For most organizations, the key questions about moving their contact centers to the cloud are “When can we do it?” and “How can it best be accomplished?” as opposed to “Is it the right step?” But even in a business environment where companies are striving to meet rising customer expectations for responsive service on any channel they choose and looking to increase flexibility and agility, practical questions on logistics, costs and capabilities must be addressed before organizations make a bottom line decision.
In the first of a series of analyses on the transition to cloud and multi-channel service five experts from industry-leading providers examine the forces shaping the market, provide intelligence on why they believe the growth rate of adoption will expand even more rapidly, discuss emerging functionalities empowered by cloud solutions, and offer guidance on what to consider in selecting a vendor. We spoke with:
Rob Farris, Chief Marketing Officer, Genesys | Echopass
Liz Osborn, VP, Product and Solutions Marketing, Five9
Mariann McDonaugh, CMO, inContact
Sachin Davankar, Product Marketing Manager, KANA
John Amein, Vice President, Product Management, Aspect
- Over the past year, what developments have you seen that changed the landscape of the market for cloud-based contact centers?
Sachin Davankar, KANA: Cloud-based contact center solutions have seen increased adoption globally during the past few years. The upward trend continued well through 2013, and some observations have been noted below.
Focus on customer experience is coming of age as customer-centric strategies envisioned more than a decade ago begin to take form with technology as a strong enabler.
Customers are dictating new terms of modern commerce and service empowered by technology, transparency and a wealth of information. They want their voices to be heard. They assert for engagement across multiple channels and media, and expect their needs to be anticipated, which is driving organizations to offer more channels for customer engagement. They are demanding, and when their needs are not met, they will not hesitate to patronize a competitor or broadcast their displeasure by leveraging social media channels to everyone they know and even some they don’t. Social media platforms have spun a new form of social customer service to bring an organization’s frontline staff into the public forum.
There are also a growing number of emerging vendors in the past 12 months who are positioning themselves as providers of multichannel products delivered in the cloud, increasing the choice of vendors and options than ever before, thus creating fierce competition in the market.
Although cloud-based contact center infrastructure solutions are not yet appropriate for all enterprises or departments, they have altered the contact center competitive landscape for the better. An air of cautiousness prevails, however, as buyers appreciate the substantial differences between the breadth and depth of solutions.
Rob Farris, Genesys: We’ve seen a clear move toward vendors enhancing their “usability” with new user interfaces, improving administration capabilities, and providing greater access to configuration tools for faster response to changing conditions.
We’ve also seen the strong emergence of “hybrid” solutions which effectively support the integration of other applications that may not be transitioning to the cloud due to many different requirements. These integrations to existing devices, systems, and software are becoming critical to provide the full range of integrated solutions to support an enhanced customer experience, and improved operational efficiency.
With the major security breaches that have taken place this year, we’ve seen more vendors enhance their security offerings to provide full 3rd party attestation of security capabilities, coupled with a move toward the highest possible security levels to engender customer trust (i.e. Cloud Service Provider, level 1), rather than the inadequate self-attestations of the past.
Mariann McDonagh, inContact: At inContact, we’re seeing much larger companies moving their contact centers to the cloud. They are moving away from antiquated premise systems and now see the cloud as the best way to unify multiple contact centers and to provide long term flexibility and scalability. The biggest driver of change is coming from consumers who are demanding more customer service options and personalized experiences.
Liz Osborn, Five9: Over the past year, we've seen a growing acceptance of cloud-based software solutions in contact centers of all sizes. From just a few seats for inside sales or customer support in startups to multi-site contact centers around the world, more companies are seeing the advantage of moving their contact center to the cloud.
Another big development we've seen is the movement to at-home agents; many of our customers have programs to supplement their brick and mortar facilities. Some have started a work at home program for a few days a week to incentivize top agents; while others have only virtual, work-at-home agents, with no contact center facility, which can greatly improve and extend the pool of agents they can hire and result in huge cost savings.
John Amein, Aspect: First, the cloud is a massive IT general trend that has significantly accelerated in the last year. It's now cool to be in the cloud. There are still a variety of concerns, but the benefits of lowering IT effort and speeding deployment are real.
Second, the customers at a business level want to "variabilize" their costs. They can expense as they go and better manage cash. Cloud is a great way to do that although not the only way. Business leaders are pushing their companies to think this way, which in turn is driving IT organizations to get familiar with the cloud if they don't already know it. This is especially true of the more risk-averse companies who don't follow cool.
