Forget the "call center in a box." It's time to start thinking about the call center in a cloud. The cloud, that is, of the network itself.

For the first time, thanks to the emergence of IP as a switching platform, call centers have the option of dispensing with wide swaths of infrastructure. Many companies have taken steps to integrate IP into their call centers by putting it into their ACD or PBX, or migrating to an architecture that relies on IP for moving different kinds of data around.

But it's also possible now to hire a partner to host all or some of the basic call center substrate in the network. Think about the possibilities: instead of investing huge sums into real estate, hardware and software, you can rent all the technology — in the form of IP applications — and operate anywhere in the globe for a per-minute price. It's revolutionary.

"If someone wants or needs a call center in their business, before hosting they had two choices," says CosmoCom's (Melville, NY) Steve Kowarsky. "They could buy, build and operate one on premises; or go to an outsourcer who would buy, build and operate on their premises."

Hosting, he says, provides a third alternative — one that involves your premises, but little or no technology. You get the technology — everything involved in the movement of the call from point to point, and the measurement of its results — as a service. Kowarsky says that hosted options have reached feature parity with premises-based equipment.

Given that parity, there are several advantages that come from hosting:

• Avoiding the capital expenditure of new equipment, which is considerable.
• Lowering the total cost of ownership also of the operating expenses: the care and feeding of that tech infrastructure.
• A lot more flexibility in terms of call handling capacity. If you are using a hosted model, you pay for what you actually use, rather than for your theoretical peak periods.
• And you achieve "location-independence" — IP hosting is unconcerned with where you locate your people. That means you can string together a network of mini-centers, move offshore, and explore different modes of operation, whatever business conditions dictate.

One sector where IP hosting is taking hold is among outsourcers themselves. Among mid-size outsourcers are many that were created through mergers and acquisitions that themselves own a hodgepodge of technologies from different vendors. Since the true core competency of an outsourcer is in agent management, using outside hosting relieves them of the technology headache and gives them more options for capacity management.

Also, outsourcers are beginning to offer hosting to some of their customers. Kowarsky describes it as an account-control issue. "Here you have an outsourcer that has a sales force out there, talking to call centers, talking about what projects they might outsource; they are in a good position to find projects that fit the hosted model, rather than the outsourced model, and they really know the call center business."

According to a report last year from JupiterResearch, hosted IP call routing systems can be had "on a per-agent or per-port monthly fee, starting around $175, with a one-time setup fee of around $150 per agent." That contrasts with an estimated cost of $175,000 to $225,000 for a 30-seat on-site IP call routing system. Jupiter calculates that pure IP becomes more affordable than hosted IP after about three years.

Hosting & Offshoring

Because it dramatically decouples location issues from operations, IP hosting is having an impact on the offshoring movement. And paradoxically, it may help integrate the offshore call center industry more tightly with the U.S. domestic industry.

EagleACD (New York, NY), for example, is an outsourcer that offers hosted IP tools to its clients globally. Currently, 65% of its traffic is headed offshore, primarily to India and the Philippines, according to EagleACD's president and CEO, Kent Charugundla.

Charugundla says that initially, clients were requesting services that involved routing toll-free number traffic to India. But they soon realized that they were paying money for bandwidth to keep calls on hold in India. By using EagleACD's hosted services, however, they could hold the call at the gateway in the U.S. and use bandwidth only when an agent is actually available.

That kind of cost-saving measure is just part of the attraction, he says. Using IP as the platform for hosting allows EagleACD to bundle value-added elements like Web chat functions, e-mail management, and predictive dialing, on top of the call routing substrate, using CosmoCom's IP technology as the platform underneath its call center offerings.

And because IP allows the labor force to be distributed as widely as the client wants, even across continents, an offshore outsourcer can plausibly make the case to a potential U.S. end user that calls can be handled at whichever location is most appropriate. U.S. locations can be used for high value customers, offshore for lower value or less sensitive contacts.

Location-independence allows the offshorers to offer India, Canada and the U.S. as part of a single multilayered package.

"The hosted model does not need to follow the offshore market," Charugundla says. It enhances the role of home and remote agents, which he says is accelerating very quickly.

