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6 arguments against Cloud in Contact Center...

From time to time everybody comes across articles (especially from cloud vendors), which provides valid arguments for the usage of cloud solutions in contact centers.
Even if most of the described arguments are valid, justified and we also find a good portion of the cloud solutions amazing, there are also disadvantages that should not be ignored..
We want hereby to highlight some arguments AGAINST the use of cloud solution, without demonizing them in general.

1. Cloud = Cost-efficient?

Cloud solutions are often touted as cost-efficient. But no company has money to waste; everyone wants to make profit. A calculation for a cloud solution is composed of many components: Hardware, Software licenses, System operation, Support, Software maintenance (development, bug fixing), Telephony costs, ...
Providers usually calculate a price for their cloud solutions that roughly corresponds to the revenue for software sales and operation/maintenance within two to three years. They then hide this in a simpler pricing sheet. The provider's specialized operating model may be more efficient than in-house server operation - but after four to five years, the math just doesn't add up.
So where are the financial advantages of the cloud? Mainly in short-term or flexible payment models, such as pay-per-use, if the volume does not have to be firmly committed. Contracts with fixed license volumes should be avoided.

2. Cloud = Unlimited scalability?

People like to talk about "infinite computing power in the cloud" (provider’s quote), this is simply not true. It may be much easier to add computing power, but that also depends on the software architecture the vendor is running in the cloud.
And: It rarely works with legacy software that was actually developed for "on-premise" usage (installation on the customer's premises) and is now installed in the cloud. Other parameters are also relevant: the number of dedicated telephone lines connected, storage space for voice recordings (which quickly costs money as additional upsell) or other integrated systems.
An example of one of our projects: With 3,000 agents, the necessary API queries to a (market-leading and well-known) cloud CRM system were already the limiting factor.

3. Cloud = Secure?

What about data protection? Of course, a provider must be trustworthy when handling business-critical company data (i.e., customer contact data in the contact center). As a company, you are obliged to ensure data protection - especially with international providers.
On July 16, 2020, the European Cout of Justice (ECLI:EU:C:2020:559) ruled that the "controller (...), in each individual case - if necessary, in cooperation with the recipient of the transfer - (must) verify whether the law of the third country of destination ensures an adequate level of protection of the (...) personal data transferred (...) in accordance with Union law".
In short, every company owning data must ensure that all that sensitive data is protected according to EU standards - in any the countries to which the data is transferred. Of course, one can apply "the principle of hope" and not or rather benevolently carry out this verification, but in a serious incident, 4% of the global cooperate revenue is at stake. At the same time, serious auditing is very costly and resource-intensive, not something that can be done lightly!
For contact centers, data worth protecting includes at least phone numbers, e-mail addresses, contact history, voice recording and, depending on the complexity of the solution, much more... Remember that data in a public cloud is located on the same servers together with data from many other companies - an attractive and worthwhile target for hackers.

4. Cloud = Quickly operational?

Another common claim is, that a cloud is immediately ready to use and can be brought to operation quickly.
Some cloud providers brag about their solution as the gateway to the home office / New Work and the holy grail of digitalization. But what is being hidden: If, despite the new cloud, home office employees have to be visited twice a day by "traveling colleagues" to exchange paper documents, something seems wrong. A real story from an real implementation...
Most customers integrate their other systems, such as CRM and document management. However, connecting these takes the same amount of time as on-premise, or even longer if the cloud provider has limited connectivity options to the corporate network. Laying the necessary telephone line can take as long as six months, by which time the provider's telephone charges (with a profit margin, of course) has to be paid...

5. Cloud = Stable?

A common myth is better system stability through a cloud. If you have previously saved on internal IT costs, a specialized vendor with experts can offer an advantage and thus a significant improvement in system stability.
But when the vendor highlights their stability KPI’s, it covers usually only the internal core system. Every cloud solution brings new sources of potential error into the game. Example: The Internet connection between agents and cloud – not included in the provider's error calculation. Looking at the bottom line - the lost employee production hours due to downtimes -  cloud and on-premise are mostly on par. Overall, a cloud solution doesn't seem much better, nor worse, than an on-premise solution...

6. Cloud = at mercy?

Another real-world example: a very large, international and experienced vendor has been delivering a long-standing cloud contact center solution for approximately 1.000 agents to a major customer.
However, the supplier's service has deteriorated dramatically, several system failures per month, support level dropped; also, and contrary to the contract, support services are now provided by the subcontractor from abroad.
The customer escalated - and the provider terminates the services with six weeks’ notice. We are talking about a fully integrated system that has grown over the years, with encrypted data communication, specially laid telephone lines, VPN connection to the customer network, integrations to other systems. Such solution cannot be transferred to a new provider within six weeks... Game Over!
The lawyers may discuss the contractual agreements and the weather the termination is valid ornot. Practically, the customer is dependent on a solution that enables him to maintain the business operations. In short term, he may agree to new conditions imposed by the provider, but on long term, the provider will get blacklisted by the customer...!

Pro tips for your vendor decision

It is not our intention to talk negative about cloud solutions. A cloud is not "bad" per se and can very often be a valid option: For example, innovations can be rolled out faster in the cloud than on-premise and flexible license models can be easily adapted to the business growth. As consultants, we however wanted to point out that there are also risks here. We make these five recommendations to companies:

  • Consider a long-term strategy: where do you expect to stand in five years, will the solution still fit then?
  • Calculate and negotiate a pricing and contract model that fits your strategy
  • Evaluate the integration efforts BEFORE signing a contract
  • Compare costs and negotiate penalties. Also don’t forget to evaluate potential future enhancements for which a supplier will ask for a high surcharge (I.e. storage space for voice recordings, telephony connection, VPN...) at an early stage
  • Involve your data protection department in an early stage
  • Think about fallback solutions - both in the contract model, e.g. with a promised transition period of x quarters after termination, and technically, with a backup solution from another vendor (cloud/on-premise) for emergency operation.

Roland Ruf - RUF Beratung



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