You love reading predictions — admit it — and we love making them. And the good thing is, we’re not always wrong! For instance, in this space in a February 2003 article titled “CRM at the Crossroads” we quoted Sheila McGee-Smith, president of McGee-Smith Analytics: “In a year when companies are facing the watchful eye of the CFO in order to get project funding, speech recognition stands out as a leader in delivering ROI.”
We said that she noted some extremely interesting developments in natural language speech recognition technology. Six months later, we reported on the O+F Web site about a new Forrester Research report, “Speech Technologies: Ready For Prime Time,” that concluded, “Forrester thinks the success of basic apps has fueled a second wave of innovation, and it’s a good time to bet on speech.” Well, if recent calls to service centers are any indication, those words were prophetic. Can you say “service”? OK — I think you said “service.” Is that correct?
SERIOUSLY
So don’t laugh when we say that 2005 could mark the beginning of the end of the call/contact “center” — as in, that place with rows of cubicles populated by headset-wearing CSRs, increasingly located in India. Whether, or when, this happens depends largely on the continued proliferation of broadband Internet services.
Chris Selland, vice president of sell-side research at Boston-based Aberdeen Group, says that the most significant call/contact center technology development of the past year was the entrance of IP telephony (VoIP, or “Voice over Internet Protocol”) into the contact center market. “Most often these days it is used to support remote (often home) agents and sometimes, offshore operations,” says Selland. “Over the long term (five-plus years), VoIP will allow contact centers to ‘virtualize’ to the point where many may no longer be ‘centers’ at all, except in name.” And, adds Selland, “2005 will be a year of heavy VoIP adoption and the beginning of the replacement cycle for traditional CTI (computer telephony integration) and telephony services.”
It’s not just Selland who’s high on VoIP. Brad Cleveland, president and CEO of Anna-polis, MD-based Incoming Calls Management Institute (ICMI), says that among a number of call/contact center technologies that are “hot” right now are VoIP capabilities, “which can have huge implications [for] costs and network structure.” Cleveland says that a related, but often ignored, part of the picture is what is happening on the callers’ end. “For example, the proliferation of broadband services to the home is opening up all kinds of opportunities for enhanced communication services (Web collaboration, instant messaging, etc.),” he explains. “And broadband services, along with VoIP developments, are fueling the growth of telecommuting — a notable trend in the call center sector.”
We also heard from Seema Lall, an industry analyst with Frost & Sullivan. Says Lall, “IP is making its move within the contact center driven mainly by VoIP cost savings and its ability to support remote agents.” While concerns about quality of service and high upfront costs associated with switching to IP-based systems are some of the barriers holding back quicker adoption, Lall points out that “a significant driver is the ability of IP contact centers to easily and cost-effectively merge multiple, geographically dispersed contact centers into a single virtual center.”
Furthermore, a recent report authored by Forrester Research Inc. vice president Elizabeth Herrell, “Trends 2005: IP Telephony,” states, “Increased adoption rates for IP telephony (IPT) are the bright spot in the enterprise communications market.” Pointing out that IPT systems remain proprietary, requiring companies to evaluate application features and functions in vendor selections, Herrell notes, “Major applications that affect IPT decisions include contact centers, unified or voice messaging, and conferencing.” Thus, companies will need to “evaluate related applications in their IPT proposal requests to ensure that they retain critical functionality and interoperability with existing applications.”
WHAT’S A VOIP?
As Chris Selland noted in a report he did for Reservoir Partners prior to joining Aberdeen, VoIP describes the technologies involved in taking voice communication, packetizing it via Internet Protocol (IP) — much like packages on a conveyor belt — and transmitting it over private or public (particularly, the Internet) networks. In other words, VoIP permits Internet telephony, in which there is no requirement for a telephone company or separate telephone circuits. In developing the business case for VoIP, the Reservoir Partners report stated that the VoIP value proposition would be strongest in places where two networks (voice and data) converge, and where this convergence can unlock both powerful new capabilities as well as significant cost savings — one such place clearly being the contact center.
While Selland notes that VoIP can offer savings over traditional switch-based telephony, he also points out that such savings are likely to be insignificant in light of established carriers’ competitive pricing strategies, based partly on their own growing use of VoIP to lower costs. (He also expects pricing pressure to force established telcos to move to a flat-rate pricing structure to compete with VoIP.) Where Selland sees real economies is in the ability to reduce technological complexity in the call/contact center. Integrating voice and data networks through CTI, a notoriously expensive proposition, would no longer be necessary, since there is no “integration” needed when everything is already running over a single IP network.
SHRINKAGE
Last August, the research firm Datamonitor projected that between 2003 and 2008, the American contact center market would shrink because of the use of self-service technologies, the effects of the federal do-not-call list, and offshore outsourcing. Aberdeen’s Selland opines that the advent of VoIP won’t send the entire contact center industry offshore. Indeed, says Selland, although it will “certainly lead to the shuttering of many uncompetitive, ‘legacy’ call centers, long-term it may very well bring some agent seats back onshore.”
