By Peter Lyle DeHaan, PhD
With the situation in Iraq again looming large in the news, I recall Operation Desert Storm, which occurred two-and-a-half decades ago. At the time, most foreign reporters relied on dial-up telephone lines to report the news. This approach was inexpensive, allowed for mobility, and provided flexibility. An alternate method was to install a dedicated line. Although providing higher audio quality and a more stable connection, it was more costly, required advanced planning, and limited reporting to one fixed location. With the exception of CNN, all other news organizations relied on dial-up for their Iraqi-based reporters. CNN defied conventional wisdom and pushed for a dedicated connection.
When the aerial assault began, in order to hamper local communication, early targets were the phone company’s central offices. Unable to process switched calls, the reporters could no longer get their stories out. However, CNN’s dedicated phone line didn’t require switching equipment and remained working, despite the devastated central offices. This resulted in CNN being the only news organization reporting live on the war. People switched channels to hear the latest news – and some never switched back. This catapulted CNN into an esteemed major news network overnight. A strategic technology decision made twenty-five years ago forever changed the status of one company.
While it’s wrong to make direct comparisons, a comparable strategic technology decision exists today for call centers: on-site equipment or cloud-based solutions.
On-site equipment allows for greater control. But with control comes responsibility: maintenance, database backups, software updates, spare parts inventory, disaster recovery, backup power, and IT staff. Financially, on-site software and equipment represents a tangible asset, which are a capitalized purchase and a depreciated line item on the balance sheet. While there are usually some ongoing costs, they are minor in comparison. On-site equipment doesn’t require Internet access to operate – but with the increased prevalence of VoIP and many forms of contact occurring over the Internet, this advantage is diminishing. Although vendor stability is a concern for both options, with on-site installations, there is at least the potential for the call center to continue operating if the vendor fails; this is not so with the alternative.
Cloud-based solutions represent the new way of provisioning a call center. With it, the responsibility to install and maintain equipment is removed, but along with it goes the associated control. There is no capital purchase or depreciation, with the only costs being a predictable, ongoing monthly expense, which is proportionate to actual usage. Cloud-based solutions also offer the flexibility to ramp up and ramp down as needed. Operations may be quickly deployed anywhere there is reliable Internet access, and they can easily accommodate remote agents. However, there are two chief concerns with cloud-based solutions. One is the requirement of a stable Internet connection for the call center or remote agents. Without Internet access, the call center is effectively down. The other concern is with the vendor. Do they provide always-on, fully redundant, carrier-grade stability, with 24/7 tech support and IT staff? Are they financially viable to offer cloud-based service for the long-term? If they stumble or fall, the call center immediately suffers the same fate.
For much of the call center industry’s history, on-site equipment was the only option. Some centers continue to pursue this approach, not because they’ve examined the alternative, but because that’s how it’s always been; they see no point in changing. Equally unacceptable are those call centers that race headlong into cloud solutions, wanting merely to follow the current trend. They dismiss the alternative without consideration simply because it’s the old way of doing things. An unexamined strategy is really no strategy at all.
Neither approach is universally right. Both have merits; both have disadvantages. I recommend a careful look at the pros and cons of each approach. Then you can make a strategic decision on which one is the best for you and your call center. Your future may be at stake.
[From Connection Magazine – Jul/Aug 2014]
Peter Lyle DeHaan, PhD, is the publisher and editor-in-chief of Connections Magazine, covering the call center teleservices industry.