Low Costs Drive the Gartner Magic Quadrant for CRM Customer Service Contact Centers

Just as most markets have been impacted by the recession, the field for CRM customer service contact centers has changed significantly. New research from Gartner suggests that the vendors most likely to gain market share during this difficult time will be those able to lower costs while driving customer loyalty.

According to Michael Maoz, Gartner vice president, distinguished analyst, and author of the Magic Quadrant report, one of the biggest challenges faced by those looking to make contact center investments is creating solid business cases. "Pointing to projects [for which] they are willing to stand up and say, ‘I guarantee you this will either save us or make us money' is very tough," he says. "There's a reluctance to approve projects and also…to replace big, core applications right now. The focus is on tactical [improvements] that can lower costs."

The kind of tactical improvements that apply to customer service processes may not be the sexiest thing a company undertakes, but Maoz insists those efforts can provide great benefits. "There's more analysis of processes going through different service channels -- be it Web, [interactive voice response], agent, even field service," he says. "Throw all those together, and there's a lot of service processes to analyze. I think that's a very healthy thing."

Interestingly, Maoz says, the leading companies are doing the analysis by asking end customers to identify the processes they deem broken -- and then specifically fixing those. That shift in approach is "showing some progress," he says. "The trend that customers want to be embraced on their own terms is continuing without abatement," he adds. "Folks expect to do things their way."

In order to support that trend, the study spells out the most-pressing customer service–related functionality vendors should offer:

• multichannel capabilities;
• native business-process management for customer service functions;
• support of online user communities;
• extension of agent presence to online communities;
• customer data integration;
• integration of knowledge solutions onto the agent desktop;
• real-time decision support; and
• integration with mobile devices.

Amid the changing requirements in the contact center, there's also been movement in Gartner's Magic Quadrant. Microsoft and Salesforce.com, both deemed Visionaries last year, have joined Oracle (rated for its Siebel offering) in the Leader Quadrant. Speaking about the Magic Quadrant last year, Maoz had predicted those two vendors would be the ones most likely to make the jump -- but at the time had said the move would take at least four years. "Salesforce.com has a large installed base," he says. "But while most are sales force automation customers, as it matures [Salesforce.com] is able to go into other departments such as customer service. It's led to very good adoption of the product." 

[Editors' Note: Salesforce.com's newfound focus on service also contributed to its selection as one of CRM magazine's 2009 Rising Stars, a description of which can be found in our April 2009 issue.]

Speaking specifically about Microsoft, Maoz says the adoption and sales of the company's Dynamics CRM product reflects the vendor's additional investment in knowledge solutions, Web self-service, business process capabilities, and industry versions adding to its basic customer service functionality. "The company definitely put the time and effort into research and development," he says. "It's building out functionality on the Dynamics CRM platform."

Amdocs remains the sole Challenger in this year's report, while Pegasystems was left as the sole resident of the now-lonely Visionary segment.

Like last year, the field of Niche Players remains crowded, with the following providers:

• Astute Solutions;
• Chordiant;
• eglue;
• Helpstream [another of CRM's 2009 Rising Stars];
• Jacada [one of CRM's Rising Stars last year];
• Oracle (E-Business Suite);
• SAP; and
• Sword Ciboodle [yet another 2009 Rising Star profiled in CRM's April 2009 awards issue].

A surprise addition this year, according to Maoz, was Helpstream as a Niche Player. "It's not a conventional play," he says. "It has taken a very different approach to the market. They want customer communities to figure out answers for themselves, which is appealing to the smaller businesses and high-tech users already adept at producing and using a combination of communications from inside the company and its customer base."

Looking ahead, Maoz suggests keeping an eye on Parature. The on-demand customer service vendor -- and another of CRM's 2009 Rising Stars -- didn't make the Magic Quadrant this year, but has what Maoz describes as the customer service market's attention. "It has gained more traction than I had seen earlier," he says. "Today, it's almost exclusively focused on the small-to-midsize customer service organizations. But, if its momentum were to continue, you can certainly make the case for it being a vendor to appear [on an upcoming Magic Quadrant]."

