In the contact center industry, one of the most pressing issues that companies face today is whether or not they should house their own contact center. For some, the answer to the question is fairly simple – they already have their own proprietary systems, the space and people in place to handle the customer service operations of the business.

For others, they are too small and inexperienced to take on such an operation and a hosted solution makes more sense. For those companies in-between, making the choice can be a bit more challenging.

 

According to DMG Consulting LLC, a provider of contact center and real-time analytics research, market analysis, and business strategy, operations and technology consulting services, more than 385,000 hosted contact center seats are in use around the world today. This number is expected to grow for a number of reasons, not the least of which is the economic downturn in the U.S.

DMG recently published the “2008 Hosted Contact Center Infrastructure Market Report” which is positioned as the most comprehensive and timely guide to this developing market, products and vendors.

 

The report actually provides an in-depth analysis of all aspects of the market, including industry trends and directions, best practices, ROI, market share, market penetration rates, pricing, product functionality and technology.

 

The consulting and research firm found that the projected slowdown in the U.S. economy will be a key stimulus for the adoption of hosted contact center solutions. Companies are compelled to reduce capital investments over the next few years as the impact of the economy is widespread, yet customer service is taking on even more importance.

According to DMG, the market is expected to grow by 25 percent to 30 percent in 2009. The firm also predicts that by the end of 2011, 30 percent to 35 percent of all new contact center seats will be hosted.

"Hosted contact center solutions enable companies large and small, as well as government agencies and institutions of higher education, to acquire leading-edge contact center technology," said Donna Fluss, founder and president of DMG Consulting, in a company statement.

 

"Given the current economic outlook, hosting provides a great opportunity for organizations to improve their customers' experience and provide differentiated service, without the need for a large, up-front capital investment or high start-up costs. Improving customer service and retaining customers should be a key focus for most organizations during tough economic times."

The current state of the economy is certainly driving consumer buying decisions. As companies continue in their price wars and consumers battle rising prices on everything from gas to milk, customers will be looking for not only a good deal, but also great service. Looking to a hosted model may be the best way for the company to provide both.