When a company is faced with the critical decision of choosing the platform to base their call center operations on they are faced with a new set of options.  The old traditional model of equipment based versus the emerging one of those provided virtually require consideration of questions not previously asked.  Typically, a call center consultant or manager who has worked with equipment based platform solutions will argue “if we own our equipment then the cost to maintain what we already have versus the monthly cost of a virtual platform is minimal.  On the other hand, consultants who are proponents of virtual platforms advocate that virtual call center platforms will decrease the overhead for a call center by 30% or more.  When faced with such a key decision it is important to understand the differences prior to choosing one over the other, the long term implications can make or break an organization.
 
Those in favor of a virtual solution derive their “30% or better cost savings” by factoring in all the costs involved in managing, maintaining, upkeep and repairs, future replacement, and expansion for their (equipment based) call center(s).   Then they do the same exercise for a Virtual solution and compare the year to year costs (see example below) to show the net cost savings over a typical ROI cost cycle.

Example:

Prospective Costs of Building and maintaining a 100 Seat Traditional Call Center vs. a Virtual Call Center

 A former Fortune 50 call center director shared his thoughts on this topic, his responses, and things to keep in mind are below.  
 

What is the cost of purchasing and maintaining the current equipment? 

 A 100 seat call center purchasing the PBX, ACD and other equipment might be looking at a $750,000 to $2 million dollar capital expenditure.

If there is an expansion, will it require additional facilities space?  

Are there service contracts in place and what are the costs?

Based on the business plans, will there be future expansion that will result in another capital expenditure for new equipment?  Perhaps an additional PBX, ACD, etc. at an additional $750,000 to $2 million.

If there is an expansion, will it require additional facilities space?  

Would there be a benefit both in cost and additional factors to expanding to a Work at Home model?

What are the projected costs for repairs on existing equipment?

What is the cost to replace existing equipment when it becomes obsolete?

How many individuals are required to run, manage and maintain the current equipment? 

A typical 100 seat call center requires a call center manager, a PBX/system tech, a call quality manager, and someone to handle workforce management.  A virtual platform can easily be run/managed by one or two individuals.  The other staff can then be reassigned to other functions within the company.

What is the cost of disaster recovery for the current platform?

(virtual platforms offer built-in disaster recovery)

Is there a financial or cost benefit to moving from a CAPEX model to an OPEX model? 

Technology advancements and smart pricing are replacing the need for expensive CAPEX investments. Servers, costly maintenance agreements, switching hardware and software can be replaced with pay-as-you-go leasing models that flex with our seasonality, new business launches, call volume and staffing.

In the virtual model, you get built-in disaster recovery, it requires less staff to manage and maintain, you have the ability to have some or all of your agents work from home saving money on facilities, there is no equipment to purchase, repair or replace and you simply have a low, predictable cost per agent (OPEX) per month.
 
Virtual Call Center platforms can include the phone system platform (for inbound que’s, outbound campaigns and virtual campaigns), call reporting, call recording, predictive dialing, Whisper functionality and much more.

While there will be times where it makes sense financially to stick with an equipment based call center platform, make sure when you are comparing the two that you are taking into account all factors, benefits and costs into consideration before making your decision.

By Darren Prine