Counting the Green with CaaS Services

This blog entry was posted by Ed Margulies, Senior Director, Product Management CRM Service Products at Oracle. Margulies is a telecommunications architect, usability expert, inventor, and the author of 17 books on telecommunications, contact centers and service automation. The views expressed in this blog are Margulies’ and do not necessarily reflect the views of Oracle.

Earth Day Meet Your New Friend CaaS

I remember participating in my first Earth Day in 1970. I wore a musty army surplus gas mask in protest of pollution. So did about 60 of my grade school friends. The Earth Day idea is simple: Save the earth and rally against its enemies. Today your use and promotion of Communications as a Service is also in the spirit of Earth Day.

This model of modern communications is ripe with examples and ideas of how you can do good for the environment but also save some of the other green in the process.

Data Centers and Counting the Tiles

One of the biggest trends in CaaS is the use of commodity, off-the-shelf servers for communications infrastructure. This versus the proprietary gear traditional telephony switches are based on. With communications backbones more and more based on packet-switched voice instead of TDM, the opportunity to reduce data center footprint is huge.

Here at Oracle, for example, we recently outfitted ten remote data centers with ACD switching gear worldwide. This was done to replace proprietary, traditional ACD switching equipment. All of this was done in a CaaS model, where a network-based service will be used to support over 40 contact centers and home-based agents.

Each data center will house an average of 12 square feet’s worth of common, off-the-shelf 1U servers. That includes front and back access to the racks. Now compare that to the equivalent proprietary cabinets of one of the traditional switch vendors: A whopping 32 square feet. Now consider how much less energy – including air conditioning, lighting, etc. is being saved by using commodity, rack-mounted servers.

Bye-Bye Water Cooler

Another green aspect of Communications as a Service is its impact on human capital. Specifically, CaaS enables a virtual workforce so users do not have to be housed “next to” or in the same building as the communications infrastructure. Yes, I’m referring to telecommuting. This year, it’s estimated that in the U.S. alone, there are about 200,000 remote contact center agents. Depending on which research firm weighing-in, that’s roughly 10% of the contact center workforce, which also accounts for contact center outsourcers.

There is a compelling argument to convert workforces to virtual workers using CaaS. For example, in a 2006 study the Telework Coalition found that companies can save between three and ten thousand dollars per employee per year in real estate rental costs. That includes the actual workspace, common areas, training rooms, etc. averaged out for each employee.

Based on numbers supplied by the Energy Information Administration, my own figuring says upwards of $300 per year per employee can also be saved on utilities as a result.

Converting Windshields to Display Screens

And what about the commute itself? We know that the maximum one-way commute most contact center agents will tolerate is about 20 miles. Accounting for vacations and holidays, that’s about 9,000 miles per year. Based on gas mileage of 25 mpg, that’s 360 gallons. Figuring $2.50 per gallon this converts to a savings of $900 annually for each worker. Besides the savings that’s also 360 gallons worth of hydrocarbons and other pollutants that don’t spew into the atmosphere – for each worker.

Green Means Retention Too

Some of the top analysts say that the job turnover rate amongst telecommuting workers is only half that of in-house, commuting workers. This is significant when you consider the cost of turnover. On average, it costs at least $5,000 per employee to acquire and train a replacement.

That can add up to significant savings. In fact, job turnover is perhaps one of the most vexing workforce problems with companies employing communications-based workers. My customers tell me turnover rates range between 20 to 30% annually. Now imagine cutting that in half. If you have a workforce of 500 with a 20% turnover, that’s 100 new employees you have to recruit, hire and train. That’s easily half a million dollars.

In summary, the message is simple: Not only is it good to be green, but you can save a lot of money in the process. You can save on the care, feeding and housing of equipment. You can save on workforce consumption of office real estate. You can save on utilities. Workers can save time and money by avoiding commutes. And you can do a better job in the area of employee retention. That all adds up to a strong argument for adopting the CaaS model at your company.

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The Communications as a Service (CaaS) blog covers industry trends, strategies, best practices and innovations in subscription-based enhanced communications services. CaaS takes in everything from hosted virtual contact centers, Interactive Voice Response (IVR), multi-channel enabled self service, Voice 2.0, and communications-centric social apps.

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