Tag Archives: Cloud-Based Computing Articles

Hosted PBX for Telemessaging Call Centers

By Allen David Niven

Digital communications market research provider In-Stat reported that the hosted PBX market is expected to reach $1.3 billion by 2009. Additionally, ads on TV are offering $25 per month unlimited phone calls, and one can go to Wal-Mart to buy a telephone with Skype built in for free phone calls. Yet many, if not most, telemessaging call center owners have no clue what hosted PBX is all about.

In a nutshell, you buy an IP (Internet Protocol) phone, plug it in to your DSL, cable, fixed wireless, or data T, and voila, you have phone service, both incoming and outgoing. The going rate for IP domestic calls in the U.S. is about a half a cent per minute, and since the providers are banking on the fact that people rarely call more than 1,000 minutes per month, the provider profits are $20 per month: $25 – (1000 x 0.005) = $20.

Although some providers that target the consumer market generate voice quality complaints, companies that gear their service to the enterprise market have gotten rave reviews. Although not hosted, Bank of America has 250,000 VoIP phones deployed, Boeing has 50,000, and Ford 60,000. Why do some experience good quality and others don’t?

The answer is that one cannot just slap an IP phone on a DSL. The DSL provider must be able to offer a DSL service that supports QOS (Quality of Service) and COS (Class of Service). Almost every current DSL router has a QOS menu, and almost every VoIP phone supports QOS and COS settings, but these capabilities do not help if they are not enabled or set correctly. One should allocate fifteen to twenty minutes to properly configure them. The result is a phone quality that is indistinguishable from legacy phone connections.

Calls from one VoIP phone to another VoIP phone exceed the quality of legacy phone service. This is because all legacy phone connections go through a phone company central office switch where they are squeezed down to an 8 kHz signal. In contrast, a connection that goes from VoIP phone to VoIP phone goes directly at 64 kbps, even if it is halfway around the world. Considering that MP3 recordings are usually 128 kbps, VoIP phone to VoIP phone sounds great.

For telemessaging call centers to venture into the hosted PBX marketplace, it’s important to first find out how many existing clients would be interested in such a service. Those that are will be more tightly bound to the call center because they will then be receiving both voice and answering services. In addition, clients will appreciate being able to forward their calls to the call center from anywhere (such as a cell phone) and not just from the phone itself. Likewise, clients may be grateful to have such desirable features as “find me/follow me” in addition to telemessaging service.

Typically, the equipment required to provide hosted PBX sits in parallel with the call center’s telemessaging equipment – it does not intersect with it at all. In short, hosted voice may be a great adjunct to offering telemessaging service.

[From Connection Magazine May 2008]

What Are Hosted Services?

By Wayne Scaggs

What do you know about hosted services? I believe you probably know – and use – more than you realize. Do you have your own website or domain name? Have you gone to a website and bought anything? Have you used a search engine (Yahoo, MSN, or Google)? If you answered yes to any of these questions, you have experienced hosted services. So what is a hosted service? A hosted service is a company’s (or an organization’s) ability to provide services via the Internet. The hosting entity provides servers, applications, and Internet connectivity – often more economically and reliably than its customer would be able to provide, due to the infrastructure and the technical support needed to maintain the applications. Hosted services have been around since the Internet began. When it comes to general data hosting applications, we’ve all been conditioned mentally to accept what is available, such as the speed or delay in opening a site or page. Our eyes have been conditioned to accept the jitter or blinking, and we even accept the lockup of a Web page. These irritations are considered part of surfing the Web.

A hosted service, as a business, has to do better to minimize these irritations, or they will not be able to compete. Another important element is the type of application being hosted. How critical is this application? Is it revenue producing? Could there be life and death issues? Is your pride or reputation at stake? All of these factors dictate how your hosted services should perform and what you are willing to accept as a hosted service subscriber.

