TCO Benefits of Hosted Call Center Platforms Over Premise Based

A terrific article was just posted on the CCNG website by Mariann McDonagh with InContact. The article was entitled “Premise or Hosted? Big Difference in Total Cost of Ownership” and reviewed recent data supporting TCO advantages of Hosted or Cloud Based call center platforms over premise based systems.

Here’s some of the highlights:

“A recent Frost & Sullivan study addressed the total cost of ownership (TCO) of traditional installed contact center infrastructure compared to the newer option of outsourcing systems and applications to a third-party service provider who delivers these services over a broadband connection. The conclusion: hosting saves up to 43% savings over 5 years.”

“According to Frost & Sullivan’s Premise Vs. Hosted Contact Center: Total Cost of Ownership Analysis – one of the first in-depth comparisons of the older and newer models of contact center technology delivery – the savings of outsourcing infrastructure to a hosted service provider can add up to as much as 43% over five years.”

“Study authors analyzed 12 contact center configurations ranging in size from 50 to 500 seats, and in functionality from ACD-only to a full-function ACD, IVR, chat, outbound dialer, quality monitoring, workforce management, customer feedback, agent hiring and eLearning system. The TCO analysis for both three- and five-year timeframes concluded that:

Hosted contact center services significantly reduce TCO over premise-based systems in both three- and five-year scenarios for all 12 of the configurations analyzed.”
The larger the contact center, the higher the savings with the hosted model. Over five years, savings averaged 23% for 100-seat centers, 34% for 250-seat centers, and 43% for 500-seat centers.”

5-Year TCO Hosted Cost Savings % Over Corresponding Premise Deployment
Configuration 100 Seats 250 Seats 500 Seats
ACD Only 9% 10% 19%
ACD+ 21% 28% 39%
Full Function 23% 34% 43%

Mariann states that those conclusions are based on a complex model that considers costs ranging from hardware, software, installation, configuration and routine integrations to maintenance fees, upgrades, staffing, and subscription expenses such as per-agent/per-month hosting fees.

As with so many IT decisions, of course, price is not the only factor. Hosted contact centers also offer faster deployment (days rather than months), instant scalability up or down (to accommodate seasonal demand or other fluctuating business needs), easy home agent setup (just a standard telephone and computer), no-hassle multi-site connectivity (with no additional hardware and telecom expenditures), low-cost disaster recovery (stopgap sites can be set up on the fly in any location with a broadband connection) and other pluses like the ability to be funded out of the operating budget rather than the capital budget.

All of these features explain why analysts predict that hosted contact center growth will continue to outpace that of traditional premises-based deployments. With so many functionality benefits, cloud-based platforms were already becoming the new normal before Frost & Sullivan did the math documenting lower total cost of ownership.

To review the complete article, visit

To learn more about hosted call center solutions, visit

~ by Darren Prine on June 14, 2011.

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