Why SMB's Succeed With Cloud Working Remotely?

Source: The Inner Circle Guide To Cloud-Based Contact Centre Solutions (4th Edition) UK (p.44), ContactBabel Research

If you’re an owner of a small or mid-sized business, you should know that private branch exchange (PBX) systems, or customer premises equipment (CPE) for contact centers, were the best some time ago.

According to the Contact Babel, contact centers with physical telephony provide a wide range of customization and versatile features for outbound and inbound calling. Perhaps these features will make you stand out from the crowd. Yet consider the price and external circumstances when planning to spend a single dollar on on-premise equipment.

The price for adjusting, launching, and operating is around thousands of dollars per agent, paid up-front. Why is it so expensive? Or maybe these days telephony companies have discounts? Frankly, this is a rough price, which includes the telephony infrastructure, maintenance, and service.

What is a Capex model of a contact center?

The shortlist of adjustments for office-based contact centers looks as follows: adjusting of POTS (Plain Ole Telephone Line), PRI (Prime Rate Interface), and SIP trunks. Additionally, you’ll pay for contact center expenses per agent that are rough $25 – 150$ per user/month. Last but not the least, equipment must be in a certain location, office, or building.

Plus, calculate salaries for your agents to achieve the visible picture of the full amount of expenditures.

Here’s where the pandemic disrupted contact centers working with on-premise equipment. From a financial point of view, these contact centers work on the capital expenditure (Capex) model. Invest first and afterward figure out the total cost of ownership (TCO) and ROI.

Why is the Opex model for a contact center better?

On the contrary, cloud-based contact centers use the model of operational expenditure (Opex), which already includes top-notch security, telephony infrastructure, servers, IT staff, and more. Here’s how expenses with the Opex model look like in the US:

Source: The Contact Babel Research

Now, take a look at nearly the same situation in the UK:

Source: The Contact Babel Research

The Opex model represents a pay-as-you-go structure. For instance, the Voiptime Сloud contact center software represents the (Opex) model when you pay for subscriptions of each agent and use outbound and inbound calling features within 48 hours.

Most of all, the cloud-based contact center is suitable for small and mid-sized businesses that need a constant cash flow without excess investments up-front.

However, even the enterprise-level companies moved towards the cloud. Sure, even if you already have your physical telephony equipment, you have versatile options for the hybrid model, the combination of on-premises and cloud.

Rarely mentioned facts about on-premises and cloud techs before the pandemic

The economical disruptions, pandemics, disasters never triggered the work from home (WFH) and remote work as many small and mid-sized business owners think. As a matter of fact, around a quarter of contact centers in the US and UK already had the option of the virtual contact center in 2019.

And events such as economic distress, restrictions, recovery periods just constantly accelerated the cloud contact center technology toward betterment. However, the pandemic made an enormous leap in remote work.

One of the crucial facts telephony companies conceal is that physical telephony has an end-of-life period. Practically, telephony companies are refusing to support those contact centers, which, in their opinion, consume too many resources of a vendor.

The end-of-life period, as you will see further, occurs unexpectedly and leave to entrepreneurs a small room for action. Thus to maintain functionality, businesses have to deploy new telephony infrastructure, and again for an uncertain period of time. And that’s additional tens and hundreds of thousands of dollars.

Take a look at the letter directed to owners of SMEs from Panasonic, dated 2 December 2020:

Dear Partner,

I am writing to inform you of a strategic decision Panasonic headquarter has made, which is to regrettably close the Panasonic Business Communication business (PBX, SIP, and Scanner categories) in a time frame of two years from today’s announcement.

In recent years Panasonic has worked hard to find a way to continue the business by making our organization and its relationships with partners as sustainable as possible.

However, it has become apparent that this is not possible to continue given the current business environment based on the limited capability of factory resources as described below.

  • A sharp decline of the market and rapid shift to cloud-based solutions.
  • Technological mismatch between factory resources/assets and future market needs and trends.
  • Lagging behind our competitor’s R&D activities.
  • A constant financial deficit due to the reasons above.
  • Shift to new types of demand (Teams, Zoom, etc.) significantly accelerated by Covid-19 which makes the future of our business untenable and unpredictable.

It is with great sorrow that we close our business, especially one that has decades of history and trust. Panasonic team will be in touch with your distributors to discuss and study supply scheme going forward and we will be at your disposal to clarify any of the aspect of this decision.

Sincerely yours,
Carlos Osuna
Head of Business Communication Business Unit at the Panasonic

Interestingly, entrepreneurs in Europe and the US have almost equal expectations and demands for the cloud and CPE contact centers. For instance, here're the expectations in the UK before the pandemic period.

Source: The Contact Babel Research

In the US, it’s almost the same. Only 19% of contact centers used the cloud in 2019.

Here are the main reasons why businesses of all levels ordered the cloud between 2015 and 2019.

Source: The Contact Babel Research

Functionality, scalability, disaster recovery, reduction of capital expenditure (Capex), end of technology life are among the 5 top factors businesses use the cloud.

Take a look at markets that benefited from the cloud from 2015 through 2019.


