10 Reasons for Outsourcers to Outsource Call Center Equipment
2 Dec, 2010
By: Tom MilliganHosted Solutions Cut Costs, Add Flexibility & Increase Profitability
Outsourcers make their living by convincing customers to free themselves of non-core business functions, but until recently they have been unable to practice what they preach when it comes to their own contact center infrastructure. The only option for obtaining essential equipment like a phone switch or automatic call distributor (ACD) was to buy it, install it, hire someone to maintain it, and upgrade it every few years at staggering cost.
Today there is a far less expensive alternative that deploys in days, never needs physical replacement, and offers opportunities for increasing profit margins as well as building new revenue streams. These hosted call center platforms – also known as cloud-based or Software-as-a-Service solutions – are delivered over a broadband connection with all back-end hardware and software installed, updated and monitored at the provider’s data center.
Off-Site vs. Installed
With this model, computers and standard phones are the only equipment needed at the outsourcer’s facility. You pay a monthly subscription fee based on the number of seats actually used that month. You have no telephony responsibilities, so you can focus on enhancing your services and prospecting for new customers.
For offshore outsourcer Vector BPO, going the hosted route saved an estimated $500,000 in startup costs even though the company already owned telephony equipment from a previous business. For domestic outsourcer Frontline Solutions, the strategy helped triple revenues in two years as well as double agent utilization, support home agents, and add tools such as click-to-call to aid in attracting clients.
Whether you’re an outsourcer replacing outdated equipment or setting up a new site, there are many reasons to consider a hosted solution – including the “stick to your core competency” argument that is the lifeblood of your own business. Here are 10 of the most compelling benefits.
One-Third the Cost
Paying for your telephony infrastructure as a hosted service simply costs less. The problem with customer premises equipment (CPE) is that it requires a large upfront capital investment for equipment, installation and configuration, plus servers, security, backup, testing and periodic replacement. You pay a fixed price regardless of business volume, need to pay IT personnel for day-to-day maintenance, and also pay 15-25 percent of the purchase price to the vendor annually for other maintenance chores.
With the pay-as-you-go pricing structure of a hosted solution, these kinds of costs disappear. One Yankee Group study estimated that cloud-based call centers can reduce the total cost of ownership by up to 45 percent. Other calculations suggest a hosted savings of as much as two-thirds with a typical per-seat charge of $9,000 over five years compared to $25,000 for an installed solution.
Expand/Contract Instantly
With a hosted solution, you can also ramp up capacity in minutes without being constrained by the size of your phone switch or investing in a bigger-than-needed switch that eats into your profitability every minute the unused capacity sits idle. Your provider can add virtual seats whenever you need them, remove them when you don’t, and charge only for what you use in a given month.
That means you can take on short-term or seasonal projects regardless of current bandwidth, and add major new customers without adding infrastructure. You never have to say no to a six-month project or a prospective new client, or pay for excess switch capacity that you can’t bill back. Result: higher profit margins.
Add Features on the Fly
In addition to being able to accommodate more projects and more clients without adding costly equipment and related overhead, hosted call center platforms can help outsourcers build business – and beat out the competition - by quickly adding features requested by individual customers without capital investment or deployment delays.
If you have a prospect that insists on IVR capability, you can turn that feature on almost immediately without having to buy an IVR system or lose the opportunity while you wait for installation. (Yes, this will automate phone calls that you could be taking, but it will also mean the difference between getting the contract and losing it.) The same is true of features like click-to-call, call recording and predictive dialing.
Monitor Social Media
With some hosted services, you can also generate a completely new revenue stream by offering social media monitoring as an add-on service. That includes not only reviewing and responding to Facebook and Twitter posts for brand defense, but also helping clients reach out to active posters with discounts and other community-building strategies.
Hosted providers with this capability can handle email, chat, SMS, phone and social media monitoring in a single queue, enabling a multi-skilled agent to handle all channels. Premises-based platforms typically cannot offer this one-queue functionality and associated efficiencies.
Solve Reporting Problems
Outsourcers have an unfortunate reputation for doctoring reports to make themselves look good. Consequently, clients don’t trust what outsourcers tell them about number of calls handled, answer time, first-call resolution and other key performance indicators. A hosted solution solves the problem in two ways.
First, you can create a unique login ID for each client so that they can run their own reports directly from the raw ACD data. They’ll know they’re getting unfiltered information, and that gives you a competitive advantage against other outsourcers who may be bidding for the same work. Second, you no longer have to pay anyone to produce reports for clients, further reducing expenses that cut into your profit margins.
Guarantee Uptime
Another competitive advantage provided by the hosting model is the ability to relieve your company and IT staff of responsibility for service delivery, including uptime that is critical for meeting customer SLAs. That means you don’t have to worry about – or pay for – network and power redundancy, 24/7 monitoring and other protections.
A reputable provider will offer a written uptime guarantee of 99.99%, backed by a network of hardened, geographically dispersed data centers with triple redundancy built into every system. That’s a safety net that no outsourcer can afford, but it can play a key role in attracting and keeping customers.
Deploy Faster
Because no hardware or software installation is required, a hosted call center system can be up and running in as little as 45 days. Traditional premises-based deployments typically take months.
Support Home Agents
With a cloud-based solution, home agents can be set up quickly and inexpensively with only a standard telephone and computer. In contrast, supporting home agents with a premises-based telephony infrastructure is a complex and expensive process. If you want the flexibility to recruit employees for home-based work or provide a work-at-home option for existing agents, a hosted platform is by far the better choice.
Calls are delivered to the next available agent regardless of location, so there is no downside in terms of call handling. In addition, home-based agents tend to be more mature, better educated and more satisfied with their jobs, leading to increased efficiency and lower attrition rates.
Low Maintenance
In a hosted call center scenario, all real-time monitoring, redundancy and ongoing maintenance are handled by the service provider with little or no need for in-house IT management and support. In-house technicians are no longer responsible for 24/7 system uptime and day-to-day maintenance, as they are in the traditional installed model.
No Equipment Replacement
If you don’t own the equipment, you don’t have to replace it every five or seven years. That means there is no disruption to your operation and no big-ticket item to finance periodically from your capital budget as older systems become obsolete. Upgrades are exclusively the responsibility of the hosting provider, and they happen behind the scenes.
Likewise, using a hosted call center platform eliminates the need to wait for new software features to be introduced en masse under expensive maintenance contracts, installed in-house and in some cases require a new software license. Instead, the hosted model enables new feature upgrades to be delivered continuously and transparently over the user’s Internet connection with no software installation on company servers or desktops.
10 Reasons to Act
All of these benefits can have a positive effect on the bottom line as well as create new pathways for growth. With both lower total cost of ownership and the ability to differentiate and grow your business, outsourcing the telephony infrastructure is the logical solution for outsourcers looking to optimize their operations. You get all of the advantages and none of the responsibilities.
Outsourcers play that tune with customers all the time. Now it’s their turn to follow their own advice in the telephony equipment arena.
