Cloud Contact Centres How they are Shaping Business Continuity and Disaster Recovery Strategies

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1 50 Years of Growth, Innovation and Leadership Cloud Contact Centres How they are Shaping Business Continuity and Disaster Recovery Strategies A White Paper by Frost & Sullivan

2 F R O S T & S U L L I V A N Cloud Contact Centres How they are Shaping Business Continuity and Disaster Recovery Strategies INTRODUCTION Virtually all Australian organisations have either implemented or are considering the implementation of cloud computing services. As the Australian economy prospers, organisations are seeking more than just cost benefits from cloud computing services, such as greater business agility and the ability to gain a competitive advantage. One type of cloud computing market that is growing rapidly is the market for cloud based contact centres. Indeed, contact centres are evolving from using a primarily an on-premise model towards a hybrid model, where the customer owns only the critical infrastructure components and contact centre applications are provided from the cloud. One of the most significant events to impact the Australian contact centre industry was the natural disasters in Queensland earlier this year. The floods in regional Queensland and Brisbane followed by Cyclone Yasi severely disrupted a number of businesses. Many businesses which had their primary contact centres in Brisbane had to evacuate staff and redirect calls to other sites. Businesses with a single site had to fully shut down for a number of days during the floods, a time when their customers most needed to communicate with them. These events, along with other natural disasters, such as the bushfires and floods in Victoria, highlighted the importance of having an end to end continuity plan to ensure the business stays operational in case of a major disruption. A cloud based contact centre would have made it much easier for contact centre operations to remain operational during and after these disasters. Against this background, this document will focus on: The emergence of cloud based contact centres The role of business continuity and disaster recovery planning in the contact centre environment Delivering business continuity services through the cloud The future of cloud based contact centres EMERGENCE OF CLOUD BASED CONTACT CENTRES Cloud based solutions for the contact centres refer to the delivery of contact centre applications over the internet on an on-demand basis. These solutions also provide processing and data storage capabilities in the cloud, thereby eliminating any hardware intensive requirement(s) at the client s end. Typically, the user should be able to access the full functionality of the solution from any thin client, i.e. any computer with a web browser and internet connection. This is largely an emerging market with activity and customer interest gathering momentum. One of the major challenges for the cloud based model is the generic nature of cloud solutions while the requirements of the customers vary greatly. As 2

3 Cloud Contact Centres How they are Shaping Business Continuity and Disaster Recovery Strategies F R O S T & S U L L I V A N vendors and cloud providers begin to offer greater levels of customisation of cloud based solutions, customer demand will start to pick up. There are presently a very small number of players offering such services to the contact centre market. The majority of contact centre applications such as Automatic Call Distribution (ACD), Interactive Voice Response (IVR), call analytics, call monitoring and multimedia are being developed by vendors for a cloud based delivery model. Generating demand for voice solutions however, will be a challenge due to concerns about quality assurance. The table below summarises some of the major drivers and restraints for the uptake of cloud based contact centre solutions: Exhibit 1 Drivers Minimal infrastructure overheads, with the agent able to access the services from any web based terminal. Intelligent devices such as smartphones and tablet computers will further drive the uptake of could solutions as the number of mobile users increase Single point update/upgrade of software, eliminating the need to update each terminal or user licence. This ability to quickly upgrade to new technologies will serve as a competitive advantage for businesses Restraints Customer concerns around perceived loss of control and a general preference to own the equipment Information security and privacy concerns about how and where the data is stored deters uptake in certain verticals such as banking and federal government departments Move away from a licensing based model to a utility based pricing allows the customer to pay only for services used Difficulties in defining SLAs and a risk of vendor lock-in prevents many businesses from committing to a contract THE ROLE OF BUSINESS CONTINUITY AND DISASTER RECOVERY PLANNING IN THE CONTACT CENTRE ENVIRONMENT While both Business Continuity Planning (BCP) and Disaster Recovery Planning (DRP) deal with keeping a business operational in the event of a disruption or a major disaster, they address the proactive and reactive ends of the spectrum. The objective of a BCP for a contact centre is to anticipate minor as well as major disruptions that may potentially impact the contact centre, and provide a plan to 3

