Analyzing the Workforce
The year 2009 was a surprisingly good one for the workforce optimization (WFO) market, which includes quality management (QM) and liability recording. The WFO market continues to deliver compelling solutions and results, despite tough economic times. For the first time since the year 2000, the WFO market did not beat its prior-year financial performance, yet it still outperformed most other contact center technology segments. Even during the worst economy since the Great Depression, research-and-development investment and innovation remained strong.
A number of WFO competitors had an outstanding year in 2009. Price sensitivity drove some enterprises to consider smaller providers of WFO solutions, resulting in excellent sales for a couple of the newer competitors that were willing and able to respond with lower prices. But price alone is rarely enough to attract and retain customers. The winning formula for 2009 was a combination of low prices and a high level of responsiveness to customers’ needs. We expect these two factors to remain primary drivers this year in solution selections for enterprises large and small.
Contact Center Analytics Is Essential
The primary theme for contact center innovation in 2009 was analytics; this trend will gain momentum during 2010. The WFO vendors have played a leading role in delivering analytics-oriented solutions to the contact center market. While the majority of contact centers continue to perform quality assurance (QA) the traditional way, a small number of companies have started to use analytics to improve the process, output, and cost of this essential corporate function. For the foreseeable future, QA will not be replaced by speech analytics or performance management, but it can be greatly enhanced by these high-value applications.
A second theme impacting the WFO landscape is the need to make solutions more actionable. Managers no longer find it useful just to be informed that they have operational issues or agents who are not meeting their goals; instead they want to know precisely what the problems are and what actions are recommended to fix them. With regard to agents, this means identifying and assigning targeted training or coaching to fix the problem, followed by frequent quality assurance evaluations. While managers and QA specialists were able to take these actions manually in the past, it’s much easier and more effective to have a solution that automates the resolution process.
Many enterprise and contact center executives and leaders came to accept in 2009 that analytics is going to play an influential role in the future of contact centers. They also began to see the potential for contact centers to make substantially greater contributions throughout the enterprise, due to the power of analytics. What no one fully appreciates yet is how this will happen or which technologies are going to pave the way. But the direction is clear, and bodes well for WFO vendors, who have a great opportunity to deliver innovation to the market.
Extending Beyond the Contact Center
At the same time that applications are using information collected in the contact center to enhance the performance of other front-office departments (e.g., sales and marketing), leading WFO vendors are investing in broadening their solutions and messages to cover branches and back-office operations. A growing number of operations managers are starting to apply contact center–like best practices to back-office activities, particularly workforce management and quality assurance. They are moving in this direction to reduce expenses and to improve the overall effectiveness and performance of their organizations. This trend is new but expected to grow in the next few years. This will vastly increase the market opportunity for WFO vendors, and will likely lead to additional contact center innovation.
Alternative Delivery Models
Contact center managers have been very slow to consider hosted/software-as-a-service (SaaS) solutions for their operating environments, except for voice response systems, where adoption is high. DMG has started to see a shift in this thinking, particularly as managers realize that they are going to have to be more agile and adapt to change more rapidly than they have in the past. The pace of innovation is expected to force many organizations to consider hosting as a viable alternative for acquiring solutions that will give them a strategic differentiator. Hosting is no longer viewed as just a way to get upgraded technology with little up-front cost. One of the major advantages of hosted solutions is now understood to be the speed at which new functionality is made available.
Analytics is new for many contact centers, but the vendors are releasing new versions of their products at a rapid rate, with greatly enhanced functionality. Contact center leaders who want to take advantage of the coming stream of technological and functional advancements will have to consider changing the way they do business, including how they have traditionally acquired their solutions.
The vendors that are pushing hosting/SaaS-based delivery are primarily the best-of-breed solution providers—the ones that view it as a strategic advantage for their companies. DMG sees hosting/SaaS as an effective way to speed up the delivery of new solutions and capabilities to a contact center market that has traditionally been slow to adopt new applications. Hosting/SaaS saw mainstream acceptance among contact centers in 2009, and the race to use this alternative technology-acquisition model is likely to result in even better solutions coming to market in the near future.
The QM/recording technology sector is a global market with more than 45 competitors. The leading and contending vendors are: Calabrio, CallCopy, CyberTech, dvsAnalytics (formerly TeleDirect/Wygant), Envision Telephony, Interactive Intelligence, KnoahSoft, NICE Systems, OAISYS, OnviSource, Verint Systems, and VPI. Though no new competitors of note emerged during 2009, a number of the smaller vendors started to grow and a couple of vendors that previously concentrated on recording started to build out their quality assurance capabilities. (Vendors that want to extend beyond recording almost always begin by adding quality assurance functionality.)
We expect a great 2010 for companies looking either to purchase or upgrade their WFO solutions or to enhance an individual application such as surveying or workforce management. Prices may not drop dramatically, but WFO buyers will see a growing number of alternatives: Enterprises can choose to purchase WFO functionality from suite providers or best-of-breed solution vendors, from well-established vendors or a newer competitor. Most end users can find vendors based in their geographical region, but enterprises can elect to host any aspect of their WFO solution, opening up even more options.
Many end users who held off investments in 2009 are already shopping for new systems. But buyers should not rush their selection. A lot has changed over the past three years, and the pace of innovation is accelerating. Prospects can now get more for their money and there is a great deal more functionality available. Companies that concentrated solely on traditional QM in the past should seriously consider investing in a speech analytics–enabled QM application this time around.
Enterprises can continue to perform quality management the same way they have for the past 25 or 30 years, but why work so hard? The new generation of analytics-enabled QM solutions can eliminate a lot of the heavy lifting by automating many traditionally manual tasks, and by collecting and distributing important information much more quickly and efficiently than was previously possible.
Donna Fluss (firstname.lastname@example.org) is founder and president of DMG Consulting, a leading provider of contact center and analytics research, market analysis, and consulting. For further information about WFO vendors, products, functionality, technology, pricing, market share, trends, challenges, implementations, and best practices, see DMG’s 2009–2010 Quality Management/Liability Recording (Workforce Optimization) Product and Market Report at www.dmgconsult.com.
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