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Large and small businesses take to hosted contact centres

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The hosted contact centre market is all set to outgrow its early adopter tag, with companies of all sizes warming up to the concept of hosting their contact centre operations.

The shift to the operational expenditure model, reduced maintenance costs and ease of provisioning multi-sourced contact centres make hosted solutions an attractive value proposition to companies in Europe, Middle East and Africa (EMEA), ensuring substantial market potential.
New analysis from the global growth consulting company Frost & Sullivan finds that the EMEA hosted contact centre market earned revenues of €277.9 million in 2007 and estimates this to more than quadruple in size by 2014 to reach €1,45-billion.
Enterprises across the region are increasingly availing the benefits of hosted solutions, especially with vendors offering a wide array of excellent solutions and a number of service providers operating in the market. However, the biggest factor driving the growth in the hosted contact centre space is the shift from capital to operational expenditure.
“Leasing contact centre technology allows organizations to deflect high upfront capital expenditure,” says Frost & Sullivan research analyst Kunal Kakodkar. “This is an attractive business proposition for small and mid-sized businesses (SMBs) that seek contact centre technology, but do not have access to the capital expenditure (CAPEX) required for expensive premise equipment.”
SMBs are more likely to choose a solution that eliminates the need for capital. The monthly usage or pay-as-you-go model simplifies cost management and business planning, giving the company the advantage of using a more favourable operational expenditure (OPEX) cost model.
In a premise contact centre, a significant percentage of the total cost of ownership (TCO) is tied to ongoing maintenance, support and upgrades. Organisations need in-house IT staff to man contact centres at each location or site, even if these human resources are not being fully utilised.
Such unnecessary costs can be reduced in a hosted environment, since service providers can pass on cost savings from the economies of scale of shared resources to the enterprise. These cost savings are one of the biggest factors directing potential clients towards the hosted environment.
End users are drawn not only to hosted contact centres’ advantages of lower maintenance costs, but also the ease of provisioning offered by multi-sourced contact centres. With multiple sites as well as remote and at-home agents, the costs of provisioning and integrating these disparate environments can be prohibitive. The hosted model considerably lowers these costs.
While SMBs have already bought in to the hosted solutions concept, larger enterprises are only gradually realising the cost benefits that can be achieved by hosting their contact centre operations.
“Many large businesses will slowly make the move to multi-tenant solutions once they become aware of the enhanced flexibility and scalability of multi-tenancy,” notes Kakodkar. “A multi-tenant offering that includes high-end applications is also an appealing proposition for smaller enterprises, since the capital expenditure required in setting up an on-premise operation is often prohibitive.”
However, the hosted market will have to battle the widespread perception that companies tend to lose control over operations and compromise the security of critical customer data once they adopt the hosted model. Legacy deployments in premise-based technology also present growth challenges to the market.
Market participants can assuage end users’ concerns about loss of control over operations or data security by offering advanced products and the option of dedicated hosting. Technology partners and service providers need to step up their marketing and sales efforts to educate customers about the benefits of their robust and secure hosted contact centre solutions.
“Hosted contact centre suites have matured to a point where several technology vendors offer robust, secure multi-tenant solutions with tenant self-administration and enhanced data security,” observes Kakodkar. “The market can grow further once these technology advancements are communicated to end users.”