Contact Centers used to be simple affairs. You packed some agents into a room, gave them a phone line and some supporting equipment and, Hey Presto! You were in business. While a few may still hanker for those simpler times, the call center world has forever changed. What we are seeing today is the emergence of the virtual contact center.

Fueled by Voice over Internet Protocol (VoIP) technology, contact centers are becoming more versatile than ever before. They can be onshore, nearshore or offshore. They can be centralized, distributed or entirely based at home. They can be in one time zone or many, one site or multiple locations. Or they can be made up of a complex mixture of all of the above.

This revolution is based on the fact that VoIP is reaching maturity at last. Just look at the vendors now offering VoIP products. As well as VoIP players like Vonage, AltiGen, Shoreline Communications and Vertical Networks, you have the technology being embraced by traditional PBX vendors such as Avaya, Nortel, Mitel, Alcatel and Siemens, as well as networking specialists such as Cisco and 3Com. You even have a free open source VoIP-based PBX known as Asterisk.

While VoIP appears to be new, it is really just the latest stage in the transition of voice transmission from analog to an all digital process. VoIP allows many voice transmissions to pass over the same piece of copper or fiber. It does this by dividing the communications into packets and routing these packets, mixed in with those from other users, to the other person in the conversation.

IP networks, after all, were not designed with the same quality of service in mind as phone systems. The architecture anticipates that some packets will get lost or delayed along the way and contains procedures to request the retransmission of any missing packets. From a data standpoint, this may mean that the user has to wait an extra second or two for a web page to download. But voice transmissions can't work that way. To be effective, it requires a continuous stream of data. You can't have a random series of three-second delays in the middle of a sentence. Thus quality has proved to be a major barrier to the widespread adoption of VoIP.

To guarantee an adequate level of service, therefore, the International Telecommunications Union (ITU) has approved the H.323 standard for voice, video and data. According to Bern Elliot, a communication specialist at Gartner Group, the implementation of H.323 by manufacturers and carriers brings VoIP quality up to the level of older switched networks and opens the door for its widespread adoption. Elliot states that VoIP quality matches that of traditional land line communication.

VoIP calls can be made on the Internet using a VoIP service provider and standard computer audio systems. Alternatively, some service providers support VoIP through ordinary telephones that use special adapters to connect to a home computer network. Thus VoIP has become the true enabler of home-based CSRs.

In many ways, this is actually bringing about a resurgence in U.S.-based contact centers. For many years, people have been saying that offshore contact centers are the wave of the future. From a cost perspective, this view was hard to argue with. Yet now we see VoIP bringing about a new era of home-based U.S. CSRs. Because the cost of providing service has come down significantly, American centers can now compete again on a more even playing field.

So the likelihood is that we will see another wave of call center growth in North America, many of them VoIP-enabled virtual contact centers. While some agents will be found within traditional call centers, many others will be working from home in a highly productive manner.

So does this signal the end of offshore contact centers? Hardly. Just as VoIP is the enabler of virtual contact centers on these shores, so will it produce a surge of overseas expansion. With so many companies now operating globally, it makes no sense to offer customer support in only one or two languages. But the more languages you enter into the picture, the higher costs soar. This spiral can be reversed by deploying virtual contact centers in every country serviced. Some countries can have centers specific to their region, while others can cater to several languages - either using multilingual agents, or via a network of home-based CSRs in the countries required.

This technology, then, has brought about a shift in the way business must think about contact centers. To stay competitive while reducing cost per call, companies must embrace VoIP in the call center and must get used to planning in virtual terms.

Similarly, vendors serving the contact center community have to get with the program and release VoIP versions of all their products. Those who truly grasp the implications of this technology can rapidly rise to visionary status in their respective fields, and are well-positioned to achieve market dominance.