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Opinion Piece - On premise vs. the cloud – what to consider before migrating contact centres

03 February 2015

By Pippa Wilson, Manager: Cloud Solutions for Jasco Enterprise, The Jasco Group

The ‘cloud’ is currently one of the biggest buzzwords in the IT space, and is also the topic of many business discussions around the contact centre. The benefits of moving to the cloud seem clear: it enables organisations to set up what is essentially a virtual contact centre, giving their employees the flexibility of connecting to their “office” anywhere, at any time, with the ability to scale up and down as needed. In addition, the cloud allows organisations to shed the burden of asset ownership by renting fully managed infrastructure that is housed in a cloud service providers’ data centre. These cloud service providers are well equipped with enough storage space, UPS’, backup generators as well as fail over options ensuring high availability of the infrastructure. They place huge emphasis on security measures to ensure confidentiality, integrity and availability of data. However, despite the numerous benefits of migrating the contact centre to the cloud, this is not necessarily the best choice for all businesses and all applications. Organisations need to assess their individual situation and circumstances, address a number of factors, and then make an informed decision as to which option, cloud or premise based, will be the most cost effective. Ultimately this decision should be based on which model will deliver the best returns.

In an ever-challenging economic climate, IT budgets are seeing slower growth rates year-on-year and organisations are trying to reduce the number of IT personnel required to maintain systems versus the number of users. Migrating to the cloud offers the ability to overcome these two major challenges. From the customers’ perspective, spend is based on usage and is usually a subscription model while providers can achieve economies of scale, reducing the need for multiple support teams; and customers can eliminate the need for support teams altogether.

For many organisations, moving the contact centre into the cloud is a solution that will deliver enormous benefit over and above those already mentioned. For organisations with existing IT personnel, this includes the ability to focus those resources on maintaining systems that are core and critical to the business’ success. It also frees these resources for greater availability to focus their skills not only on running the business, but on changing the business for the better. The cloud is also beneficial for organisations that do not have large IT budgets or teams, providing them with access to solutions that are maintained by specialist resources at state-of-the-art data centres.

However, the cloud is not necessarily the most appropriate solution for all businesses, particularly with regard to the contact centre. When it comes to making the decision as to whether to adopt premise or cloud based contact centres, organisations should always consider the features and functions of the solution as well as the costs, including implementation, customisation and training. Cloud solutions often include maintenance and support in the monthly subscription fee, which can save large capital outlays on expensive software updates and platform overhauls. It is advisable though for organisations to clarify what levels of support are offered and how much is being saved as a result. In addition, integration can be a costly exercise for both premise and cloud based implementations, and should be carefully considered. When evaluating cloud solutions, the costs of portal integration, both operations and customer facing, should be considered.

With regards to training, this is one area where costs may be higher for a cloud deployment if there is some level of support that needs to be performed by the customer. This is solely due to the newness of cloud, so the customer is unlikely to be able to leverage existing skills. However, the same can often apply for a premise based implementation if the organisation does not currently have those skills in-house. Where support is done by the cloud service provider, the only training requirement would be using the self-service portal to provision and manage services. The bottom line is that while the cloud model may result in more specialised integration and training, the burden of premise based models often incurs hidden costs due to the liability of asset ownership, which is not present with cloud deployment models.

Size is another important factor to consider. The rule of thumb is that a cloud contact centre is the best fit anywhere from 250 seats and below. In situations where contact centres require more than 250 seats, it is generally more cost effective to opt for the traditional premise based contact centre. This is not necessarily only due to the cost per user of a cloud based model, but the fact that companies requiring over 250 seats often have their own in-house dedicated IT personnel, making leveraging these skills a cost effective option. Generally, three conditions will determine that a premise based contact centre solution will provide the best fit: when the number of users exceeds 250, when the contact centre is the company’s core business, and when the IT team is not able to be re-positioned into another function to add value. However, there are exceptions to every rule so it is important to conduct a thorough total cost of ownership (TCO) exercise to determine the best solution for your organisation.

Security should always be a key concern. With regard to premise based solutions, a secure data centre environment is essential to mitigate risk. When adopting a cloud based model, the risk lies in the fact that this control is in the hands of the cloud provider. The cloud service provider should ensure all layers are secure, including the network, storage, server, hypervisor, application and data layers. Data should be adequately segregated to provide confidentiality, and the integrity and availability of the data should also be preserved. Organisations also need to ascertain what will happen to their data in the event of a failure and request a list of the cloud service provider’s vendors and their roles with regards to the data. If you are considering a premise based solution, security risks and responsibilities will be in your hands.

Both cloud and premise based solutions have the potential for hidden costs that need to be calculated into the TCO. If a cloud subscription includes maintenance and support, the hidden costs are implementation, integration, customisation and training. With regard to premise based solutions, the hidden costs tend to come from implementation, integration, customisation, hardware, IT personnel, maintenance and training. Ultimately, organisations need to assess their specific situation, their existing investment and their IT teams to determine the feasibility of migrating the contact centre to the cloud. Partnering with an expert service provider, who can conduct an accurate audit and provide the necessary recommendation and roadmap, will ensure that cloud contact centre migrations and deployments deliver on the expected benefits.