In the call center industry, we already subscribe to many hosted services, whether we realize it or not. Web-based appointment setting and Web accounts are examples of hosted services we are currently using. A few companies have ventured beyond the traditional data-hosting model and have incorporated the ability to host voice applications along with the data. With call center hosting, one of the first things you realize is that you can have remote agents that are not tied to a traditional phone line. Next, you realize that if you can have a remote agent, you can have a remote office, and so on.

With new ventures come new challenges. Adding voice to hosted services opens untapped opportunities as well as known challenges – what a combination! I defined a hosted service as the ability of a company or organization to provide services via the Internet. When voice capabilities are added to this accepted application, what happens? Our ears have not yet been conditioned to accept delays or retries in the same way our eyes have been conditioned to accept delays on the screen. If the voice is choppy or cuts out on either end, it is unacceptable. VoIP is the voice in data form over the Internet. Due to the unique requirements of voice, your hosted voice service needs adequate bandwidth and real time to perform as advertised.

Sufficient and stable bandwidth will make an agent anywhere in the world seem like they are in the next room taking calls. When you host your services, you have added a new layer of disaster recovery to your call center because agents can be working from outside the disaster area. You are also able to keep a valued agent who moves away and needs employment – wherever they go. You have worked with them, you have trained them, and now you can keep them.

Embrace hosted services and open the door to new opportunities to enhance your call center’s profitability. When you do what is necessary (to stay in business), you begin to see what is possible (new opportunities), and suddenly you are doing the impossible (adding more clients and improving your bottom line).

Wayne Scaggs is president of Alston Tascom. He can be reached at 909-548-7300.

[From Connection Magazine June 2007]

What’s the Big Deal about Hosting?

By Steve Michaels

There’s a new term floating around the call center industry called “hosting.”  But what exactly is it?  Basically, it’s like carpooling your accounts on someone else’s system. The hosting agent has a switch, a call processing platform, or some other large piece of equipment and wants to grow his or her business. The call center owner, or hosting client, has a smaller system and also wants to grow their business through leading-edge technology but has limited resources.

Betty Hendrix of Voice One Message Services in Memphis, Tennessee wanted to upgrade her equipment, but she was concerned about the financial burden, and she was also trying to form an eventual exit strategy for her business. When Betty heard that her good friend Tom Camp of Answering Memphis had a Startel CMC, Betty approached him about hosting. Now Betty’s dedicated staff is answering calls from their homes, thus saving on rent and the expenses associated with a brick and mortar facility. She also gave Tom the “first right of refusal” to purchase her accounts when she is ready to retire.

Betty stated: “It’s like going from a roadster to a rocket with Tom’s new system; it is digital with enhanced clarity and speed, and my customers love it.” With a cutover date of January 2006, Betty had her accounts clustered into a section of Tom’s CMC that allowed the system to send only her account traffic to her agents. Should she or Tom’s agents become bogged down with a traffic spike, sickness among the staff, or other such debilitating circumstances, they always have the option to overflow their calls to each other. “I just reached a point where this was the way to go. I save money on office expenses and let somebody else take care of the cost and maintenance of the equipment, which allows me to take care of my customers. I wished I’d done this sooner.”

There are also many benefits for the hosting agent. As Allan Fromm of An*ser Services in Green Bay, WI stated, “There are a lot of small business people out there trying to figure out what they’re going to do about equipment,” says Allan. “I host two clients–one located in Racine, WI and the other in Rochester, NY.”

How it works: Allan explained that there are three components to be concerned with when hosting: How does the client’s customer get their calls to the host?  How does the hosting client get their client information? And how does the agent receive the audio for the call?

Allan’s office or the client can program the client’s accounts into the Infinity system. The client purchases Microsoft Remote Desktop and a program called Terminal Services for their PC, which connects to Allan’s Infinity in Green Bay. The client then loads Amtelco Windows Operator onto their computers, which counts as a seat license. This remote operator position accesses the data utilizing Terminal Services over VoIP.

