For many years, companies that needed to conduct sales or customer service over the phone established on-location call centers. While effective, this approach had some major flaws.

First of all, it required significant investments in real estate and physical phone equipment. These call centers were also difficult to scale up or down when there was a shift in demand or an expansion of operations. Call centers were also vulnerable to natural disasters, major storms, or other events that caused a major disruption.

More recently, companies are shifting to a hosted contact center model that is based on the internet, not physical phone equipment. This model is much more robust, resilient and scalable. It also offers a number of business benefits and reduces the need for employees to be on location.

What Is a Hosted Contact Center?

A hosted contact center is a communications model that is based on servers hosted by a provider or in the cloud. It is capable of managing communications over many different channels, including phone calls, email, self-service and web chat. Unlike the traditional call center model that prioritizes voice communication, this model elevates customer concerns to a phone call with a customer service representative when they cannot be addressed by other channels like self-service and web chat.

What Makes it Different from a Call Center?

Call centers are built to handle all of a company’s outbound and inbound calls. Representatives working in call centers might try to sell products and services to potential customers, or they might try to provide customer service to existing customers. Some call centers are set up to handle calls from business partners or internal staff. For many years, call centers were based on a private branch exchange (PBX), which is a physical phone system that has many different phone lines. This approach was effective, but it’s seen as increasingly cumbersome and inflexible by modern standards.

A hosted contact center is different from a traditional call center in many ways. While many call centers have shifted away from legacy PBX systems that rely on physical equipment, all hosted contact centers use internet-based voice technology. Being based on the internet offers a number of advantages, such as allowing for remote work. Hosted contact centers also come bundled with modern features like call analytics, scalability, and automation.

Because hosted contact centers incorporate web chat, self-service and other support functions, they provide a much broader service than the traditional call center model, which is primarily focused on communication over the phone. In addition to providing better customer service, the multifaceted nature of a hosted contact center model lends itself to more complicated sales, marketing and customer support initiatives. This approach also gives a company more insight into their customers’ journeys, as interactions can be tracked across multiple channels.

Hosted Contact Center vs. Cloud Contact Center

The hosted contact center model is often compared to a similar model called a cloud contact center. These models are similar, but there are important distinctions.

In a hosted contact center model, a service provider hosts a virtual communications center on its servers. Sales personnel and customer service agents only need a laptop, internet connection and a headset to do their job. Depending on the agreement reached with the service provider, a company using a hosted contact still has costs and responsibilities, such as customization, integration, patching and updating.

A cloud contact center is similar to a hosted contact center, and both systems are virtual. However, a cloud-based approach is more decentralized, and it requires fewer client-side responsibilities and infrastructure. A company using this approach does not have dedicated server space set up for its contact center. This means more service-based services are available if needed, allowing a company to quickly scale its contact center up or down. Not being tied to a specific set of servers also makes a cloud contact center less vulnerable to natural disasters and local disruptions.

Benefits of Hosted Contact Centers

Both hosted and cloud contact centers have significant advantages over the legacy call center model. However, these more modern approaches aren’t without significant costs. For example, a company might need dedicated IT resources to handle ongoing maintenance and updates of a hosted call center system.

Consider the following benefits provided by a hosted contact center when compared to a traditional call center.


We’re all familiar with the busy cubicle farm of call center representatives that has been parodied in popular culture for decades. The days of that model appeared to be winding down as hosted contact centers have significantly decreased the need for physical infrastructure and real estate. 

In fact, the COVID pandemic accelerated the rate of virtualization, and many sales or service representatives now work from home, at least on a hybrid basis. Given that remote work is now an expectation of many modern professionals, virtualization is a great option for employers looking to attract and keep top talent.

Rich Features

Hosted contact centers offer a number of features that go way beyond the functionality provided by traditional PBX systems. Modern features of these contact centers include:

