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Virtualisation: The virtual reality for contact centres

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24th Aug 2009
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It’s spent years on the periphery but is contact centre virtualisation now spreading its wings as a de facto standard in the industry? Technology correspondent Jon Wilcox explains what it is and what's likely to be in store for the future.

Cost versus customer service: it’s a conflict that’s been raging within contact centres since their inception but the current recession has made the debate even more acute. The implementation of virtualised contact centres is one strategy evangelisers are heralding as the future model that could reach the right balance but what is virtualisation and why is it now gaining traction as a practical alternative?

Virtualisation in the context of contact centres tears down the walls – quite literally – of traditional models. Implementing IP (internet protocol) based contact centres allows for the distribution of calls across multiple office spaces and, at its extreme, has the flexibility to route calls to home and mobile-based agents. Of course, the dramatic shift away from traditional TDM (time-division multiplexing) systems - which allow one communication time slot to be divided into several - isn’t without its own fraught path, so why do it in the first place?

Agent productivity

Improving efficiency is an objective for most companies in the recession, and it’s an area that virtualised call centres (VCCs) can help improve. However, with such constrictions on budgets during the current downturn, many companies are holding back from making the transition to virtualisation - despite the obvious ROI benefits.  “Undoubtedly people are trying to stretch out what they’ve got,” says Trevor Richer of contact centre technology company Empirix.  “It’s a natural reaction to the current economic crisis.”

Substantial improvements in agent productivity and flexibility are the major benefits of virtualised contact centres.  Richer highlights the way in which they provide a two-fold advantage over the traditional TDM model: “It works on an economy of scale basis," he says. "Where you have substantial contact centres of more than a hundred, normally, by bringing several together, the productivity gained is 10-15%.” 

Drew Kraus, research vice presdident at analyst firm Gartner explains how such productivity gains are found: “When you have separate contact centres that aren’t virtualised, you have to over-staff each one by a little bit to be ready for peak call loads at each site.," he says. With a virtualised contact centre, you can defray that over-staffing across a variety of sites and end up with a more optimised staffing model.” 

Cutting the queue

Virtualisation may increase agent productivity by up to 15%, but it can also dramatically affect the rate of call-waiting times. Travel retailer Thomson Holidays switched to an IP contact centre model in 2007 and the increase in productivity since the VCC roll out is marked to say the least. “Virtualising the contact centre, coupled with customer-centric routing, has allowed us to create a truly dynamic contact centre, enabling the whole business to exceed previous service levels,” says Lorraine Dempsey, head of call centres and virtualised call centres at Thomson parent company TUI. Part of the reason behind this is the Thomson virtual contact centre not only connects the physical offices, but home-based agents and the company’s UK high street stores.

The strategy echoes the thoughts of Richer, who comments: “The other thing is flexibility. If they see one unit is overloaded when the contact centre structure as a whole is virtualised, they can bring in another unit that is not so busy.”

Thanks to the implementation of a VCC, Thomson now has a robust overflow system that dynamically redirects calls to its high street stores. The resulting effect on productivity is obvious. In the Genesys report detailing the Thomson migration, Dempsey highlights the dramatic consequence: “One of the most significant achievements of the implementation has been the dramatic reduction in call-waiting times, from five minutes to only 13 seconds!” 

Thomson’s switch to a virtual contact centre has proved very successful in increasing both productivity and service levels, and is a good illustration of how IP-based systems can be used to shift the structure of a contact centre, according to Kraus. “That’s a great example of a company that was ready to use the technology to enable to change the way they did business, rather than implement a like-for-like switch," he explains. "They didn’t move to IP just to do what they were doing before.”

Robust network infrastructure

In May, contact centre strategists Sabio published a white paper on the subject of cost-effective customer service in difficult market conditions, which features a section on virtualised contact centres. In the report, Sabio consultant Stuart Dorman gives his thoughts on the current traction levels and why some companies are holding back from making the migration: “[The benefits] are still largely unrealisable because their business is being held back by out-of-date or mismatched telephony systems that can’t support the latest applications,” he concludes.

The robustness of a network infrastructure is absolutely key if contact centres are to maintain the same high quality of service of TDM in an IP-based environment. For Kraus, it’s for this reason virtualised contact centres experienced issues in the beginning. “In the early days, when we saw most of the failures, it wasn’t with the technology itself,” reveals the Gartner analyst. “It was because companies under-invested in the network and didn’t realise the impact of sending a lot of high priority voice traffic along the network.”

Over the last few years, providers of IP and virtualised contact centre systems have made steps to improve the tools needed to evaluate a company’s infrastructure quality. However, Kraus explains some companies still dredge up the old excuses: “It’s still the case that when I hear companies say IP-based telephony or contact centres failed for them, it’s almost always the case they under-invested in the network.”

After the recession

However, the recession has impacted the update of virtualisation, even with the system’s touted cost-efficiencies and productivity improvements. Some companies are holding back on making the investment in IP-based systems, preferring to push their current systems as far as possible. “Companies that might have considered upgrading their contact centre infrastructure are delaying those purchases so they can reduce costs by using existing infrastructure for as long as they can,” says Kraus. 

The delaying tactic from companies during the recession can also be attributed to the large scale TDM investment a lot of the bigger contact centres already have in place.  “They’re willing to live with some inefficiency in the way they support their contact centre infrastructure, because they’re not ready to take on such a big hit.”

Kraus continued: “For them, it’s more cost-effective for them when they need an expansion to just add more TDM ports to the existing system than take a big hit and move the whole infrastructure to Voice over IP.” The migration from TDM to IP-based virtualised systems will inevitably move forward once the brunt of the current downturn has passed - and for one very good reason, says Richer: “There’s only so much time that companies can hold back on their investment. We know that if you hold back for too long you start to fail as a business because you’re not keeping up to date,” he explains.

“Contact centres are right at the sharp end of this and if they’re not using the latest technology then others who are operating more effectively and more efficiently will go past you.  I think it’s inevitable that normal investment plans will start to get going again – they’re just on hold.”

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