive dashboard. No longer having to
wait to see volume changes, with real-time data, the client could react quickly to spikes and
shortfalls, resulting in increased call servicing. Also with 100% call recording capability, the
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9. company no longer needs to manually monitor calls by site. Reporting is now available in
one location; allowing the client to save time and resources and provide instant feedback
or coaching to agents. CSAT (Customer Satisfaction Scores) saw improvement of 3%
meeting overall targets established by the company.
Today the wireless communications company is enjoying significant cost savings of millions
of dollars per year, improved customer satisfaction and increased customer care and
promotional capabilities.
BUSINESS BENEFITS
Chart 4.0 highlights the West Interactive difference and benefits to its clients.
Frost & Sullivan
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