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Historically, one of the biggest reasons that UK businesses had for considering implementing cloud
contact centre solutions was the potential cost reduction. While this is less
of a driver than had been the case previously, centres looking to
implement cloud contact centre technology still need to be able to understand and calculate
their return on investment (ROI).
Issues affecting the total cost of ownership
(TCO) for a cloud call centre solution include:
Reduction or redistribution of agents (e.g. through
homeworking or virtualisation) expanding the agent pool and service levels
without increasing agent numbers overall. This is particularly the case for
businesses requiring highly skilled and trained agents - health, medical,
technology, life sciences and pharmaceuticals for example - as homeworking is
seen as an effective agent retention and recruitment method
Impact of increased functionality on call handling times and
first-contact resolution rates (e.g. having multi-site skill-based routing
strategies supported in the cloud)
The in-house cost associated with the maintenance and
management of on-premise hardware and software, compared with that spent
monitoring cloud-based systems (although minimal, businesses will still want to
be aware of what is happening, when upgrades are scheduled, supplier liaison,
etc.)
Initial cost of CPE (customer premise equipment) and the
structure of financial payments, effect of depreciation, etc. (NB – CPE costs
are likely to be substantially higher than cloud at first, but lower as time
passes and costs are written-off. It is important to compare the overall cost
of any cloud contract with the TCO of the CPE solution over the appropriate
timescale)
The value of staying current with technology, both in terms
of reduced licence fees and the impact of superior systems on agent
performance. Include the cost of additional training requirements in a frequent
release environment
Whether additional functionality provided by the cloud based contact centre provider over time is included in the fixed monthly payment, and if so, what
would be the cost of upgrading on-premise solutions to include this
functionality?
Cost of calls, the ease of moving between telephony
providers, and the extent to which calls are included in the cloud package
Compare the cost of staffing for seasonal volumes and spikes
(licences, recruitment, training, staff salaries etc.) compared to cloud-based pay-as-you-go,
homeworkers or short-shift workers, as well as attendant additional hardware
fees for major on-premise volume increases (e.g. adding an extra server).
The distribution of payments is very different, as well as
the overall fee paid. Although there may be an initial fee associated with
cloud-based solutions (connected with the discovery and implementation phase,
as well as a payment in advance), this upfront cost is likely to be far lower
than with traditional on-premise purchases, although the latter may be
alleviated somewhat in the case of a leasing arrangement.
TCO assessments of cloud vs on-premise deployments generally
reach a conclusion that cloud-based cost savings are proportionately larger
with increasing contact centre size, and also where the level of functionality
is greater too. However, some solution providers report that longer-term, the
depreciation associated with on-premise solutions means that the TCO gap
narrows, so that after 7 years or more, the difference is much less, if not
wiped out totally.
There is no single right calculation to the ROI question,
although payback is stated by most solution providers to be within 12 months in
virtually all cases, and in many, a considerably shorter timescale (perhaps 3-6
months). The actual figure depends on factors such as number of seats, the
number of contact centre locations, the functionality employed, the costs of
integration or customisation and other such factors. Most vendors have an ROI
calculator for prospective clients to use. Any choice not to move to cloud is less frequently financial than for many
other types of technology decision (except perhaps in cases where there has
been large recent capital investment made), but may be more concerned with
cultural issues, existing IT infrastructure and expertise, and other concerns such
as security, customisation or integration with irreplaceable legacy systems.
Contract lengths vary, but are generally in place for at
least a year, more often two or three. Some vendors provide a zero-commitment
option but these are likely to work out pro-rata perhaps 40-50% more expensive
than long-term contracts. Solution providers differ widely in their contract
offers, with some operating a very flexible 'per logged hour' billing system,
whereas others will want an agreed minimum number of agents per month, with
additional users billed as required.
For most vendors, especially those offering a multi-tenant
model, the cost of maintaining and upgrading the solution is lower, which
impacts positively upon their own costs.
Pricing will of course depend on the features and
functionality that the client chooses to use, although the following table gives a
rough idea of what users can actually expect to pay. Generally speaking, when
comparing similar levels of functionality, price points have come down over the
past three years. Cost tends to be 10-20% higher for small operations on a
per-agent basis. Businesses should note that per-minute telecoms charges may
not be included in the monthly cost.
Figure: Pricing examples
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Functionality / size
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Price
(typical £ per agent per month)
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Basic - voice only, may have recording
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£25 - £70
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Advanced – may have routing, automated outbound, reporting
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£60 - £100
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Enterprise - full blended and omnichannel, may include WFM, disaster recovery, quality
management, analytics
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£90 - £150
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Further notes on
pricing
Potential cloud clients should also check and include the
cost per minute of delivering and making calls, as well as any additional
platform usage fee (e.g. per logged-in agent minute)
Non-standard service requests (such as customisation, extra
reporting etc.) will also usually be charged for separately, with a rate of
£70-£100 per hour being typical
Omnichannel functionality may be added on a per-seat basis,
including email, social media and chat. Extra pricing of £20-30 per agent per
month per extra channel can be expected
Potential customers should also take into account any per
supervisor/manager licence costs
Most cloud-based providers offer pricing based on concurrent
users, rather than specific named users, which reduces wasted licence fees
Most cloud vendors offer pricing on a per-seat/per-month
basis, but some offer the even more granular approach of per logged hour or
even per minute, which is of particular interest to outbound telemarketing
companies and outsourcers, for whom this directly impacts upon profitability,
with daily viewing of billing offered by some vendors
Businesses may be charged separately for connectivity to the
data centre which may be on a per minute basis, so will need to make sure that
any request for quotation includes the same levels of access, data and voice
traffic. Solution providers also note that prospective customers should ask
about minimum call charges, per second billing, per digit billing and the
rounding up or down of telco charges
Standard service level agreements start at around 99.7%
guaranteed availability, with some vendors offering 99.999% on a premium
contract. If these SLAs are not met, vendors will offer reduced rates as
compensation. Service levels offered by some vendors may differ depending on
contact type, although with the multi-tenancy approach, everyone gets the same
service levels.
Contact centres will experience significant reductions in
one-off implementation costs, as there is little or no hardware or software to
be deployed in the contact centre environment. It is likely, especially in
multitenant environments, that any maintenance fee will either be included
within the package, or at least much less than the typical CPE maintenance
charge, which can be around 15-20% of the original licence cost per year).
Solution providers comment that the majority of savings
realised in the first year are due to the elimination of maintenance and
implementation costs, particularly in environments where there is a single
cloud provider delivering all of the services, rather than the organisation
still running some functionality itself, which would still require maintenance
and effort to keep software levels compatible between products.
The length of the contract is also an issue. Cloud solution
providers prefer long-term multi-year contracts, and offer significant
discounts to encourage this, enabling them to predict their revenues more
accurately and thus be able to invest in the solution with some confidence. Customers
which are new to cloud may prefer to have shorter contracts, with the option to
break, at least until they become familiar with the offering. In theory,
longer-term contracts benefit everybody, in that customers of businesses which
are financially secure are more likely to benefit from the stability and
consistent levels of R&D that such a supplier can provide, as well as not
having to re-engineer their customer contact environment and processes every
few years.
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