DMG Report Sees Surge in Cloud-Based Contact Center Solution Usage

Thanks to myriad benefits, such as lower cost of ownership and flexibility, more organizations are shifting contact center technology from on-premises systems to the cloud, according to a new study from DMG Consulting. While this might spell gold for cloud-based solution vendors, there are still pain points to overcome.  

“Cloud-based solutions give organizations the ability to expand channels and functionality more readily than they can with premise-based solutions,” says Donna Fluss, president of DMG Consulting. “If you’re using a premise-based solution and you have to install another solution, it takes time and effort. But if you’re using a cloud-based solution, for example, if you want to add Web chat, it’s really easy. You say to the vendor, ‘License me for Web chat.’”

DMG surveyed 169 enterprise, contact center, IT, operations, sales and marketing executives, managers, and leaders in organizations of all sizes, from 47 countries and 40 U.S. states. The number of organizations deploying cloud-based solutions skyrocketed from 38.1 percent in 2010 to 62.4 percent, according to DMG findings.

Cloud-Based Solution Planning Soars

Of those companies that are not using cloud-based solutions, 45.4 percent said that they are planning to use them within the next 18 months. DMG said that it expects 2014 to be the best year for making contact center investments since the end of the recent Great Recession.

“The United States is on its way to economic recovery,” the report said. “Latin America is moving nicely and picking up momentum. Africa is growing rapidly, as is Asia/Pacific. The Middle East and Western Europe are expected to outperform 2013, and Eastern Europe continues to come on strong. The worldwide economic recovery, product innovation, and new regulatory requirements, along with a continued desire to reduce risk, are driving a new round of contact center investments.”

The Most Popular Contact Center Channels

The primary channels contact centers are using are led by the phone (97.1 percent), followed by email (90.4 percent), Web chat (66.3 percent), and self-service (47.1 percent).

“I get asked all the time, ‘What channels do people use?’ Fluss says. “‘Are they using the phone, is the phone going away?’ No, the phone is not going away. “[These findings] are saying that call centers are here to stay.”

When companies were asked what channels they planned to add in the next 18 months, DMG found that Web chat, voice, email, instant messaging, and Twitter made up the top five.

These numbers represent a big opportunity for cloud-based vendors, Fluss says. “We’ve been talking about multichannel contact centers for years, but the cloud is going to enable this, which is why it’s so important for cloud-based vendors to provide multiple channels. It is essential.”

Reasons for Investing in Cloud-Based Solutions

The survey also asked respondents why they wanted to purchase cloud-based solutions. The top reasons for implementing cloud-based solutions were: ease of scaling up and down, avoidance of major capital investments, and decreased total cost of ownership. “With cloud-based solutions you pay by the drink…with a cloud-based solution you pay for what you use,” Fluss says.

Other reasons respondents were looking to buy cloud-based solutions included the resulting decreased reliance on internal IT resources.

“[Sometimes] by the time IT gets around to fixing a problem, the contact center has been massively overwhelmed,” Fluss says. “The reason why contact center managers are in favor of [cloud-based solutions] is because they expect a cloud-based vendor to be more responsive to their needs, because if they’re not responsive [a company] won’t keep them.”

Issues That Vendors Need to Address

As far as the biggest concerns organizations have about purchasing cloud-based solutions, security, reliance on vendors, and connectivity and quality of service were cited the most.

“All of these reasons talk about vendor dependability, which talks to the importance and issues of [problems], Fluss says. “A lot of vendors go through a period where they have to learn how to be a cloud-based vendor. Prospects need to pay a lot of attention to this...this is a call to action for vendors.”  

The actual market size of cloud-based contact center infrastructure solutions is more than 80 players, says Fluss. “At this point there are no leaders in this market. There’s about five vendors who are vying for leadership, but there is no clear leader because it’s not just a question of market activity. It’s a question of [issues such as] platform reliability, responsiveness to customization, and integration. [It’s about] having great people who know contact centers and having the right vision and breadth of applications.”     

Since so many companies of all sizes are adopting cloud-based solutions, vendors need to do a better job of addressing issues such as security and platform reliability, says Fluss.

“Cloud-based vendors have a huge opportunity to differentiate themselves and their offerings and emerge as a leader by addressing concerns and issues,” she says. “Vendors have to do a better job so they can differentiate their products based on service quality.”   

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Posted March 03, 2014