Four out of five contact centers have opted for a cloud-based routing platform or have migration plans. Only a small group of contact centers seems determined not to go for cloud-based contact center software. However, the typical promises of cloud solutions – which are also often used as an argument for a migration – are not fulfilled to full satisfaction in all cases. This is evident from research by Ziptone among 51 Dutch contact centers.

 

Although the Netherlands is one of the global leaders in cloud adoption, organizations are still moving their on-premise applications to the cloud. The customer contact sector is no exception. To understand what's happening in the customer contact industry, Ziptone commissioned and commissioned MarketResponse research into adoption of cloud-based contact center software. This shows that there is still a relatively large group of contact centers that intend to implement a migration within the next three years. So there is work to be done and a lot to distribute in the cloud market.

“We are not going to the cloud”

Only a small proportion of organizations still run the contact center platform in their own server room (within the walls of the organization, 20%). Of this group, 42% plan to switch to a cloud solution within a year. It is remarkable that 33% of the on-premise group have no plans to switch. The main reasons for this are: the existing solution 'satisfactory' (38%); existing systems must first be written off financially (23%); the technical infrastructure is not yet in order (23%). In 15% of cases, regulations and/or privacy stand in the way of the application of the cloud.

In 2020, it is estimated that one in ten contact centers will be fully cloud-based, in 2021 this will have risen to one quarter of contact centers. This volume is expected to increase further by the end of this year. The latest estimates are that the global cloud-based routing software market will grow from $17,1 billion in 2022 to $54,6 billion in 2027, at an annual growth rate (CAGR) of 26,1% over the forecast period (according to Research and Markets). Ziptone's research report further discusses trends and developments.

 

Motives to migrate

For companies and institutions that have not yet switched, but are considering doing so, better functionality, better integration options, innovation/faster use of new functionality and always the latest version (44%) are the most important arguments. Security (cited by 38%) and being better able to scale up/down (cited by 25%) are also high on the list. Respondents from the customer contact sector find lower IT costs or savings in personnel costs IT management less important, as do better reliability or fewer failures.

Not all expectations come true

Providers of cloud applications often profile themselves with the offer of the 'latest technology', but by no means all respondents who have already switched to a cloud solution are enthusiastic about this. Just over half of the respondents are very satisfied or satisfied with the availability of innovations, but the rest are neutral (29%) or dissatisfied (19%). Another characteristic that is especially true for cloud applications – flexible scaling up and down – also appears to be less self-evident. Two thirds of the respondents (67%) are very satisfied or satisfied with this; there are also companies that are dissatisfied with this (17%), while you would not expect that. Dissatisfaction about the lack of innovation and the difficulty of flexibly scaling up and down is most common in mid-size in-house contact centers (50-250 seats). In general, if the cloud platform investment decision is made by the CTO/CIO, business satisfaction tends to be lower.

Migration forces choices

Hans Rever, Managing Director of Frontline Solutions, says: “Contact centers moving to the cloud face a number of choices. Will you stay with the same provider or will you opt for a different platform? Who handles the migration? What do you do with all the point solutions around your routing software? Often makes a switch to the cloud it is necessary to adjust part of your business processes. The fact that the promise of innovation is not being fulfilled calls for a further analysis, or – for those who are considering a cloud migration – for the necessary vigilance on the part of the requesting party. Cloud migrations can sometimes be implemented quite quickly, but a lot depends on the presence of a clear vision and a good understanding of your application landscape. These matters also determine your innovative capacity.”

The financial side of the cloud

The results show that customer contact professionals are not yet concerned about the longer-term financial and operational consequences of using the cloud model – think of data portability between clouds or the use of data-intensive services, which can be expensive.

Respondents who have already switched to a cloud-based platform are less positive about the TCO (total cost of ownership) than about issues such as uptime or availability, implementation by the supplier or system integrator, functional management and support. The end-user convenience also scores well.

Remarkable – Facilities contact centers are generally more positive about their platform than in-house contact centres. Dissatisfaction about the lack of innovation and the difficulty of scaling up and down flexibly is most common in mid-size in-house contact centers (50-250 seats) and is most prevalent in Avaya and Genesys.
Reuver: “The contact center platform is a business-critical application for facility contact centers when it comes to availability. Cloud solutions do not require time-consuming and sometimes risky upgrades and, above all, offer more space for home workers. But facilities are highly cost-driven and face narrow margins. The licenses purchased in the past have often been written off and the transition from Capex to Opex is often seen as a curb by facilitation. What we also see is that facilities are increasingly working on the platform of the outsourcer, where it used to be the other way around. As a result, the outsourcers gain full access to all data that helps them much better to organize customer contact more efficiently and are more willing to invest in it with their own cloud platform in order to be less dependent on the service provider.”

Even an integrated platform cannot do without point solutions

Although providers of cloud-based contact center software often offer rich, integrated solutions, the reality is that the largest group of participating companies have a mixed form. That means: an integrated platform, with separate point solutions. A quarter of the respondents explicitly state that they have an integrated, all-in-one solution (25%), as many as the group that says they opt for a best-of-breed model in which the landscape is composed of various specialized partial solutions.

The amount of customer contact data that is potentially available is enormous. However, the presence of point solutions stands in the way of quickly arriving at 'actionable insights'. And that is the advantage of an integrated environment where a cloud solution offers much more computing power to arrive at those real-time insights. “Contact center managers must realize that they must make room for additional competencies in the field of data analysts, but in doing so they increase the added value of their department for the rest of the organization,” says Reuver.

Ziptone's cloud research was set up in collaboration with Frontline Solutions. The respondents were asked questions about the arguments and considerations that were made to opt for cloud solutions or not, about the use of functionality and about the satisfaction with various aspects of providers. 51 companies and institutions from the Dutch customer contact sector participated in the survey.

More than half of the respondents are director of customer service or contact center manager and the majority of the respondents (N=42) work within an in-house contact center, the rest work within a facilities company (N=9). The bulk of the response came from the retail/e-commerce, financial services and telecom sectors. Respondents were roughly evenly distributed across small (1-50 seats), midsize (51-250 seats), and larger (more than 250 seats) contact centers.

Although the number of respondents is too small to consider the survey as representative of the sector, the results do provide insight into a number of relevant trends in the field of cloud-based contact center software. The report also looks at trends and offers a series of tips for those migrating to the cloud. You can do the report download here.

(Ziptone/Erik Bouwer)

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