  • Call queueing and parking. Nobody likes to be put on hold, but these call management features are designed to ease callers’ pain by putting inbound calls into the correct queue. Most hosted contact centers also have a callback option that lets callers receive a call back instead of waiting on hold until a representative is available. This provides more control to callers, giving them a better overall experience and reducing the number of dropped calls. It also makes life easier for support agents.
  • Call recording and monitoring. These features help managers maintain oversight and review the performances of their representatives. If sales or service metrics reveal an issue, call recordings can identify systemic problems with agent performance so they can be addressed with training and coaching. Modern contact centers typically have speech tools that are capable of automating parts of the monitoring and review process. This helps managers gain better insights and address issues faster than ever. Emerging technology in this area is focused on gauging customer sentiment through analysis capabilities.
  • Call presence. At its most basic, call presence allows users to see which agents are available on a phone system. But this functionality goes far beyond basic status indication, and it has become a useful management tool. Using call presence, managers can quickly distribute tasks or calls based on real-time availability. Call presence also allows managers to take a light touch approach with remote workers, as indicates their real-time productivity and availability. Advanced functionality allows agents to indicate their preferred channel and in what channel an agent is currently working.
  • Team chat. Chat capabilities support productivity by allowing managers and representatives to quickly exchange information, which is memorialized for later reference. Team chat also allows representatives to quickly and discreetly get help with a “challenging” situation. Chat becomes even more powerful when used in combination with call presence, as it lets people know when someone is available to chat. Of course, there’s also a lighter side to the chat function. It helps to give remote employees a sense that they are still connected to their coworkers by letting them message one another in real time.

Business Integrations

Hosted contact centers are capable of connecting to popular business software packages, specifically CRM platforms. These connections allow for an exchange of data that can yield significant insights. Through business integrations with a hosted contact center, the company is capable of automatically logging calls into the CRM, allowing representatives to connect to customers through different channels, decreasing the administrative burden through automated synchronization and more.

Simply put, business integrations add agility to a hosted contact center so that representatives can provide better quality and proactive service or sales. Companies can realize an omnichannel communication strategy that makes use of voice communications, texting and emails. Data from these channels is collected, associated with specific customers and stored for analysis. Representatives can also refer back to this information to better understand a customer or prospect before reaching out to them.

For sales, business integrations mean more opportunities for upselling and cross-selling. Data analysis can reveal the cause behind decreases in demand or missed opportunities. Integrations also help personalize sales interactions, which has been shown to build long-term customer loyalty.

For service, business integrations mean more personalization, and this is something customers appreciate. Within the context of maintaining privacy, that might sound counterintuitive. However, according to research from McKinsey, 71 percent of consumers expect companies to understand what they want and personalize interactions as such.

Interactive Voice Response (IVR)

IVR is an automated system that allows inbound callers to access information using their voice or touch-tone keypad. Typically, an IVR is used to route calls to specific individuals or departments. It can also provide callers with important information if a human representative is not available. Some advanced IVR systems provide functionality that resembles a virtual assistant: They use AI technology to process voice requests and provide answers. This technology helps to get information to customers, and it makes a company’s representatives more responsive to callers.


Reporting for a hosted contact center includes data from a broad range of channels to provide key metrics related to customer interactions. Reports typically include both short-term and historical data. They are designed to reveal both progress towards short-term goals and information on long-term trends. 

Most hosted contacts center platforms include dashboards filled with visual aids, allowing you to quickly see information. Reports and dashboards can be customized to focus on specific metrics that relate to particular business goals. They are typically focused on three key areas: customer satisfaction, representative performance and contact center performance.

Better Employee Experience

A recent study from Glassdoor revealed what we all know to be true: There’s a strong connection between happy employees and happy customers. Some features of a hosted contact center, like those related to automation and user experience, do not directly benefit callers, but rather, they make it easier for representatives to do their jobs. 

When you empower your representatives, however, it indirectly benefits your consumers because they receive more efficient service from agents who are more satisfied with what they do. This is a key and underappreciated benefit of using a hosted contact center.

Things to Consider Before Switching to a Hosted Contact Center

Switching to a hosted contact center is an investment, so it’s important to make sure that you are getting an adequate return on that investment. This requires a bit of research on your part and some analysis. The needs of every company are different, and it’s hard to cover every single consideration for every single business. However, there are a few basics you should research and analyze before making the switch.

Platform Reliability and Uptime

Downtime in any business can be costly, but if your contact center drives your business, downtime can be downright devastating. Sales representatives won’t be able to make outbound calls or follow up on leads. That means revenue has been completely cut off. Also, customer service agents won’t be able to support customers, which significantly impacts customer satisfaction. Simply put, you need to make sure the system that your company uses is reliable and resilient.

Cost of Use

There are significant costs associated with using a hosted contact center. These typically include hardware, software licenses, maintenance, employee training and the hiring of outside staff or consultants. Some hosted contact centers require significant setup and investments in client-side equipment. Some require minimal on-premise setup and equipment. The costs associated with each type of system are very different.

Security, Privacy and Compliance

If your company deals with highly sensitive communications, you need to make sure that the appropriate security, privacy and compliance measures are in place for a hosted contact center system. For example, your company may need to comply with GDPR regulations if it does business in Europe or HIPAA regulations if your organization is related to the delivery of healthcare. Providers that specialize in these areas typically have measures in place to ensure that sensitive information remains secure and private.

