The Network-Based Call Center Opportunity
By Erik J. Laurence
 
A new generation of technology is presently enabling a far more complete, easier, and efficient way to deliver the latest call center technology to enterprises. It's known as the Network-Based Call Center (NCC), and promises to evolve today's call centers into true multimedia contact resource centers.
Industry analysts are bullish on the NCC and expect tremendous and unprecedented growth in NCCs. Ovum (www.ovum.com), for example, predicts that by 2005, fully 35 percent of all agent seats will be served by NCCs versus less than two percent today. With more than six million agent seats worldwide today and a total of nearly 12 million agent seats forecast for 2005, that translates into growth of network-based seats from 120,000 today to over four million by 2005. The best way to explain what an NCC is may be to begin by explaining what it is not: It is not a premise-based call center and it is not an outsourced call center.
 
PREMISE-BASED CALL CENTER
A premise-based call center typically consists of a room full of agents. Each agent has a desk, a chair, a computer terminal, and a phone. Down the hall or in the back room - or at least somewhere on the premises, there is a room full of equipment. Prominent in that room is the automatic call distributor (ACD) - essentially a telephone switch that queues and distributes incoming calls. Also in the room is an interactive voice response (IVR) system that allows callers to key in and retrieve basic information via their phones' DTMF keypads in lieu of speaking to, or while waiting to speak to, and agent. Nearby would be a customer relationship management (CRM) system enabling the agents to pull up records on the callers and/or create new ones about them. Some newer centers also have systems that support Web chat, e-mail distribution, and maybe even voice and video over IP (to enable live voice and video communications through your computer). Down the hall from that room sits the MIS and telecom department - the wizards who keep it all together and running. Unseen are the teams of highly paid consultants and systems integrators who managed to get all of theses systems talking to each other using computer-telephony integration (CTI) - a complex technology required to integrate the disparate worlds of computers with telephone systems. Unfortunately, the complexity and cost of CTI has often meant incomplete integration between call centers. We've all had some experience with the frustration it cases: We're often asked to key in our account number while waiting for an agent, presumably to "ensure speedier service." When we are finally connected, the agent asks again for the same information. More often than not, this frequent occurrence is caused by a poorly implemented CTIO project, resulting in blank screen pops at the agent's desktop.
OUTSOURCED CALL CENTER
An outsourced call center is very similar to a premise-based call center. In fact, it essentially is a premise-based call center, complete with agents, ACDs, IVRs, CRM, and the rest, only at someone else's premises. Call center outsourcers effectively run entire call centers on behalf of their clients, terminating their clients' toll-free and other cal traffic on their own premises. The centers are typically staffed with agents trained to represent the client's product or service as if they were employed directly by the client (which usually they are not).
THE RISE OF THE NETWORK-BASED CALL CENTER
At the heart of the network-based call center is an ACD, only this ACD lives in a service provider's network rather than on a company's premises. The trick behind the NCC is that it's not based on legacy circuit-switched technology - instead, it's based on all-IP open computing systems. By removing the circuits from the equation, the only thing between the service provider and the agents is a managed IP network. This makes hosting an all-IP NCC about as straightforward as hosting a company's Web site. It also means that the agents can essentially sit anywhere. Thanks to the inherent switching of the all-IP environment, agents no longer need to all sit at a central location - they can be distributed at multiple regional locations or even work from home with DSL or cable modem connections.
Best of all, an all-IP call center becomes a unified contact center, handling not only telephone calls and IVR, but also Web chat, browser collaboration, VoIP, video, voice mail, e-mail, and more. The motivation for enterprises to go the route of the NCC instead of deploying premise-based call center equipment is considerable. The benefits include:
Capital expenditure avoidance. Instead of large upfront purchases of capital equipment, enterprises are able to sign up on a month-by-month basis, paying either by the agent or by usage (more on this later) for the services they need.
Focus on core business, not complex telecom systems. Deployment and maintenance of call center equipment is complex and labor intensive, and large telecom and IT departments are required for the task. With today's trend toward an ever-sharper focus on core competencies, businesses should focus on what they do best and not have to be in the business of building and running their own "phone company."
Call centers becoming multi-channel "contact centers." There is dramatic change underfoot in the way customers want to contact the companies they do business with. Telephone communications are being augmented bye Web-based chat, e-mail, and even voice and video over IP. This means that call centers in enterprises all over the world are rethinking the way they handle customer contacts, and they're all thinking about how they're going to enhance existing equipment and when they should replace legacy systems. In short, they need to make major changes anyway, so why not consider NCC?
Capacity management. One of the strongest benefits of NCC is in the area of capacity management, especially as it applies to these new contact methods. Enterprises simply don't know what the new mix of contact methods will be - to a certain extent no one knows what it will be. Phone calls vs. Web chat vs. E-mail vs. VoIP vs. video vs. voice mail - who can figure out the right amount of capital equipment for enterprises to buy in each of these areas? That's where the NCC comes in. With NCC, customers pay for the capacity they need as they go.
 
For CosmoCom's breakdown of the market dynamics of network-based call centers, visit our Web site at www.tmcnet.com/casp/0901/0901serv.htm#1.
 
Multi-site call centers. NCCs can provide a single queue for an entire enterprise independent of the number of sites or the locations of agents. This capability maximizes agent efficiency while significantly reducing the technological complexity of multiple sites with layered, independent queues.
Call centers for small businesses. Call centers are becoming more essential to every business, and for small businesses this is no exception. While operating a call center is complex for large businesses, it especially strains the resources of smaller enterprises. This is an area where the benefits of NCC are truly compelling.
IP delivery of phone calls. One of the highest costs in a typical call center is the cost of the calls themselves. A domestic toll-free circuit-switched 800 call in the U.S., typically delivered over T1 or E1 lines, can cost anywhere from $0.07 to $0.30 per minutes. Outside of the U.S., the costs can be higher. The same toll-free 800 calls, routed via VoIP gateways, can be delivered to NCC agents in the IP domain for much less - in some cases even as little as $0.02 to $0.04 per minute. But even if it's only a penny or two less per minute, the total cost savings can be very substantial.
The NCC is also a compelling opportunity for service providers. For telcos, the NCC represents an opportunity to create a natural complement to the toll-free service they already offer to call centers. In fact, given that call centers currently spend more than $20 billion dollars annually on toll-free service, it is strongly in the telco's interest to find a value-added, "sticky" service that can enhance loyalty among their existing call center customers. And for all service providers, the NCC offers a new revenue stream with a strong business case. One analysis shows an ROI on NCC investment to the service provider of higher than 90 percent.
NCCs present a tremendous opportunity for tomorrow's call centers. Companies benefit by focusing on their core businesses while enjoying expanded functionality at a low cost in their contact centers. Service providers benefit not only by enjoying a new, high growth revenue stream, but also by playing a leadership role in this rapidly expanding market.
 
Erik J. Laurence is vice president, marketing and business development for CosmoCom. Cosmocom offers a new generation of IP-based call center platforms that are fully unified in supporting standard voice telephony and Internet-based multimedia communications.
Fore more information, visit CosmoCom's Web site at www.cosmocom.com or call CosmoCom's regional office in Hong Kong at +852 2956 2168