Contact center as a service (CCaaS) platforms are a very familiar concept in the customer experience (CX) market. The commonly accepted definition of these offerings is a multi-tenant omnichannel contact center infrastructure solution operating in a vendor's or third party's data center. DMG includes four types of seats in the CCaaS market: voice-only, omnichannel (voice and digital), digital-only, and basic (used outside of a formal contact center). These solutions have been known by many names over the years, including cloud-based contact center infrastructure (CBCCI), software-as-a-service (SaaS)-based contact center, hosted contact center, virtual contact center, digital engagement platform, and more.
Although CCaaS systems have been around since the 1990s and practically all contact center infrastructure innovation comes from cloud providers, their adoption rate is surprisingly low, at just 31.8 percent. Many organizations keep their legacy, premises-based contact center systems for 10 - 15 years, long after they've been fully depreciated. These companies could justify replacing them with new systems and enhanced capabilities. Several factors continue to slow the adoption of CCaaS solutions, including the following:
- Risk and security concerns associated with operating in multi-tenant cloud environments;
- Integration and implementation complexity when migrating from an existing legacy system to the cloud;
- Limitations, cost, and speed of customizing a CCaaS solution;
- Unpredictable and variable costs due to consumption-based pricing vs. fixed-price seat models; and
- Inertia and lack of prioritization for new contact center systems.
The good news is that many of the earlier concerns about CCaaS solutions, including feature parity, system reliability and uptime, improved agent and supervisor experiences, availability of out-of-the-box application programming interfaces (APIs) for integration, geographic flexibility and sovereignty, and more, have been addressed and alleviated. CCaaS vendors have also made great strides in addressing security and regulatory concerns by enhancing compliance and obtaining certifications for a variety of regulations (e.g., General Data Protection Regulation (GDPR), Payment Card Industry Data Security Standard (PCI DSS), Health Insurance Portability and Accountability Act (HIPAA), California Consumer Privacy Act (CCPA), Federal Risk and Authorization Management Program (FedRAMP), etc.)
CCaaS vendors can help themselves and speed up market adoption, particularly for enterprises in need of greater security, control, and customization, by expanding their deployment options to include private cloud alternatives. This approach provides the benefits of cloud delivery, such as continuous innovation without onsite updates, ease of scalability, rapid provisioning, and more, while enabling organizations to use a dedicated environment that's isolated from other tenants. DMG recommends expanding the CCaaS definition to include SaaS-based and managed service implementations, which were part of the original concept and practices at the start of the market. While these deployment options are not needed, appropriate, or cost-effective for all businesses, making them available to those whose corporate and IT policies require them will make moving to the cloud viable for a large percentage of CCaaS holdouts.
The CCaaS market is mature, yet adoption is lower than expected. A significant number of companies that have not migrated to the cloud have indicated the lack of a dedicated deployment model to be a key barrier. To overcome the concerns and open these opportunities, CCaaS vendors should expand deployment choices to include private cloud SaaS and managed service offerings, as multi-tenancy is not an option for all organizations.
Donna Fluss, founder and president of DMG Consulting, provides a unique and unparalleled understanding of the people, processes, and technology that drive the strategic direction of the dynamic and rapidly transforming contact center and back-office markets. As the foremost analyst and visionary dedicated to the contact center and back-office markets, she has provided expert guidance for more than 30 years to technology leaders as well as disruptive newcomers, investors, and enterprises that want to build next-generation AI-enabled contact centers. She can be reached at Donna.Fluss@dmgconsult.com.>