Analyst Perspectives

Twenty years ago, when I began consulting in the contact center industry, building a call center was a hard, resource-consuming task. Just to begin handling calls required purchasing lots of proprietary equipment, such as PBXs and automatic call distributors (ACDs), as well as software for computer/telephony integration (CTI) and business applications such as case management and CRM – and then spending a lot of time and effort integrating them. Lots of tasks were managed using spreadsheets, and if you wanted anything more than the basic reports available from your PBX/ACD supplier, you would have to budget a great deal more money. Right from those early days, call center managers focused on efficiency and relied on basic metrics such as queue lengths, average call-handling time, hold times and call transfers.

Not far into the evolution of call centers, consultants – including me –  told companies to deploy interactive voice response (IVR) because it would support more advanced call routing. We also advised companies to deploy Web-based self-service applications because letting customers perform tasks themselves would be cheaper than paying agents to handle calls, and consumers would demand such capabilities.

To help drive efficiency, vendors developed workforce optimization systems to record calls (hardly any of which were actually listened to), products to help increase agent utilization and systems to let companies monitor agent performance more rigorously. The name of the game was still efficiency, and although people started talking about first-call resolution, the focus remained on average hold time (AHT).

According to my research, two decades later, things have not changed much. My latest research into contact center analytics shows AHT is still the number-one performance metric. My research into the use of technology in contact centers shows that routing to the next available agent is still the most popular use of call routing. The success of IVR is questionable, with more than 70% of visitors to IVR choosing the option to speak with an agent, and the same is true of Web-based self-service, where again more than 70% of people opt to call an agent.

The same research does shows two significant changes. More than 60% of companies have transitioned to voice over IP (VoIP), and companies have been hectically implementing additional channels of communication. My latest research into the state of contact centers shows companies now support an average of four communication channels. However, the focus on efficiency hasn’t changed – the transition to VoIP was made not to use all its new features but to save on communication costs and equipment, and the deployment of additional channels was done largely to divert calls from the contact center.

At this point I believe that contact centers can’t continue in this fashion, for three fundamental reasons:

• Consumers have grown used to using social media. If a company doesn’t support it, some consumers will not do business with it, and poor-quality products or service are likely to produce adverse comments on social media, with potentially major business implications.
• Customers have become more demanding. The purpose of having multiple channels of communication should no longer be cost savings or diverting calls from agents; it is about embracing consumers who want to work with you through the channel of their choice. However, consumers demand consistency across channels; if the information on self-service channels doesn’t match their expectations, consumers will be unhappy and will drive up your costs as they try other channels, especially the phone, until they get what they expect – or stop doing business with you.
• The business market has changed, and retaining existing customers or winning new ones has gotten harder. This means companies need more cooperation across business unit boundaries, especially when it involves social media. Interaction-handling processes have to be improved – for example, companies need better IVR menus, need to avoid asking callers to repeat information and must not promise to call back and then not do it. Finally, companies need better information to drive strategy, to give to customers and to measure performance against key business goals.

The good news is that vendors in this space “get it,” probably more than the majority of end-user companies. Vendors have developed more and better products: while I used to cover about 20 products seven years ago, now the number is close to 100. More products are developed based on standards, making them easier to integrate. Vendors have put together more integrated suites or have developed close partnerships that deliver preintegrated products, and more and more are providing access to these products via the cloud. Leading vendors such as Contactual, inContact, Interactive Intelligence, LiveOps and SAP BCM have developed suites of products that support the majority of contact center requirements – and have made these suites available as cloud-based services.

Why are cloud services important? Yes, they save capital expenditures; yes, using a service provider means having to depend less on skilled in-house resources; yes, such services are accessible from anywhere. More importantly, however, the products have rich functionality. They put business users in control through features such as configuration and parameter-driven functionality. The vendors make them secure to access and use. They are scalable to meet most user demands. And vendors take care of housekeeping activities such as operations, product upgrades, backup and recovery. In summary, cloud-based services afford companies the opportunity to innovate in the way they handle customer interactions at affordable costs.

Our Ventana Research Maturity Index shows around 10% of companies have improved their processes, information and technology and reached the highest Innovative level of contact center maturity. Others would do well to learn from their experiences. The emergence of the contact center in the cloud might just be the stimulus to bring about a surge of innovation in the next few years.

Regards

Richard Snow – VP & Research Director