Providing excellent customer service will usually generate an increase in clients and sales. So, to keep your business growing, the choices you make when establishing your support system for clients will be fundamental to your long-term success.

Technological advancements have recently seen a rise in using cloud-based contact centers and customer support. Finding the right solution for your commercial activities will undoubtedly influence overhead costs. Equally important, your choice will determine how well customer interactions are managed and create a loyal client base. 

On-Premises vs. Cloud-Based Customer Support

On-premises customer support refers to traditional contact centers at your business. All communications and the necessary hardware and software will be located at your business location.

Consequently, relatively often, on-premises centers require updates, upgrades, and maintenance interventions. This, in turn, can be expensive in terms of time and the monetary investment needed. 

It can also lead to interruptions in your customer support system. An on-premises center assumes the entire responsibility for anything and everything related to customer care, from selecting, purchasing, evaluating, installing, and maintaining all systems with the hardware, software, and network used, along with qualified personnel to manage the system.

Cloud-based customer support, by contrast, happens in the cloud rather than at your business location. This means you will not be investing in acquiring and maintaining on-premises equipment. You select a competent cloud service provider, and the provider will design and create your customer support system for you. Known as CCaaS or Contact Center as a Service, everything is handled by the service provider. For example, live chat thrives on cloud-based support. This means the software you use to run your live chat software isn’t installed directly on your computers but rather accessed through the internet.

Another distinguishing characteristic of a cloud-based system is that it will be accessible from anywhere. You can still offer your customers the help they need if you work remotely. Emails, calls, social media contacts, and messages will be facilitated through cloud-based management thanks to impressive bandwidth internet.

The Differences

When comparing, it’s essential to consider several aspects of a customer support system:

  • Equipment
  • Installation
  • Maintenance
  • Scaling
  • Systemic Failure and downtime
  • Upgrades 
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On-premises customer support necessitates a dedicated space, hardware equipment, software licenses, complicated installation and integration of systems in place, considerable maintenance, upgrades of both hardware and software, and complex scaling, whether downscaling or upscaling. Companies opting for on-premises solutions also need an in-house IT team to manage an onsite system.

System failure will consume precious time and happen with more frequency because influenced by everything from the state of hardware, software glitches, system connections, and external factors such as physical location problems, including fires, electrical mishaps, burglaries, and anything that can interrupt system functioning at an on-premises location. 

Cloud-based customer support offers networking, storage, and security through a third-party provider. Cloud-based systems require no specific systemic equipment, provide easy installation and low maintenance, and guarantee upgrades in real time, so there is no downtime for you and your clients.  

The necessary hardware infrastructure will be located elsewhere, at an offsite location. The service provider has the responsibility for hardware and maintenance. The choice of specific business software may be obtained using a subscription model.

Scaling can also be accomplished rapidly to meet and reorganize business needs. Failures are less frequent, as service providers have backups and secondary systems to prevent interruptions.

Another attractive aspect is that companies, especially startups, will not be required to invest upfront in an on-premises center.

On-Premises Customer Support Cloud-Based Customer Support
Requires considerable heavy equipment

Software licenses

EquipmentNo equipment needed

No upfront investment in a data center

Complex installation and system integrationSetupEasy installation
Regular maintenance requiredMaintenanceMinimal maintenance
Scaling requires time and moneyScalingScaling happens in real-time
Upgrades of both hardware and software require timeSoftware Upgrades and Patches Software upgrades take place in real-time
System failures are more frequentFailure Low risk of system failure

The Merits of On-Premises Customer Support

When comparing the two options at face value, a spontaneous question arises as to whether on-premises systems are still useful and worth the cost. On-premises contact centers do maintain these benefits.

  • Call costs

The related costs will be minimal if your business has a low volume of customer service calls. On the other hand, high call volume can prove to be expensive unless your business has opted for a plan with unlimited calls. Cloud-based providers tend to charge for each call.