4 F R O S T & S U L L I V A N Cloud Contact Centres How they are Shaping Business Continuity and Disaster Recovery Strategies deal with the disruption. This can range from maintaining generators in case of a power outage to responses to a major natural disaster where an entire region is affected. BCP focuses on keeping the contact channel operational for customers during a disruption or disaster. Disaster Recovery Planning (DRP) on the other hand, is a reactive process detailing how the IT department goes about restoring functionality for the business after a disruption. This typically involves backing up data to a location off-site and reestablishing data and network connections. In the event of the primary voice channel being totally disrupted, many contact centre managers indicate that they could remain fully operational by redirecting calls to other sites. In such instances the waiting time for customers would only increase marginally. However, a significant proportion of managers indicate that the business would not be able to function with the primary communication channel, typically telephone/voice, totally disrupted. A number of contact centre managers believe that the contact centre would be severely impacted in functionality, if the primary voice channel were to be disrupted. In this instance, customers will be faced with long wait times and limited services. For businesses with multiple contact centre sites, in the event of a disruption to one site, the first response will be to re-route calls to other functional sites. Businesses with a single site are at most risk, and will have to redirect traffic to other channels such as IVR and SMS for status updates, and web site (including social media sites). While many organisations have some form of BCP in place, they often neglect the DRP, leaving them vulnerable to the type of natural disasters that recently impacted Queensland. Businesses in Queensland account for a majority of businesses currently undergoing a review or in the process of installing a BCP/DRP. With the exception of banks and emergency services, most businesses tend to focus little attention on BCP/DRP solutions. This section illustrates the top three challenges faced by companies in deploying and maintaining a reliable BCP/DRP system. Exhibit 2 Costs: The overall cost of installation and maintenance of the solution is the primary challenge for companies operating or planning to install a BCP/DRP solution. Beyond the initial deployment costs, contingency plans have to be regularly tested and checked for reliability. This places additional overheads for the business in terms of staff and costs. Such expenditures are typically made low priority since the impact is not 4

5 Cloud Contact Centres How they are Shaping Business Continuity and Disaster Recovery Strategies F R O S T & S U L L I V A N readily measurable. Scale: The second challenge for organisations is that the scale and nature of their business does not justify the investment in a BCP/DRP solution. For an organisation that does not experience a huge volume of calls or does not handle sensitive customer data, finding the budget to invest in an insurance service becomes particularly difficult. Small companies, government departments and non profit organisations typically fit this description. Responsibility: Due to the way an organisation classifies its information and data assets, a number of managers indicate that the responsibility for disaster recovery is typically undertaken by the IT department. The IT department manages the budget, deployment and maintenance of the DRP solution. The contact centre has little or no responsibility for maintaining such a solution, and has to route requests for upgrades or review of these solutions through the IT department. Risks of Not Having a BCP/DRP Solution in Place While many organisations have a plan to deal with increased call volumes and disruption to a site, very few organisations have experienced total disruptions to the extent seen in Queensland or the earthquake in New Zealand. For instance, during the Brisbane floods, companies that had their primary contact centre in the city were totally out of service. This situation is further aggravated if the data centre or the backup site is located in the impacted area, leaving other functioning centres without access to necessary customer data. The matrix below illustrates the risks faced by an organisation without a BCP/DRP solution in place. Exhibit 3 Risk to Revenue The impact on revenues is typically measured by the amount of business lost as a result of a down me. With a large number of businesses processing transac ons through their contact centres, the impact of a disrup on could be felt immediately Risks of Not Having a Business Con nuity and Disaster Recovery Plan Risk to Reputa on Although the impact on a company's reputa on is di cult to measure, it is very important for its overall success. With superior customer becoming a key strategic ini a ve for many companies, the consequences of not being available for customers for extended periods of me will adversely a ect the company's reputa on. Risk of Failing to Meet Compliance and Policies The importance of adhering to compliance and policies vary depending on the industry. For instance, banks, nancial ins tu ons and u lity companies are required to follow policies governing data, security, privacy and business con nuity. As a result, signi cant investment and a high degree of maintenance is required to ensure reliability of the BCP/DRP solu ons. Risk of Public Safety and Other Risks In certain segments such as the emergency services and police departments, the risks are far greater. Any down me for these departments can poten ally put lives at risk. As a result, these departments have the most comprehensive and resilient BCP/DRP solu ons in place. 5

6 F R O S T & S U L L I V A N Cloud Contact Centres How they are Shaping Business Continuity and Disaster Recovery Strategies BCP/DRP DELIVERED THROUGH THE CLOUD As businesses realise the importance of BCP/DRP solutions, the demand and the cloud based model will go hand in hand. While the demand for such solutions will drive companies to consider the cloud based model for delivery, the fundamental characteristics of the cloud will also make it an ideal medium to deliver BCP/DRP solutions. Due to the type and volume of data stored in a cloud-based data centre, the service provider typically builds in multiple levels of redundancy and resilience. In the Australian market, service providers are beginning to offer additional contact centre seats through a hosted model, allowing the business to quickly add remote or additional on-site agents. The standard process involves the relocation of staff to a secure disaster recovery location, managed by a third party, to ensure continuity of services. The turnaround time for such a process is typically less than an hour, provided the business can find the resources. Another option for businesses is for the third party or service provider to fully manage the call handling including provisioning of the agents. Due to the readily available platform (infrastructure and agents) the response time for this process is very short. The business however, has to ensure that as a part of its BCP the service provider is fully trained and capable of managing the nature of calls. This is often a major issue for businesses and, as a result, this model is popular mainly within government departments where there is a shared IT infrastructure and similarity of customer queries. Some key customer sentiments regarding BCP and DRP solutions: Although we have BCP/DRP solutions capable of handling disruptions, they weren t built to cope with the scale of disruption brought on by the recent floods A Queensland government department Following the disaster we have more agents who work from home in order to build greater business continuity If our phone system went down, a third party provider can take calls from a different location A Queensland government department As a government owned corporation, a reliable BCP/DRP solutions is critical to serving customers, especially during emergencies A Queensland based energy company The recent natural disasters in Queensland have reinforced the importance of a BCP/DRP solution, and we are testing a range of components for worst-case-scenarios A major Australian bank We have subscribed to a Software as a Service (SaaS) based recovery facility with a third party for a specific number of seats. This gives us a high degree of redundancy and resilience in the event of a disruption A retail company Our call volumes and size of operations are too small to justify an investment in a BCP/DRP solution A NFP organisation 6

