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Advantages of Today's Managed Services Model

Advantages of Today's Managed Services Model

New technologies and standards and new economic drivers are opening the door for companies to leverage the benefits of managed services. With the ability to maintain control, minimize capital investments, increase functionality and reduce total cost of ownership, managed services can give companies a significant competitive edge.

By Matthew Kresch
03/10/06 5:00 AM PT

Enterprises that have already invested in contact center equipment may think managed services have nothing to offer them, but much of the managed services functionality offered today works in tandem with the Customer Premise Equipment already in place, enhancing features already in use. Advances in technology and new industry standards have expanded the variety of applications available and opened the benefits of managed services to a wider variety of organizations -- from small centers needing self-service applications to large, multi-site contact centers.

The new managed services model moves much of the hardware, software and infrastructure out of the organization's site and into the domain of the network provider. The business keeps its existing hardware to deliver calls to the contact center, but routing and Interactive Voice Response/Automatic Speech Recognition functionality can be hosted in the network. These solutions can be purely IP-based, or data can be delivered via an IP network and calls delivered separately via the Public Switched Telephone Network.

By investing in managed services, businesses are now able to outsource call processing infrastructure to the service provider, while retaining business logic and direct control in-house. Moreover, by linking contact centers together through a single service provider, organizations can improve communication between sites and deliver more consistent customer service.

Analyzing the Benefits

Among the benefits of hosted services for contact centers are the following:

  • Access to new technology. According to Datamonitor, the additional technical abilities that managed services solutions provide is among the top three criteria for enterprise decision makers in North America when they consider a hosted provider. Today's managed services model offers expanded access to new applications, particularly for smaller organizations that previously could not afford advanced contact center technology. Even businesses with some existing in-house routing functionality can extend their capabilities.
  • Lower cost of ownership. Instead of investing in capital equipment, bandwidth, staffing and in-house operations, enterprises can take advantage of advanced IVR and Web-based applications through managed services and continue to focus on core activities. The technology is owned and managed by the service provider, and is therefore constantly updated and maintained at the network level, saving enterprises many of the costs and risks associated with upgrades, patches and maintaining the technical staff to run the software.

    When compared to premise-based solutions, managed services can lower total cost of ownership by reducing hardware and software costs, saving floor space, and leveraging the cost-efficiencies and economies of scale associated with setup, training, maintenance and upgrades.

  • Improved customer service. With managed services, enterprises can deploy self-service applications in the network combined with intelligent network routing; not only does this offer customers more opportunities to serve themselves, it also more effectively routes calls that need to be served by an agent. As a result, calls are answered faster and by the most appropriate agent, leading to improved customer satisfaction.
  • Reduced capital outlay. Another factor that contact center decision makers have identified as a driver to purchasing a hosted contact center is the ability to migrate from a focus on capex to opex. Under a traditional CPE contact center model, organizations must purchase technology in order to meet their peak rather than their average usage requirements. With managed services, enterprises can pay for extra capacity as needed, rather than paying for maximum usage. This pay-per-usage model allows organizations to shift costs from capital expenditures to ongoing operational expenditures, significantly reducing upfront investments.

Evaluating Providers

When choosing a managed service provider, it's important that organizations not limit their horizons. That means companies should carefully assess the strengths and weaknesses of the underlying technology platform on which their contact center services will be based. Some key considerations to keep in mind include:

  • Control. Enterprises want control of business applications and logic so they can respond to business changes with browser-based and drag-and-drop changes and reporting on what happens in the network. Effective control over any outsourced function is a key business issue.
  • Leverage existing infrastructure. With a renewed focus on business priorities and technology advancements, companies should look at the new managed services model as an enhancement to what they have, rather than a replacement. To reap maximum benefits, the contact center platform should be scalable and allow organizations to grow their business and roll out more advanced applications as required. Equally important, it should be able to easily integrate CPE.
  • Get the right service agreement. Organizations should make sure they establish a service level agreement (SLA) that meets their needs and provides clear performance incentives and standards. An agreement that establishes penalties for under-performance is often the most effective way of ensuring the service provider delivers the desired level of service.
  • Ease of deployment. Look for a managed service provider that can offer applications that are easy to deploy -- the ability to start with simple functionality, such as call direction, and scale to address more complex capabilities, such as self-service or assisted-service, when you need to.
  • Focus on open technology. The managed service platform should support open standards and integrate closely with a range of existing network and premise-based applications. To help simplify the integration process, look for a technology platform that supports the widest range of existing contact center applications and open standards, such as VoiceXML, and is independent of transport protocol (TDM or IP). An open approach enables integration with existing premises switches, Web and voice integration, configuration management integration and Intelligent Network integration.

New technologies and standards and new economic drivers are opening the door for companies to leverage the benefits of managed services. With the ability to maintain control, minimize capital investments, increase functionality and reduce total cost of ownership, managed services can give companies a significant competitive edge.


Matthew Kresch is senior director, product marketing for Genesys Telecommunications Laboratories.


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