Witness Eyes the Enterprise
Witness Systems announced Monday that it has nabbed Demos Solutions Consulting Group and Exametric, two workforce management (WFM) solutions providers catering to the financial services (FS) industry for $29 million in cash and a potential earn-out of up to $18 million. These acquisitions are projected to add $13 million to $15 million to Witness's revenue in 2007. The two companies will be combined and operate as Witness Enterprise Solutions, which, according to Witness, will focus initially on WFO solutions for retail bank branches and operations. Darryl Demos, CEO and founder of Demos Solutions, will lead the group.
Demos Solutions' FS-focused portfolio features consulting services and its Workforce Management Software Suite, which includes StaffSmart, a set of integrated WFM and performance management applications. Demos Solutions serves four of the five largest Canadian banks, while 33 percent of the top-100 North American bank branches use Demos Solutions' StaffSmart Enterprise resource planning and scheduling tool, according to the company. Exametric, which provides WFM products used at more than 12,000 locations worldwide, also focuses on retail banking and in addition, quick service restaurants and groceries.
"What we think this represents is a move [for] WFO outside of just the contact center and into the enterprise," says Ryan Hollenbeck, vice president of corporate marketing/investor relations at Witness. "Instead of just being able to help [our customers] serve their customers over the phone in a contact center, we now will be able to leverage complementary strength to this evolving WFO market, which includes branch banking environments." About 30 percent of Witness's revenue is derived from financial services.
Rather than tailoring its previously acquired Blue Pumpkin functionality to the retail banking space, Witness opted to take the acquisition route because of the fundamentally different business environments of contact centers and retail banks, according to Hollenbeck. "We actually evaluated that; we've been probing around this market for about a year now," he says. But "what we found is that you really can't serve the market with [WFM applications that serve only the contact center]. In the contact center we have capabilities like ACDs and CTI, and all the other technology that the different software talks to, whereas in branch banking we don't have all that. So how we do things like trying to figure out exactly how many staff I need in a branch banking environment is very different."
"The traditional QM recording market is continuing to expand in many different directions and with Blue Pumpkin, Witness made a significant invest in workforce management," says Donna Fluss, principal of DMG Consulting. With its Demos Solutions and Exametric acquisitions Witness is "extending its investments beyond the contact center." Fluss notes that "for years the majority of Witness's revenue has not come from licenses, but instead from services which includes professional services, so this is another investment in the area of professional services."
Seema Lall, industry analyst at Frost & Sullivan takes a similar stance: "The Witness acquisitions are in line with the current industry trend in augmenting existing contact center focused agent performance optimization product lines, to deliver a much broader enterprise impact," she says. "For Witness this means an opportunity to expand their existing revenue streams." She adds, though, that the challenge for Witness "is to make sure this enterprise expansion growth plan does not result in a loss of focus on existing contact center revenue streams."
WFO suite vendors offer call centers increased ease of use, improved staffing, and lower business costs via new product packages.
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