7 Cloud Contact Centres How they are Shaping Business Continuity and Disaster Recovery Strategies F R O S T & S U L L I V A N Summary While the recent floods in Queensland got businesses to re-assess their BCP/DRP strategy, it is predominantly the affected businesses that are investing or upgrading their BCP/DRP solutions. Most contact centres have robust continuity (BCP) plans, while the data recovery strategies remain vulnerable to major disasters. FUTURE OF CLOUD BASED CONTACT CENTRES The increasing business demand for maximum flexibility of resources and the rapid pace of change in technology will make hosted and cloud based solutions the dominant model in the future. By deploying cloud-based contact centres, businesses can avoid upfront investment in infrastructure and vendor licenses and can opt for a payment model based on usage. Back-up and data recovery can be ensured regardless of where the agent is based. The integration of multiple communication channels such as social, voice and will enable an agent to address an issue raised on Twitter, for example, through a voice call from the same communication platform. Business continuity and disaster recovery is another area where the cloud-based model can facilitate increased uptake. The combination of cost advantages with the elimination of maintenance overheads will make it a viable option for smaller companies which typically find the necessary budget allocation difficult. Additionally, companies can have access to the most advanced contingency processes and technologies, which are typically affordable only by large enterprises. One major impact that these solutions will have on the market will be in levelling the competitive playing field in favour of smaller companies. As the cloud based model makes sophisticated and advanced applications affordable to smaller companies, technology/infrastructure will gradually cease to be a barrier to entry, thereby negating a major competitive advantage held by larger companies. Overall, the cloud based contact centre model will not only change the way solutions are delivered to customers but will also drive the shift away from the dominant on-premise model. As developments such as the National Broadband Network (NBN) enable easier access to some of the most computer resource intensive applications, the overall advantages of this model will help to outweigh some of the current concerns. Over the next 5 to 7 years, the cloud based model is expected to be the dominant contact centre model, with compliance and legal requirements being the only factors still holding back the shift away from the traditional contact centre model. 7

8 F R O S T & S U L L I V A N Cloud Contact Centres How they are Shaping Business Continuity and Disaster Recovery Strategies The Last Word Given the current nascent stage of development of the cloud-based model, trust in a cloud service provider and their solutions is currently the biggest challenge facing this model. While perceived loss of control over operations and the security of critical customer data in a hosted or cloud environment continue to cause end-user concern, the reality is that a well engineered hosting environment will have deeper security infrastructure in place than many companies could afford on their own. This enables a business to leverage the significant financial investments that the service provider has made in security standards and measures. Business continuity for a contact centre primarily centres on continuity of the voice or telephone channel, and a total disruption to this channel is not manageable for most companies. Through solutions such as telephony over the cloud, service providers can enable businesses to have greater resilience for their most business critical channel. Therefore, this demand for better and more reliable business continuity and disaster recovery will be one of the factors driving the shift towards cloud based contact centres. Service providers will play an important role in the evolution of contact centres and the move away from on-premise models. Lack of choice and availability of solutions are one of the major challenges currently faced by customers. Service providers are typically well positioned to leverage their carrier and network expertise and vendor alliances to provide customers greater choice of contact centre models fully hosted to hybrid models. The hosted as well as cloud contact centre solutions are steadily shifting towards mainstream market acceptance. Frost & Sullivan recommends that customers consider critical aspects such as vendor experience, customer references, technical platform, security and the deployment timeframe before committing to a solution. The following type of companies will benefit most from a hosted or cloud based model: Companies with limited capital budget or IT resources for upgrades and expansions Businesses needing to rapidly expand and scale down depending on peak and off-peak seasons/traffic/campaigns Organisations that are finding traditional BCP/DRP solutions too expensive to deploy and maintain Businesses growing through merger and acquisition activity or rapid organic growth Businesses considering the best-of-breed customer management tools Organisations with multiple sites with multiple customer communication channels in their contact centres This whitepaper was authored by Frost & Sullivan s analysts in the Enterprise Communications Practice in ANZ Anand Balasubramaniam is a Consultant for ICT, ANZ Audrey William is Research Director for ICT, ANZ 8

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