How much do cloud contact centers cost compared to on-premise contact centres?
Cloud software, a predictable costs model
The market for cloud software is expanding considerably. The business market is ready for Software as a Service (SaaS) solutions. According to research by Gartner* in 2016, the cloud market will expand by 16%. The most important reason given by CIO’s is the cloud's flexibility and scalability. In addition, it also leads to a predictable costs model where you only pay for things that you actually use. So there is no need to invest in expensive systems where not all the features are used. Everything is now structured so annual peak periods can be dealt with effectively.
Difference in flexibility
Due to its flexibility and scalability, a cloud-based contact center can be very beneficial to customer contact centers. For instance, by using flexible user models to deal with seasonal factors and temporary peaks in workload. In addition, licensed versions of on-premise systems are often based on the total number of users and not the number of simultaneous users.
No investment costs
There is also a difference in the Total Cost of Ownership (TCO) between cloud-based solutions and on-premise software (installed locally within the organisation). By acquiring business software from the cloud, you can shift investment costs to operational costs. This means cash flows can be better coordinated based on operational benefits that accompany migration to a cloud.
So, when you start a project, you will not have to create an investment overview for licensing costs and the accompanying capital investment. Additionally, the assets and future depreciations accompanying this investment can be removed from the balance sheet.
‘When examining the savings made, do not just look at the operating costs.’
No hidden costs
When examining the savings, do not just look at the operating costs for maintaining and managing the system. Savings are also made because you no longer have to manage the on-premise environment. For instance, maintenance costs for buildings, costs for the necessary IT infrastructure, personnel savings, lower telecommunication costs and costs associated with upgrades and patches for your system. These costs can be avoided if you acquire your contact center as a cloud-based service.
Always the latest version
A cloud-based service means you will always have the latest version and will not have to invest in a new system - and the accompanying infrastructure - every 6 to 8 years. The requirements for the necessary infrastructure and technological systems become more unmanageable when the implemented technology starts to become obsolete. An OPEX model allows you to be more flexible in responding to the changing needs of your business. In addition, you can free up employees for critical IT projects that support your core business instead of spending money on renewing hardware and infrastructure.
Transparency in costs
The costs associated with cloud-based contact center systems are considerably more transparent than on-premise systems. When it comes to cloud software, you know in advance that 68% of costs will be encountered in the form of (monthly) subscriptions. With on-premise solutions, only the cost of software licenses is known in advance (which accounts for 9% of costs). This was demonstrated in a study carried out by Nucleus Research.
Most of the costs encountered in the on-premise approach relate to customisation, implementation, hardware, ICT personnel, maintenance and training. With cloud-based software, unexpected costs primarily relate to implementation, customisation and training. Customers are rarely responsible for hardware and maintenance, which means costs become a lot more transparent.
Costs for on-premise versus cloud:
Expected and unexpected costs have been shown here in the form of icebergs. You only see the tips, but not what's below the surface. This image clearly shows the transparency of costs associated with cloud-based contact centers.
|Comparison between on-premise and cloud contact centers|
|Implementation||expensive, time consuming||minimum costs, fast|
|Upgrades||time consuming||no nonsense|
|Type of costs||Capex||Opex|
|Customer Experience||Inflexible and unable to change||Flexible to use|
Making the right choice
If you are looking for a flexible and scalable environment, then a cloud-based contact center is the only sensible choice. If you want to use a flexible group of employees at several locations, or use several applications and functionalities, then a cloud-based contact center can offer even more benefits.
Mtel - the Partner in customer contact
Would you like to discuss the benefits with one of our consultants? Mtel will be pleased to inform you about the benefits you can achieve with a Cloud Contact Center. Please complete the response form below or contact us by phoning 088 - 428 31 11.
*Source Gartner: www.gartner.com/newsroom/id/3188817