why contact centres are moving to cloud-based solutions

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1 why contact centres are moving to cloud-based solutions 1/18

2 Managing a modern contact centre is tough. Technology is moving so quickly, consumer habits change overnight and regulatory requirements are becoming more demanding. Moving from a traditional call centre environment to a contact centre one, in theory, would seem fairly straightforward. But the reality is very different. Legacy IT equipment, lack of properly trained staff, time and resource are just a few of the problems that contact centre managers and directors come up against. On top of that, the cloud is now firmly on the contact centre agenda. If your organisation hasn t already moved to the cloud, then you are probably either considering your options or planning a move in the near future. We wanted to find out not just where organisations were in the cloud adoption curve, but what the drivers are for cloud adoption and equally importantly, are those who have already made the move reaping the rewards? Are they using the cloud to deliver new communications channels? What challenges are they facing? We commissioned an independent survey of 100 contact centre decision makers in the UK to find out the answers to these questions. ntroduction 2/18 David Ford Managing Director, Magnetic North

3 3/18 Executive summary Our research confirmed that contact centre decision makers are realising that a cloud-based solution is increasingly becoming the most viable option for a true modern day contact centre. Cost savings, of course, are one of the main drivers, but savvy contact centre decision makers now realise that a service hosted in the cloud can do so much more for their organisation. key findings from our research include: Cloud adoption is set to explode: 71% of contact centre decision makers are actively considering the move, or say they are more open to adopting cloud technology. The top five perceived benefits of a cloud-based solution are reductions in maintenance costs, flexible licensing models, access to a more advanced feature Other frustrations with on-premise technology include the cost of upgrades, technical limitations, long deployment times and costly integrations. set, compliance with industry The limitations of legacy equipment are tipping the balance towards the cloud: Over half of all contact centre managers and directors regulation and the ability to extend contact centres across multiple locations. The increased flexibility The top three drivers to the cloud are the need to save money, the need to offer better service to the multi-channel customer and say legacy equipment is executive summary preventing them from rolling out a multimedia infrastructure and becoming compliant; and just under 50% say legacy equipment is preventing their contact centres from meeting their KPIs. of cloud-based solutions, the ability to quickly roll out new services and being able to essentially outsource compliance management are now outweighing any perceived former concerns, such as security or potential downtime. compliance requirements.

4 Contents 1. The on-premise problem 2. Cloud converts 3. Cloud benefits 4. The outlook for Storm clouds? 6. Conclusion 4/18 contents

5 5/18 1. The on-premise problem On-premise contact centre technology is holding the industry back. on premise problem Legacy equipment continues to be a big problem in the contact centre industry. Our research found that it is holding back innovation and the ability to service today s demanding and multi-channel customers. Costly upgrades (cited by 40%), technical limitations (37%) and lengthy deployment times, together with the difficulty and cost of integrating with existing infrastructure were the biggest frustrations (both 28%) with legacy systems.

6 And these frustrations are not only wasting scarce financial resources, they are also providing a barrier to the innovation the industry needs: of contact centre directors and Nearly managers agree that legacy equipment is preventing their ½contact centres from meeting KPIs 54% believe that it is a financial drain on their organisation 56% state that it is preventing them from rolling out multimedia capability an additional 56% agree that their legacy system is a hindrance to PCI compliance 6/18

7 What are the biggest frustrations you come up against with on-premise contact centre hardware and software? 40% COST OF UPGRADES 37% TECHNICAL LIMITATIONS 28% DEPLOYMENT TIMES ARE TOO LONG 28% 19% 19% A change is coming Thankfully, the tide is turning. More and more contact centres are moving away COSTLY TO INTEGRATE TECHNOLOGY WITH MY EXISTING INFRASTRUCTURE SPEED OF PRODUCT INNOVATION DIFFICULT TO INTEGRATE TECHNOLOGY WITH MY EXISTING INFRASTRUCTURE from their legacy infrastructure to a dynamic cloud-based solution that can offer businesses the opportunity to add new communication channels, even alongside their existing telephony infrastructure if needs be, without replacing these systems. 12% OTHER 9% DIFFICULT TO MANAGE PLANNING & RESOURCE 9% VENDORS FAILING TO UNDERSTAND MY BUSINESS NEEDS 7/18

8 2. Cloud converts The cloud-based contact centre market is set to explode as decision makers realise the strategic benefits of cloud solutions over on-premise. Our research found that the cloud-based contact centre market is set to explode with 71% of contact centre decision makers actively considering the move, or more open to adopting cloud technology. While money-saving has historically been the primary driver for cloud-based contact centres, our research confirms that decision makers are cloud beginning to realise the strategic benefits of moving to the cloud, such as the ability to roll-out new features quickly and to better service multi-channel customers. 8/18

