Are You Spending a Fortune Setting Up Call Center Technology?
When you look at the cost of a call center, there are a number of variables with varying complexities. When you contextualize these variables along with the complexities, then you can arrive at the cost of a call center. Most often than not, when a call center technology vendor submits their quote, the buying side typically sneers at it and huffs and puffs at the total cost of owning the technology.
7 Key Factors Affecting Cost of Call Center Setup
Before we pass our judgment, let us get into the details of what makes up the cost of a call center. Some of these variables and their complexities would include:
- Size of the contact center – 50-seater with 1 location, 200-seater with 2 locations or a 500-seater with 3 locations among other possibilities
- Technology used – predictive/progressive/preview dialing, ACD, intelligent routing, CTI, IVR, Quality Management, Work Flow Management, integration with existing applications, integration with web, email and chat, voice broadcasting among others
- Nature of call center – outbound only selling telecom lines, complex technical support with L1/L2/L3 clearly defined, or Revenue Cycle Management in healthcare
- Self-service Vs. agent support – what percentage of the operations can be converted into self-service handled by IVR, chatbots, FAQs or the website
- Telecommunication and networking – PRI lines, VoIP lines, GSM lines, hybrid of PRI, VoIP and GSM with least cost routing, routers, headsets, IP phones, soft phones, leased Internet connectivity, or broadband connectivity
- Staff – number of agents, supervisors, QA managers, VPs, auditors, training managers, administrators, and the number of shifts and the hours that they work
- Location – low-cost country or skill-based country as the location
The variables that aren’t considered for this discussion include setting up costs, finance and administration costs, cost of PCs and the likes.
What is Call Center Costs Structure in India
What clearly comes out as the highest cost in all of these variables is the labor cost. Globally, it is anywhere between 60% to 76% of the cost of running a virtual call center. Compared to this, every other cost is miniscule in nature. The technology elements including the platform, telecommunication and networking adds up to anywhere between 9% and 16% of the overall cost. If you leave out telecommunication and networking, the cost that we are talking about is only in the range of 2.5% to 6% for technology alone.
Read more: What is Call Center Workforce Optimization?
Why Bother About Technology Investments Then?
Ideally, no call center should bother about it, for it is only a small percentage of their cost structure. They should go after the right technology to make sure that their agents achieve peak efficiency and productivity. Labor, after all is the biggest contributor to their costs, which is almost 3/4th of their costs.
Imagine with better technology, if the productivity of their call center increases by 20%, then the technology investments pay for itself in the first year itself. After which, it is literally free.
In addition, you also have the option of looking at on-demand contact center solutions that bundles the telecom infrastructure and offer it as a comprehensive solution on a per-minute basis. Here, your capex is kept to the minimum while you leverage the benefits of a full-blown enterprise-class contact center platform.
Frequently Asked Questions
The cost of a call center is driven by multiple variables, including the size of the operation, the nature of the service (outbound sales, technical support, healthcare RCM), the technology stack, the telecommunications setup, the staffing structure, and the location. Among all these, labor costs dominate the cost structure, accounting for 60% to 76% of total operating expenses.
Call center technology, including the platform, dialing systems, and supporting tools, typically accounts for only 2.5% to 6% of total operating costs. Even when telecom and networking are included, technology-related expenses usually remain below 16%, making them significantly lower than labor costs.
Costs vary significantly depending on whether the call center focuses on outbound sales, multi-level technical support (L1/L2/L3), or specialized operations such as healthcare revenue cycle management. Each model requires different skill sets, staffing structures, and technology capabilities, which directly influence cost.
Per-seat cost is determined by factoring in agent salaries, supervisory overheads, shift structures, telecom expenses, technology licensing, and infrastructure. Since labor accounts for the largest share of costs, variations in staffing and productivity have the greatest impact on per-seat pricing.
Shifting suitable interactions to self-service channels, such as IVR, chatbots, FAQs, and websites, reduces reliance on agents for repetitive queries. This allows contact centers to optimize staffing levels while maintaining service quality, directly lowering operating costs.
On-demand and cloud-based contact center solutions reduce capital expenditure by bundling infrastructure, telecom, and platform costs into a usage-based model. This allows organizations to minimize upfront investment while still accessing enterprise-grade capabilities.