It wasn’t supposed to be like this. 2001 was to be the year when colonists on the Moon discovered a black monolith, which emitted an ear-piercing signal in the direction of Jupiter, leading to the launch of an interplanetary space mission and, in turn, the discovery of another black monolith and infinite knowledge about man’s place in the universe. (Or something like that; the symbolism at the end of 2001: A Space Odyssey has always been a bit hazy to me.) Instead, 2001 was the year in which two steel monoliths on Earth were destroyed, through the depraved acts of people who, truth be told, seem to have more in common with the ape in the opening scene of Arthur C. Clarke and Stanley Kubrick’s visionary film. You know, the one who is inspired to utilize a large bone as a tool — and promptly uses it to bash in the head of his rival.
Now you’re wondering: What exactly does all this have to do with contact center technology? Simply: Over the past few years, as customer relationship management (CRM) became a buzz term, the flashy call and contact center technologies that made it work grew hot. But even before Sept. 11, 2001 was destined to go down as the year in which the dot-coms tanked and the whole technology market nearly followed. After Sept. 11, everything just got a lot worse. Now, with the economy officially in recession, companies don’t have the luxury of being lured by flashy tools or buzzwords. But most industry analysts agree that in the current environment, contact centers take on even greater importance. So while 2001’s space odyssey did not go off as predicted, the sequel “year we make contact” looks like it will move up a lot sooner than 2010. Here’s what the analysts are saying — and what you should know — about contact center technologies now.
Back to the future
“I see a trend toward the basics,” says Gary Lemke, president of RealMarket (www.realmarket.com), which tracks customer relationship trends and the stocks of CRM providers. “I think there will be a move to get back to the fundamentals of good customer service, instead of the gee-whiz, fancy stuff; more focus on customer retention versus customer acquisition. It’s a matter of blocking and tackling rather than razzle-dazzle — maybe not as exciting to watch, but much more effective.”
Lemke also foresees a move toward workforce management tools, which, he notes, “have the ability to save lots of money, since people costs in the call center are big, big, big. And if you thought cost control was important before, it’s now even more important. Justification of technology purchases is that much more difficult.”
A November 2001 Yankee Group (www.yankeegroup.com) report agrees that workforce management tools — which are included in what Yankee Group categorizes as “agent performance solutions” — have taken on great importance. As the report’s author, analyst Devon Shea, explains, “Companies have been utilizing some combination of automation and internal business processes for scheduling, monitoring, and training agents to improve performance for some time. However, as the economic climate becomes increasingly competitive and as agents continue to be challenged with an adjustment to new channels, new technology, and more demanding customers, contact centers must make sure they are taking full advantage of the capabilities of newer performance tools.”
The newer tools of which Shea speaks include quality monitoring systems. These have evolved from simply recording every phone call into rules-based systems that can be set to record only the most pertinent transactions — and that can record agents’ chat and browse Web sessions as well as traditional voice interactions. NICE, Witness Systems, and Envision Telephony all offer this ability. Shea also cites e-learning and agent empowerment tools as key performance management components.
“Many headaches have been caused over the last few years by the failure of CRM initiatives to pay enough attention to one critical component — the employees using the systems,” says Shea. “This leaves the door open for several vendors already focused on contact center performance to try to fill in the gaps by offering agent enhancement solutions.”
Quality monitoring and workforce management vendors have been the quickest to emerge with agent-empowering applications, but, Shea says, they still await large-scale implementation in the contact center market. Still, the Yankee Group report predicts that, as contact center managers continue to feel the pressure to make agents more effective, and as interest in e-learning grows, these vendors will be able to make a good case for the benefits of a complete workforce optimization solution.
Driving with the top down
While agreeing with Lemke’s assertion that emphasis on cost control will be paramount, Bill Chambers, principal analyst and director of CRM Research for Doculabs (www.doculabs.com), sees a somewhat different spin. Predicts Chambers, “The charge coming down from corporate executives will be, ‘Good customer service is terrific, but how do we use it to expand our market and sell services?’” Chambers points out that disillusionment with current direct marketing methods (including e-mail) make the contact center, with its captive audience, an even more attractive venue for marketing efforts. “There’s been talk for a long time about turning contact and service centers from cost centers into revenue generators,” says Chambers. “In this economy, that’s become critical for the whole manufacturing/retail space. Fortunately, the needed technologies exist, and these factors will combine to help push marketing efforts into the contact center.”