  • Control and Visibility

With an on-premises system, a company can directly control hardware and software uses, substitute or add hardware components, and access hardware if necessary.

  • Customized systems

Each business is a reality unto itself, so while the principles of customer service are shared, if you require some degree of customization, depending on your business, if you are sharing a cloud service with several tenants, there is minimal possibility of designing customized customer service. If you require customization, on-premises is probably a better choice.

  • Performance

A good internet connection is necessary for a good user experience when sharing on remote servers. For some industries, slower connections and high latency can spell a death knell. Onsite centers are ideal for increased storage performance, such as graphic design.

  • Protected storage of data

The protected data storage is a matter of opinion and is still open to debate. Some companies feel more secure in having their own data storage center where third parties are not involved. With a cloud-based system, providers can access data unless they include zero-knowledge encryption. Another preoccupation might be if the service provider meets regulation compliance in highly regulated industries like healthcare.

The Merits of Cloud-based Customer Support Systems

Opting for a cloud-based solution also comes with considerable benefits. These include:

  • Analytics

Cloud-based software can give immediate feedback on what is working and what isn’t by analyzing incoming and outgoing calls, call lengths, and personnel performance.

  • Data Backups and Recovery

Reputable cloud service providers generally have established data backup and recovery protocols. Providers usually distribute data in more than one center in various geographic positions. Should one machine malfunction or be subject to a natural disaster, data can be retrieved from other locations. This may not be the case with onsite service centers, as out-servicing to remote centers is complicated and costly.

  • Expense

The most immediate and perhaps most significant benefit to using a cloud-based system is the money you save by not buying costly hardware and creating a customer service department from scratch. Cloud-based solutions cost a fraction of what onsite options cost.

They also reduce personnel costs by reducing or eliminating the need for technical staff.

  • Extra Features

Cloud-based support systems will not be limited to call transfers or waiting for music. They include call monitoring, click-to-call features, and much more.

  • Flexibility and Speed

A cloud-based solution will offer greater flexibility than an onsite choice. Most providers offer varied service packages depending on organizational needs and a pay-as-you-go price, as companies only pay for what they consume (computing, networking, storage, etc.). The cloud-based solution can also be up and running in hours, whereas an onsite center will require days.

  • Integration

Software for cloud-based solutions is more easily integrated with various applications, including social media and systems for managing customer relations. This software work well with chatbots, self-help platforms, and features that do not require a live person to resolve problems.
  • Maintenance

A significant saving in time and money is the elimination of maintenance. Service providers fully manage cloud infrastructures, eliminating businesses’ need to manage upgrades or purchase patches for hardware and applications.

  • Scalability

Contrary to onsite centers, scaling your system will not require buying expensive hardware that will require maintenance. IT providers will provide or reduce resources with just a few clicks and can respond to business needs in real time.

  • Talent

Thanks to the cloud, companies can work remotely, permitting HR to search a global talent pool during hiring. Onsite systems will be dependent on the in-house IT team.

On-Premises Customer Support or Cloud-based Customer Support, Which Is Better?

There is no definitive answer as to one being better than the other. A cloud-based solution may be ideal for startups without substantial capital to invest because costs are limited. 

One thing to remember when opting for a cloud-based option is that there are public and private clouds. An on-premises solution may be the most practical for industries requiring control or customized options.

Hybrid Solutions

A hybrid cloud solution may be an excellent compromise that permits companies to store sensitive data and high-performing work such as graphics in-house and entrust the remainder of service needs to the cloud. A hybrid alternative that includes the cloud affords businesses cloud-based flexibility, the latest technology for security convergence, scalability, and accessibility, particularly remotely, with onsite control and onsite security.

All Things Considered

The principal differences when selecting boil down to expenses, control, security, and scalability. To choose the best option for your company, it’s essential to determine your business’s needs and future objectives. 

Cloud-based options are less expensive, but the quality of the service will depend on the provider. On-premises choices offer customization and control but will come with a higher price tag and depend upon the quality of the in-house IT team.

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