Source: The Contact Babel Research in 2019

Source: The Contact Babel Research in 2019

Here’s must-know data about small, mid-sized, and enterprise-level contact centers that used the cloud from 2013 through 2019.

Source: The Contact Babel Research from 2013 through 2019

According to Contact Babel, from 2013 through 2019, entrepreneurs accelerated the transition to the cloud.

Watch this planned and future cloud-based call routing functionality in 2019 by contact center size.

Source: The Contact Babel Research in 2019

Call recording is a vital feature in on-premise contact centers and in today’s cloud.

Source: The Contact Babel Research shows the call recording popularity in the cloud

Interactive Voice Response (IVR) systems reduce the inbound calling volume and save money, now in the cloud.

Source: The Contact Babel Research indicates the IVR increasing in the cloud

Customer relationship management (CRM) system integration and agent desktop functionality.

Source: The Contact Babel Research shows on average, the hefty 58% of the importance of cloud-based CRM and agent desktop functionality in the cloud

These days, the control and workforce management features are critical for choosing the right cloud vendor.

Source: The Contact Babel Research Data

Interaction analytics features let you understand the big picture of the personal and overall agent’s performance.

Source: The Contact Babel Research Department

Why are cloud contact centers fully-fledged today, not 20 or 10 years ago?

The first profitable private branch exchange (PBX) system was designed in the 1960s. While cloud technologies were not even on a blueprint. Of course, after 40 years of existence without any competition, PBX gained versatile and unique features for customization that we mentioned above.

However, the complexity of customization, engineer's fee, equipment maintenance, high price, and the end-of-life period created a demand for new technology.

The cloud contact center techs started to hit the telephony market in the early 2000s. They've been late for more than 4 decades. The time distance between on-prem and cloud tech left on-prem as the unanimous winner and the industry’s standard.

To change the situation, experts in telephony, software engineering, and cyber protection were forced to put a huge amount of time and effort into making cloud telephone conversation and protection as good as on-premises.

When cloud technology showed up as an effective and economical solution, most companies already invested a hefty amount of their capital in the business. Tens and even hundreds of thousands of dollars of investments in the equipment. Any ideas for switching to the cloud and additional investments had no ground of necessity.

Consequently, the vast majority of contact centers, especially of enterprise-level that used on-premise techs, were forced to revise their opinion in April 2020.

The contact center industry state in April 2020

“We believe many companies already had plans to move to the cloud and that timelines were accelerated by the pandemic more than companies all of the sudden deciding they want to move into the cloud.”

— Kevin Lasky, VP of Operations & Managed Services, SKWeston & Company

A full Q&A session with our partners is here.

Source: The Contact Babel Research April 2020

In the UK and US, nearly 4% of contact centers chose to furlong most or all agents for good in April 2020. Another 20% actively lay off agents to reduce headcount. For SMEs owners, it occurred with losing their customers, brand image, and agents.

Why did these companies furlong their agents in April 2020? It’s because they’ve no other options for business continuity. Really, while on-premises technologies are useful in the office-based environment, they become redundant in times of restrictions.

Contact Babel informs that these companies that choose to lay off their agents use the government coronavirus job retention scheme instead of finding a rapid solution. The scheme promised to pay 80% of the agent’s salaries, up to a maximum of 2.500 £ per worker.

And in the US worked Short-Time Compensation (STC) programs and the Coronavirus Aid, Relief, and Economic Security (CARES) Act, in 26 states. These programs aimed for retention of 55% to up to 90% of the agent’s salaries.

Instead of waiting and achieving part of salaries for an uncertain period, experienced and talented agents choose companies that worked during the pandemic disruptions. Of course, companies that use cloud technologies could afford to hire more talented agents.

The hybrid (on-premises plus virtual contact center options) or 100% virtual contact centers had a plan “B”. They maintain the same level of cash flow and grow both financially and competitively.

And those who previously were hostile to the cloud now left 2 choices, either the bankruptcy or the right cloud contact center vendor. Most of the businesses choose the second.

2021 is the year of rapid switching to the cloud

In the UK, the coronavirus retention scheme ended on 30 September 2021. It means no additional money entrepreneurs left to pay their agent's salaries. Yet restrictions continue to disrupt office-based work.

In the US, on 1 January 2021, most of the federal support programs for contact center agents ended. Now businesses in the US and UK somehow have to support themselves.

Is there a solution to the situation? Sure. The proven way to maintain in the business is to have either a hybrid or completely cloud-based contact center.

The switching to the cloud contact centers and to the WFH model in 2021 is even more rapid than in 2020 because it’s clear the pandemic is here to stay.

Here is what businesses think about the difference of the cloud:

Source: The Contact Babel Research

Here’s an opinion about low total ownership costs (TCO):

Source: The Contact Babel Research

Data about extended functionality and powerful features for businesses:

Source: The Contact Babel Research

The contact center industry in 2022 and beyond

In 2021 the cloud-based contact centers showed practically the low total cost of ownership (TCO) and high return on investment (ROI) in comparison with the office-based centers. The first reason why the switching rapidly causes owners of SMBs contact centers to need the “fast and effective tool” for contacting customers.

