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SaaS, On-Premises Call Centers Contrasted

TMCnews Featured Article

April 07, 2010

SaaS, On-Premises Call Centers Contrasted

By David Sims, TMCnet Contributing Editor

A recent white paper from Contactual (News - Alert) looks at call centers and "examines the differences between on-premises call centers and hosted alternatives." Tipping its hand a bit, the paper's introduction says it "looks at the reasons why on-premises call centers are becoming obsolete."

Noting that enterprises have traditionally invested millions of dollars into building and maintaining best-in class call centers, the paper says "for decades, this strategy made sense." However, "in today's environment of rapid technological change and economic volatility, an on-premises call center is no longer an asset; in most cases, it is a clear disadvantage."

Highlighting three of the major problems with on-premises call centers, the paper notes that, for one, it requires significant capital expenditure. "Purchasing the hardware and software required to set up a new call center runs into the hundreds of thousands of dollars," it finds, adding that given the tremendous complexity and cost, the technology often becomes outdated soon after it is up and running.

Setting up a new call center can take months to plan and build out, the paper says, "and requires a team of specialized, highly-trained IT personnel to ensure proper implementation. IT staff often spend 4-6 weeks in training at the launch of a new call center."

Then of course there are the maintenance costs - "annual maintenance agreements often run 18-20 percent of the capital expenditure, which is a significant line item."

It's little wonder, then, that one of the initial attractions of hosted call centers is their affordable cost structure. Hosted centers usually require a one-time set up fee plus a modest monthly per-seat price.

Tech research firm Frost and Sullivan has written recently that "... the pay-as-you-go model simplifies cost management and moves companies to a more favorable operational expenditure payment approach in the long term."

A typical on-site call center requires highly trained in-house IT personnel to perform maintenance, support, and troubleshooting, with a hosted product you don't need that - "And there is another cost that is often invisible at the outset; most on-premises systems have annual maintenance agreements that run well into five figures," the free white paper notes.

David Sims is a contributing editor for TMCnet. To read more of David's articles, please visit his columnist page. He also blogs for TMCnet here.

Edited by Patrick Barnard

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