CHANGING CHANNELS
Frost & Sullivan’s Lall notes, “ACD systems have traditionally been the key technology component used within contact centers, due to their proven positive impact on efficiency and productivity in a complex multi-channel contact center routing environment.” And Brad Cleveland points to the newest generation of ACDs, which do a much better job of integrating multiple contact channels, as one of the hot contact center technologies. Yet, Selland observes, “today’s ‘contact center’ is still mostly two channels: voice and e-mail. While that’s one more channel than we had a few years back in the voice-only days, channels will expand even more dramatically over coming years.” Selland contends, however, that this expansion will be “pulled” by consumer adoption and demand, rather than “pushed” by contact centers — and that a key to that “pull” will be expansion of bandwidth on the consumer side, leading to increased adoption of multimedia. Lall says that IP-based ACD systems “mark the evolution to next-generation products, and are tied in to the broader trend toward increased adoption of IP within contact centers.”
NOTHING LEFT OF CENTER
Once IP is adopted fully, says the Reservoir Partners report, labor essentially becomes the only reason to manage centralized contact centers. The report still does not expect any immediate shift to virtual contact centers, pointing out numerous and powerful reasons to manage operations — and people — centrally. But with existing contact centers already enhanced with IP-based virtual capabilities, VoIP will accelerate outsourcing and offshoring by eliminating a major barrier to effectively integrating offshore/outsourced capabilities, enabling companies to outsource more efficiently than ever before. The result, says the report, is that within ten years, only the largest companies will even think about running their own contact centers.
Brad Cleveland thinks the most important impact of information technology is not the capabilities of the technologies themselves, but that these systems force you to organize your processes and information more logically. “We’ve certainly seen that in the call center space,” affirms Cleveland. “For instance, knowledge management systems have little value if processes, training, performance objectives, and culture don’t support these initiatives. Similarly, quality-monitoring systems aren’t worth much if you don’t know what you want to accomplish at a higher level.” And, says Cleveland, the most important technology trend in coming months will be driven by a larger development: renewed understanding of the call center’s strategic value. “Call centers have the potential to create value on three levels,” he proclaims. “Level one is basic efficiency — because call centers pool information, people, and technology resources, they are a highly efficient means of delivering service. A second level is that of customer satisfaction and loyalty. Research has begun to reveal the powerful connection between high levels of customer loyalty and profitability; in fact, there is a significant difference in intent to repurchase by someone who checks ‘very satisfied’ on a customer satisfaction form, versus someone who checks ‘somewhat satisfied.’ One of the call center’s major objectives must be to ensure that customers’ views end up in the ‘top box’ on customer satisfaction surveys.”
A third level, according to Cleveland, is contribution to other business units. “Call after call, the call center captures information that can literally transform an organization — e.g., intelligence that helps other departments improve quality, further research and development, focus marketing campaigns, detect potential legal or publicity problems, and provide input on how to improve self-service systems,” he says.
THE MEDIUM ISN’T THE MESSAGE
So, concludes Cleveland, think about the potential: “How can we use routing and reporting systems, quality monitoring capabilities, VoIP, or whatever, to ensure we are creating value on all three levels? This will mark the most important trend in coming months; it’s a trend that goes beyond technology capabilities themselves, and instead considers their impact on the business environment.”
But if you can accomplish that most efficiently by utilizing the best customer reps wherever they happen to be, talking with customers over the Internet while exchanging documents, pushing pictures, and playing videos … it may be time to say, “Call Center, Rest In Peace.” This year. Or maybe in 2006. Or 2007. Not that we don’t have confidence in our predictions.
Jeff Morris, O+F’s contributing editor, hasn’t been able to get DSL service for his home.
TEMPUS FUGIT
AVG. SPEED OF ANSWER
19.8 seconds
AVG. TALK TIME
4.6 minutes seconds
AVG. TIME IN QUEUE
29.9 seconds
Source: O+F survey, 2004
DOUBLE AGENT
AVG. # FULL-TIME AGENTS
107
AVG. # PART-TIME AGENTS
76
AVG. HOURS PER DAY
14.9
Source: O+F survey, 2004
CALL CENTER SUPPLIERS
Apropos Technology Inc. www.apropos.com
Aspect Communications Corp. www.aspect.com
Aspen Systems Corp. www.aspensys.com
Avaya Inc. www.avaya.com
Cisco Systems Inc. www.cisco.com
CosmoCom Inc. www.cosmocom.com/
Convergys Corp. www.convergys.com
Customer First Call Centers, Int’l www.customerfirst.com
eConvergent Inc. www.econvergent.com
eGain Communications www.egain.com
Empirix Inc. www.empirix.com
Envision Telephony Inc. www.click2coach.com
eOn Communic. Corp. www.eoncommunications.com
Epiphany Inc. www.epiphany.com
etalk Corp. www.etalk.com
ICT Group Inc. www.ictgroup.com
IEX, a Tekelec company www.iex.com
Interactive Intelligence Inc. www.inin.com
IntraNext Systems Inc. www.nextsys.com
KANA Inc. www.kana.com
NICE Systems Inc. www.nice.com
Nortel Networks Ltd. www.nortel.com
Siebel Systems Inc. www.siebel.com
SITEL Corp. www.sitel.com
SYKES Enterprises Inc. www.sykes.com
Witness Systems Inc. www.witness.com
For a complete annotated listing of these companies, as well as full contact information, visit www.opsandfulfillment.com.
— JM