Ventana Research Analyst Perspectives

The CCaaS Business Case Shifts from Costs to Capabilities

Posted by Keith Dawson on Dec 14, 2022 3:00:00 AM

The market and buyer landscape for contact center operating services has changed significantly since the onset of the pandemic, now almost three years ago. Three years would have been enough time for some significant shifts, even without the pressure the pandemic put on service operations. Nevertheless, with on-premises systems now taking a backseat industrywide, it’s fair to say that CCaaS, which typically refers to cloud-based systems, now represents the lions’ share of spending and therefore stands as a proxy for the industry as a whole. Ventana Research predicts that by 2026, 7 in ten organizations will have moved all or part of their contact center technology into the cloud to attain greater flexibility and scalability.

The impact of unified communications/contact center combinations has been widely felt, as has the rise of Communications Platform as a Service and similar developmental platforms. The totality of features VR_2022_Contact_Center_Assertion_3_Square-1that buyers expect to see in a modern contact center platform has shifted to become more digital, more automated and more integrated with other enterprise tools in the front and back office.

This changes the fundamental argument vendors need to make to distinguish themselves. The original case for CCaaS over premises-based tools was rooted in lower cost: buyers would save money in technology ownership and administration, as well as in real estate and scalability. They would benefit from the higher reliability of broad cloud platforms and from more frequent state-of-the-art updates.

Those arguments are now fully baked into the cake. It’s unlikely that a vendor can make that case stick against peer competitors without some other significant differentiation. CCaaS has strong cost control characteristics that can attract buyers, but unlike the benefits from earlier iterations of the cloud, these arguments are more subtle and require different messaging — rooting the cost equation in a set of features that expand the functions of a contact center tool well beyond simple interaction handling.

The business case takes two steps:

  1. CCaaS enables better features like agent assistance, real-time guidance, next-best-action awareness, CDP, AI and intelligent self-service, all of which can reduce ongoing operating costs.
  2. To fully realize the benefits of these more complex features, buyers need to move to more broad-based software platforms that touch and integrate a wider spectrum of business applications.

The argument for CCaaS boils down to the fact that in today’s world, access to modern features affects cost more than any other factor, and the cloud is the only way to access those superior features.

Since labor represents the vast majority of ongoing costs, that’s the best place to point buyers towards savings. Instead of the CapEx vs OpEx argument that drove earlier CCaaS and still drives some buyers on the low end, the real savings come from the enhancements the cloud makes possible or easier. Buyers have to understand that though they still need to pay for the use of the equipment just as they would on-premises, the benefits will come to operations.

Vendors should be discussing how the cloud, specifically, can reduce costs for more complex or agented interactions. They should present buyers with answers to pointed questions like: Does having an omnichannel approach encourage more efficient handling? Does self-service cut down on handling costs? Making these linkages helps the buyer associate CCaaS not just with lower costs, but with improved efficiency.

A CCaaS-specific cost reduction argument starts with making agents more efficient during voice calls and digital interactions. Intelligent self-service moves fewer calls to agents in the first place, and making the agent more efficient reduces the need for headcount. To make these arguments on behalf of CCaaS is to say that all the advancements the industry is touting — AI-powered chat, agent guidance, optimized digital unified communications and video capabilities — can be put in place more quickly, with less overhead and with minimal ramp up time for training and value realization.

Then, in an echo of the current interest in workforce engagement and “work from anywhere” management, the case shifts to how CCaaS can better balance a remote workforce that scales up and down more rapidly and more often. In that way, scalability and reliability, which are classic CCaaS arguments from earlier days, are now repurposed as part of the answer to cost-control questions.

From the buyer side, organizations should be recalibrating feature priorities based on the realities of remote agents and increasing digital interactions. For many, this is a formalization of some of the shifts put in place earlier in the pandemic. For others, it may reflect how their organizations are relying more on service outcomes to power longer-term profitable customer relationships in tandem with other stakeholders in other adjacent departments.

Buyers also need to codify the specific circumstances which may still require either premise-based or hybrid systems. There may be regulatory or other reasons for holding certain contact center applications on premise, even if parts of an operation migrate to the cloud.

From a cost point of view, buyers should urge vendors to make it easier to compare pricing for more complex deployments that include wider varieties of software and more expansive platforms. Mixing contact center software with other tools, especially data and AI tools, makes comparison for even mid-sized or smaller deployments more complex than it was in the past. Vendors would be smart to get ahead of that buyer need.

Regards,

Keith Dawson

Topics: Customer Experience, Voice of the Customer, Contact Center, agent management, Customer Experience Management, Field Service, customer service and support

Keith Dawson

Written by Keith Dawson

Keith leads the expertise in Customer Experience (CX), covering applications and technology that facilitate engagement to optimize customer-facing processes. His focus areas include: agent management, contact center and voice of the customer and technology in marketing, sales, field service and applications such as digital commerce and subscription management. Keith’s specialization is in natural language and speech tools with intelligent virtual assistants, multichannel routing and journey management, and the wide array of customer analytics. He is focused on how businesses can break down technology and operational silos to provide more efficient processes for two-way engagement with customers. Keith has been an industry analyst for more than a decade and prior was the editorial director of Call Center Magazine. There he pioneered coverage of cloud-based contact centers, speech recognition and processing, and the shift from voice to multichannel communications. He is a graduate of Amherst College.