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Cloud vs. On-Premise Contact Center: What is the Right Option?

Identify and prioritize your goals before making a decision to build a new Contact Center or overhaul an existing platform.

March 10, 2020 9 minute read

Through the years, I have accumulated a long list — that is ever expanding — of lessons learned by migrating complex customer Contact Center platforms from analog to VoIP and from on-premise to cloud solutions. Building out or upgrading cumbersome, on-premise solutions with pay-as-you-go cloud services can seem very appealing, but it’s important to stay mindful of common pitfalls when determining which type of platform will meet the specific Contact Center requirements for your organization. Public cloud, private cloud, hybrid cloud, remain on-premise – so many choices! The task of making a quick, well-informed decision can seem daunting.     

Let’s review some of the most relevant topics that need to be vetted. 

Regulatory and data security constraints (e.g., FedRAMP, GDPR/CCPA, HIPAA, PCI DSS)

Businesses in highly regulated industries such as financial institutions, critical-care facilities (hospitals and clinics), and federal government/military (typically requiring FedRAMP certification) are continually faced with data privacy and security mandates. Depending on the level of constraint, some Contact Center solutions may not meet your compliance requirements. For example, some public cloud platforms are not FedRAMP compliant; some are PCI DSS compliant, but at an added cost. In addition, Contact Center as a Service (CCaaS) platforms are typically multi-tenant (that is they are shared by multiple customers). For these reasons, it is very important to ensure that the platform you select is flexible enough to keep up with these ever-evolving regulations, and it is committed to a stringent roadmap to stay ahead in this area. In some cases, an on-premise, private cloud, or hybrid cloud solution (versus public cloud), may be required to address all requirements.          

Size and complexity of your organization

The make-up of your overall organization is a very critical factor when making a Contact Center platform decision. Is your business small-to-medium, single-threaded and on a tight budget? In this case, a public cloud platform may be best. Or, do you have a large, complex global footprint in locations with varying local regulations from a voice and data perspective? Is your organization made up of multiple, diverse business units with varying feature and compliance requirements? Are acquisitions, mergers and divestitures a common part of your business? In these instances, a hybrid cloud platform may be more appropriate than a public cloud solution. Do your agents work in the office only or do you have many remote agents that utilize their own internet service, headsets, etc.? All these considerations are crucial to consider. 

Consider your organization's structure when selecting your contact center.

Consider standardizing all your business units on a single contact center platform to achieve common administration, management and integration.  

Tech savviness of your internal staff

Transition to a new Contact Center platform will mean changes in the skillsets required to support and extend them – and to use them from an agent perspective. The move from on-premise to cloud can be especially impactful to IT/telecom staff. Based on your current staffing model, the challenges will vary. For example, will you retrain current staff? At what cost? Will you eliminate and replace staff, relocate staff? All the above? Do your IT teams have the flexibility to transition from infrastructure and administration to API-based development? Will your operations staff be able to adjust to role changes, support model shifts and changing operational processes? Will your Contact Center agents be able to multi-task to take advantage of the Contact Center features available on some of the latest and greatest platforms (e.g., omnichannel routing) and to help IT troubleshoot local connectivity issues if necessary? Being truly cognizant of your challenges in this area will help produce a better outcome.

Application integration complexity and strategy

If you require integration between your Contact Center platform and applications (Customer Relationship Management solutions, Quality Management platforms, Workforce Management platforms or IVRs with hooks into legacy backend systems), you should consider the complexity and criticality of any existing integrations, regulatory requirements constraining the integrated applications themselves and the technology roadmaps specific to those applications when making a Contact Center platform decision. For example, it can be very difficult to properly integrate some traditional applications with cloud-based API solutions while meeting a set of complex, access/data security/compliance requirements. In addition, integrating legacy, on-premise applications with API-based Contact Center solutions can result in unexpected performance-related issues. These are a few of the factors that can have major impacts on the time and cost required to migrate to your target platform. If you’re just starting to build these integrations and only require the basics, prebuilt integrations and robust API sets available on some public cloud platforms will help accelerate your efforts and increase day one productivity and customer satisfaction.   