9 Top drivers for moving to the cloud 33% ABILITY TO ROLL-OUT NEW FEATURES QUICKLY This is a significant shift in opinion. The cloud is moving from being simply the cost effective option, to becoming the option that best allows the contact centre industry to react quickly to the needs of its customers and support them via any channel, from any device. 37% 41% THE NEED TO STAY UP TO DATE WITH THE LATEST COMPLIANCE REQUIREMENTS THE NEED TO BETTER SERVICE THE MULTI-CHANNEL CUSTOMER magnetic north mantra: Cost savings might be the reason you deploy a cloud-based solution, but it won t be the reason you stick with it. You should consider the impact of a cloud solution on your entire organisation, not just the bottom line. 52% THE NEED TO SAVE MONEY 9/18

10 10/18 3. Cloud benefits What are the benefits of adopting a cloud solution? Those organisations that are using a cloud-based solution are reaping the benefits of their decision to ditch their on-premise system: Cost savings and a flexible licensing model were cited by two thirds of respondents as the biggest benefit cloud enefits Half agreed that a cloud-based solution had given them greater flexibility Just over a third stated that compliance with industry regulation was a key benefit Interestingly, organisations that have rolled out a cloud-based solution are much less worried about managing customers across multiple channels than those with on-premise systems, suggesting a big vote of confidence in the future-proof benefits of the cloud.

11 The best of both worlds Savvy contact centre managers and directors realise that they don t have to completely remove their on-premise equipment to move to the cloud. Cloud applications such as call routing software, customer relationship management systems, workforce management software, call recording software and IVR systems can all run alongside existing on-premise systems. Keeping compliant Compliance is another key driver for moving to the cloud, cited by 37% of those interviewed in our survey. Compliance is constantly changing and it is costly to update legacy systems to adhere to the latest regulation, so it is not surprising that, as we already said, 56% of contact centre managers and directors agree that their legacy system is a hindrance to PCI compliance. And of course, PCI compliance is not the only regulation that contact centres have to contend with. This approach helps many contact centre managers and directors to prove the benefits of a cloud-based solution, without completely having to rip out and replace all their existing on-premise equipment in a big bang. An average blended contact centre of 105 seats, managing inbound and outbound calls, has to adhere to up to 20 different regulatory requirements to ensure compliance with EU, Data Protection, the FSA and Ofcom regulations. With a flexible cloud-based solution, contact centre managers and directors can ensure they are meeting today and tomorrow s compliance requirements. In effect, compliance management can be outsourced to a cloud provider. magnetic north mantra: Cloud adoption needn t be painful; you don t have to rip out and replace all your legacy equipment. Start to move your technology and comms infrastructure to the cloud gradually. magnetic north mantra: Compliance doesn t have to be a headache. With the right technology in place, you can meet any regulatory requirement without a great deal of effort on your part. 11/18

12 Flexibility The flexible nature of a cloud-based solution means contact centre decision makers can add and remove seats as and when required. Rather than pay up front for licences and hardware for whatever you estimate your maximum should be in the next 12 months, you can pay as you go, scaling up and down depending on the needs of the business. This flexible business model gives contact centres the ability to bring in more staff on a short-term basis to deal with seasonal peaks, which in turn helps deliver maximum returns for those peaks without continuing with these costs when business is slower. magnetic north mantra: All businesses have peaks and troughs. Choose a partner that understands this reality of the contact centre environment and offers a flexible licensing model that can scale up or down. Improved agent retention Interestingly, our research found that those that have moved their contact centre IT infrastructure to the cloud are much less concerned about employee retention, with only a third of those interviewed stating that employee retention is a challenge, compared to 60% amongst those who haven t yet moved to the cloud. There could be two reasons for this; firstly, cloud-based solutions are more easy to use than traditional on-premise equipment, making life easier for agents. Secondly, the flexibility of cloud solutions offers benefits to the agents as staff can be brought in on a short-term basis for peaks, and can even work remotely. magnetic north mantra: The average age of a contact centre agent is just 26 years; a generation that is accustomed to technology and expects to be able to work flexibly. Choose a solution that offers them that. 12/18

13 Reliability and disaster recovery When asked about reliability and downtime, none of Not only are cloud-based contact centre software the contact centre decision makers surveyed using systems extremely resilient but even in the event a cloud solution reported that they had ever had an of failure, having a solution in the cloud offers issue. Yet despite this, 28% of our total survey base significant benefits over on-premise. In the case of told us that they think reliability is a barrier to cloud call recordings for instance, data is backed up at adoption, highlighting a clear disparity in perception least once, meaning there is no chance of losing versus reality in this area. A small but significant them. If an on-premise system fails, contact centres proportion are viewing reliability as an issue, when often have no plan B. However, in the cloud users the reality is that it is a core strength of using a can rely on an entire backup system that can be cloud contact centre solution. implemented quickly ensuring that a disaster does not have to be a disaster for your contact centre. magnetic north mantra: A cloud-based contact centre should offer a significantly more resilient service than fallible on-premise systems. Should disaster strike, your cloud system should have everything backed up and a plan B to roll out. 13/18