The client’s customer’s next step is to call forward their business phone to an 800 number, which is then pointed to a local number at Allan’s location and then into the switch. Depending on whether they have a footprint in the area, they can also use CommPartners, which provides local DID numbers. If the client’s customer doesn’t have a local footprint, ComPartners will charge them accordingly. These calls are on an unlimited basis.

When using CommPartners, the call goes to a local CO where it is routed over the Internet and then into Green Bay. An Internet gateway at Green Bay routes the call into the Infinity system. The gateway equipment changes the Internet protocol (the 1s and 0s) into a T1 or PRI configuration which then plugs into the Infinity to generate the call.

Ellie Hill, from Answerline Telemessaging in Seattle, was in the process of signing a new lease for office space when she was approached by Wayne Scaggs, her equipment vendor from Alston Tascom. He asked her if she knew about the new hosting opportunity that was available from Altson Tascom, which uses VoIP. She hadn’t heard of it but wanted to listen since she had known and trusted Wayne for many years. After weighing the pros and cons and talking with others about the idea, Ellie gave it a go and is very happy she did.

Ellie mentions that along with the savings, she personally likes the flexibility that hosting offers her. Ellie now works from home and is more available for her young daughter. She avoids rush hour traffic and no longer has to pick up her operators when there is inclement weather–one big headache now eliminated because of hosting.

“Finding good agents is now a thing of the past,” says Ellie. “The major factor that sets us apart from other services advertising for agents is that we offer the ability to work from home, which is a big plus. Also, agents who don’t want to come in for a three-hour shift due to traffic or the commute are now a thing of the past.”

Ellie has been hosting since April 2006, and she understands why some TAS owners may be leery of hosting at first because of the trust factor and giving one’s account base over to another service or vendor. After a year, Ellie states, “I have never doubted my decision and would highly recommend it to anyone who is contemplating that major step of equipment acquisition.”

Tom Camp from Answering Memphis who has Betty Hendrix’s accounts states, “There are many smaller companies using old technology. They are either going to have to make an investment of $80K to $150K in new equipment, or they are going to have to sell their service. How is a company billing $250k per year going to justify spending $150K or more for a new piece of equipment? They cannot justify the costs. I think hosting gives them a third alternative.”

Tom mentioned that it takes a special breed of people to make it through the complexity and intricacy of installing and maintaining the likes of an Infinity or CMC. “It is much different than the days of the old analog equipment where you program the account, turn the thing on, and start taking calls. There is so much more tech work involved, from the telephone/PRI/T1 side of things to the data lines and programming of the accounts. I feel the small mom-and-pop companies are going to have a difficult time making the transition of buying the equipment, getting it installed, and hiring the right people to run and maintain it. It really is a big deal!”

An important point mentioned by Tom is that the marriage between the affiliate and client involves not just dipping your toes in the water, but a total body submersion. “Hosting is a serious proposition. The affiliate needs the right equipment, a back-up generator, an air-controlled environment, an IT person to maintain the equipment, and qualified staff to field additional questions. Part of the contractual agreement between the two parties should include a Quality of Service clause. Because of the high stakes, both individuals should share those risks equally. I commonly ask my clients for a three-year commitment.” When asked why Tom chose to implement the hosting idea, he states that his objective was to simply lower the costs of his equipment. Covering overhead cost is a net gain from hosting, and he says he would certainly love the ability to help other service owners.

The Economics of Hosting: If you are billing less than $500K per year, then you have a big decision to make. You have to ask yourself the question: Should you host or buy new equipment? If the equipment costs around $90,000 to $150,000, then your monthly payment can be $2,000 to $3000 per month, plus another $800 to $1200 for service fees. Other items you might not realize that you need include peripheral equipment like an integrated firewall, a Cisco router, a Windows 2003 server so you can work your remotes, Windows SQL, Windows Server 2003, plus updates on all of your remotes. Tom laughs when he states that you might even need a Microsoft Certified Engineer to make it all work! So plan on at least $3000 per month or more to move to a new system. Can a small business owner afford that kind of expense? And can he afford to hire the talent it takes to run such a switch?

