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OnDemand Means Immediate ROI
[October 31, 2005]

OnDemand Means Immediate ROI


By Charles Ciarlo, TMCnet Workforce Management Columnist


 
Over the past several years, workforce management (WFM) software has a proven track record of improving agent productivity and contact center profitability with rapid return on investment (ROI). Now the ROI equation has gotten even better with WFM OnDemand. No longer is a heavy upfront investment required to implement WFM. Instead of purchasing expensive hardware to run the application, companies can now gain the benefits of workforce management while paying only for what they use on a monthly basis. That way, ROI is immediate. The company increases forecasting accuracy and heightens agent scheduling efficiency thereby raising profitability while paying only a small monthly fee for WFM OnDemand.

 
According to Datamonitor, the workforce optimization marketplace will exceed $1 billion by the end of 2006. OnDemand services will represent a significant piece of the pie. And over the next few years, it will grow dramatically.
 
That trend can already be observed in such fields as CRM. Until the late nineties, almost all the review came from software sales. Then a few startups launched hosted CRM software. While it took OnDemand CRM a few years to catch fire, there is no stopping it now. Companies such as SalesForce.com, NetLedger, Salesnet and Upshot have established a firm market presence.
 
But the real validation of the workability of this model lies in the fact that the largest CRM vendor in the world – Siebel – has teamed up with IBM to offer Siebel CRM OnDemand. Not only that, IBM’s Chairman Sam Palmisanso named application hosting as one of the company’s most strategically important areas for the future in the most recent annual report.
 
This OnDemand trend is gathering strength in other areas, too. Hardware giants such as Sun and HP have released computer systems which allow you to turn on or off processing power as your needs dictate. Software firms such as Computer Associates and Oracle have garnered a lot of attention by making some of their software systems available on a pay-per-use basis. Startups like WebEx have pioneered application delivery over the web for such vital services as web meetings.
 
According to Karen Moser, an analyst with research firm International Data Corporation (IDC), the market for web-based applications will reach $1.5 billion within one year. You can be sure that same trend will soon catch hold in the contact center. And applications such as WFM, in particular, are ideal for the OnDemand model.
 
WFM OnDemand Benefits
 
Call centers of just about any size can benefit from WFM OnDemand. This includes:
 
· Small to mid-sized companies that cannot afford to buy their own workforce management system outright
· Mid-sized to large contact centers that wish to implement workforce management software but do not currently have the budget to purchase the system immediately
· Companies which experience seasonal peaks whereby they have to double or triple their number of seat licenses for specific periods each year.
· New contact centers or regional contact centers that don’t have the in-house IT expertise to support a premised-based workforce management system.
· Contact centers with older workforce management software that are looking to benefit from the latest technology without having to pay large upgrade license fees.
 
Take the area of seasonal peaks. Say you purchase 50 WFM licenses for your average demand, yet twice a year need to ramp up to 100 seats. If these seasonal peaks last only a few weeks, you are wasting a lot of money buying 50 extra licenses that sit unused most of the year. When the ramp up from 50 to 100 or more seats is required, the transition is made seamless by the on-demand model. The monthly bill rises, of course, but only for as long as the additional functionality is being utilized.
 
But there are many other benefits to WFM OnDemand. Gone are the large upfront expenses that can sometimes delay the implementation of the technology, replaced by a manageable monthly bill. Gone is the need for additional IT resources on site to manage your WFM hardware and software. Gone is the space requirement of additional servers or software to download onto each desktop – a zero footprint, in other words.
 
Another scenario to investigate is when starting a new contact center with low overhead using OnDemand services. As business improves, you can add more seats without a permanent licensing and hardware commitment. At some point, though, you may expand to the point where it actually makes more sense to host your own software and hardware. But even where the customer determines that it has reached the point where it is easier or cheaper to bring WFM in house, there is still an important role for OnDemand. Say the center has expanded to a steady 500 seats. It is unlikely that business will remain stable throughout the year. WFM tools can help the company determine how many permanent seats it requires all year. The company can then match its hiring to that level, and buy the appropriate number of license. For peak periods, though, temporary hiring and on-demand usage of workforce management software ensures the highest possible profits.
 
About the Author:
 
Charles Ciarlo is founder and CEO of Left Bank Solutions, a Workforce Optimization Software vendor based in Los Angeles. He began his contact center career in 1978 and has since led three successful call center companies, including the award-winning 800 Direct, Inc. Clients served include ATT, Sprint, Playboy Enterprises, Hallmark, Barnes & Noble, Hasbro, BOSE Corporation, Lucas Arts, Galoob Toys, and many others.  In 2001,
Ciarlo named his own company Left Bank Solutions after the Left Bank of the Seine River in Paris, a haven for artists. Similarly, he named his signature product after the famous impressionist painter Monet. Ciarlo’s aim is to put the art back into workforce management, and to offer affordable world class workforce optimization solutions to contact centers of all sizes.
 

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