The Workforce Optimization Market Adapts to Ever-Changing Rules of the Road
The workforce optimization (WFO) market had a very good year in 2018, and strong revenue performance is only one of the underlying trends driving its success. Leading WFO vendors are helping contact centers—and, increasingly, enterprises—traverse their own “customer journeys” through rapidly changing business landscapes that can include digital transformation, migration to the cloud, artificial intelligence-enabled technologies, analytics, automation, employee-centricity, and more.
WFO MARKET PERFORMANCE
Last year started off strong, with midyear total company revenue up 6.4 percent compared to the first half of 2017; the pace then accelerated in the second half of the year. Total company revenue for full fiscal year 2018 for the WFO market was $3.61 billion, up $273 million from $3.34 billion in 2017, a year-over-year increase of 8.2 percent. The two market leaders, NICE and Verint, set the pace in 2018, growing their total company revenue at a very similar level of 8.4 percent and 8.3 percent, respectively. And contact center WFO revenue grew at an even faster rate: 12.1 percent higher in 2018 vs. 2017. The contact center WFO segment increased $200 million to $1.86 billion in fiscal 2018, up from $1.66 billion in 2017. (This article is based on annual 2018 revenue, which is the most recent full-year data available.)
For a mature IT segment like WFO, this level of revenue performance is impressive. WFO suite vendors are not experiencing this degree of growth simply because contact centers are springing up around the world and generating demand for WFO products and services. On the contrary, DMG Consulting estimates there was less than 1 percent growth in the number of contact center seats globally in 2018. Instead, WFO vendors are creating demand by responding to evolving business expectations with innovative or enhanced capabilities.
A DIFFERENT CUSTOMER JOURNEY
WFO providers understand the customer journey; many sell journey mapping applications and customer journey analytics (CJA) solutions. These products are designed to help clients analyze the touchpoints and paths customers take through an organization, providing invaluable insights. But this isn’t the only customer journey WFO vendors encounter. Contact centers large and small are navigating ever-changing business conditions, complying with increasingly challenging regulatory requirements, managing a new generation of employees, and looking for tools and partners to help them navigate on a sometimes bumpy and increasingly fast-moving business speedway. This is the customer journey on which WFO vendors are focusing: assisting their customers with their digital transformations.
LUXURY VEHICLES AND ECONOMY CARS
As with automobiles, some WFO functionality is more or less “standard” today—e.g., audio recording, traditional quality management (QM), basic dashboards and reporting. In the auto world, what turns a Kia Rio into a Maserati are the extras, like additional horsepower, upgrades, and luxury options. The same is true for WFO solutions.
The newly available or enhanced features and functionality of leading and contending WFO suites make them almost unrecognizable compared to the offerings of just a few years ago. Recent innovations include true omnichannel capabilities; a full suite of analytics (speech, text, desktop, customer journey, and predictive); analytics-enabled QM (AQM); next-gen workforce management (WFM) with real-time adaptive scheduling and real-time adherence; attended and unattended robotic process automation (RPA); and feature-rich contact center performance management (CCPM) applications.
The “engine” powering many of these capabilities is artificial intelligence (AI). WFO vendors are leveraging AI in many different ways and in various areas of WFO suites. Machine learning is improving the accuracy of forecasts in WFM applications. Natural language processing/natural language understanding and deep neural networks are enhancing speech and text analytics applications to allow users to more effectively mine contact center trends and opportunities, as well as passively collect voice-of-the-customer data. And AI is being used to automatically assess employee performance, identify skill gaps, and assign coaching and/or e-learning via CCPM solutions.
AI is also helping to push the knowledge management (KM) agenda, and companies are getting on board with the idea of creating a single repository of enterprise knowledge as they consider the broad benefits this approach has for the corporation, employees, partners, and customers. To help enable digital transformation, every organization needs a single source of truth for internal and external users. It is imperative for prospects and customers to receive the same information—or direction—no matter the channel or resource. To ensure an agent handling a voice call in the contact center provides the same response that an intelligent virtual agent (IVA) delivers via a webchat requires the information to come from one source. This does not mean that all constituents see the same answers, but instead that the information they receive all stems from the same primary source and is customized to each group, possibly even to each individual. Content management or basic search capabilities are not enough; disseminating knowledge with this level of sophistication requires KM.
KM can be acquired on a standalone basis, through contact center infrastructure providers, and in conjunction with other enterprise solutions—including CRM systems and enterprise resource planning (ERP) applications—but DMG expects WFO vendors to increasingly offer these critical capabilities. As a result, DMG is now tracking WFO revenue associated with KM applications in the “2019 Contact Center Workforce Optimization Market Share Report.”
THE ROAD LESS TRAVELED
For decades, contact centers—and enterprises, for that matter—have focused on productivity improvements, cost containment, and, more recently, the customer experience. Now, however, organizations are frequently being forced to travel a new path: employee engagement. Although efficiency, effectiveness, and delivering an outstanding customer experience continue to play an important role for WFO vendors and their clients, there is a clear appreciation that organizations cannot deliver on those goals without the right employees. WFO solutions are helping to deliver a previously unprecedented level of operational transparency into the front- and back-office environments they support. WFM solutions, in particular, are moving the control of an employee’s day to the employee herself. Self-service capabilities, including automated approval for shift swaps, time-off requests, schedule changes, agent-requested overtime/voluntary time-off/coaching opportunities, and more, allow work activities to be completed by the employee without supervisor involvement. Furthermore, these capabilities are often available via purpose-built employee-facing IVAs or native mobile apps.
WFO solutions have come a long way in recent years, but this is not the time for vendors to rest on their laurels. The pace of change in business continues to accelerate, and there is little chance of it slowing down. Following a number of years on cruise control, the WFO market has its foot on the accelerator. This is where the fun starts, because after all, market success is a journey, not a destination.
Donna Fluss is president of DMG Consulting. For more than two decades she has helped emerging and established companies develop and deliver outstanding customer experiences. A recognized visionary author and speaker, Fluss drives strategic transformation and innovation throughout the service industry. She provides strategic and practical counsel for enterprises, solution providers, and the investment community.