By Peter L DeHaan, PhD
We understand a computer room full of equipment. It’s tangible. We can see it, touch it, and kick it (but don’t do that). It’s how we’ve done things for decades, since the beginning of computers and telephony switches.
Contrast this to internet-delivered solutions, which go by a myriad of names, such as SaaS (software as a service), cloud-based solutions, hosted services, and a few more labels that have come and gone. The oldest I can remember is provided by ASPs (application service providers), but I haven’t heard that in years. For the sake of discussion, let’s call all variations of this offsite provisioning concept as internet-delivered solutions.
An on-site system allows for greater control. But with control comes responsibility: maintenance, database backups, software updates, spare parts inventory, disaster recovery, backup power, and technical staff. Financially, an on-site system (hardware and software) represents a tangible asset, which is a capitalized purchase and a depreciated line item on your balance sheet.
While there are usually some ongoing costs for an on-site system, these are minor in comparison to the onetime purchase price. An on-site system doesn’t require internet access to operate, but with the increased need to access information and remote systems through the internet, this advantage is rapidly diminishing.
Although vendor stability is a concern for both options, with on-site systems, there is at least the potential for the call center to continue operating if the vendor fails; this is not so with the alternative.
Internet delivered solutions represent a newer way of provisioning a call center. With it the responsibility to install, maintain, and update equipment is removed, but along with it goes the associated control. Financially, an internet-delivered solution is a service, which shows up on the income statement as an expense. It is not a capital expenditure and there is nothing to depreciate. The only costs are a predictable, ongoing monthly expense, which is generally proportionate to usage.
Internet delivered solutions also offer the flexibility to quickly ramp up and ramp down capacity as needed. Operations may be deployed anywhere in the world where there is reliable internet access, easily accommodating remote agents.
However, there are two chief concerns with cloud-based solutions. One is the requirement of a stable internet connection for the call center or remote agents. Without internet access, the call center is effectively down. The other concern is with the vendor. Do they provide always-on, fully redundant, carrier-grade stability, with 24/7 tech support? Are they financially viable to offer cloud-based service for the long-term? If they stumble or fail, the call center immediately suffers the same fate.
For much of the call center industry’s history, on-site systems was the only option. Some call centers continue to pursue this approach, not because they’ve examined the alternative, but because that’s how it’s always been; they see no point in changing. This is shortsighted. Equally unwise are call centers that race headlong into internet-delivered solutions, wanting merely to follow the current trend. They dismiss the alternative without consideration simply because it’s the old way of doing things. An unexamined strategy is really no strategy at all.
Neither approach is universally right. Both have advantages; both have disadvantages. Take a careful look at the pros and cons of each approach. Then make a strategic decision on which one is the best for you and your call center. Your organization’s future may be at stake.
Peter L. DeHaan, PhD, is the publisher and editor-in-chief of AnswerStat and a passionate wordsmith. Connect with him on his blogs, social media, and newsletter, all accessible at www.authorpeterdehaan.com.