What is a Hosted Contact Center? Pros & Cons

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Our story begins within the walls of the traditional on-premise call center, where clunky hardware and labyrinthine software held sway. Agents toiled tirelessly, surrounded by wires and cables, ensuring that customer interactions flowed smoothly.

However, this impressive facade came at a great cost - regular maintenance and costly upgrades were the price to pay for this setup. The gruelling disruptions during these upgrades often left both agents and customers frustrated and unsatisfied.

On the horizon, a new contender arose, the cloud contact center, with its modern and agile approach. It held the promise of reliability and ease like never before. It was the advent of a new era: Contact Center as a Service (CCaaS)

This cloud-based infrastructure had the power to liberate agents from the confines of the office, granting them the freedom to interact with customers from any corner of the world. It was as if the shackles of geographic boundaries had been shattered, paving the way for a new era of connectivity and efficiency.

So who will be the ultimate, undisputed winner in this duel of on-premise vs. cloud contact center? Read on to find out. 

What is an on-premise contact center?

An on-premise contact center is a traditional model in which an organization hosts and manages its contact center infrastructure&#; including hardware and software, within its own physical facilities or data centers. These are the main features they offer.

• Control and customization: Organizations have full control over the contact center environment, allowing extensive customization to meet specific business needs and integrate with existing systems.
• Data privacy and security: With data hosted internally, on-premise contact centers offer enhanced data privacy and security, ensuring compliance with industry regulations and protecting sensitive customer information.

The primary benefits you get from an on-premise call center are :- 

• Compliance adherence: On-premise solutions provide greater control over security measures and data handling, making it easier for businesses to adhere to strict industry and government compliance requirements. 

• Lower latency and high call quality: By keeping the infrastructure on-site, on-premise contact centers generally experience lower latency, leading to improved call quality and overall customer experience.

Read more: Type of contact centers, features and benefits 

What is a cloud contact center?

A cloud contact center is a modern customer service solution that operates on cloud-based technology. In such a setup, a third-party service provider hosts all contact center resources, such as communication channels, software and data storage on cloud. Here are the main features of a cloud contact center.

1. Remote accessibility: Agents can access the cloud contact center from anywhere with an internet connection, enabling remote work capabilities and ensuring flexibility in agent locations. 
2. Scalable operations: Cloud contact centers offer high scalability, allowing businesses to easily adjust resources based on call volume, enabling efficient management of varying customer demands. 
3. Flexible pay models: It provides organizations with flexible billing options leveraging the distinctive agent and concurrent agent pay-as-you-go models. These flexible options ensure seamless adaptability and cost-effectiveness for your business.

The primary benefits you get with a cloud contact center are: 

1. Cost-effectiveness: The pay-as-you-go pricing model eliminates the need for significant upfront investments, making cloud contact centers more affordable and accessible to businesses of all sizes.
2. Rapid deployment: Cloud contact centers can be set up quickly without the need for extensive hardware installation, reducing deployment time and accelerating customer service readiness. 
3. Seamless integration: Cloud-based solutions often come with pre-built integrations and APIs, enabling smooth connections with other business tools and applications, streamlining workflows and enhancing productivity.

Cloud contact centers have gained popularity for their ability to offer enhanced customer experiences, cost-efficiency and easy adaptability to changing business needs, making them an appealing choice for modern customer service operations. 

Dive deeper: Top benefits of cloud contact centers for businesses 

10 differences between on-premise and cloud contact center

The best choice between an on-premise and cloud contact center depends on an organization's specific needs, resources and priorities. While on-premise contact centers offer more control, some businesses prefer the flexibility and cost-efficiency of cloud-based solutions.  

Here are 10 major differences between them to help you choose the best solution for your needs.  

On-Premise Contact Center 

Cloud Contact Center 

&#;Infrastructure 

Physical hardware and software hosted on-site. 

Cloud-based technology, hosted off-site by a provider. 

&#;Control 

Full control over the infrastructure and settings. 

Partial control, as the provider manages the backend. 

&#;Scalability 

Scaling may be complex and require hardware changes. 

Highly scalable, resources can be adjusted on-demand. 

&#;Deployment Time 

Longer deployment time due to hardware setup. 

Faster deployment with minimal hardware configuration. 

&#;Maintenance 

In-house IT team responsible for maintenance. 

For more information, please visit Cloud Call Center.

Provider handles maintenance, updates, and patches. 

&#;Cost 

High upfront costs for hardware and licenses. 

Pay-as-you-go pricing, reducing initial investment. 

&#;Accessibility 

Limited remote access, typically office bound. 

Remote accessibility for agents, enabling flexible work. 

&#;Integration Capability 

Custom integrations may require more effort. 

Pre-built integrations and APIs for easy connectivity. 

