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Answering service industry perspective: The following article is courtesy of Connections Magazine (http://www.connectionsmagazine.com). The article was written by David Hauser and published in the March 2005 issue. Please check back often for more articles.

Small Call Centers Want VoIP, But Is It Ready?

By David Hauser
March 2005

From startups like Vonage, to giants like AT&T, everyone is marketing VoIP (Voice over Internet Protocol) services, but does this mean it is ready for the small business customer? Large enterprises can quickly realize cost benefits while controlling quality and residential users are able to tolerate reduced quality, which leaves the small enterprise without a very happy medium. Before hopping onto the VoIP bandwagon, the benefits and drawbacks for small enterprises need to be closely examined.

For small enterprises, especially call centers, the quality of voice calls is extremely important and so is the cost. A large enterprise has access to expensive QoS (Quality of Service) management technologies, dedicated bandwidth, and large IT departments, allowing them to control quality at an acceptable level. Beyond quality control, the return on investment (ROI) is extremely fast simply with the cost savings for interoffice communication.

Small call center owners and managers rank quality, manageability, features, and cost among their top concerns. They consider whether calls will go through and sound clear, what their IT support requirements will be, and how much money may be saved.

As soon as VoIP is mentioned, people want to know about the quality of the typical phone call. While this is a good indication that VoIP technology has matured, it highlights a problem for the small enterprise: without access to expensive equipment and knowledgeable staff, quality can deteriorate. This decline in quality is noticeable to both parties during a conversation and can convey an unprofessional image to both callers and clients. Despite these questions about quality, the small enterprise should not give up. Technology manufacturers are starting to listen to the requests of smaller operations looking for advanced quality that is still affordable and manageable. The good news is that the price of such technology is beginning to come down.

The small call center does not have access to a large IT department or the capital to outsource the requirements, so manageability of a VoIP system is essential. Current systems are not easy to setup, but more importantly, they are even more difficult to maintain. As with any new technology, there are bugs, updates, and upgrades that need to be applied to complex, mission critical systems. The manageability concern can easily be remedied by outsourcing or finding an on-demand provider, which for many applications and processes will work perfectly. An on-demand provider will alleviate the management issues. However, quality is even harder to control with the current setup of providers. As companies begin to realize the concerns of the small enterprise, changes to technology, pricing, and offering will occur making the on-demand segment very attractive.

Virtual agents are essential for a successful 24/7 call center. To make VoIP attractive, the technology needs to be able to service these agents. At first glance, the technology looks perfect for such a situation – any agent anywhere in the world with Internet access could answer calls, but closer examination reveals possible problems. A virtual agent working on a residential bandwidth connection presents some obstacles. It is impossible to control quality and there is no SLA (Service Level Agreement) with the provider, so bandwidth could not work or be delayed. An unavailable virtual agent will negatively affect both the agent, as they will not be making money, and the call center, as calls may not be answered.

The last two concerns, features and costs, are intimately related. While pricing remains a sticking point, customers are increasingly asking for additional features. VoIP can be attractive to those interested in switching for more features, but costs must still be lower or comparable to traditional PSTN. The vast majority are willing to pay a premium to increase current feature sets (assuming quality is not an issue) and wait longer for the ROI through calling savings. Manufacturers and providers of all sizes have long seen the appeal of features, and as a result have developed robust and powerful feature sets for the small enterprise, as well as call center-specific packages. VoIP must then be used to make these features more powerful, allow more control, increase information, and be more flexible, rather than just a way to deliver the features to a user.

While many indicate that they are willing to pay a premium for features, the small enterprise does not have an unlimited budget. There are savings to retain with VoIP for long distance calls; however, with traditional networks, competing to use capacity means these savings are getting smaller. This makes it harder to justify large upfront costs for equipment and installation, again making VoIP less attractive. This is the perfect opportunity for on-demand providers to offer the services the small enterprise is looking for with much lower upfront costs and easy management.

No matter what providers try to sell, if the quality is not high it will not matter. As a business owner and technology lover, I have personally tried VoIP for both home and work and I believe it is not ready for the small business environment yet. If you call me today, I will pickup on a traditional PSTN line somewhere. This is not to say the technology does not have its place in large enterprises or carrier networks. Although the small enterprise desires VoIP and is ready for it, the technology is not ready for the high demands and lower price points of the call center. This should not discourage or dissuade anyone from researching and evaluating VoIP solutions, as it can be used with very high quality in certain situations, but if the “perfect” solution is what you are after, VoIP might not be the best fit.

To truly “sell” the small call center market on VoIP the technology needs to be reliable, high quality, and most importantly, feature-rich. The technology needs to serve as a tool rather than just a cool new technology and it needs to provide large business features to smaller call centers.

David Hauser is CTO of GotVMail Communications, where he is responsible for overseeing the product road map for GotVMail’s hosted communications solutions and managing its carrier grade VoIP network. Hauser can be reached at hauser@gotvmail.com.