Among the leading CRM suite vendors, however, Chambers does not see any with really strong marketing automation or marketing analytics capabilities. “Kana is the leader, as far as having the best individual components goes,” he says. “But their level of integration is not where it needs to be; it’s probably about a year away.” He views Siebel and PeopleSoft as also having strong marketing capabilities, although to a lesser extent. The trend, says Chambers, is toward a best-of-breed approach, employing some of the many marketing analytics vendors that, for instance, offer integration with Siebel. Among these he names Chordiant, Protagona, MarketFirst, SAS, Teradata (a division of NCR), and Unica. However, as Chambers also notes, these stand-alone solutions are quite expensive, and as such are targeted toward Fortune 500 companies. Mid-market firms are much more likely to use whatever marketing capabilities are already built into the CRM products aimed at that level.
Knowledge is power
Another trend Chambers sees is a demand for more sophisticated knowledge bases. The reason? “Many organizations have finally made the move to multiple customer-contact channels,” says the Doculabs analyst. “Most now at least support e-mail, and quite a few have customer self-help capabilities on their Web sites. These generally take care of the simpler problems and FAQs — and there is a cost savings in rerouting those interactions off the phones. But the result, for a lot of retailers and high-tech manufacturers in particular, is that their remaining customer contacts are fairly sophisticated; the phones get the more complex problems. And agents are simply not in a good position to respond to those without an extensive knowledge base.”
Here again, notes Chambers, Kana is alone among CRM vendors in having a complete, full-bodied knowledge-base component; most other applications rely on ServiceWare or Primus knowledge tools. And Chambers expresses surprise that those two knowledge vendors are still out there on their own: “Somebody’s going to buy them,” he predicts.
Chris Martins, research director and CRM analyst at Aberdeen Group (www.aberdeen.com), makes the case (in an Aberdeen report published in November 2001) that the economic climate is most favorable for third-party providers of customer interaction management (CIM) solutions. Such suppliers can offer “the assurance of an established solution delivery mechanism that manages both technology complexity and supplier uncertainty,” says Martin. CIM solutions providers can thus insulate clients from the tumult of the market, offering experience and expertise that help clients transcend difficult times. However, warns Martins, CIM outsourcers must show that they deliver “more than just cost savings based on phone banks and staffing. Cost management is important, but penny-wise customer management strategies often prove to be customer-relationship foolish.”
Anticipating the argument that with the increased emphasis on customer relationships, customer-facing applications are simply too important to be farmed out, Martins points out that outsourcing — in the form of call centers and teleservice providers — is a longstanding practice. He contends, “These service providers have been a key delivery mechanism for customer management processes in both marketing (customer acquisition) and service (customer retention). In fact, such outsourcing long predates the time when ‘CRM’ became the accepted moniker for such solutions.”
In a December 2001 Yankee Group report that makes a similar case for customer care outsourcing, analyst Devon Shea says that “both large and small enterprises, including several Fortune 500 companies, have been taking advantage of the benefits of outsourcing segments of customer care (including customer service, tech support, and telesales) since the mid-1990s.” Indeed, notes Shea, “companies facing enormous pressures to reduce operating expenses may be unable to not consider the value proposition associated with outsourcing in view of the opportunity it presents to take advantage of large and fairly immediate cost savings.” Shea explains that leading outsourcers such as Convergys, Sitel, and ICT Group present clients with an option that allows them to quickly reduce expense while acquiring significant global agent support or advanced technological capabilities. He cautions, however, that handing off customer care to a third party puts another layer between a company and its customers, so merchants must take care to choose a third-party provider that can understand and execute their customer strategy.
Shea notes that many outsourcers are planning to expand into areas such as fulfillment services and back-office business processes. And, echoing the viewpoint of Doculabs’ Chambers about the direction contact centers will take, Shea indicates that outsourcers have been looking into providing deeper marketing, customer information, and analytics capabilities. “As this market grows over the next several years,” he says, “many outsourcers (both the large, traditional outsourcers and the smaller, more niche outsourcers) will be looking to further differentiate themselves. Several have already begun to offer innovative technology and services, such as offshore outsourcing and advanced customer analytics capabilities. In the future, they will continue to broaden the scope of services that can help companies implement a complete, customer-focused strategy.”