News relevant to the customer relationship management industry is posted several times a day on destinationCRM.com, in addition to the news section Insight that appears every month in the pages of CRM magazine. You may leave a public comment regarding this article by clicking on "Comments" at the top; to contact the editors, please email editor@destinationCRM.com.

Related Articles

Sword Ciboodle and SAS Announce Partnership

Sword Ciboodle and SAS revamp the contact center with SAS Real-Time Manager, designed to predict customer behavior.

Pegasystems and RightNow Added to Leaders in Gartner Magic Quadrant for CRM Customer Service Contact Centers

Magic Quadrant for CRM Customer Service Contact Centers '10: New players join Oracle Siebel, Microsoft, and Salesforce.com as the market seeks to empower agents and deliver next-generation service.

Pegasystems Collects Chordiant for $161.5 Million

Two months after rejecting a bid by CDC Software, customer experience management vendor Chordiant strikes a deal with a leader in the BPM space.

Amdocs Releases CES Version 8

The vendor's latest release focuses on enhancing the customer experience by enabling companies to be connected.

Customer Service Is the New Research and Development

Only one of these two critical areas of investment requires capital expenditures.

Tying Together Social Service and CRM

Helpstream adds deeper integration and a bolstered best practices community with its latest release.

The 2009 CRM Service Awards: Rising Stars -- Sword Ciboodle: Crossing the Pond

Sword Ciboodle—the former Graham Technology—plants a flag in North America.

The 2009 CRM Service Awards: Rising Stars -- Salesforce.com: Clouding Up the Scene

CRM veteran Salesforce.com utterly revamps its service offering through acquisition and innovation.

The 2009 CRM Service Awards: Rising Stars -- Parature: Gaming the System

On-demand customer service provider Parature expands from interactive gaming to target firms of all sizes.

The 2009 CRM Service Awards: Rising Stars -- Helpstream: Ministering to the Masses

Helpstream brings the community into customer service.

Few Changes in Gartner Magic Quadrant on Contact Center Infrastructure

Alcatel-Lucent joins some familiar faces in the Leader space: Aspect Software, Avaya, Cisco Systems, Genesys Telecommunications Laboratories, Interactive Intelligence, and Nortel Networks.

Customer Demand Drives Gartner Workforce Optimization Magic Quadrant

The research firm's debut report on this market puts Nice Systems and Verint Systems on top, and says we can expect more vendors to join the WFO party in 2009.

Customer Service for the Web 2.0 World

Helpstream's new Summer 2008 release looks to move beyond traditional knowledge management; one pundit believes the company "has done it better than anyone."

Siebel Continues to Fly Solo as a Leader

Magic Quadrant for CRM Customer Service Contact Centers '07: The vendor leads all evaluated companies in Gartner's annual report, while more than a dozen players chart as visionaries.

It's Siebel in the Service and Support Leader Corner

Magic Quadrant for CRM Customer Service and Support (CSS) Applications '06: The company maintains its Magic Quadrant dominance, although the emergence of a full customer service suite is still some time off.

The 2008 CRM Service Awards: Rising Stars -- Jacada

Jacada hopes a tighter focus will lead to brighter fortunes.

Microsoft and Nuance Get Muted By Gartner Magic Quadrant for IVR

The two vendors are removed from contention in the research firm's latest assessment of the interactive voice response marketplace.

Contact Centers Aren't Yet Ready for Web 2.0

Magic Quadrant for CRM Customer Service Contact Centers '08: Foreseeing a "revolutionary" future for the contact center customer service market, the latest Gartner Magic Quadrant for the sector extends the multiyear Oracle/Siebel winning streak, and highlights the continuing value of niche players for verticals.

Gartner Announces CRM CSS Magic Quadrant

Magic Quadrant for CRM Customer Service and Support Applications '04: In Gartner's recently released report, Siebel stands alone in the leader quadrant, while E.piphany and PeopleSoft are the two closest competitors in the visionary quadrant.

Siebel Enchants Gartner's CRM CSS Magic Quadrant Again

Magic Quadrant for CRM Customer Service and Support Applications '05: Lack of industry breadth keeps Amdocs out of the leaders box.

Getting Ready For PeopleSoft 8.4