14 Relationship with technology service provider While not a technology related benefit, cloud-based With the SaaS model the relationship is ongoing, contact centre solutions are Software as a Service with service and support all part of the package, (SaaS), with the emphasis on service as well as so these issues with non cloud-based providers software. With the traditional model of suppliers shouldn t occur. In Magnetic North s case we go so selling hardware to contact centres, that is often all far as to allocate every client a Success Manager, they do; sell the hardware and licences, with some a highly experienced contact centre professional offering limited professional consulting on top. When who works with our customers throughout the life of asked about their relationship with their current non a contract with the goal of helping them to make the cloud-based contact centre technology suppliers, a most of the platform. That way every customer has a massive 65% of contact centre decision makers said contact who is not a sales person, but an extension suppliers either don t understand their business, are of your team with a full understanding of your only seen when there s a problem or the contract is business to work with you to adopt and maximise all up for renewal, or are constantly trying to get extra the features and capabilities. money out of us. magnetic north mantra: Don t pick a technology partner who ll pitch you then ditch you. Find one that will understand your business, offer you the support you need and work collaboratively with you to ensure you get the best out of the systems you are using. 14/18

15 4. The outlook for 2014 Over the course of this year, technology concerns will be exacerbated as contact centre managers and directors struggle to ascertain which solution will work best for their organisation. What do you think are the key challenges facing the call centre industry in the next 12 months? 30% DRIVING TECHNOLOGICAL INNOVATION AND 21% OVERCOMING LIMITATIONS OF EXISTING SYSTEMS DRIVING OPERATIONAL 23% EFFICIENCY AND COST SAVINGS DEVELOPING AGENT SKILL-SETS Our research found that managing the customer experience across multiple channels (44%), ensuring technology keeps pace with changing customer behaviours (40%) and developing agent 33% MANAGING THE TRANSITION TO CLOUD-BASED CONTACT CENTRES skill-sets (30%) were some of the key challenges that contact centre managers and directors expect to come up against in the next 12 months. In addition, managing the transition to cloud-based 40% ENSURING TECHNOLOGY KEEPS PACE WITH CHANGING CUSTOMER BEHAVIOURS contact is clearly a priority for many contact centres (33%). 44% MANAGING THE CUSTOMER EXPERIENCE ACROSS MULTIPLE CHANNELS 15/18

16 Concerns over managing the customer experience across multiple channels? Interestingly, as this graph shows, those managers in organisations operating with cloud-based solutions had no concerns about multiple channel communications, compared to 60% of contact centres using on-premise solutions who cited multi-channel as a big concern over the next 12 months. 60% on premise users magnetic north mantra: Your customer s behaviour and expectations are constantly changing. Manage and prepare your contact centre for that change. 0% cloud users 16/18

17 5. Storm clouds? Of course with updating any technology, issues can occur and frustrations arise. Over two thirds of contact centres with a fully cloud-based solution cited loss of control as the biggest issue they faced; this is followed by voice quality (33%) and restrictive service level agreements (33%). By choosing a solution that works closely with the contact centre, offering a non-restrictive agreement allowing flexible control, these issues can be avoided. With the wrong cloud solution voice quality could be an issue, but by using a cloud partner that is tightly integrated with the telephony network this can be avoided. magnetic north mantra: As with every new technology, there may be teething problems. The key is to find a long-standing vendor that knows the contact centre and telephony environments and who will work closely with you to iron out minor issues. Make sure yours does. 17/18

18 6. Conclusion We re still early on in the contact centre cloud adoption curve, but our research confirms that we can expect to see exponential growth in the next few years. The cloud offers an attractive, viable and cost-effective alternative to the unresolved issues presented by legacy on-premise equipment, so it is no surprise that the majority of contact centres are weighing up the benefits of a move to the cloud. While we are still seeing lingering doubts about quality, reliability and security, these are increasingly being overturned by the reality that cloud solutions can offer greater surety in each of these three key areas. The ways in which people communicate, and therefore expect to be able to communicate with businesses, has changed greatly in the last five years, and the pace of change continues to increase. Contact centres have to be become even more adaptable if they are to survive and arguably contact centre in the cloud providers are best-equipped to deliver the technological innovation at the speed demanded by organisations and their customers. 18/18 onclusion

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