Who’s who, and what’s what?
One reason for the popularity of outsourcers is that they save companies from the tasks of selecting and implementing their own contact center solutions. Just navigating the maze of solution components and providers has been a cryptic process, albeit one that, most analysts agree, will become simpler with continued market consolidation. Doculabs’ Chambers says that the number of leaders in the CRM arena is shrinking, and that it will be a tough year for CRM vendors in general — a year that a lot of providers will not survive. Those high-end vendors he expects to still be around are Siebel, PeopleSoft, Kana, and ERP vendors SAP and J.D. Edwards. Chambers sees these last two as a particularly good fit for manufacturing companies’ needs, because they also provide back-office solutions. Among mid-market companies, he expects most implementations to be of Pivotal, Talisma, or Onyx.
Robert Mirani, research director at Yankee Group, points out in a December 2001 report on the state of the contact center solutions market that “a clean, single-vendor, software-based, multichannel contact-center-in-a-box solution is more myth than reality, and what is available from any one vendor is unlikely to meet the needs of most customers. Best-of-breed solutions and custom integrations will still be required for even moderately complex contact center environments.”
Mirani foresees an evolution away from a CRM contact center model of hardware and software products pigeonholed into many fixed categories (such as ACDs, IVRs, or e-mail systems). These categories will gradually dissolve, and the lines between hardware-based platforms and middleware platforms will ultimately blur, he says. That, Mirani believes, will leave two main categories of products: premises-based and network-based interaction management solutions from vendors such as Avaya, Aspect, Cisco, Apropos, and Interactive Intelligence, and CRM applications from Siebel, PeopleSoft, E.piphany, Clarify (Amdocs), Oracle, Pivotal, and SAP.
And, we’re relieved to note, no one mentioned any products called HAL.
Jeff Morris is a freelance writer who writes frequently on technology and retail topics. Based in South Salem, NY, he can be reached at [email protected].
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|Amdocs Limited||(314) 212-7000||http://www.amdocs.com|
|Apropos Technology Inc.||(630) 472-9600||http://www.apropos.com|
|Aspect Communications Corp.||(408) 325-2200||http://www.aspect.com|
|Avaya Inc.||(866) 462-8292||http://www.avaya.com|
|Chordiant Software Inc.||(408) 517-6100||http://www.chordiant.com|
|Cisco Systems Inc.||(408) 526-4000||http://www.cisco.com|
|Convergys Corporation||(513) 723-7000||http://www.convergys.com|
|Envision Telephony Inc.||(206) 621-9384||http://www.click2coach.com|
|E.piphany Inc.||(650) 356-3800||http://www.epiphany.com|
|ICT Group Inc.||(215) 757-0200||http://www.ictgroup.com|
|Interactive Intelligence Inc.||(317) 872-3000||http://www.inin.com|
|J.D. Edwards & Company||(800) 727-5333||http://www.jdedwards.com|
|Kana Software Inc.||(650) 298-9282||http://www.kana.com|
|MarketFirst Software Inc.||(650) 691-6200||http://www.marketfirst.com|
|NCR Corporation||(937) 445-5000||http://www.ncr.com|
|NICE Systems Ltd.||+972-(0)9-775-3777||http://www.nice.com|
|Onyx Software Corporation||(888) 275-6699||http://www.onyx.com|
|Oracle Corporation||(800) 672-2531||http://www.oracle.com|
|PeopleSoft Inc.||(925) 694-3000||http://www.peoplesoft.com|
|Pivotal Corporation||(604) 988-9982||http://www.pivotal.com|
|Primus Inc.||(937) 294-6878||http://www.winholesale.com|
|SAS Institute Inc.||(919) 677-8000||http://www.sas.com|
|ServiceWare Technologies Inc.||(412) 826-1158||http://www.serviceware.com|
|Siebel Systems Inc.||(650) 295-5000||http://www.siebel.com|
|SITEL Corporation||(410) 246-1505||http://www.sitel.com|
|Talisma Corporation||(425) 897-2900||http://www.talisma.com|
|Unica Corporation||(781) 259-5900||http://www.unicacorp.com|
|Witness Systems Inc.||(770) 754-1900||http://www.witness.com|