VoIP Makes Hosted Services An Attractive Option For IVR And Contact Center Solutions

By John P. Joseph

TMCnet Voice Solutions Columnist

 

 

The increase in VoIP technology adoption is having an interesting impact on hosted IVR and contact center solutions and their providers. Like their enterprise counterparts, hosted service providers are adopting VoIP quickly, and there are more hosted IP-based services than ever before. This is good news for enterprises because hosted IVR and contact center services provide a number of advantages over on-premise solutions, especially for small and medium-sized businesses.

 

Why the change? As always, money is a great motivator. A VoIP connection between the hosted service provider and the enterprise allows calls to be transferred over the Internet without the cost of a traditional phone network. Plus, analysts have pointed out that VoIP-based enterprises and service providers can more easily connect their networks and applications, thereby lowering the cost and pain of adopting hosted solutions. VoIP, therefore, allows hosted service providers to lower their service delivery costs — either to attain healthier margins or to remain competitive in a price-sensitive market.

 

In addition, VoIP allows hosted service providers to pack more services into their offerings.  For example, industry analysts have pointed out that VoIP allows hosted service providers to deploy speech-enabled voice solutions faster and with a lower TCO compared to their TDM counterparts. With price a major barrier to adoption of speech-enabled solutions, VoIP is making speech-enabled applications a more attractive option — even for smaller enterprises.

 

Aside from the punch that VoIP adds to hosted services, there are several core reasons that companies elect a hosted option over an on-premise solution. First and foremost, hosted solutions have significantly lower start-up costs than on-premise alternatives. When an enterprise signs on with a hosted service provider, the enterprise is buying the historical performance of the service provider. Assuming that the hosted service provider has a long list of customers, an enterprise can validate that the infrastructure has been fully deployed and tested with other customers. The enterprise avoids the capital cost of buying voice servers, Web servers, telephony hardware, speech recognition software licenses, and other system components. Plus, the enterprise does not have to dedicate valuable space to the IVR and contact center systems. There are also few, if any, back-end costs because the solution provider maintains the applications and server infrastructure. The company doesn’t need in-house application specialists for the same reason, and there are no training costs because in-house IT doesn’t have to keep up with the hosted technology.

 

Customers buying hosted voice solutions also save the cost of developing voice user interfaces, which is a highly specialized skill that few companies can afford to maintain in-house. The only major up-front cost customers incur with hosted contact center solutions is for any customization to the solution provider’s application.

 

Next, since the infrastructure itself is already running and validated by the provider, the start-up time drops. There is less to integrate because the telephony, speech technology, and application licenses are already integrated. Even if changes are required, the entire infrastructure is under the hosted service provider’s control so there is less wasteful back-and-forth between the service provider and the enterprise to reconcile differences between data and voice communications. The service provider can just issue a standard set of specifications that enterprise has to meet to tie in.

 

Finally, hosted solutions are a good tool for reducing the risks associated with adopting new, rapidly changing technology. In the case of hosted IVR and contact center solutions, speech technologies — such as speech recognition, speaker verification, and text-to-speech (TTS) — are all rapidly advancing technologies. VoIP itself is also a rapidly changing technology because of the adoption and evolution of the SIP standard. To a large extent, hosted services shield their users from these underlying technologies. The hosted service provider must incur the costs of keeping up to date with technology advances. If they don’t, their customers can readily switch to another hosted service provider. Enterprises that use hosted solutions, therefore, can respond to market changes and new technology faster because they don’t have a capital investment in their own software/hardware infrastructures.

 

These advantages deliver tangible results. Customers’ overhead savings add up quickly. To implement an interactive voice response (IVR) system, a staple in most contact centers, it may only cost $25,000 on average to implement a simple 96-port hosted system, compared to $125,000 for an on-premise solution. Implementation time is a week, compared to a month.

 

While the concept of hosted voice services is not new, with the emergence of VoIP, I expect more enterprises to consider outsourcing some, or all, of their customer service infrastructure. If you are considering deploying a hosted voice solution, pay close attention to the reliability of the network and the level of redundancy offered. These are often the key metrics that service providers use to differentiate their services and the results can vary. Also, carefully review the service level commitments that the hosted service provider offers. With a good choice of hosted service providers, plus the benefits of VoIP and hosted services, you can assure that you’ll stay ahead of the competition.