How much is it going to cost the client to do hosting? They would need to sign a three-year commitment with Tom, but they would have to do that anyway with a leasing company. The $5000 down payment needed to start is comparable to the up-front cost for a new piece of equipment, and there is also the monthly cost of approximately $200 per seat plus $.05 cents per minute. On the other hand, there’s no hassle, no techie, no office, and no worries about equipment failure–plus you have happy operators.

Some of the people I interviewed think that the down payment should be $5000 per seat versus per installation since that’s what they most of their manufacturers charge them for licensing. Others think that the client should sign at least a three-year lease with the affiliate because that’s what IBM and most cellular companies are doing to insure that their up-front costs are covered. One thing I do know is that there are many changes going on in the telephone answering service industry, and only time will tell how this thing called hosting will fare. So is hosting for you? You decide…

Steve Michaels is a hosting broker who can be reached through TAS Marketing at 800-369-6126.

[From Connection Magazine June 2007]

The Virtualization of the Call Center

By Ari Sonesh

Lowering costs while providing better service within the call center environment is a desirable yet elusive goal. The problem that call centers have faced is a “no win” situation. They have been forced to choose between two seemingly mutually exclusive options. The first is providing callers with excellent service through staffing for peaks, which is expensive and may drive a business to losses. The other is staffing lean for economy, which results in lackluster service and can, in turn, also drive the business to losses. Either way, it is “no win.”

The solution is virtualization of the call center. Virtualization allows adding skilled resources whenever and wherever they are needed. In every enterprise, there are capable personnel ready to help out when needed with call center shortages. Those capable personnel should always be readily available and deployable when they are needed. Furthermore, with the advent of high-reliability broadband connectivity and enterprise mobility, the best qualified personnel can often be reached on mobile devices. These skilled employees, distributed throughout the enterprise, are actually informal, casual, part-time call center agents.

Virtualization does not only refer to staff and communication channels. It also encompasses access to caller information. Formal call center agents and informal ones alike need customer information screen pops. Further, as the contacts are intelligently routed, transferred, and rerouted through the enterprise, the information must travel along with the call. This is only possible if covering personnel are truly part of the call center technology infrastructure.

Virtual call centers require not only appropriate technology, but also appropriate licensing schema for that technology. While high-speed broadband IP networks and IP call centers are making virtual call centers possible, it takes special casual agent pricing to make it practical and economically viable to have a large number of people participating in a part-time way in the call center.

With virtualization, every employee can become part of the call center. The increased recognition and validation of virtual call center models will lead to the re-engineering of the call center as we know it. With this change will come a greatly improved customer experience. We will be seeing a fundamental remodeling of the entire customer contact process. Today’s technology as we know it, will be replaced with the virtual contact center.

Ari Sonesh is President and CEO of CosmoCom, an enterprise contact center technology company that enables organizations to unify and intelligently route multiple customer communications channels including voice, video, email, voicemail, and Web

[From Connection Magazine June 2006]

Let Your Next System Upgrade Be Your Last

By Cary Fulbright

Nothing scares contact center managers as much as the looming need for a system upgrade or the end-of-life of existing systems. These changes are inevitable for businesses who buy, install, and maintain their own call center systems. However, unlike death and taxes, system upgrades can be avoided.

Taking advantage of Software as a Service (SaaS) offerings provides call centers with a variety of benefits and is an affordable alternative for call centers of any size. The SaaS model means never having to do another software upgrade or purchase additional infrastructure to accommodate your growing call center. Plus, when using SaaS, the software is always current since it is upgraded by the provider as new releases are available.

What is Software as a Service (SaaS)? SaaS is a model of software delivery where a company provides customers access to software, eliminating the need for that customer to conduct maintenance and daily technical operation and support of business software. SaaS is a model of software delivery rather than a market segment so it can include a variety of software.

