How ASPs Can Set You
Free
Here’s how application service providers can help you to reduce IT costs and increase your call center’s efficiency with hosted software.By Lee Hollman,
CallCenter You don't want to become a prisoner of your own call center. When you purchase new software, you want to avoid spending too many extra hours ensuring that it's installed properly. Upgrading your software every time a new version becomes available can also be time-consuming. Hiring additional agents to work at your center entails even more upgrades, forcing you to find a few more spare hours in your already busy schedule. On top of everything else, you need to be certain that the server running the software doesn't break down. Given all of these factors, you can easily find yourself spending a few long nights at your call center. a Application service providers (ASPs) can set you free from installation and IT maintenance headaches. ASPs enable you to use their software from a host server at a remote location, typically at their own headquarters. You connect your call center to this server through a wide area network to use the hosted software through the Internet or your company's intranet. Since application service providers are responsible for the servers that their software runs on, you save money on IT costs. ASPs haven't had an easy time finding customers. Ben Pring, principal analyst for Gartner Group, a research and business strategy firm based in Stamford, CT, cites a report that the firm released in August 2000 revealing that out of approximately 500 ASPs, 60% of them folded or were about to go out of business. Pring explains that since the hosted software market is still very new, a given number of superfluous ASPs are going to have to shut down. “In any new space where people rush in, there's too much supply and not enough demand,” he says. But Gartner Group also has good news regarding the future of hosted software. The company predicts that ASPs will become an $18 billion dollar industry within five years. Pring says that the top ten providers currently share about 30% of the market, which also accounts for why so many ASPs have gone out of business. By 2005, he expects that the figure will drop to 17%, as other providers gain a foothold in a currently crowded marketplace. Some of these ASPs include companies that don't specialize solely in providing hosted services. Tom Scholer, president of trustedanswer.com, an Internet outsourcer, speculates that part of the reason why so many ASPs went under is that they didn't understand the full extent of what hosting software involves. “Many of them really didn't have the knowledge or skills to deliver hosted services and they quickly vanished,” he says. He explains that successful ASPs need to employ an extensive range of IT professionals, like licensed MCSE technicians and XML programmers. They also need to provide diverse on-line communication options, including e-mail, text chat, shared Web browsing and voice over IP. Scholer estimates that half of trustedanswer.com's customers outsource their on-line transactions to the company and that the other half uses the company's software as a hosted service. He explains that hosted software won't be the exclusive domain of ASPs as it becomes more widely accepted among call centers. For now, though, ASPs continue to be key resources for hosted software. Here's a look at how some ASPs can liberate you from prolonged software installations and high upfront license fees. Getting The Most From Hosted Software Some companies that offer hosted software also sell licensed versions of their products, like Epicor (Irvine, CA) does with eFrontOffice. The software comprises two modules, eSales and eMarketing and eSupport. Agents can use eSales and eMarketing to take customers' orders and to quote prices for different products and services. eSupport provides agents with prepared answers to customers' questions and lets them save a case history for each customer they communicate with. Agents can use both modules to respond to customers' phone calls, e-mail messages and text chat requests. The software also lets agents view Web sites with customers and lets agents view information about customers within Web browsers. Jeff George, director of strategic alliances and ASP for Epicor, estimates that between 5% and 10% of Epicor's customers use the ASP version of eFrontOffice and that the remaining 90% to 95% prefer to install the software on-site. “We did not have one specific client who said, 'We must have ASP or we won't buy your product,'” says George. “We did have [potential] customers [who] looked at our product ask if we had an ASP model. If we said no, they moved on. It became a checklist item so we could say 'Yes, we have ASP.'” He adds that many companies favor the licensed version of eFrontOffice since they're nervous about storing customer data outside of their own call centers. Many companies don't use hosted software because they're concerned about the high number of ASPs that have folded or are currently going out of business. George explains why the majority of them haven't made a profit. “They wanted to try and get ten to 20 companies running on [each] server,” he says. “The problem is they didn't get enough customers coming in, and their expenses were too high.” ASPs connect multiple customers to the servers that host their software, which enables them to charge less on a short-term basis than they would for licensed software. They lose