Cloud is about more than cost-cutting

Analysts such as Gartner have long said that the cloud isn’t about recession-busting or cutting costs any more.

September 17, 2013

Analysts such as Gartner have long said that the cloud isn’t about recession-busting or cutting costs any more – but perhaps it never was, says 1Stream director, Bruce von Maltitz.

“I think there has always been massive confusion about the cloud and cost-savings. Most people have no idea how much they spend per user on their call center, so they often pitch the cloud as being exactly the same product as on-premise, but for a fraction of the price,” Von Maltitz says. “Although the cloud does reduce costs – and in some instances, dramatically so – it’s not as easy as simply plugging in the solution and cutting costs. There is expertise and investment involved.”

According to Von Maltitz, the real business benefit of the cloud lies in its ability to provide scalability and flexibility. “In the call center industry, the cloud provides the ability to adapt and scale up or down according to the demand. Because it’s a pay-per-use product, the company can scale up and scale down according to demand, which allows them to respond to changes in the marketplace very quickly. It’s meant to cut costs – but it doesn’t mean it’s a cheap solution.”

Von Maltitz says that distinctions need to be made between cloud products and true hosted solutions. “There are plenty of cloud-based products available online (some of which are free), but a true hosted solution should always include a component of service and full technical support. It’s particularly important in South Africa, where IT skills in the call center space are in short supply. If you start cutting away the service component to lower your costs, you are stripping away the most important element of the hosted platform. Even the best system that money can buy will experience problems. If something goes wrong, your hosted provider’s support is the one thing that will ensure that your call center stays up and running.”

Von Maltitz warns customers to be especially wary of the influx of low-cost or free solutions entering the market. “It’s tempting for small companies with a constrained budget to leap at the chance to get a cloudware solution at a very low price, but not if there is a trade-off between service and cost. Hosted solutions should be packaged with both technology and a full service element included – and companies should be able to take full advantage of that service element at any time. Trying to cut costs to the bone will end up causing more harm than good for the industry as a whole, not to mention the individual call centers that might have nowhere to turn if their technology falls short for any reason.”

Von Maltitz advises customers to find a cost-service equilibrium. “Strive to find a product that matches your budget, but still offers guaranteed support should you experience any problems. Plan for growth and changes to your business processes in the future – change is inevitable, and you need a technology provider that will have your back. Make sure that there are guaranteed service level agreements in place so that you can hold your provider accountable. And be extremely sceptical of bargain offers.”