&#;Data Security 

Data stays within the organization's network. 

Provider ensures robust security measures and compliance. 

&#;Reliability and Uptime 

Depends on the organization's infrastructure. 

High reliability with multiple data centers for redundancy. 

It's crucial to evaluate your business requirements and consult with experts to make an informed decision. 

When to opt for on-premise vs. cloud contact centers?

There are varied scenarios in which an organization opts for on-premise vs. cloud contact centers and vice versa.

Typically cloud contact centers are advantages to businesses that aspire to scale quickly without the added hassle of infrastructure and maintenace costs. Let&#;s take a look at some real-world case studies. 

1. A telecom provider experienced surge in customer interactions

India's leading telecom service provider was facing an enormous surge in customer interactions during and after the pandemic.

With social media mentions skyrocketing and the digital revolution sweeping the nation, they needed a solution to maintain flawless voice and data connectivity.

To fix these problems, they turned to the power of a cloud contact center solution. Since then there were able to give 99.99% uptime without any voice lags despite heavy traffic. Also, they were able to provide 24*7 customer care on always-on social media platforms, which improved their customer satisfaction substantially.

What&#;s more?

Within months, their Net Promoter Score (NPS) skyrocketed by a jaw-dropping 500% in just six months for social media interactions. And let's not forget the icing on the cake &#; a 30% improvement in time saved through brilliant, cloud solutions.  

Interesting article: How cloud contact centers boost your overall customer satisfaction 

2. A global transporter scaled their contact center operations during lean period

A renowned cab provider, with a presence in more than 10,000 cities across 71 countries, has witnessed tremendous growth since its establishment in . The company has earned a reputation for its exceptional ability to engage and serve its vast customer base efficiently.

However, in , the company faced a significant challenge when the coronavirus pandemic caused a drastic reduction in movement as people stayed home.

Then what?

Seizing the opportunity during this downturn, the company aimed to enhance its global customer care capabilities, ensuring preparedness to serve its customers effectively when business rebounded.

With a goal to provide immediate, proactive customer service &#; but with a human touch, the company moved their customer support function entirely to the cloud. The cloud contact center&#;s AI component played a crucial role in identifying the most crucial messages among the roughly four million inbound messages received annually from platforms such as Facebook, X, formerly Twitter and Instagram.

The result?

The company was able to attain an industry-leading response rate and prompt case resolution times and saved their agents over 4,000 hours and big savings in the form of lower contact center expenses and lower customer churn. 

Read more: How cloud contact centers gives big financial savings to brands 

How do you migrate from on-premise to cloud contact center?

The on-premise contact center, once a stalwart solution for customer support, is now facing a transformative challenge &#; the migration to the cloud. But don't be daunted!

With careful planning and strategic execution, this migration can unlock a new era of customer engagement and operational efficiency.

• Define your objectives: Are you seeking greater scalability, enhanced agent flexibility, or improved cost efficiency?  
• Assess your current setup: What are the strengths, weaknesses and areas for improvement of your existing infrastructure? 
• Choose the right cloud environment: Does your chosen vendor promise data security, regulatory compliance and integrations? 
• Determine the deployment model:  What is the degree of control and customization you seek in your contact center? 
• Choose a strong cloud partner: Does your partner understand your industry and specific needs? What is their track record, scalability, security measures and customer support? 
• Choose the right architecture: Does your cloud architecture allow for scalability, high availability and fault tolerance? 
• Prioritize migration components: Have you identified the non-critical applications to migrate first?  
• Establish performance baselines: Did you measure your current contact center's key performance indicators (KPIs) to have a benchmark for future comparisons? 
• Create a robust data-migration plan: Did you develop a meticulous plan to transfer data securely, ensuring integrity and consistency? 
• Migrate applications: Did you test the applications extensively to validate their functionality and compatibility within the cloud ecosystem? 

&#;Sprinklr pro tip: If the above looks like a lot of work, partner with a CCaaS solution provider that does it all for you. Sprinklr Service integrates with countless sales, marketing and support platforms to give your customers the seamless experience they deserve. Plus, it offers unmatched compliance and network security for your customer data via a public Sprinklr Security Trust Portal.

CHECK OUT ALL SPRINKLR INTEGRATIONS 

Conclusion

Both contenders, whether on-premise or cloud contact centers are flexing their tech muscles vying for the top spot of ultimate efficiency. Cloud is emerging stronger, like an elegant gladiator wielding scalability and accessibility. On the other hand, an on-premise call center stands its ground guarding sensitive data like a fortress.   

If you want the best of both worlds, consider trying out a hybrid solution like Sprinklr Service. Experience seamless scalability on our cloud platform for swift remote work transitions while maintaining precise control over costs and customer satisfaction.  

Ready to elevate your CX game? Request a free demo of Sprinklr today. 

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