money quickly if they don't find enough customers, and potential customers don't want to spend money on hosted software from an ASP that could go under in a matter of months. Even when they do find enough customers to stay in business, ASPs still have a problem accommodating each of their specific needs and requests. “If [an ASP] has five companies on the same server and allows [one] company to do as much customization as it wants, there's a chance it can affect the other four companies on that server,” says George. “So they limit the amount of customizations because they're trying to get economies of scale by putting several companies on the same [server].” George says that most of Epicor's customers customize eFrontOffice to accommodate how they handle processes like billing and order taking. He adds that companies are typically more willing to customize licensed software than hosted software. “If I buy a car and put on nice wheels and a big stereo, I feel better because I own the car,” he says. “Do I want to do that with a car I'm only renting? There's a lot of value to owning software as opposed to renting software on a monthly basis.” Other companies are more optimistic about the future of ASPs. Mansour Salame, president and CEO of White Pajama (Hayward, CA), anticipates that the majority of call centers will make the transition away from licensed to hosted software in the next five years. White Pajama currently offers Integrated Contact Center Network (ICCN), software that routes phone calls, e-mail messages, live text messages and Web callback requests to agents based on criteria that you set. White Pajama conducted a study to find out what security risks are specific to hosted software. The company found that between 70% and 80% of security hazards occur because someone has physical access to the server. To ensure that only authorized personnel can access the servers running Integrated Contact Center Network, White Pajama partnered with Exodus, a Web hosting service based in Santa Clara, CA. Salame says that a steel cage protects the servers that host the software and that only a select group of White Pajama employees can open the cage. The lock on the cage door identifies them by their palm prints and a nearby security camera videotapes the servers at all times. Most recently, White Pajama introduced a service for routing phone calls through a voice-over-IP network. The service is currently available in Chicago, IL; Dallas, TX; New York, NY; and San Francisco, CA. Salame says that the voice-over-IP service helps White Pajama provide a cost-effective alternative to routing calls through a phone switch. “The reason that we went with voice over IP is that it's very cheap for us to scale,” he says. “[We] don't add line cards [to our servers], just more CPU and more RAM.” White Pajama partnered with Qwest to offer long-distance services and toll-free numbers to customers, and with IP gateway manufacturer Level 3 to convert circuit-switched calls to voice-over-IP calls. Salame says that although the company can route voice-over-IP calls to agents' phones through a T-1 trunk, installing the trunk can take up to 60 to 90 days. That's why the majority of White Pajama's customers prefer to route calls over a standard circuit-switched network. He adds that he believes most call centers won't make the transition to voice over IP until there is one commonly accepted voice-over-IP standard. Although many call centers with limited IT budgets rely on hosted software, ASPs can also be just as useful to a multimillion dollar corporation. Henry Robertelli, president of ThinAgent (Southfield, MI), says he was initially surprised by his own customer demographics. “We thought [we would be] more interesting to small and medium companies rather than large companies,” he says. “We're working more with medium to large companies because they're able to identify the cost savings, and the administrative and technical advantages of an ASP solution.” Robertelli defines large companies as those that appear on the Fortune 100 or Fortune 200 lists. He adds that all businesses face the same basic challenge of providing effective customer service, regardless of their size or annual revenue. “Big companies have a lot of cash flow, but a lot of their problems are similar to those of a smaller company with one to 15 people,” he says. “They both need to offer a consistent method of handling customers across their entire enterprise. That's difficult to do for larger companies, which often have multiple call centers.” ThinAgent's ThinAgent CRM Suite routes phone calls to agents and enables them to respond to e-mail, text chat messages and Web callback requests from a Web browser. Agents use a softphone to answer, hold or transfer calls and can click on a desktop icon to request technical support from ThinAgent. The software also lets you assign agents to groups so that you can route each type of call or message to the most qualified agent. You don't need particularly advanced hardware to use ThinAgent CRM suite. “Agents only need a phone line and a computer,” says Robertelli. “So whether an agent is in the call center, at home, or in the office, we maintain full control over the contact.” But Robertelli warns that telecom firms are still catching up on how to provide Internet services, which can sometimes prevent ASPs from helping customers as quickly as they would like. He describes an incident with Protocol USA, a nearby outsourcer and one of ThinAgent's