Third is software. Aspect is changing the landscape significantly in this coming year because of the work we've been doing to develop Zipwire, a true cloud contact center solution that delivers great functionality with a no-risk, self-service signup. And unlike many of the smaller cloud solutions based on Asterisk or even some of the name brands that are just their regular on-premise solution hosted in the cloud, Zipwire scales in a true on-demand fashion.
- With greater awareness of the benefits offered by cloud platforms, do you foresee the adoption rate in contact centers growing even more quickly than some experts have projected?
Sachin Davankar, KANA: A number of factors contribute to an organization’s ability to adopt cloud platforms and reap the benefits. Existing contracts often lock organizations into stale technology solutions, thus proving to be a barrier to adopting newer platforms, not necessarily just cloud. Investments in existing technologies need to be protected, and more often than not, any adoption of cloud platforms requires some form of integration and considerable thought given to security. This introduces an element of latency in adopting newer technologies, including cloud-based platforms, thus impacting a company’s ability to derive benefits.
Our observation is that organizations at the end of the life cycle of existing solutions have a strong preference to adopt cloud platforms. A growing number of small businesses, especially in the online retail sector, now find it easier to adopt cloud-based platforms with a rich feature set due to lower cost of ownership and the flexibility to scale up during peak periods.
The overall adoption rate will definitely rise overall, but organizations with a greater ability to overcome barriers to adoption will definitely contribute significantly to the overall rate. The public sector operates under a significantly different set of parameters where data sensitivity, compliance and security trump the adoption of cloud-based platforms unless vendors can prove 100% compliance. Validation of these parameters impacts the rate of adopting cloud-based platforms.
Rob Farris, Genesys: Yes. The analysts have traditionally been quite conservative on their cloud forecasts as the market has been emerging. With the recent well-publicized successes of cloud implementations, we see that trend only gaining additional speed in the coming years due to the popular cloud benefits of substantial cost reduction and shifting the challenging capital expenditure process to an operating expense model; the speed at which cloud solutions can be implemented; and the significant non-contact center benefits of IT value transformation, corporate competitive differentiation, and enhanced agility in the marketplace.
Mariann McDonagh, inContact: 2014 is looking to be the perfect storm for growth. According to Gartner, customer service is a major strategic focus for top executives this year. Companies are seeing their customers lured away by more nimble competitors. To differentiate and thrive, companies must expand beyond voice-only service to meet their customers in all channels, from email and online chat to mobile and social and more. Under these conditions, growth in the cloud will continue to accelerate.
Liz Osborn, Five9: Most experts predict anywhere from 12%-20% growth in cloud contact center seats over the next few years. With more than 6.8 million agents in the US and less than 10% of those currently using cloud based contact center seats, we expect adoption of cloud platforms to increase significantly in the next few years.
John Amein, Aspect: The contact center business overall is a relatively slow growth market. So there is not a lot of new contact centers. However, there's always a percentage each year that are doing a refresh due to the age of their systems or as a result of a merger or new needs. Those companies in the refresh cycle are more seriously evaluating cloud for the future instead of buying a system to put on their premises. The adoption rate of this community is what we're measuring. Analysts are usually overly optimistic, but in this case, we think they have it about right.
Therefore, adoption will be high for those companies in the refresh cycle, but the overall market will still take years to be more cloud than on-prem.
- How important is it for contact center managers to be able to make a stronger case for adopting cloud contact center solutions to C-level executives?
Sachin Davankar, KANA: Contact center managers are the ones who are best positioned to make a case for any solution that can improve operational efficiency in their contact center and improve customer experience. A consistent observation however, particularly in midsize to larger organizations the challenge to make a strong case to resonate the value at the organizational level. Dependency on existing technologies, back-office systems and exiting contractual obligations can prove to be deterrents in adopting newer technologies. The same applies to their ability to validate the business case for adopting cloud-based solutions. Contact center managers are urged to review these dependencies and engage proactively with IT and back-office management as operational efficiencies in the contact center may not necessarily improve overall organizational cost to implement.
Rob Farris, Genesys: It is critical that contact center managers address the cloud as a clear alternative for any substantial enhancements or replacement for their existing infrastructure. We are seeing a majority of customers now seriously looking at the cloud in their decision processes and contact center managers need to have the skills and education to provide guidance on all acquisition options, regardless of the ultimate decision to go cloud or remain with an on-premise solution. To do so, contact center managers need the right tools and knowledge to address the implications (financial, operational and strategic) of any viable alternative and should strive to enhance their education to support the decision process in these areas.
