The Call Center of the Future?

OnState is a SaaS solution that brings call center functionality to small businesses quickly and inexpensively.

By Gerry Blackwell | Posted May 27, 2009
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When CyberDefender Corp., an Internet security software and services firm, found that its growing pool of customer service agents in Los Angeles was tying up all the company’s office phone lines, it realized the time had come to implement a proper call center system.

CyberDefender’s new director of customer service, Jose Martinez, investigated a few solutions, including traditional Panasonic and Nortel automatic call distribution (ACD) systems. But in the end, Martinez chose a radical on-demand service from start-up OnState Communications, and coupled it with VoIP service from Skype.

"OnState was very competitive," he says. "But not only was it priced right—and this was very important to us—they were able to implement very quickly." It took barely a week to get agents up and running and trained.

CyberDefender pays $50 per month per seat for the OnState solution, which it has been using for almost a month now. So far, it’s working as advertised, Martinez says, with only occasional Skype-related call quality problems, which he expected.

The savings over traditional premise-based and hosted call center solutions are significant. And the company’s AT&T bill will also be lower because calls to its toll-free customer service number are now routed to agents via Skype.

Perhaps more importantly, OnState for the first time allows the company to see how many customer service calls it’s receiving, how many get answered, how many callers hang-up, how long calls last, who calls are coming from, who they’re going to, etc.—all the data that call centers need in order to appropriately staff, train, and coach agents.

Martinez immediately added more staff—the call center went from six to 20 agents. That in turn resulted in a noticeable decline in customer complaints about not being able reach a warm body when calling the company.

"That was a huge win for us," he says.

OnState, launched late last year, is a software-only solution, sold as a service, that provides skills-based routing and presence management. It works with virtually any communications system, including plain ordinary telephone service (POTS), VoIP, cellular, instant messaging (IM), and e-mail.

"Conversation management and knowing about people are the most important elements in our application," says OnState CEO Pat Kelly. "We’re interested in phones, but the problems our customers come to us with are not really about phones."

"We’re more concerned with understanding the business presence of employees. What can they do—what skills do they have, what kinds of calls can they answer? And what are they doing at this moment. Are they at work today? Are they free? Are they involved in a chat? Are they on a phone call?"

The company doesn’t actually switch customers’ calls. It receives SIP signaling information or data from an IM service, applies the customer’s business logic and then tells the communications service provider where to send the call.

If it’s a call from this particular caller or from a caller who chooses this option from an on-screen or interactive voice response (IVR) menu—configurable in the OnState management software—route the call to this employee. If the employee is unavailable, send the call to this person, or to voice mail or play on-hold music until the appropriate person is available.

Agents receive calls in an OnState client application, which displays small enough and has a small enough memory-CPU footprint to be useable on mobile devices.

So OnState is not a VoIP solution as such, but it’s designed to work with VoIP services, and is tightly integrated with Skype and GoogleTalk, and works well with any SIP-based system or service.

It also integrates with GoogleApps, SalesForce.com and, in future, other CRM systems, including Microsoft Dynamics and Netsuite. Information about each call is automatically exported into SalesForce.com so outbound sales people and contact center agents can see complete histories when they pull up a customer record.

OnState is also not a hosted solution in the usual sense, so the company doesn’t have to maintain a big data center with ACDs and phone switches. It’s a business model that offers distinct advantages for OnState.

"It means we can be global instantly," Kelly points out. "And because it’s inherently Internet-based, distribution costs are incredibly low."

That in turn means the company can keep its prices low. While they may seem high compared to hosted IP PBX and virtual PBX solutions, Kelly says OnState isn’t really competing with either—even if it sometimes wins customers away from such services. It’s really competing with other call center offerings, both on-premise and hosted.

OnState claims its solution costs 70 percent less than traditional alternatives. Kelly estimates that customers pay anywhere from $1,000 to over $2,000 per seat for on-premise call center systems and $100 to $300 per user per month for hosted solutions. OnState charges $50 per user per month, plus $20 per user per month to add in a chat capability, $20 for outbound dialing and $20 for call logging.

As with any SaaS (software as a service) offering, smaller companies and departments get big-company functionality, pay only for what they use, and can scale the solution as they grow. OnState sees its sweet spot as companies with one to 50 call center seats.

For CyberDefender, one of the big attractions was that it didn’t want to commit to any solution long term until it figured out how quickly it would grow and which business model best suited its needs. With OnState, Martinez points out, there are no long-term contracts.

Most of the OnState executive team share a Cisco heritage. They came to Cisco in 2000 when it acquired GeoTel Communications Corp., which provided similar software solutions for distributed call centers, only using Signaling System 7 (SS7) the set of signaling protocols used in traditional phone systems.

Can they repeat that success? (The Cisco-GeoTel transaction was estimated at $2 billion.)

Even without a serious marketing program, the company acquired over 600 paying customers in the six months since its soft launch, mainly through word of mouth and listings at the Skype site. Now it’s starting to market.

But unlike the GeoTel, which sold to service providers and large enterprises, OnState is targeting small companies and departments within larger companies. Getting the marketing message right—explaining how the service works and what exactly it offers—will be a challenge given its uniqueness.

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