largest clients. “We needed to have a T-1 trunk installed between their location in Lansing, MI, and ours in Southfield,” he says. “It took AT&T two months to do that.” Robertelli recommends that call centers that employ 100 agents or more make the extra investment necessary to work with two or three different telephone service providers to avoid the type of delay he describes. Other ASPs, like Expertcity (Santa Barbara, CA), can help your call center handle specific requests from customers. Expertcity's DesktopStreaming is hosted software that businesses often use to offer technical support to on-line customers. DesktopStreaming enables agents to control customers' PCs. Agents can also use the software to participate in text chat sessions with customers, push Web pages to them and draw diagrams on a whiteboard. Customers can resume control of their mouse or keyboard at any time. John Greathouse, CFO and senior vice president of strategic development for Expertcity, recalls that he wasn't certain at first if customers would be willing to let agents control their PCs. “We've done about 1.5 million sessions, and this was a real concern of ours coming in,” he says. Since then, those customers completed an on-line survey to rate their experience and the overall survey results eased Greathouse's concerns. “Over 97% of [customers] rated the experience positively,” he says. Despite customers' glowing responses, Greathouse concedes that many companies still have reservations about using hosted software at their call centers. “I think [they're] still cautious and doing it selectively,” he says. “But we've definitely seen less resistance to the ASP model in the last six months.” He explains that although IT employees at numerous call centers initially prefer to maintain software and perform upgrades in-house, they eventually appreciate it when ASPs take responsibility for these tasks and thereby furnish IT staff with extra time for other duties. Greathouse believes that the increasing usage of hosted software within call centers has prompted call center managers to consider aspects of licensing software that they hadn't before. “The cost of maintenance was overlooked more in the past,” he says. “They would look at the purchase price of the software but not at the next level.” The next level often includes upgrade costs and the expense and time it takes to install software. To help you implement DesktopStreaming, Expertcity e-mails a Java applet to you that you then e-mail to every agent at your call center. The applet routes on-line customers' support requests from Expertcity to agents. Expertcity also offers three versions of DesktopStreaming. If you don't want to use the complete package, you can select another version of DesktopStreaming that enables agents to view customers' screens without taking control of their PCs. Although ASPs have become especially popular among call centers that assist visitors to their companies' Web sites, many centers still don't provide on-line customer service. John Houtsma, executive vice president of corporate development for Spider Technologies (San Diego, CA) explains why. “If you think about the evolution of call center software, it wasn't until the mid-'90s when people came up with Web-based software,” he says. “Not too many people have developed Web-based packages that handle phone calls and e-mail.” Spider Direct 3.0 from Spider Technologies enables agents to view histories of customers' e-mail messages, participate in text chat sessions with customers and browse Web sites with them. The software lets you assign agents to groups and enable them to fulfill customers' orders. You can also use the software to generate reports about your company's sales figures and inventory. Hosted Services At Your Service Different call center software vendors have different strengths. For example, one company might specialize in speech recognition, another in call routing and a third in on-line communication. You could purchase software from each vendor for your center, but that would be costly. And you would also need to factor in the time and expense of integrating the software so that it all works together. Or you could find an ASP that partners with leading software companies to provide you with a complete range of hosted options. “We recognize that there's other vendors that do things well,” says Frank Nigro, the director of e-applications product management for WorldCom (Clinton, MS). “So we leverage their applications, integrate them and then offer them as services.” He estimates that WorldCom uses products from more than a dozen different companies, but says he is contractually obligated to not name them. WorldCom first provided hosted IVR services a decade ago and branched out to provide software from additional vendors that help agents bill customers, fulfill orders and generate trouble tickets. The company began to offer speech recognition services in March 2001, and then partnered with another vendor to host its on-line customer service software. “We knew that we could take advantage of our network, and the hosting experience we already had, to take that software, put it up on the network and make it available to our customers,” says Nigro. In June 2001, WorldCom introduced its hosted Internet service plan, World Web Center. Agents who use World Web Center can communicate with customers through e-mail, text chat sessions and instant messages. Customers can request calls by completing on-line