On-demand is changing the call center landscape

Enterprise Networks & Servers, Sep 2005 by Ciarlo, Charles

We've all heard the term "on-demand." Hardware giants such as IBM and HP have released computer systems that allow you to turn on or off processing power as your needs dictate. Software firms such as Computer Associates and Oracle have garnered a lot of attention by making some of their products available on a pay-per-use basis. Startups like Salesforce.com and WebEx have pioneered application delivery over the web for such vital services as CRM and web meetings.

According to Karen Moser, an analyst with research firm International Data Corp. (IDC), the market for web-based applications will reach $1.5 billion within one year. You can be sure that the same trend will soon catch hold in the contact center.

After all, the level of sophistication required today to set up call center operations means that you can't enter the game without deep pockets. With budgets being so tight, some are already searching out hosted alternatives - letting someone else worry about the hardware, software and maintenance of the IT infrastructure so that they can get on with the job at hand - interacting with customers.

This will eventually reach the point where all the technology in back of the call center - VoIP, ACD, call queuing, skills-based routing, predictive dialer, IVR, call recording, etc. - can be delivered easily over the web. All a contact center will need are phones, computer screens and an Internet connection. Everything else is handled offsite at a remote data center.

Of course, such changes won't happen immediately. Only the very brave will abandon overnight the tradition of hosting hardware and software onsite. Rather, companies will test the waters gradually. Applications such as workforce management (WFM), in particular, are ideal for the on-demand model.

Think about it. Most companies have long since realized that manual forecasting and agent scheduling is unworkable beyond about 20 seats (if you route calls by agent skills then it is unworkable at any size). To implement WFM, however, means an upfront investment in hardware and software. Say you purchase 50 licenses for your average demand, yet twice a year need to ramp up to 100 seats. If these seasonal peaks last only a few weeks, you are wasting a lot of money buying 50 extra licenses for WFM (as well as other call center applications) that sit unused most of the year. By purchasing these services on an on-demand basis, you only pay for the extra seats for the time required.

But there are many other benefits to on-demand WFM. Gone are the large upfront expenses that can sometimes delay the implementation of the technology, replaced by a manageable monthly bill. Gone is the need for additional IT resources onsite to manage your WFM hardware and software. Gone is the space requirement of additional servers or software to download onto each desktop - a zero footprint, in other words.

On-demand WFM even means you can, if desired, dispense with the necessity of hiring your own workforce planner. Depending on the size of the contact center, it may be wiser to purchase professional services from a WFM vendor. Once-a-week scheduling and forecasting assistance is a way for some contact centers to maintain high efficiency while keeping costs down.

When the ramp-up from 50 to 100 or more seats is required, the transition is made seamless by the on-demand model. The monthly bill rises, of course, but only for as long as the additional functionality is being utilized. During peak periods, it might also mean a ramp-up in professional services. But for some operations, this is far less expensive than having a full-time workforce planner on a salary.

Another scenario to investigate is starting a new contact center with low overhead using on-demand services. As business improves, you can add more seats without a permanent licensing and hardware commitment. At some point, though, you may expand enough so it actually makes more sense to host your own software and hardware. Smart on-demand vendors make this transition easy by enabling customers to buy the complete package at a reduced rate.

But even where the customer determines that it has reached the point where it is easier or cheaper to bring WFM in-house, there is still an important role for on-demand. Say the center has expanded to a stable 500 seats. It is unlikely that business will remain stable throughout the year. WFM tools can help the company determine how many permanent seats it requires all year. The company can then match its hiring to that level, and buy the appropriate number of license. For peak periods, though, temporary hiring and on-demand usage of workforce management software ensures the highest possible profits.

Core competency

The underlying reason for on-demand can be summed up in two words - core competency. If your core strength is inbound and/or outbound calling, you may not want to get into the IT business. You may not even want to get into the workforce scheduling business. Ideally, you can just focus on your areas of competence and pay a monthly rate for vital ancillary services such as WFM hosting, planning and IT infrastructure.