"They can use a virtual labor force and stay flexible to operate 24 hours a day without pigeonholing themselves into a physical box," he explains. And by "box" he doesn't mean the cabinet we used to think of as a switch. He's talking about the building itself.

IP Takes on Financial Services

Ocwen (West Palm Beach, FL) is a company that describes itself as a process management solutions provider with roots in the mortgage servicing market — but now finds it's in the business of offering their spare call center capacity as a product in itself, thanks to IP hosting.

Ocwen turned its own core competency, which is in dealing with customers for financial services applications, like collections and mortgage processing, into a call center outsourcing opportunity. Ocwen's new Advanced Contact Center Enterprise Solution (ACCES) is a turnkey infrastructure, entirely network-based, that runs on Cisco's (San Jose, CA) IP Contact Center platform.

"We developed this for our own use," says Ocwen's Dale Pickford. "We were trying to take the single call center and make it global, to reduce the cost of transport." He says that Ocwen built a full suite around a series of existing tools — Aspect's (San Jose, CA) workforce management software, Verint's (Melville, NY) call recording system — and a custom software that they call a "decisioning engine."

"It's an AI-based solution that we use to optimize our call routing," Pickford says.

"It identifies the caller, does a data dip to work out where we know it from, looks at the account the phone number belongs to, runs analytics against it to identify the highest probability for [the call's subject matter], and routes it to a specialist in that call. It also opens up whichever app is needed, and the customer records."

He says that Ocwen's first customer was in the financial services sector, with the next in outbound telemarketing. "We do inbound customer service, tech support, collections campaign management, welcome campaigns, a little bit of everything. People forget that financial services is a very complex transactional environment."

The underlying IP has allowed Ocwen to take something built for itself and offer it to other companies as a hosted service: "If you bring me the premise, and the bodies, we will supply the telephonics, all the infrastructure, IVR, call routing," and so forth, he says.

It's catching on in small and mid-size centers, he says, in the 50- to 250-seat range. For example, for a company that may have a handful of centers with different switches viewing centers as a whole may be difficult, or impossible.

Ocwen itself has two large call centers in India, in the large cities of Mumbai and Bangalore. And although Pickford says Ocwen is seeing opportunities for growth in using the Indian labor force for its own centers, he points out that his hosting clients have a wide view of the possibilities.

"They're asking us to put the [IP] gateway in the U.S., or nearshore, or offshore. Give us an address, the number of agents, and the features that you want, and I'll see you in a few days." He says that the last customer brought in was outfitted in a month. "They had a fully functioning call center with full IVR, inbound, outbound, dialer and full call recording in just 30 days," he says.

The underlying IP platform makes it simple to relocate an entire operation on short notice. For example, Ocwen recently upgraded its Bangalore center from 600 seats to 850. To do that, Ocwen needed to move to a new site. "We moved it and reprovisioned it in a weekend," Pickford says. "The teardown and reinstall — the switch is all software located at my gateway."

There's strong demand in India for equipment and services that support outbound campaigns. In the U.S., the cost of having agents on hand relative to the results delivered from outbound calling is increasing, making it less economical to run those kinds of campaigns from the U.S. But in financial services, which relies on what Pickford calls "intelligent outbound" — collections and other targeted calls, like new account welcome calls — has found India a more cost-effective launching pad from which to run outbound campaigns.

"We put our dialer next to the gateway, in the U.S.," he says. "If it gets a bad call, you don't pay for the haulage back and forth into India. So the number of circuits needed drops dramatically."

This kind of innovative mix — putting the agent in the most cost-effective location offshore while the software that guides the transaction remains closer to the customer — is just one example of the way that IP lets you run centers that don't exactly look like the centers of yesteryear.

There are other things that Ocwen and other service providers are considering, much of it generated by client inquiry. "The ability to match data and voice as a single stream has changed the way we do business, and it continues to change as people look at it and say 'now, I wonder if I can do this?'" Pickford says. "You start exploring things like how a chat session can be turned into a voice call, and the agent is looking at the transcript of the chat session. We're starting to blur those lines, and look at the total contact, not just the voice."