forms and they can browse the same Web pages with agents. Nigro explains that as more companies upgrade their call centers to help on-line customers, WorldCom wants to be ready to offer them an alternative to buying software. Although offering products from a variety of vendors may seem potentially difficult, Nigro says that programmers at WorldCom created homemade software that enables each of these disparate products to work together. “In many cases it's not that these vendors have to integrate their software because each component handles a particular function,” he says. “They don't need to be integrated, but interfaces need to be created from one [product] to the others.” Steve Miller, executive vice president of marketing and business development for Echopass (Burlingame, CA), agrees that working with products from diverse vendors can be challenging. The company uses a Meridian phone switch with voice-over-IP software, both from Nortel Networks, as well as Avaya's Unified Messenger to organize calls and e-mail messages in a unified queue and Genesys' Internet Suite to route on-line communication. Miller says that Echopass spent three years developing its own software to enable these products to work together. Echopass uses all of these products as pieces of its Echopass Communication Services. Echopass Communication Services enable you to create skill sets for specific campaigns, assign agents to groups and generate reports based on your own criteria. Agents can view screen pops containing information about customers using Echopass Sales Center Services. Echocase lets agents save a record of each interaction with customers. Miller says that Echopass Communication Services are popular with mid-size and large businesses. He explains that many of Echopass' customers have multi-site call centers with a minimum of 100 agents employed at each site. “We resolved a lot of complexity for the centralization of technology that are more prevalent among larger-scale enterprises,” says Miller. “We could handle smaller call centers with [fewer] agents, but it doesn't take advantage of the full services that we have.” Using hosted software at a multi-site call center also saves larger corporations the IT costs of running licensed software from each site. “Maintenance is the lion's share of the long-term costs of a state-of-the-art contact center in a multi-site situation,” says Miller. Art Coombs, the CEO of Echopass, estimates that annual maintenance costs for most call centers can go up to two times the initial cost of the hardware and software that they purchase. Miller says that Echopass didn't decide to specialize in serving multi-site call centers at first. “A year ago, we wanted to go after the entire universe, [including] small businesses, medium businesses, start-up companies and large enterprises,” he says. “We didn't have a target and took more of a shotgun approach. [Now] we have a unique differentiation as being the most robust carrier class service for large-scale enterprises.” Other companies still prefer to purchase software for their call centers instead of customized hosted packages. Service bureau West TeleServices (Omaha, NE), for example, hosts software from outside vendors that enables text chat and Web collaboration between customers and agents. Jonathan McIntosh, senior vice president of West TeleServices, says that customers who originally implemented these products in-house now prefer using them as hosted services to save on IT and licensing costs. But McIntosh is the first to admit that hosting software presents its own challenges. “Often these packages were developed for companies to use in-house and to run just for them,” he says. “If you're running the software for hundreds of customers, we need to make sure each client's data is separate and secure.” Buying software instead of developing software also complicates technical support. “If it's internal software, I can just pick up the phone and call someone in our company,” says McIntosh. “When you're talking to a different vendor, you can get mired in the process of trouble tickets and going through tiers of support.” He speaks from experience, since West TeleServices relies on a combination of off-the-shelf and homemade software. West TeleServices introduced its own internally developed IVR software, SpeechXchange, more than a decade ago. McIntosh provides two primary reasons why the company still uses it today. “The number one advantage is speed, the ability to rapidly integrate and customize integration for our environment,” he says. “Number two is cost. I can build my IVR systems at a fraction of the cost instead of buying them commercially.” In May 2001, West TeleServices upgraded SpeechXchange to work with speech recognition software from Nuance and SpeechWorks so that customers can select menu options by speaking numbers, words or phrases. CosmoCom (Melville, NY) hosts its CosmoCall Universe software to ASPs. Steve Kowarsky, executive vice president of CosmoCom, explains why the company prefers working with ASPs to working as an ASP. “One of the main reasons is that [we] then put [ourselves] in the position of competing with many companies that would otherwise be superb customers,” says Kowarsky. “If I'm a service provider, how can I sell to another service provider when he knows that I'm his competition?” Since CosmoCom works with many different ASPs that compete with each other, the company takes care not to show preferential treatment to any one