Higher Calling

By Tara Seals

The beauty of hosted call center technology is deceptively simple: In a world with a high commoditization of network services, the hosted contact center lets agents and VArs move up the value chain, reduce attrition and become resources that customers ask to address real business needs. For businesses, it provides an opportunity to leverage the latest contact center technology by paying a monthly service fee, rather than lay out thousands, or even millions of dollars for software licenses, integration and ongoing maintenance. And, it can be implemented in a far shorter amount of time than the 12 to 18 months required for a premises-based offering.

As a bonus for channel partners, the technology itself is relatively simple to understand. A VAr or agent would sell connectivity T1s or other lines, local services and Internet and then layer in a series of IP-based call center applications depending on the customers needs. These are delivered to call center agents via the Web through a portal, and are often bundled by the provider with CrM or workflow management. A management module allows the call center manager to run reports, see call volumes, make routing plans, track productivity and so on. The process is very easy, says Jim Dvorkin, CTO of Five9 Inc., maker of a fully hosted, VoIPenabled contact center solution. First, you take the customer business processes and translate them into call center configurations that can be entered into hosted call center applications over the Web. Training the [call center] agents is the next step, and then the customer can go live. This process can take anywhere from a few hours to a few days or weeks. He notes that the process does require careful thinking about what processes and procedures might be required to leverage various capabilities, making for a consultative sales experience.

Hosted contact centers also allow agents and VArs to get away from selling commodity services. When you throw in high-end applications like this into the mix, youre not just selling a T1, says kevin Childs, president at UCN Inc., which offers an embedded contact center solution within its network, integrated with eight carrier partner footprints. revenue volumes come from LD (long-distance) and data, and most channel partners bundle those with local and look to save money for customers. But those services have the highest risk of churn, because youre only addressing a problem for that year, and there will be another rFP next year looking for savings, and another commodity player can swoop in on it. A contact center is not something customers look to strip out margin from every year, and once its in, they dont want to change it.

That said, agents and VArs can make the applications an add-on to core services. A call center doesnt exist in a vacuum, says Ali Giacomin, director of product management at Qwest Communications International Inc., which offers a Web-delivered, network-based multitenant suite of call center applications. The customer will need toll-free numbers, long-distance, Web hosting, a data networking component and professional services. Channel partners can find a lot of opportunity in a contact center sale.

Thus, an agent can go to the customer to talk about longdistance, but if he or she has contact center services in the portfolio, that agent has an opportunity to widen the discussion. And there are a variety of customer targets for hosted contact center services. Typical customer segments include companies that take reservations, such as hospitality organizations and traveloriented businesses; financial services institutions and banks; hospitals; IT and technology companies with help desks; and any company with a collections department.

Look for a toll-free number, says Childs. Thats the first indicator that a company may require a contact center. Youll find that 90 percent of organizations looking for this have fewer than 100 seats in any one location, but some have as few as five. The important thing is to focus on local businesses with high-end application requirements. He also says that hosting, while once targeted at SMBs, is now appealing to larger companies. This is becoming more and more mainstream, and premises-based services are on the right side of the bell curve.

Weve seen a lot more acceptance lately for considering a hosted solution, agrees Giacomin. Many customers have end-of-life equipment and are looking for alternatives. Most of the time were selling against a premise-based solution, and were winning more and more.

That may be because the sale is not just a question of convincing customers to trade capex for opex; the selling points of the hosted service run deeper than that.

This is a fantastic solution to sell because of the wide variety of sticky business benefits it can bring to the end user, explains Bruce Dresser, CMO at Echopass Corp., which provides an on-demand, multitenant solution thats integrated with carriers, CrM platforms and workforce management for an end-toend hosted offer. Its not just rOI thats the main driver. The real value lies in hosted contact centers addressing specific business pain points.

Like, for example, there may be a need for flexibility. Say the customer is a retailer that scales up its customer service team by 50 percent during the holiday season. They dont need those people most of the year, says Dresser. A hosted solution can be turned on to handle excess capacity when needed and you only pay for what you use. You cant do that with hardware unless you pay more, overprovision it and then have it sit idle nine months out of the year. With a hosted solution, you can always be the right size.

Another benefit is the ability to handle multisite and multisource installations. Some companies may have 100 people in one location and 100 in another. Others may have some agents in-house and some outsourced. Often, with a hardware solution, the call center manager doesnt have visibility across those multiple systems and sites. A hosted call center offering is by nature virtual, and can give the manager the ability to see all seats as though they were in one location, identify spikes in traffic and bottlenecks, and route calls accordingly. That ends up providing quicker, better customer care in a more efficient manner.

Productivity enhancement is another area of focus. Labor is typically about 70 percent of a companys spend while telecom budget is about 6 percent to 8 percent, says Childs. So saving a company $1,000 per month by reducing the telecom budget by 10 percent pales in comparison [to] increasing productivity by five points, he says. That can translate into tens of thousands for a company. He adds smaller companies are less productive than larger ones, so by giving them tools to help them boost productivity to the same levels as their bigger rivals, they can become more competitive.

A hosted solution also can provide built-in redundancy and business resilience. If theres a power outage, the manager can see that right away and reroute calls to another facility. Or, if theres a chemical spill, blizzard or other emergency preventing customer service reps from getting to work, a hosted system can often adapt on-the-fly to route calls to agents homes.

Then there are reporting requirements; for health care and financial institutions, government regulations on data privacy and business transparency require security and storage compliance, along with audit-ready records. A hosted call center can provide remote and secure storage, and file backups.

The fact is, you have much more adaptability with a hosted call center, says Echopasss Dresser. The technology is built to answer these pain points. Taken together with the quick deployment and lack of ongoing maintenance, upgrades or big capital outlay, youre looking at a powerful total cost of ownership story.

Its a story that appeals to companies with existing contact centers and greenfield opportunities alike, making for a ripe area of opportunity for agents and VArs willing to dive into the market now.

According to some industry reports, the hosted call center market is growing at over a 60 percent year-to-year rate, says Five9s Dvorkin. More and more customers are realizing the benefits of adopting the hosted call center model versus investing in premise-based infrastructure. The VArs that start offering these capabilities will have an advantage of being early to market so that they can build up the recurring revenue stream, expertise and reference-able customer base to be successful long-term.

Looking for More?

Making Contact With Hosted Call Center Opportunities

Find out more about this sticky service and how it can help you move your portfolio up the value chain at the Channel Partners Conference & Expo. Experts from Qwest and UCN will be part of a Growth Track session, Making Contact with Hosted Call Center Opportunities, at 4:30-5:20 p.m., Sept. 26. For details, visit http://channelpartners.phoneplusmag.com/secaucus2007.