They need to hit the ground running by investing a few hundred dollars and start to work within 2 days. They also want an economical solution, and they put all the telephony maintenance chores on the shoulders of professionals.

Take a look at the fact that Amazon grows its cloud call center potential because it gives the option for working remotely.

Security issues

The main concern of business owners is the security of the cloud. According to the contact babel research, 1 of 3 respondents reported that security is the main issue in the switching from on-premise to the cloud. Their main concerns are:

  • Is the cloud safe for personal identity information (PII) or data storage?
  • What if something happens to the company's internal and external security?

These and many other security questions were the backbones of fear, the main reason for the delays of transition from on-premises to the cloud.

Yet today, data centers jumped ahead to fulfill the security issues. The rise of security protection to prevent bypassing and penetrating of data stems from both government and customer demands. Those data centers that aren’t 100% compliant with security issues are already forbidden by governments or bankrupt.

Thus data centers are constantly improving and updating their protection standards. For instance, the modern data centers have:

  • ISO/IEC 2700 family compliance standards;

  • PCI_DSS family level security;

  • ISAE 3402 in the United Kingdom and SSAE 18 in the United States. Other European countries have equal standards and requirements;

  • FIPS 140-3 certification;

  • Compliance with the Sarbanes-Oxley Act of 2002;

  • Health Insurance Portability and Accountability Act (HIPAA) Act, and more.

The Voiptime Cloud chose proven data centers as the main partners in security to ensure 100% protection from external sinister attacks.

For instance, the Voiptime Cloud grant prevents data fraud from agents in the contact center. Specifically, agents have 100% data-restricted access to customer personal data, such as phone or credit card numbers.

Working culture-changing

Did you hear someone say the performance will decline since you put your agents remotely?

Statistic: How would you describe how effective your company has been at performing the following activities with employees working remotely? | Statista

Source: The Statista Research Department, Performance in remote work setting in the United States 2021

The number of remote workers in the US and UK is on the rise. As never before, talented cloud contact center agents wish to work from home or have a hybrid model.

Statistic: What's the biggest benefit you see to working remotely? | Statista

Source: The Statista Research Department, Benefits to working remotely 2020-2021

The most attractive reason why remote work is so attractive is that employees are capable of flexible schedules, working from any location, and taking care of their children and family.

While meeting the company’s goals. The combination benefits of personal life created a huge demand for remote work.

Here’s how remote work trends established in the US:

Statistic: CIO COVID survey current and future trends in remote work worldwide from 2020 to 2021 | Statista

Source: The Statista Research Department, Global telework state and trend COVID 2020-2021

Why is the future of the on-prem and cloud contact industry anticipated?

Over the 5 million cloud contact center agents are constantly working remotely in the US.

Source: The Statista Research Department: Cloud contact center agents working in the cloud from 2015 till 2019.

Everything listed above, including charts and information about the on-premise (CPE) and cloud-contact center industry, are facts. And the Voiptime Cloud believes that the only proven way to anticipate the future is to ground the knowledge based on experts’ opinions, the real historical, and real-time facts.

Cloud technology is an economical and fast solution for small and mid-sized businesses. Thanks to the tremendous amount of efforts towards security, outbound, and inbound features, the ease and speed of use, cloud techs already have the competitive edge on the telephony market.

The frequency of working remotely is accelerating, and there are no limits for it:

Statistic: Frequency of working remotely in 2020 | Statista

Source: The Statista Research Department, Frequency of working remotely in 2020

In 2022 and beyond, the competitiveness of the cloud will rise astronomically because of the option of working remotely. Moreover, in 2022, there’s nearly every feature you can have in your cloud-contact center that previously was accessible only using on-premise technology.

As a matter of fact, the business found that the cloud can handle all of their demands and satisfy every customer. Here’s what Forbes thinks about cloud during the pandemic.

To conclude our confidence that most contact centers over the globe will switch to the cloud, we need to highlight one important fact. The on-premises or CPE contact centers have a precise end-of-life period, as Carlos Osuna, Head of Business Communications Business Unit at Panasonic mentioned above in his letter to partners.

That means that no matter how great on-prem technology is, there are limits to its maintenance. And setting up brand new physical infrastructure will be a very costly and time-consuming activity that nearly every business over the globe can’t afford these days.

Take a look at the table conducted by Contact Babel about to conclude the big picture:

Source: The Contact Babel Research

Why Voiptime Cloud?

You saw this data with your own eyes, and we urge you - don’t take our words for the truth, conduct your own research and ask experts. And the reason why Voiptime Cloud conducts content such as this is that we want to keep our readers, customers, and people interested in the industry both intelligent and prepared.

It’s also true that our company delivers top-notch contact center software for small and mid-sized businesses all over the globe.

And if you’re a business that is looking for the switch to cloud-contact technology, don’t know where to start or you do, yet you need additional information, just contact the Voiptime Cloud office by phone or chat.

Or for more accurate service, you can fill the “Get the quote” form. Either way, our team will contact you as soon as we receive your request. Thank you.

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