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Hosted Services

April 2005

Using a hosted service is essentially renting software and accessing it over the Internet. For a hosted service, the software resides in a central server at the provider's location, which users access via the Internet. With a hosted service, call centers do not need to concern themselves about software updates, database backups, system maintenance, buying and licensing software, or purchasing additional hardware.

There are four main reasons to consider using a hosted service:

1) to try-it-before-you-buy-it,

2) to offer a new service with an upfront investment;

3) to preserve capital; and

4) for occasionally used applications.

Renting Versus Buying

Consider the analogy of renting an apartment versus buying a house. When you rent an apartment, you have a low initial cost (such as a security deposit or one or two month's rent), no long-term commitment (month-to-month or a short-term lease), and flexibility (as your space requirements change you simply get a larger or smaller apartment).

Contrast this to buying a house. With a house you have a greater initial cost (the down payment), a long-term commitment (a 30-year mortgage), and inflexibility (you can't easily move or add space). In the same way, a hosted service, like renting, has a low initial cost, no long-term commitment, and is highly flexible as your needs and usage level change.

The arguments against using a hosted service also parallel the apartment versus home ownership debate. The downsides of apartments are that you pay rent as long as you live there, you do not build equity (that is, ownership), and you are often limited with what you can do to it or with it. The advantages of home ownership are that once it is paid for, there are no more mortgage payments to make, you have much more freedom to make changes to the house, and it is an investment.

Just as there are times when it is appropriate or advantageous to rent, so it is with using a hosted service. Conversely, other conditions make buying the right and wise decision.

Hosted IVR

By Chuck Raudonis

Speech recognition has such unique challenges that it's prudent to choose a development partner for your first application, especially considering the many different technologies available and the potential obstacles you may encounter while developing the initial system. Speech technology is more complex than Dual-Tone Multi-Frequency (DTMF) and there is an up-front investment, which leads some to consider a hosted solution. Hosting allows you to cost-effectively offer customers a speech solution without the need to build up your own speech technology team. A hosted provider maintains the hardware and software, ensures the latest speech software releases are being used, and continually monitors and supports your application. Plus, you only pay for what you use.

You should reasonably expect your development and hosting partner to have documented expertise in the following three areas:

Speech recognition IVR,

Integrating speech recognition applications with back-end systems and a live contact center,

Specific customer service needs of your product of service.

Chuck Raudonis is Vice President, ICT Global Interactive of ICT Group, Inc., a provider of interactive voice response, call center, and back-office business process outsourcing solutions with operations in eight countries.