Key Characteristics of SaaS Software: The key characteristics of SaaS software include:

  • Internet-based access to, and management of, commercially available (that is, not custom) solutions.
  • Easy and rapid deployment because hardware and software systems are already installed, configured, and running. This means that it takes weeks versus months for a roll-out.
  • Subscription licensing means no upfront capital expenditures, low pay-as-you-go operating expenses, and the ability to scale capacity up or down over time to meet needs.
  • The solution provider handles all system software and hardware upgrades, updates, patches, and maintenance, without customers needing to do anything on their end, so every customer always has the most current release.

What Does This Mean for Your Call Center? This last point is the most exciting to many contact center managers. SaaS call center solutions take the entire burden of system upgrades off your hands and your project calendars. There’s no longer the disruption of installing new components, integrating them into your existing infrastructure, and training your staff on all the changes. No more escalating maintenance costs and contracts until it gets to the point that it’s cheaper to throw out what you have and start over. Call center managers can stop being systems administrators and can focus on their real business.

SaaS software can benefit call centers of all sizes by enabling them to build a comprehensive, feature-rich call center – anywhere in the world – without any hardware, software, or upfront capital expenditures. In addition to the cost-savings and benefits to the business bottom-line that the SaaS model can bring, this type of on-demand, hosted service allows for easy set-up and administration of at-home agent workforces as well as singular or distributed, multi-site centers acting as one, regardless of geographic location.

What’s in SaaS Call Center Solutions: A comprehensive and integrated call center software should allow any business with just a PC and a broadband connection to deploy an integrated suite of powerful capabilities including call blending and prioritization, predictive dialing, Automatic Call Distribution (ACD), Customer Relationship Management (CRM), Interactive Voice Response (IVR), Computer Telephony (CTI), remote agent capabilities, skills-based routing, call recording, do not call list and call abandonment compliance, silent monitoring, real-time reporting, and centralized management.

Key Points to Consider When Selecting SaaS: Along with ensuring that you have the right features to meet your needs, there are five key areas to consider when selecting the right solution for your call center.

Do your homework: Understand the key features of a good on-demand solution and ask to speak to customers using the solution in a similar way to how you will be using it. The quality of VoIP may vary with different solutions, so make sure you are receiving business-quality VoIP. Check the difference between the features they offer and the solution’s ability to integrate with existing programs that your business uses.

Assess your business needs: Consider what the call center will be used for – the number of seats you will need, whether it will be used for inbound calls only, outbound calls only or both, what CRM features you need, where your agents will be located, and so forth.

Deployment and training: Ensure deployment can be done quickly and can be done with your existing telephone service. Additionally, make sure agents will be able to quickly use the solution. How easy is it to learn and how are agents trained?

Assess workforce needs: Consider the location of agents and what type of management and support needs they have. If you will be linking multiple locations or at-home agents, what kind of tools exist for agents to interact with one another and management for support on the job? What tools exist for management to monitor and help agents that they are not in physical proximity to?

Technical support: Review support offerings. What will be available to you and how will the vendor work with your in-house technical team? Make sure that whatever the problem may be, you can work with the vendor’s team to quickly resolve issues. Support offerings can include 24/7 phone or email support, comprehensive FAQs for solving questions yourself, training and manuals.

SaaS solutions can lower overall costs, provide greater flexibility, and ensure that your call center is automatically updated with the newest software releases and features. However, as important and powerful as these benefits are, selecting the right solution for your call center needs is critical to helping you achieve the benefits that SaaS can offer. There are a number of SaaS solutions available on the market, but doing your homework is a must before committing to one.

Cary Fulbright is VP of marketing and products for Five9, Inc., a provider of on-demand telemarketing, customer service, and call center solutions for customer interaction management. He can be contacted at cfulbright@five9.com or 925-201-2215.

[From Connection Magazine June 2006]

Is a Hosted System in Your Future?