Mariann McDonagh, inContact: The conversation with C-level executives is about more than just efficiency. The strongest business case demonstrates not only cost savings but also revenue drivers such as changing customer preferences and the ability to handle more customer contacts during peak seasons. New customers coming to inContact say scalability and flexibility are primary motivations. They are seeing the customer- and business-focused advantages of the cloud.
Liz Osborn, Five9: It will be absolutely critical for the success of many companies, to adopt cloud contact center solutions in order to remain competitive. If your contact center isn't in the cloud, and your competitor is, they will have a huge competitive advantage over you.
Imagine this scenario: two companies are selling consumer products one company, who has their contact center in the cloud is able to scale up in hours, adding seats for peak seasons, or an unexpected spike in volume due to a new product. They can scale back on the seats when they don't need them, so they only pay for what they need on a monthly basis. They are able to hire a higher quality agent and pay them a lot less, because they can hire agents anywhere in the country, and let them work at home. No equipment overhead, hardware, or facilities are necessary. The system is easy enough to use that someone in the contact center can change routing strategies or IVR scripts if necessary, they no longer need to rely on IT to implement changes. Their systems no longer get in the way of providing an excellent customer experience. Their IT people are freed up from monitoring infrastructure and are able to focus on more strategic tasks to support the business. Their agent productivity is sky high, as they are able to use the same system for inbound and outbound calls, and integrate their CRM system with the contact center in days.
With happier customers, lower overhead, business agility and more productive agents, the competitor with an on-premise contact center system will find it difficult to remain competitive.
John Amein, Aspect: We don't see the contact center manager very often making this case because they are usually too engaged with execution. They want a system that works. The drivers for cloud tend to come from CFOs who want to ‘variabilize’ and CEOs and COOs who want to simplify their infrastructure and let experts run infrastructure so the company can focus on its value to its customers. The contact center manager is not usually driving the cloud decision unless they are frustrated with their ability to do their job on their current platform and are not getting support from IT.
- In addition to ACD, IVR/self-service applications and call recording, what functionalities do you see as important for driving demand for cloud-based contact centers?
Sachin Davankar, KANA: It should be noted that the initial driver for cloud-based contact centers was not necessarily the ability to deliver feature rich applications, but rather to eliminate the cost of ownership to organizations to manage and maintain technology. Cloud-based platforms primarily allow organizations to focus on their core business. From IT outsourcing to a steady evolution into the cloud, it seems to be a steady progression of software solutions to move all functionalities into the cloud.
Solutions, such as those offered by KANA, are the first to offer omni-channel contact center solutions where all functionalities are delivered via a unified desktop with rich knowledge-infused processes. On the rise are social monitoring tools that allow sentiment analysis and facilitate “response and resolve” capabilities driven by a contextual and centralized knowledge base. Mobility continues to pervade the market as vendors have critical functionality available on devices. Plug-and-play integration components are being deemed as essential as is the need for capturing, curating and analyzing big data. We expect to see a lot of movement in integration of customer experience with workforce management solutions and big data to facilitate actionable intelligence.
Rob Farris, Genesys: We see a growing move toward back-office and enterprise-wide workflow distribution, as well as analytics, driving additional cloud discussions. Both of these complex applications lend themselves well to a cloud environment, with vendor full service provisioning and consulting being key elements for successful implementations, as well as lower capital costs to initiate early stage projects.
Mariann McDonagh, inContact: Our research this year with Harris Interactive, showed that 86% of U.S. adults expect brands to offer multiple options and flexible timing to interact with customer service. In addition, we found that 87%of consumers want to be contacted proactively by an organization or company. This research underscores what contact center software must be able to support and enable for customer service—multichannel and self-service options via web, mobile and social as well as more personalized experiences including proactive outbound communications.
Liz Osborn, Five9: The ability to have one unified platform for blended inbound and outbound calling is key to improving agent productivity and is driving a lot of demand for us here at Five9. Also, multichannel capabilities like email and chat, social engagement and the ability to easily link mobile applications and the contact center, are all very important in today’s environment.
John Amein, Aspect: The features you mention are just call center. These are indeed essential, but businesses today need to interact or be prepared to act across all channels, including chat, texting, and social. Once you have those other forms of interaction, you have a "contact" center. These are the interaction functions that are important for driving demand.
br/>Furthermore, if you are contact center of reasonable size, say 100 seats or more, people performance and people management become critical. Managing all the people in the contact center, including forecasting load, scheduling, and coaching, without purpose-built systems becomes very difficult. This is Workforce Optimization in the contact center, and we see this as being an essential part of a customer engagement blueprint as contact centers get bigger. Contact centers larger than 100 won't move to the cloud without a Workforce suite.