When reviewing different providers, be sure to ask them about their privacy and security measures. In addition to addressing compliance issues, these measures should also address disaster recovery, network monitoring, data backups and more. Providers should be able to provide certificates indicating compliance with regulations.

Necessary Features

If your business needs call routing, call monitoring, business integrations, or other features, be sure to make a list of non-negotiable features to have for your provider evaluation process. You need to make sure that your representatives are empowered and working as efficiently as possible.

It’s also important to consider nice-to-have features and features you may need in the near future, such as automated features and analytics. If you don’t, you may find yourself needing to switch providers when your business grows and evolves.

Bots and AI Functionality

By now, we’re all used to conversing with chatbots, virtual assistants and other interactive AI technologies. While customer support still requires the human touch, there’s no denying the acceptance of bots and AI functionality.

If your company wants to get the most out of the hosted contact center solution, it needs to embrace available AI functions. Automated technology can be used to handle customer support sessions from beginning to end. Or, it can be used as a supportive tool to assist human representatives. Importantly, they can allow your business to provide 24/7 support, at least to some degree. Automation also helps to reduce labor costs.

Some common contact center uses for bots and AI technology include:

  • Answering simple questions from customers and potential customers
  • Reducing or eliminating hold time
  • Directing customers to the appropriate agent or department

These simple applications go a long way to increasing customer satisfaction and reducing the need for labor. Automation also lets representatives focus on more complicated issues, which can be more rewarding work than handling repetitive, mundane issues.

Hosted or Cloud

One important thing to consider before switching to a hosted contact center is whether or not to opt for a cloud contact center.

With a cloud contact center, the software you use will not be running on dedicated servers, and this has implications for privacy and security. Many countries have laws related to data storage, and if your cloud servers are located in one of these countries, you may be responsible for the information on your servers.

There are also concerns related to the deployment of a contact center solution. With a hosted contact center, there is still some client-side infrastructure your company must accommodate. With a cloud contact center, there is very minimal technical infrastructure needed.

Another concern is deciding what to incorporate under your contact center umbrella. This should be based on both your current and your desired capabilities. A Contact Center as a Service (CCaaS) cloud platform is designed for customer services and sales agents to use call center technology. A Unified Communications as a Service (UCaaS) model is designed to combine all business communications under one (virtual) roof.

Need Help Making the Choice? Taylored Systems Can Help

After learning about all of the features and benefits associated with hosted contact centers, you might think that only large businesses can get the most out of this investment. However, businesses of every size can benefit from a contact center solution because even the most basic features provide significant returns on investment. For example, IVR, call management and routing functions can save significant time for customer service representatives, making them even more productive. Most hosted contact center solutions provide customized reports and statistics that allow you to boost both productivity and quality of service.

At Taylored Systems, we provide all kinds of hosted contact center solutions, including a hosted unified communications solution. With this approach, your sales and customer service agents can coordinate their efforts using mobile voice communications, presence management, instant messaging and various contact center applications. 

In addition to keeping all of your representatives on one page, a unified communications solution brings remote and on-premise workers all under one virtual roof, supporting workplace flexibility. This lets your remote workers or employees on the road remain connected and productive.

Voice over Internet Protocol (VOIP) is at the core of many contact center solutions, and it’s another area of service for Taylored Systems. Our VOIP services allow your employees to communicate anywhere they can find a signal and talk to each other with superior call quality. 

VOIP solutions also have many digital features capable of streamlining workflows and generating new business insights. The benefits of only adopting a VoIP system include simplified costs, business class voice service, scalability, minimal necessary hardware, greater dependability and significant workforce flexibility. When you get your VoIP system through Taylored Systems, it comes with a comprehensive service plan and first-in-class customer support. Our experts and technicians are available 24/7 to take care of your communications issues.

Over the past 30 years, our company has built up a network of provider relationships so that we can provide best-fit business phone services to our clients. If you are considering a holistic contact center or business phone services, our experts can assess your current capabilities, communications needs, and budgetary concerns. 

We can then help you analyze different solutions from different providers and compare the costs of each. We stand by the solutions that we provide to our clients and ensure that they deliver the highest level of performance.

We pride ourselves on helping businesses in and around Indianapolis. By helping local companies advance their technology, we help our city, our area, its economy and its people. Contact us to see how your business can benefit from a hosted contact center or voice solution.