By Wayne Scaggs

Today’s call center and telemessaging environment is more challenging than ever before. Clients have greater access to information and are more demanding because they know that your competition is only a phone call away. The ability to deliver consistent, personalized service – and to do it cost effectively without diverting resources from other business needs – is critical to attracting and retaining clients so that your business can profitably grow.

Often, this means limiting service offerings, increasing staff to manually process a greater number of client demanded features, or obtaining a system that provides additional features and applications while improving efficiency. The question then is, which of these three options provides the highest probability of achieving your goals?

Limiting your service offerings makes it difficult to attract and retain clients and, over time, decreases your client base. Increasing staff increases labor costs, decreases cost effectiveness and, in the long term, does not attain your goals. Obtaining a state-of-the-art system that provides not only the features and services demanded by your clients today, but a system that leads the way for anticipated client demands and can decrease your costs – is the best of these options.

Traditionally, this third solution required the purchase of a system. However, there is an alternative, subscribing to a hosted system. When reviewing your requirements, and deciding whether a system purchase or hosted system is right for you, here are some items to consider.

Set-Up and Installation: Hosted systems involve less set-up and installation on your premises. The installation is less complicated because there is less equipment on the premise site and the telephony requirements are much simpler in a VoIP environment.

Growth Management: Managing service growth is easy in a hosted environment. Additional trunking or talk paths can be added quickly and easily if your capacity is exceeded. The same applies to adding agent workstations. Another advantage of hosted services is that costs can decrease if your client base or call flow declines (such as with seasonal businesses) because your call usage decreases.

Maintenance: Should there be maintenance problems with the system, the provider has technicians to resolve them. The customer’s site has the responsibility to maintain only their network, workstations, and Internet service. Spare parts are not required on premise for servers and switches. There are no annual maintenance contracts; software patches and upgrades are taken care of by the host.

Security: Hosted systems provide centralized security managed by the provider, which means that you avoid the associated cost and responsibility. In addition, hosted systems have good physical security in the provider’s datacenter, generally greater than is common on a customer’s premise.

Reliability: Typically, carrier grade reliability is provided for hosted services with redundancy exceeding that of premise-based equipment.

Virtual Office: Another major advantage of hosted services is the ability to quickly and easily set up a virtual (remote) office or site. All that is required is broadband access. Remote agents can work from home or from a satellite office.

Business Continuity: One of the most important benefits of hosted systems is disaster recovery. Hosted systems are backed up with the most current configuration and data as well as greater redundancy than what is often found at premise-based sites. Should there be fire, flood, tornado, hurricane, or other disasters in your area, your replacement costs are limited to the agent stations rather than an entire system. More importantly, your entire service can be quickly relocated to any area where there is broadband access, whether it is your home, a hotel, or a location hundreds of miles away from your call center.

Cash Flow: Hosted services require a much lower investment than capital purchases of customer premise equipment.

Software Upgrades: In hosted services, upgrades are included in the fees. There is no need for your staff to manage upgrades or be involved in this process. Since there is no additional cost associated with the upgrades, the decision to upgrade need not be delayed to preserve cash flow requirements. This means that your system and service offerings are always up to date.

Mergers and Acquisitions: Hosted services offer the ability to deploy additional agents and services in any increment at any location having broadband access. This means that you can easily convert or merge another facility into your system.

Obsolescence: A hosted system eliminates the issue of your system becoming obsolete, which is often accompanied by increased maintenance costs and/or the difficulty of obtaining spare parts.

Conclusion: Hosted systems can offer savings and simplicity. Without the need to purchase a complete system, there is less initial cost, and much less equipment to maintain. Additionally, the agent workstations can be located in a centralized office environment, in remote locations, or in a combination of both. There are no service maintenance contracts, and the system is kept up-to-date by the host, and costs are predictable and manageable.

Wayne Scaggs is president of Alston Tascom, Inc., a provider of hosted systems in the teleservices and call center industry. For further information call 909-548-7300 or email info@alstontascom.com.

[From Connection Magazine June 2006]

Hosted Services

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.