- Among the key considerations for companies adopting cloud contact centers are vendor support in migration and implementation as well as long-term viability. In a climate where acquisitions and vendor attrition are inevitable, what qualities should businesses look for in selecting a cloud provider?
Sachin Davankar, KANA: As with any product selection, a number of factors come into play when selecting vendors. Cost of acquiring a product or service that best fits an organization’s needs is of prime importance and must be driven by a strong business case. A framework needs to be created for vendor selection that highlights the vendor’s past performance and its ability to execute on a strategic vision. A comparison of a vendor’s strategic vision from five years ago to date will reveal significant information about a vendor’s sustainability and capability to bring the vision to fruition. Vendors must support their customers’ existing software investments by continuing to enhance their products with new core features, capabilities and access to world-class services and support.
Vendors must be in a position to demonstrate the value of their customers’ investments in maintenance by delivering new, state-of-the-art applications that work across product lines to offer new and next-generation capabilities to enhance existing solutions. Determine vendor commitment to R&D and continued investment in new functionality and capabilities to deliver tangible business benefit and value on an ongoing basis.
Rob Farris, Genesys: First must be the successful track record of the vendor being evaluated. They should have been in the cloud business for many years and have the full skills, resources and demonstrated track record to handle similar implementations to the existing configuration.
The availability of key references using similar configurations and solutions is also critical, and must be handled with a deep level of private due diligence with direct conversations unfiltered by vendors.
It is essential to understand the vendor’s capabilities with adherence to strict security and SLA requirements that will determine the security and effectiveness of the overall solution. Deep due diligence by your IT security organization is required to thoroughly understand all elements of these key characteristics in the decision process, since once a security breach occurs it will be difficult to contain as well as very costly for the organization. The qualitative evaluation of any vendor’s true and consistent commitment to security should also be assessed carefully.
Finally, the importance of the correct cultural fit between companies cannot be understated. A full cloud implementation requires a strong mutual partnership between the companies. A tight relationship throughout executive management is indispensable to ensure that high levels of trust exist, and that the cloud organization is prepared and committed at the highest levels to support the customer’s ongoing business needs.
Mariann McDonagh, inContact: When you move your contact center to the cloud, trust becomes a big deal. With this decision, you are entering a partnership that is more than features and capabilities. You should look at long-term track record and commitment to the cloud. And you’ll want to ask detailed questions about security, reliability and performance. inContact was recognized as a market leader in Ovum’s 2013 Multichannel Contact Center Report, and was named by Forbes as one of America’s 100 most transparent and trustworthy companies.
Liz Osborn, Five9: Stability both financially and technically, is key for a cloud provider; businesses need to make certain that their provider is established with a reasonable number of successful implementations, solid references, and good financials. In addition, they need to make certain that the provider offers excellent customer and technical support. Checking references is, of course, a must.
John Amein , Aspect: First, it may be hard to see on the surface, but the fact is that cloud contact centers are not created equal: Scalability, ease of flexing, reliability, easy agent on-boarding, omni-channel , and workforce optimization are all examples of key areas of differentiation across vendors. Buyers have to look across all these aspects to ensure they are choosing a provider that can support their chosen customer engagement strategy. For example, how hard is it to move agents from the current system to a new system? Is it a lightweight browser model or a thick client with rich functionality? How big does the contact center need to grow over the next three years? Several cloud vendors are cost-effective and easy for smaller customers but cannot scale. A business has to put thought into their business model and the breadth of capability and size they need.
Second, the general rules of company viability also certainly apply: Does the vendor have critical mass to survive and grow? Does it have a strong service culture that retains customers? Is the vendor committed to the customer engagement market and not otherwise distracted by other parts of their business? Focus is an important quality if you want excellence in product and great support. I have always been a fan of choosing a vendor who has reached critical mass, has good financial backing, and is focused in a market. As a result, from the CEO down, everyone at that vendor will be thinking about how to make you successful. Speaking from experience with the Voxeo acquisition as well as others that I have seen at Intel, the focused companies with great products tend to be the products that survive.
The latest in-depth solutions will be presented at CRRMXchange’s Multi-Channel and Cloud Virtual Conference: Best Practices in Creating Customer Loyalty and Retention Strategies, March 17-20. You can attend 10 sessions on proven strategies led by top authorities, network with colleagues, and visit the virtual exhibit hall where you can download new product information, case studies, and more. Register for complimentary attendance at www.ecrmevents.com