provider. “ASPs [have] a desire, when they initially talk with us, to have some kind of exclusive relationship with [CosmoCom],” says Kowarsky, who adds that he can usually convince them why that wouldn't be in their best interests. “By offering [our software] to multiple customers, you don't have one customer attempting to support the entire cost of maintaining the product.” CosmoCall Universe runs from Windows 2000 servers and receives each call as packets through a voice-over-IP gateway. The software then sends each call to a softphone on agents' PCs that also runs on Windows 2000. CosmoCall Universe enables agents to send and receive e-mail messages, participate in text chat sessions, browse the Web with customers and push Web pages to them. Although you can also purchase software licenses for CosmoCall Universe, CosmoCom has had great success offering it as hosted software to ASPs. Kowarsky says that although ASPs don't represent the majority of CosmoCom's customers, they do provide the company with more than half of its total business volume. He adds that many of the ASPs that host CosmoCall Universe also use the software within their own call centers. ASPs Speak Out About IVR Systems Odds are that you already use an IVR system at your call center. If so, then you already know that providing customers with touchtone menus helps them find the answers to their most basic questions and saves agents from having to repeat the same answers. But not every call center can afford IVR systems. Hosted versions of these systems like EZ-Automatic Operator from Phone Interactive Communications (Boca Raton, FL) offer these centers cost-effective alternatives. Phillip Kemp, president of Phone Interactive Communications, says that call centers with in-house IVR systems use EZ-Automatic Operator to help handle higher call volumes during certain timeframes. For example, special events like sweepstakes and contests raise call volumes significantly for a given number of days or weeks. EZ-Automatic Operator enables call centers to use additional ports for less than it would cost to add more ports to on-site IVR systems. Kemp says that adding more ports is just one expense that call centers using their own IVR systems need to pay. “When you buy IVR systems and it's time to upgrade them, your only option is to throw out the entire system and start all over again,” he says. “You also need redundancy, so you should have a standby or a backup system.” Given the amount of time it takes to install a new system, either as an upgrade or for the sake of redundancy, it's much quicker to use hosted IVR software when you want to help customers immediately. EZ-Automatic Operator enables customers to enter their addresses, phone numbers or other information from touchtone phones. Agents can then view the information through a Web browser or a customized screen that on-site programmers can create using Microsoft Visual Basic. Although Phone Interactive can design screens for you, Kemp says that most call centers prefer to rely on their own programmers. He explains that they want to ensure that their screens can also display information that it retrieves through third-party software like billing or order fulfillment systems. Phone Interactive runs EZ-Automatic Operator from its headquarters on three PCs that run Microsoft SQL Server. The company keeps two servers running in case of disasters. The third server warehouses the data that customers enter. Phone Interactive uses software it developed internally to generate reports and identify trends such as those concerning the number of customers who call about a specific product. You can print these reports or view them on-line. Call Interactive (Omaha, NE) offers hosted IVR services rather than software. The company uses Periphonics' VPS-IS2 IVR systems and employs 22 Periphonics programmers to create customized touchtone menus for each customer. “We're focused on driving more calls in their automated environment to save our clients hundreds of thousands of dollars a year,” says Gene Chevalier, vice president of technology for Call Interactive. “There's lots of ways to do prompting inexpensively, but letting [customers] truly resolve their needs within IVR is where we add value.” He cites as an example how Call Interactive's IVR services enable customers of its various financial clients to conduct stock trades, check account balances, transfer funds and make payments by selecting options from touchtone menus. Chevalier says that he works closely with each company to design IVR prompts for them. “We need to help them understand their problems, as opposed to having customers come to us with designs in place and wanting us to implement them,” he says. A team of programmers from Call Interactive visits customers on-site to discuss the content of their touchtone menus before they create and host IVR applications for them. Customers can also request modifications to these menus after they're completed. A Host Of Hosted Software Vendors Here's how to contact vendors from this article that provide hosted services for call centers. Call Interactive 800-428-2400 CosmoCom 631-940-4200 Echopass 888-622-5345 Epicor 888-937-4267 Expertcity 877-EXP-CITY / 805-964-0383 Phone Interactive Communications 800-900-1565 / 561-391-9686 Spider Technologies 877-433-7832 / 619-683-3300 ThinAgent 877-650-THIN / 248-784-1000 trustedanswer.com 800-729-0083 West TeleServices 402-963-1200 White Pajama 877-PAJAMA1 WorldCom 800-WORLDCOM |