If your call center has a need that fits one of these categories, see our current list of hosted services providers for the call center and teleservices industry.


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.

[From Connection Magazine April 2005]

ASP and Hosted Service Providers

By Peter Lyle DeHaan, PhD

Author Peter Lyle DeHaan

In simple terms, using a hosted service is like renting software. The Internet is a common element to hosted services. Typically software resides in a central server at the provider’s location and users access it via the Internet. According to Shane Green of Creative Entropy, the provider of SqueezeMeIn appointment-scheduling software, with hosted services, “There are no updates to worry about, no data backups to slow down your network, and no expensive hardware required to operate it. It is all handled by the provider. With the program running from one location it can be modified and new functions added easily. When the application is enhanced, there is no effort required by the call center to begin using the improved functions.” This is one of the chief advantages of using a hosted service.

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). Of course there are disadvantages to apartment renting and advantages to home ownership, but they don’t apply to this analogy!

In the same way, using a hosted service has a low initial cost, no long-term commitment, and is highly flexible as your needs and usage level change. In fact, many users of hosted services echo the sentiments of Earl Jarmanof LaBell Exchange: “We chose [Almond Hill’s] TurboSchedule for three reasons: simplicity, support, and affordability.” Stacy Polinsky of Tel-us Call Center, who also uses Turboscheduler, added, “You pay for the calendars as you need them, so you have no capital expense.”

Consider these four reasons to use a hosted service.

Try-It-Before-You-Buy: Think of this as an extended test drive. For a modest cost and minimal commitment you can assess a hosted service. If it works out, you can go ahead and buy the software or system for your office. However, if it is not what you expected, you simply cancel the service and move on, happy that you did not make a capital expenditure on something you are not likely to use.

Bootstrapping: A second scenario for using a hosted service is to build a client base and generate recurring revenues in a controlled way before buying any additional software or equipment. Once you have established a threshold of monthly revenue, you can then invest in the technology and bring it in-house. This is a low-risk way to pursue new markets and specialized niches that require services or capacities that you don’t have. This is feasible because you do not need to make a capital investment until after you have developed a client base and revenue stream to pay for the equipment. You can then determine when it is cost-effective to stop renting and buy, just as you can in our preceding apartment versus home example. Of course, some users will appreciate the utility, flexibility, and ease of the hosted service model so much that they will continue in that mode indefinitely.

Conserve Capital: The third reason to pursue a hosted service approach is to avoid making a capital investment, retaining funds for other purposes.

Occasional Use: The fourth justification is for a call center to obtain services that it needs on an intermittent basis or for the specific needs of one client. Since it would be difficult to justify the cost of an outright purchase in either case, using a hosted service is an ideal solution.

There are two business models for providing hosted services, though the line of distinction between the two is not always clear and can overlap. In fact, several of the vendors covered in this article fall into both categories.

Manufacturers: Often manufacturers want to provide low-cost options for prospective customers to try out products before they buy. While all of the preceding examples are objectives that the manufacturers pursue, the first two models (try-it-before-you-buy and bootstrapping) are their main objectives, though their pricing structure is viable when customers want to use their hosted services indefinitely.

ASP (application service provider): An ASP is a company whose primary business is to provide hosted services. Buying the software or equipment is generally not an option. So ASPs focus on recurring revenue (just like a teleservice company) and the last two usage scenarios (conserve capital and occasional use) are ideally suited for ASPs. The bootstrapping model is also of interest to ASPs, although in that scenario there is not an option to buy their software or equipment in the future.

“The ASP approach makes so much sense for Web-based applications,” said Ray Shaw, president of Business and Professional Exchange. “It also relieves our staff from the routine headaches and hassles of supporting an application internally.”

See our current list of hosted services providers for the call center and teleservices industry.

Peter Lyle DeHaan, PhD, is the publisher and editor-in-chief of Connections Magazine. He’s a passionate wordsmith whose goal is to change the world one word at a time.

[From Connection MagazineJul/Aug 2003]