Enhancing customer experience (CX) with customer service excellence is the prominent objective of every call center/contact center, along with other ideals. The traditional setup of call centers was kenspeckled in the past days for the ultimate customers. Still, with the changing times, updated trends, and technology, the transition of contact centers from physical setup to online base has been quite popular. Still, the prevalence of traditional call centers is popular due to their catbird seats (advantages). Today, we will be highlighting the comparative differences between on-premise and cloud-based call centers along with their pros and cons.
Also referred to as premise or legacy contact centers, on-premise contact centers rely upon the traditional setup with voluminous hardware and byzantine software maintained at a physical location. The infrastructures that include hardware and software are owned by the company itself. The company may host the entire operations based on its own data center or other location under its ownership or lease from third-party service providers. The agents have to be self-present at the physical locations to work under the physical infrastructures for better customer interactions. There might be one or multiple servers located at the location and the company itself is solely responsible for the management, upgrade, and security of the entire operations of that contact center.
With the emergence of updated technology and new tools, a new contender of on-premise contact centers appeared that operate online via the Internet on cloud-based technology. In cloud-based contact centers, there is an immense role of a 3rd party service provider as it hosts all the technology and infrastructure such as communication channels, data storage, software, and many more. These contact centers are often referred to as hosted contact centers as these contact centers exist in the global network of services providing users access globally online with the help of Internet connections.
With the clunky infrastructures required at physical locations, on-premise love centers have higher upfront costs and longer time deployability but there is an extreme level of control and customizations as an advantage of on-premise contact centers. As the company owns the infrastructures, data privacy, and security remain a top-notch advantage for on-premise contact centers over cloud-based contact centers as the third-party service provider manages the contact center resources in cloud-based contact centers. Also, the on-premise contact centers offer features such as compliance adherence, and lower latency with high quality whereas, on the other hand, cloud-based contact centers offer benefits such as remote accessibility with scalable operations, fast deployments, seamless integrations, and more.
Let's dig into the main points of differences with their distinct pros and cons.
On-premise contact centers require too many infrastructures to carry on the work hence these types of call centers require higher upfront costs with longer deployment time. The huge investment in the infrastructure including real estate costs makes it more expensive. The owner manages everything like the maintenance of equipment, vendor relationships, servers, and others are carried on by those owners. With the online cloud-based technology, the operational costs are very low in cloud-based contact centers than on-premise contact centers with the rapid deployment with no physical infrastructures setup, there is easy scalability at cloud-based contact centers than on-premise contact centers as it may be complex to the frequent changes in hardware. As the 3rd party service provider hosts the services, the cost may go higher for cloud-based systems with less security for a longer term but the pricing model is pay-as-you-go so it depends.
On-premise contact centers have full control over the features, workflows, and operations which means handy customization from setting up IVR menus to various integrations. As mentioned earlier, the data is hosted on the owner’s side, and data privacy is maintained. Regarding the cloud centers operating remotely, the control and customization is also easy but as there is a presence of 3rd party service providers, there are automatic updates with modern tools and technology.
On-premise contact centers offer the benefits of easy integration with the existing infrastructures as with the availability of their own CRM systems, database analytics, and call center management tools, it avoids the additional cost of extra purchases. Connection with multiple vendors is easily compatible rather than limiting the benefits from 3rd party cloud service providers. The already existing infrastructure disrates the extra expenses for further purchases of infrastructures enabling cost efficiency. Seamless and built-in integrations are made easier in cloud-based contact centers.
As the owner owns the data center in on-premise contact centers, the data is well secured and privacy is maintained. The on-premise contact centers have superiority over data privacy and cloud-based service providers as the 3rd party may not maintain expected privacy. The data may get encroached upon by hackers and all the potential sabotages like cyberattacks. With the heavy reliance on cloud/Internet access, several disruptions may occur impacting customer service excellence too.
In-house IT staff handle the maintenance work in on-premise contact centers. The 3rd party service provider handles the work reducing operational costs for cloud-based contact centers. On-premise contact centers have limited remote access restricted within office boundaries whereas the agents can have access from anywhere using Internet connections in cloud-based contact centers. The online works and hybrid team modules benefit from it and it offers more flexible options. Whereas rigidity is a disadvantage for on-premise contact centers. Sometimes power outages, infrastructure failures, and on-premise backdraws cause the on-premise contact centers prone to downtime whereas due to the geographic redundancies based on cloud, the services are continuously delivered with higher uptime and no hassles.
With the manual setup on on-premise contact centers, the agents' productivity is limited by outdated trends whereas updated features such as auto-dialing, and advanced CRM tools enable the agents to boost their productivity at cloud-based contact centers.
We have discussed some of the key differences with the ultimate pros and cons of both on-premise and cloud-based contact centers. By the end of 2024, it is reported that 70% of the contact centers have transitioned to cloud-based contact centers. With quick adjustments and remote access, cloud-based contact centers are preferable whereas in terms of data security, control, and compliance options, on-premise contact centers are quite impressive.
There are several call center software requirements such as omnichannel support, CRM integration, intelligent routing, etc. And the contact centers need to fulfill these requirements to enhance customer service excellence. According to the business size, cost, and operational requirements, the contact centers based on physical setup or cloud access need to be selected, and the important thing for selecting the best contact center is to do a cost-benefit analysis before the execution along with delivering high-quality customer service.