Let's get this straight

Hosted contact center and on-premises centers demystified

When implementing a contact center, one of the most important decisions is whether a company should choose an on-premises or a hosted contact center -- and it isn't helped by the fact that misconceptions and debate abound about the differences between the two and what hosted and on-premises even mean. Let's examine the differences and benefits of each.

Courtesy of your host

When a company chooses an on-premises system, it takes on responsibility for all call center tasks. An on-premises contact center usually owns its own hardware and software to manage and distribute calls. It's up to the organization to evaluate, purchase, install and maintain all those systems.

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a hosted contact center, a company outsources its contact center infrastructure to a network that manages these systems externally. Because the company doesn't own any infrastructure components, it may reduce up-front costs. The call center "hoster" is responsible for all maintenance and management of the system. However, do not confuse a hosted contact center with a virtual contact center, which also features an outsourced team of call center representatives. A virtual contact center will cost more, but could be a good option for an organization that would rather outsource all its customer care operations to a company that specializes in CRM.

Some companies benefit from the hosted contact center model. If a company has multiple contact centers or remote employees, a hosted service eases representatives' scheduling among different centers and regions. Because up-front costs and maintenance fees are lower, a hosted contact center could mean better return on investment for a business. A hosted contact center is generally an all-in-one package, which some companies prefer. Also, for fast-growing organizations, it can be beneficial to offload managing scalability to the hoster.

On-premises: Under one roof

However, an on-premises contact center has benefits as well.

Once the initial investment in tools and equipment has been paid off, an on-premises contact center shouldn't incur much additional cost. With an on-premises approach, companies can avoid monthly hosting payments and contract negotiation fees. After a few years of paying hosting fees, costs could grow to be on par with that of equipment in an on-premises contact center.

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Why the time is right for hosted contact centers

An on-premises system is also easier to customize. Rather than doing things the way a vendor wants to, a company has greater latitude to make its own decisions.

While some argue that it's harder to deploy a contact center on-premises, proponents of on-premises systems say all that's needed is a high-speed Internet connection -- the company can purchase what it is needed to meet the needs of the business. This task is relatively easy given the available information on contact center equipment.

A business can also benefit from the peace of mind of owning its own equipment and have all their resources centralized under one roof. A 2013 IDG Enterprise cloud computing survey found that 42% of cloud-based projects are eventually brought back in-house due to security concerns. The decision might change at different stages of an organization's lifespan -- for example, in the startup phase, a company might prefer hosted infrastructure to avoid high costs, but then switch to an on-premises system once it can afford to make the investment in the contact center.

Let's get on-premises and hosted straight

If an organization is comfortable with offloading its customer information and management to a hoster, it might consider a hosted system; but if ownership isn't put off by an initial investment and likes the do-it-yourself approach, an on-premises system might be a better fit. This is also true if there are security concerns that cannot be alleviated through hosting.

So, let's get this straight. An on-premises contact center is a contact center where the equipment is in-house, hosted contact centers feature outsourced infrastructures, and virtual contact centers are outsourced completely. Now the differences between each of these methods of call center management should be straight.

This was first published in December 2013

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