Tuesday, July 14, 2020
CX Tech

Comparing the Cost of Customer Service Software – Cloud vs On Premise

Kyle Harper
January 07, 2019

3 minute read

When you consider that over the past year, poor customer service cost US businesses 75 billion dollars—a 20% increase from the previous year, it’s little wonder that 66% of respondents actually prefer self-service systems to speaking with a brand representative. Businesses are at a tipping point between phone contact center interactions and a plethora of choices for customers in the digital age.

The best customer service experiences are convenient, responsive, and tailored to the individual. But, the growing number of customer service options makes this a constant challenge to achieve.

But what style of customer service software technology is best for your business?

Pros and cons of on-premise and cloud

On-premise options present a lot of potential customization and data access for your team. This can be great for smaller businesses that want to be dynamic and agile in developing their service portals. However, this can present a lot of up-front costs, including hosting the right equipment, hiring support staff, and maintaining your team and technology as you scale.

Alternatively, cloud-based software can provide a predictable and scalable hedge against financial risk while your business grows. The right SaaS partner can also often provide your business with exposure to new techniques, technology, and expertise more quickly than your in-house resources. This comes at the expense of some proximity to your data, and possible restrictions to customization or development, depending on your chosen software.

3 cost considerations

There are 3 key areas to consider when choosing between an on-premise versus cloud based solution:

Customization and Support: The primary hidden costs of a customer service software solution lie in scaling and maintenance. When calculating costs, think critically about how much your business plans to expand over the coming five years, and what internal overhead would be demanded to support that growth on premise. It’s also a good rule of thumb to consider that traditional software licensing will typically demand large-scale updates roughly every 4 or 5 years.

Security and Compliance: Understand how data security and regulation compliance relate to your software. In some cases, a large technology partner may be able to help you stay up to date on security and industry standards, while some niche industries might find that in-house teams are more capable of keeping your interactions secure and compliant. Being realistic about how much security and regulatory expertise you have in-house is helpful when comparing options, particularly for businesses working with customer conversations that include privileged information.

Integration and Channels: Customer service has become a multi-channel venture. Many popular SaaS solutions offer-out-of-the-box integrations and tools that can make it easy to overlay customer service systems with your existing ticketing and communications technology. On the other hand, enterprise software packages can lead to paying for redundant or completely ignored services that you don’t need. Consider your agreements or in-house tech stacks carefully to focus on paying only for complimentary services.

Ultimately, the best solution for your business is the one that enables your team to consistently delight your customers and helps them solve their problems quickly. But to control costs, it is vital to be realistic about how much growth, development, and maintenance your team will need to support over time.

Interested in learning more about cloud-based CX solutions? Visit oracle.com/cxfuture.

Kyle Harper
Kyle Harper
Kyle Harper is a writer turned data geek who is obsessed with the experiences that brands can build. A big believer in "learning by doing," he's helped launch a handful of startups as a Marketing Director, and today is working to understand the future of customer-centered listening as a Marketing Analyst at Harvard.
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