Migration timeline

Timeline objectives can also play a major role in determining the best solution for your organization. The timeline of a small start-up whose business involves low-risk customer interactions, whose servicing applications are fairly out-of-the-box and whose business is skyrocketing quickly may vary dramatically from the timeline of a well-established organization with deep-seated integration requirements, customer bases whose interactions are considered high-risk or where the target dates are being mandated. 

These considerations, coupled with the others being reviewed here, can quickly narrow down the playing field of target platforms best suited for your organization. But, remember not to box yourself in by meeting an expedited ramp-up schedule only to short-change customer service, future capabilities, ability to meet regulatory requirements and other critical items.

Budgetary model

As we know, finances are always a critical subject when selecting a new Contact Center platform. Are you more concerned with CAPEX or OPEX? What level of transparency and forecasting do you require? Is funding centralized or disseminated down to individual business units within a larger enterprise? Do your interaction volumes, agent staffing requirements or feature requirements fluctuate dramatically throughout the year? For example, some businesses only require outbound dialer functionality during specific times of the year. In this case, a pay-as-you go model may be best, unless some of the other conflicting considerations discussed here take precedence.  

Platform stability

The level to which your organization requires a robust level of Contact Center solution availability, partitioned environments for development, testing and production, immediate response times, bullet-proof resiliency and disaster recovery should play a major role in your decision-making process. 

How critical is voice quality? How stringent are your desired service level agreements (SLAs), business resiliency and disaster recover requirements? 

For instance, many customers with zero tolerance in these areas have steered away from public cloud solutions and toward hybrid (public+private) cloud solutions to better accommodate these types of critical requirements. For example, they may be using private for mission critical applications and public for disaster recovery.

Customer and market demand for rich feature sets

External and internal customer demand for rich and more complex Contact Center feature sets should be a key driver in your decision. With some CCaaS cloud platform options, customers are locked into pre-determined release dates and feature enhancements that are driven by a collective customer base. 

If your organization is small-to-medium in size yet requires very deep, customized feature sets, this may leave you at a disadvantage. If you are in a very regulated industry where features such as call recording and voice analytics are mission-critical, some CCaaS models may not be right for you as these extended features are still very basic and sometimes problematic as the roadmaps are still maturing. One critical item to note is that cloud platform providers limit which third-party solutions can be utilized by customers, what integrations are allowed and the level of access that is provided to users. These limitations differ based on the type of solution (CCaaS public, private, etc.). The important question is:  are you willing to negotiate on any of their mission-critical features? 

Total cost of platform ownership

While it is initially easy to be attracted to pay-as-you go CCaaS cost models, CCaaS TCO is actually more expensive over the long run with a cross-over point at about three to five years. In addition, the actual cost of the migration itself — rebuilding functionality — is typically underestimated regardless of the target platform. 

Another major impact on TCO is your organization’s stance on security. Does your IT organization want to be fully responsible for your security strategy and associated regulations? If so, on-premise upgrades or a hybrid cloud solution may be best. 

On a related note, consider the strength and centralization of your procurement and vendor management areas. If you have complex integration requirements and do not have a strong IT development team and select some platform types, you may have to engage several third parties to help achieve your goals. From an operations perspective, you may be very risk-averse and require tight control over when and how changes are introduced into your production environment. In this case, CCaaS public cloud solutions that follow a specific, rigid release schedule may not be conducive. A private cloud, hybrid cloud or on-premise solution may be better in this case. 

Bringing it all together

With so many complex elements to consider, the Contact Center deployment decision-making process itself can be a daunting task that can leave you in a state of analysis paralysis, and possibly lead you to a decision based on an incomplete analysis. And even once the decision has been made, most customers feel a huge weight on their shoulders with a fear that critical pieces have been overlooked.

We can help bring a data-driven, logical approach to the table with a Cloud Contact Center Migration Workshop. We will guide you in engaging all critical stakeholders across multiple business units and IT teams to understand the true requirements and priorities of each. We will then compile this information into a structured scorecard format and provide a documented recommendation that supports the needs of your enterprise. 

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