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How to price contact center solutions (Strategy Focus)Product Type: Market Research ReportPublished by: Datamonitor Published: July 2006 Product Code: R313-15736 Description IntroductionIn a recent Datamonitor survey end-users emphasized the importance of how the vendor needed to understand broad business requirements; yet, the biggest factor in a decision to purchase a technology came from the price offered. As such, vendors need to be able to understand how the end-user operates in order to better price the contact center to them. Scope The role of a contact center is moving from a utility to a strategic partner. Production costs and sales costs play an important role in vendor and reseller margins. Hosted services are gaining traction in the market pricing them correctly is key. Sources of finance for the end-user. Highlights An organization that views its contact center as a utility will adhere to specific metrics (such as call handling time). With the focus on delivering services to cover the cost of the operation, end-users will be more interested in pricing models that alleviate cost. A contact center has to be able to provide an assessment of its financial health to its investors in order for it to succeed. In purchasing contact center technologies, the organization has to make the decision as to what is more viable to make an up-front investment, or to rent the service. CapEx and OpEx decisions effect how a purchase is made, and it is vital for vendors to assess whether its potential customer can make upfront investments or afford cyclical rental charges. Reasons to Purchase Understand the nuances between CapEx, OpEx, and the financial metrics used to justify purchasing decisions. Understand that some value added services are more attractive then others, and why. Table of Contents DATAMONITOR VIEW 1
CATALYST 1
SUMMARY 1
METHODOLOGY 1
ANALYSIS 2
Role of the Contact Center 2
Cost center vs. Value Center 4
CapEx vs. OpEx 5
CapEx helps to plan for the long term 5
OpEx has the advantage of flexibility 6
General contact center technology pricing 6
Production costs and sales costs play an important role in vendor and reseller margins 7
Regional variations has an impact on the price 7
Discounting schemes can be complex but help push sales 8
Maintenance does help end-user efficiency and competitiveness and provides a steady revenue stream 8
Value added services 9
Managed services offers flexibility to the end-user 9
Vendors need to find the right balance when selling consulting services 9
Sources of finance for the end-user 10
Attractions of financing options for SMEs 11
As hosted services are gaining traction in the market pricing them correctly is key 11
Usage - based pricing for contact centers 12
Concurrent verses log-in pricing 12
Bundled minutes and contact center services 12
CRM and Contact Centers 12
APPENDIX 14
Definitions 14
Contact center 14
Further reading 14
Ask the analyst 14
List of Tables
Table 1: Typical contact center costs in developed markets 4
List of Figures
Figure 1: Enterprises consider a number of criteria as important when selecting a vendor 2
Figure 2: Enterprises expect their IT budgets to increase further in 2007 3
Figure 3: Changes to software and hardware spending are at opposite ends of the IT budget spectrum 4
Figure 4: Raising efficiency dominates over increasing revenues 7
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