Quality monitoring is no longer an exception--it's now common business practice. Many analysts predict penetration rates as high as 100 percent among the enterprise-size companies. The market is a hefty one, featuring over 40 vendors. The space grew 9.5 percent to $1.1 billion last year and is expected to grow another 9 percent in 2007, according to DMG Consulting.
As QM vendors try to gain a competitive advantage over the competition, a growing number of them are bundling their QM solutions with other offerings, such as e-learning, VoIP, speech analytics (one of the hotter offerings, as it enables companies to extract data from the endless stream of recorded calls), and performance management. This increased interest by vendors to cluster quality monitoring with other workforce-related capabilities leaves the market at a crossroads, as the lines differentiating QM from workforce optimization blur. "I expect we're going to see the market head down this road in years to come," says Dick Bucci, an associate consultant at The Pelorus Group.
Last year's category winner, Verint Systems, dropped out of the winner's circle, despite the fact that the company's lowest score was a stout 4.0. Customer satisfaction continues to be its strength, as Verint's 4.4 was far and away the highest of all the leaders. "They do an outstanding job of executing and sticking to their business model," one analyst says.
Verint received praise for having a strong analytical offering, but analysts knocked the vendor for its failure to add surveying capabilities to its portfolio. Conversely, they gave credit for Verint's acquisition of Mercom in July, which provides the company with a fresh influx of workforce optimization (WFO) technology and an entry point into the SMB call center segment, a sector that is ripe for the taking, according to industry pundits. "The acquisition gives them a strong global platform for their QM and analytics solutions," says Seema Lall, a strategic analyst at Frost & Sullivan.
Like many of the vendors in this market, Witness Systems spent 2006 extending its WFO functionality and enterprise offerings. In December 2006 Witness purchased Amae, adding real-time surveying to its portfolio, which was preceded by Witness's October 2006 purchase of Demos Solutions and Exametric, two WFM financial service specialists.
Analysts lauded the company for these acquisitions, but some felt Witness might be leaving quality monitoring--the foundation of its product portfolio--behind, resulting in a 4.0 in product functionality, lowest of the leaders. "They're great with acquisitions and they're enhancing their enterprise offerings, but they've been slow with improving their speech analytic and QM offerings," one analyst says. "Some of their underlying stuff is getting old." Another analyst says, "They may have bitten off more than they can chew," referring to the acquisitions. "They have a lot of integrating to do."
Since 2004 this category has produced three different winners: first, NICE (in 2004), followed by Witness (in 2005), and then Verint, last year. For 2007 NICE Systems becomes the first repeat winner.
NICE acquired WFM provider IEX and PM provider Performix in April 2006, two acquisitions that marked the movement of NICE into the WFM field. "It's a change of strategy for them," one analyst says. "Now they need to execute on it."
The company enhanced NICE Perform, its flagship product for enterprise contact centers, by integrating it with VoIP infrastructures, allowing it to provide QM solutions in multisite environments. NICE also released the latest versions of IEX TotalView and has begun assimilating that company's product line into its own. NICE's emphasis on enhancing its Perform platform, combined with the two acquisitions and its commitment to releasing new versions of its acquired companies' product lines, led to NICE receiving a 4.4 in company direction and an astounding 4.9 in depth of product functionality. --Colin Beasty
One to Watch
Although etalk didn't make the top three, the company's acquisition by Autonomy in April 2005 and resulting expansion of its product offerings make it this year's One to Watch. "Etalk's customers will get greater value out of their implementations by supplementing them with Autonomy products and it will help etalk expand its reach globally," says Seema Lall, a strategic analyst at Frost & Sullivan. Autonomy released Intelligent Contact Center in January 2007, an analytics and performance management solution. "They've come a long way from being a bunch of good old boys down in Dallas to becoming a global vendor," says Dick Bucci, an associate consultant at The Pelorus Group. --C.B.
Agent-Facing Universal Desktop
A compact user interface for CSRs is important, but few vendors are able to get it right. "This is a huge pain point, and I don't think traditional CRM vendors have solved the problem," says Sheryl Kingstone, CRM program manager for Yankee Group. "Without a 360-degree view of the customer on the desktop, agents have too many places to look--it's very challenging." Integration technologies like SOA are making it possible to get the complete picture by combining sources, but this is changing the nature of the market. "The desktop doesn't necessarily have to be provided by one vendor anymore," says Martin Schneider, senior enterprise software analyst with The 451 Group. "A lot of effort by SAP and Oracle has gone toward this, so the cost and complexity of integration is coming down and companies are putting together multivendor desktops that are unified." With multiple vendors, the question is becoming not who owns the desktop, but what the desktop environment is.
The time has finally come for us to consider Oracle as one entity, combining all its branches into a single vendor with one exceptionally broad offering. Oracle has suffered from questions concerning its company direction, due to the fact that it is constantly acquiring and integrating technologies. At the same time, this gives the company access to a wealth of functionality; its 4.1 rating is the highest on our chart. "Oracle eBusiness Suite is often overshadowed by its flashy siblings from Siebel and PeopleSoft," says John Ragsdale, vice president of research at SSPA. "But as Oracle has moved their focus away from application functionality and onto infrastructure, the eBusiness Suite is best positioned to take full advantage of Fusion, and companies with Oracle ERP and financials should definitely evaluate Oracle EBS for the agent desktop." Customers will welcome Oracle's ability to fit any industry, says Chip Gliedman, a vice president at Forrester Research. "Oracle is developing a very vertical market strategy, presenting customized solutions for many different industries."
