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What are the main differences between on-premise and cloud contact centers? Location and lift.
On-premise is the traditional setup for a contact center. All the required hardware, software, and infrastructure are housed and maintained at a physical location. A business running an on-premise contact center, which might be one server or multiple servers located in a suburban office building, is responsible for managing, upgrading, and securing that entire operation.
A cloud-based contact center, on the other hand, is operated entirely online, with a third-party provider hosting its technology and infrastructure. Companies access cloud contact center services via the internet. This arrangement allows for more scalability and flexibility, less upfront costs, as well as easier updates and greater remote work capabilities for contact center staff.
Choosing which type of contact center makes the most sense for your business can be tricky, as both setups have advantages and disadvantages to consider. To help you with your decision-making process, let’s dive deeper into some of the key differences — and similarities — between on-premise and cloud contact centers.
Let’s focus first on the on-premise setup, which is the traditional model for contact center operations, and its pros and cons.
On-premise call centers and contact centers, also sometimes referred to as premise or legacy contact centers, are hosted and managed by a company for its own exclusive use.
The company owns the entire infrastructure, including hardware and software. It also owns the data. It might host the entire operation in its own data center or in other real estate, which might be owned by the company or leased from a third party.
On-premise call and contact centers have three clear advantages for businesses.
Companies have full control over the design, features, and workflows of their on-premise contact center systems, allowing them to customize everything from call routing and IVR (Interactive Voice Response) menus to integrations with internal tools like customer relationship management (CRM) systems. This flexibility ensures that the contact center operations are in harmony with business processes.
Companies also control the data generated by their on-premise contact center operations. Data privacy and security are enhanced with the on-premise setup because the data is hosted internally. Businesses can implement their own security measures, such as encryption standards, data storage policies, and compliance protocols, which is particularly important for industries with strict regulatory requirements like healthcare or financial services.
A company that chooses the on-premise contact center approach will be well-positioned to make the most of its current technology investments, like databases, CRM systems, and call center management tools. This creates benefits such as:
The ability to integrate with existing infrastructure helps businesses optimize both their existing resources and the performance of their contact center operations.
The long-term administrative costs of operating an on-premise contact center or call center can be lower than those typically associated with cloud-based setups. (Whether the physical premises for the contact center are owned or leased by the business factors into the overall cost equation, of course.)
Another advantage of operating an on-premise contact center is the reduced need for ongoing expenditures since the equipment is typically purchased upfront. In contrast, most cloud contact center operators charge users an annual subscription fee for software.
On-premise contact centers can have higher upfront costs than cloud contact centers. In addition to investments in hardware, software, and other equipment, there are real estate costs to consider. Construction costs have risen considerably in recent years, and even the costs associated with taking over existing premises can be steep, especially if renovations are needed.
In cloud contact centers, the responsibility for maintaining hardware and upgrading software is the operator’s, not the user’s. In contrast, the entire responsibility for maintenance of on-premise contact center equipment, vendor relationships, and software upgrades is the responsibility of the owner/user.
Business continuity is one of the greatest risks of operating on-premises contact centers versus cloud contact centers. A physical call center can be sidelined by a natural disaster, like an earthquake or flooding, or a problem at the facility, such as a fire. The risk of downtime can be mitigated by operating contact centers in multiple locations to create redundancy; however, that’s costly, too.
Next up, let’s look at the potential upsides and downsides of using a cloud-based solution for your call center or contact center.
Cloud contact centers, also known as hosted contact centers, exist in the cloud. The cloud is a global network of servers that store data, run applications, and deliver services, such as contact center operations, via the internet. Cloud contact centers provide users with access from anywhere as long as they have an internet connection.
Cloud contact centers typically have lower upfront costs than on-premise contact centers because they don’t require expensive physical facilities or hardware. A contact center operation can also be implemented far more quickly in the cloud, sometimes in as little as 72 hours. On-premise contact centers sometimes take months to bring online.
Cloud contact centers allow businesses to scale up and down more quickly than on-premises contact centers. Users can contract for more or less service based on need and even seasonal demand.
Users of cloud contact centers face less pressure to upgrade systems. Regular upgrades, patches, and support are routinely conducted by the cloud contact center service provider. This arrangement also gives users access to advanced features and functionality and the latest innovations.
Cloud contact centers are often targeted by malicious hackers and other bad actors operating in cyberspace. According to PwC’s 2024 Global Digital Trust Insights survey, cyberattacks on cloud services are the top concern for business leaders, including in healthcare, where cyberattacks are more costly in dollar terms than any other industry.
Users of cloud contact centers don’t have control over call center operations so they are very much dependent on their service provider. Even so, according to research and advisory firm Metrigy, more than 58% of businesses in North America have adopted cloud contact center services from a third-party service provider.
Lastly, the very infrastructure that makes cloud contact centers so attractive to businesses can also be a disadvantage. Cloud is reliant on internet access. If internet service is disrupted for any length of time, customer service can be disrupted — and that can lead to financial loss and reputation damage for a business.
Whether you choose an on-premise or cloud setup for your contact center, you will want to deploy robust and reliable technologies that will complement your operations. Doing so will help to create efficiency and ensure a superior customer experience (CX).
Invoca’s conversational AI platform, for example, integrates seamlessly with on-premise and cloud platforms and provides features and options like the following to help businesses optimize their contact center operations.
Invoca uses intelligent call routing to transfer incoming calls to the right agent or department every time, even across multiple call centers. The technology assesses various factors, such as the caller’s location, the nature of their inquiry, and their previous web interactions. By using this information to direct calls appropriately, Invoca helps companies cut down on transfers and answer inquiries faster.
Invoca’s Interactive Voice Response (IVR) software allows call center operators to create human-like voice interactions to greet callers. It also helps to shorten call handling and hold times by allowing callers to self-route to the best location or agent.
Invoca’s software can be configured in minutes without coding or IT assistance. It works with any phone system, and you can use it to set up customized IVRs for multiple locations. Even better: It allows you to handle a large volume of calls and maintain high service standards without needing to scale your workforce proportionally.
Once a customer’s call has been routed to the right contact center agent, that agent can use Invoca’s conversational AI tools like PreSense to create a VIP experience for the customer. PreSense captures insights from callers’ pre-call digital journeys and packages that data in a convenient screen pop, equipping the agent with much of the key information they need to handle the call effectively.
The detail PreSense provides might include the caller’s name, which product page they visited before their call, and whether they have an item sitting in their online cart. This information allows agents to take a more personalized approach to every customer call.
Invoca’s AI also helps behind the scenes in call centers on-premise or in the cloud by automating many of the time-consuming administrative jobs previously handled manually by call center managers, such as quality assurance (QA).
Invoca’s ability to quickly and accurately analyze and score conversation data at scale means call center managers can conduct QA based on 100% of calls, not just a small sample. This not only results in much more accurate QA, but it also allows agents and managers to get insights from calls faster as well as analyze complete calls.
Invoca’s AI-driven technology helps ensure optimal handling of every caller interaction, underscoring why conversation analytics is a must-have for any call or contact center operation, whether it’s on-premise or in the cloud.
As you continue your research to determine which contact center setup is right for your business, on-premise or cloud, consider reviewing these additional resources from Invoca:
To learn more about how Invoca’s conversational AI tools can help you run a standout contact center operation in any location, contact us today to set up a customized demo.
