Richard Snow's Analyst Perspectives

Companies Should Consider Adopting Contact Centers in the Cloud

Posted by Richard Snow on Sep 5, 2012 12:01:51 PM

Our recent benchmark research on the contact center in the cloud shows companies are under more pressure than ever to upgrade their contact centers. The large majority of companies (73%) think it is very important to improve the way they handle customer interactions, and only a small percentage are fully satisfied with their current applications (19%) or their communications (14%).  Upgrading presents a significant challenge, however, because simple call centers that handle only phone calls have been made obsolete by the need to support multiple channels of communications. Consumer communication preferences have changed, and as a result companies on average now support five channels of communication in their centers, with just over a third (37%) supporting six or more – the most popular being inbound calls (still tops), email, outbound calls, fax and postal mail.

Furthermore, handling of interactions has become more distributed. Nearly two-thirds (61%) of companies have at least some interactions handled outside of their formal centers; employees in sales, customer service, marketing and branch offices, as well as home-based agents, knowledge workers and mobile employees all handle interactions, and 16 percent of companies expect more interactions to be handled by home workers and 13 percent by mobile workers. Supporting all these channels and locations requires several systems, and to provide a consistent experience, all these systems need to be integrated.

The traditional way of achieving a fully integrated multichannel communications system is to deploy multiple on-premises systems, in all probability from multiple vendors, and spend a considerable amount of time and money integrating them into a cohesive system. This in return requires a multitude of different skills, which leads many organizations to turn to systems integrators to carry out this task, increasing the costs. The same is true of contact center applications, where many organizations turned to third parties to integrate the many systems (including CTI, call routing, CRM, case management, workforce management and quality monitoring) needed to operate a successful center. This approach has become increasing less practical given the number of systems involved, and our research into the technologies used in contact centers shows that most organizations don’t have the budget. As a result, the majority of companies that responded to our contact center in the cloud benchmark research are increasingly turning to cloud-based systems, with 63 percent likely to adopt applications in the cloud and 44 percent communications in the cloud. At the same time, companies understand that cloud-based services alone are not a panacea for all these issues; 73 percent of companies recognize they must also improve training and coaching for the employees they use to handle interactions.

Adoption of systems in the cloud is being led by CRM, with approximately 20 percent of companies already having taken this step. Over the next two years applications in the cloud are likely to remain more popular than communications or analytics, with adoption rates moving into the 30- to 40-percent range for most applications. However, in the short term, the challenge of supporting multiple communication channels is driving more companies to adopt communications in the cloud. This is particularly true as companies seek to support channels such as chat, text messaging, unified communications and video, each of which has been adopted in the cloud by 15 to 20 percent of companies. Over the next two years cloud implementations are likely to increase to around 30 percent. Lagging behind is the adoption of analytics in the cloud, where current penetration rates are in the 10-percent range, with that likely to increase to 25 to 30 percent in the next two years.

The research confirms that systems in the cloud are not for everybody. Companies have concerns about security, integration with on-premises systems and ownership of data. However, the top two concerns are responses times and overall performance. The good news is that the top contact center in the cloud vendors recognize this and have made every effort to ensure their services run as efficiently, effectively and securely as most on-premises systems, leaving the choice of implementations as much an emotional decision as it is a technical one.

Cloud software vendors often tout benefits such as cost savings, less risk, easier maintenance and less resource dependent. However, the research shows that for many companies, the prime reason for moving to the cloud is that it gives them an opportunity to innovate their processes: which communication channels they can support, the locations from which they can handle customer interactions and how they respond to customer interactions – all key objectives in today’s competitive markets.

In one role or another, I have been involved with contact centers for more than 25 years. Despite continuing developments, it has not been a fast-changing market, and many companies now operate what can only be termed legacy systems. The advent of cloud-based systems is changing this. Cloud-based software gives companies the opportunity to update their systems in an affordable and effective way, especially considering that many vendors support a hybrid environment in which companies can make a gradual transition to the cloud.

In many ways cloud-based systems are not new but are a reincarnation of other models that supported running systems off-premises, but today’s vendors and applications are more sophisticated. If your organization wants to support multimedia customer interactions and needs new systems to support those efforts, I recommend you evaluate the emerging group of contact center in the cloud vendors.


Richard J. Snow

VP & Research Director

Topics: Customer Analytics, Customer Data Management, Customer Experience, Customer Feedback Management, Social CRM, Speech Analytics, Voice of the Customer, Analytics, Cloud Computing, Customer Service, Call Center, Contact Center, Contact Center Analytics, CRM, Customer Performance Management (CPM), Desktop Analytics, Text Analytics, Unified Communications, Workforce Force Optimization

Richard Snow

Written by Richard Snow

Richard leads Ventana Research’s Customer and Contact Center Performance Management research practice, which is dedicated to helping organizations improve the efficiency and effectiveness of managing their customers, throughout their lifetime and across all touch points, including the contact center. He conducts research exploring the people, process, information and technology issues behind customer operations management, contact center management, and customer experience management. He also works with senior business operations and IT managers to ensure that companies get the best performance from today’s highly complex application products. Richard has worked in management and consulting leadership positions in the technology industry including with Price Waterhouse, Sema Group and Valors. In his work, he has been involved with all aspects of delivering highly complex IT solutions to a variety of clients in the telecommunications, financial services and public sectors. Richard has specialized in delivering customer care and billing solutions for telecommunications operators, and several multi-channel contact centers for organizations in both the public and private sectors.