SAP is another acquirer of technology, but the company tends to be quieter about that fact. "SAP gives the impression that NetWeaver and family are integrated and organically grown, but that's not the case," Schneider says. It doesn't seem to be a problem, though: "SAP has been extremely successful building an ecosystem, meaning the agent desktop comes preintegrated not only with all of SAP's cross-enterprise applications, but with the applications from all of their ecosystem partners as well," Ragsdale says. SAP was hit hard by analysts this year in terms of company direction. Despite this, Ian Jacobs, a strategic analyst for Frost & Sullivan notes that SAP is "actually convincing some companies to move off of dead-end products and onto MySAP, and getting [a net gain in] new customers."
Not even on the charts last year, Amdocs has catapulted itself into the winner's circle with category-leading marks in company direction and customer satisfaction. "The Amdocs service delivery platform is very strong, especially for communications," Kingstone says, alluding to the company's history in that vertical as well as more recent appearances elsewhere. "Amdocs is still vertically active in communications, but it's landing more deals as the system of record than anybody else," Schneider says. "They understand what it is to be a universal desktop." If the company can continue to strengthen its performance and add more functionality outside of its specialty, it could be a player in this category for a long time. "They are finding customer service deals in financial services and high tech, where their professional services expertise in deep application integration can best be leveraged," Ragsdale says. Amdocs will do best with industries "where the connections to billing are both major customer requirements and Amdocs's strengths," Gliedman says. --Marshall Lager
One to Watch
Several companies were notable this year in the agent desktop category, but in the end our One to Watch must be Salesforce.com. Ian Jacobs, strategic analyst for Frost & Sullivan, noting the company's contact center partnership with Cisco Systems, says, "Salesforce.com is new to this space, so companies either go with them because they're fans, or because they already use a partner's applications." Says Chip Gliedman, a vice president at Forrester Research: "The company has momentum. Its 2007 releases fill some major holes. However, complementary products available through AppExchange partners are still required for a full solution." This may not be a weakness, though. Martin Schneider, senior enterprise software analyst with The 451 Group, says: "When AppExchange works, you don't worry about an integrator." --M.L.
An effective outsourcing relationship can help a customer company slash costs and potentially support growth and drive innovation. But a lackluster outsourcing engagement can hurt the company's reputation and the level of service it delivers, while also damaging the outsourcer's image. Many outsourcers are well aware of this and have spent the past year strengthening their geographic presence, at-home agent approach, and technology offerings to ultimately better meet the demands of their customers. Their efforts have altered the look of our 2007 leaderboard. TeleTech, a two-time leader, falls off the list this year as a result of pulling in the lowest direction and satisfaction scores. Another well-known outsourcer, ClientLogic, which acquired SITEL (the deal was completed in January), was just a few tenths of a point away from moving back into its One to Watch slot since losing that position in 2006, but didn't due to its low depth of services score.
EDS's continued hold on its status as one of our category leaders is largely attributable to its extensive service offerings. Its depth of services score of 4.4 is second only to our category winner. A partial catalog of the company's services includes its industry-specific offerings in several verticals, such as communications, consumer industries and retail, energy, and financial services, and mature offerings in customer analytics, self-service, and hosted contact center solutions, according to Suvradeep Bhattacharjee, a principal analyst at NelsonHall.
Along with internal development, EDS spruced up its go-to-market services by acquiring MphasiS, a deal that "both increases Indian delivery capabilities and extends offerings to the financial services sector," says Rachael Stormonth, a research director at NelsonHall.
With its continued emphasis on bolstering its footprint in various geographic markets, Teleperformance, our 2006 One to Watch, makes the jump to a category leader. The company is clearly focused on building local market leadership in EMEA and Latin America through acquisitions, Bhattacharjee says. It "completed six acquisitions in 2006 to establish or enhance its presence in Germany, Switzerland, Hungary, Russia, Canada, and Belgium."
Teleperformance has made strategic moves "in terms of going after different linguistic markets and catering to different national markets across verticals," says Peter Ryan, an outsourcing and offshoring senior analyst at Datamonitor. "They've got a very solid inbound and outbound presence, as well as technical support. They've made customer satisfaction a huge priority and that's paid off in terms of their growth."
Teleperformance also merged its two most significant U.S. business entities--Teleperformance USA and CallTech Communications--with the merged company retaining the Teleperformance moniker. (Teleperformance USA operated in five countries with more than 10,600 contact center stations, providing domestic, nearshore, and offshore customer care tech support, and inbound sales solutions, while CallTech leveraged nine U.S. call centers to provide tech support and customer services.) These initiatives ultimately helped Teleperformance grab a company direction score of 4.5, the highest among this category's leaders. To boot, the company earned a respectable customer satisfaction score of 4.3.
Backed by its category-leading depth of services score, 4.5, a two-tenths-of-a-point uptick from its 2006 score of 4.3, Convergys, which is known for its muscle in the contact center, billing, and HR services arenas, clinched its standing as the outsourcing services category winner for the third consecutive year.
"Convergys has experience and deep expertise in the telecom sector, with strong billing expertise," Stormonth says. It "continues to look for new opportunities, both in service delivery and in broadening its offerings portfolio."
The company's weakest mark was for its company direction, a still-impressive 4--even though that is a moderate slide from 2006's 4.3, which may be a reflection of personnel issues, according to one industry pundit. "There's been people in mid- to high-level management positions moving back and forth, and I think that that has had an effect in terms of their direction," the analyst says. Even so, Convergys's three-peat performance is clearly impressive. --Coreen Bailor
One to Watch
West Corporation, a company that continues to get applause for its at-home agent initiative, is a veteran in the contact center outsourcing services market, but a newcomer to this category. The addition of natural language speech solutions to the service offerings of West Interactive, a West subsidiary, and West's acquisition of InPulse Response Group, which specializes in outsourced sales solutions to direct response marketers, are indicative of the company's devotion to broadening its portfolio. --C.B.
Click The 2007 Service Leaders, Part 1 to read Part 1.