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The 2012 Service Leaders

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Workforce Optimization Suite

The Market

Workforce optimization (WFO) vendors had a very good start in 2011, despite the frail economy. Sales of contact center solutions in general saw an uptick, and WFO shared in that success, with revenue increasing 7.9 percent between the first half of 2010 and the first half of 2011, growing from $522.1 million to $563.4 million, according to DMG Consulting.

As the industry moves toward a more suite-based approach, DMG expects that recording revenue will decrease and all other WFO sectors, including performance management; coaching and e-learning; quality management; speech, data, and desktop analytics; surveying; compliance management; and call monitoring, will grow in size as adoption of applications increases.

The Leaders

Spun off by Spanlink Communications in 2007, Calabrio has done quite well for itself. With scores of 4.0 in depth of functionality and cost, it is a favorite among many analysts. "Perhaps the most distinguishing attribute of the Calabrio product is its ease of use," says Dick Bucci, president of Pelorus Associates. "They were early adopters of Web 2.0 tools and technologies, and this shows in the flexibility and dynamism of the user interface."

Paul Stockford, chief analyst at Saddletree Research, calls Calabrio "the market leader when it comes to Web 2.0–based solutions," but lauds the company for other reasons. "Calabrio is forward-thinking and highly responsive to market shifts," he says.

Long known for its integration with Cisco call center technologies, Calabrio this year expanded its partnerships to include Avaya, giving it even greater reach. What's more, Sheila McGee-Smith, president and principal analyst at McGee-Smith Analytics, says the company "will continue to increase market share and invest in functionality," which should keep it competitive in this category.

Genesys Telecommunications Laboratories isn't especially known for its workforce optimization products, but the company advanced from a one to watch last year to a leader this year based mainly on better-than-average scores in all the judging criteria. In many cases, analysts were willing to give the company the benefit of the doubt as it breaks away from Alcatel-Lucent. But their optimism was somewhat tempered. "Genesys has some catching up to do in the [workforce management] part of their WFO suite and needs to modernize their go-to-market strategy," Stockford says.

"Genesys has made some moves to improve the quality and marketability of its WFO offering, especially in [quality management]," observes Keith Dawson, principal analyst at Ovum.

NICE Systems, a mainstay on the WFO leaderboard, continues to score high in depth of functionality, with a 4.1 this year. "NICE has an offer for every application in the WFO suite," Bucci says. But this year it saw its company direction scores falter, with many analysts noting that the company continues to emphasize individual solutions while the rest of the market is moving toward product suites.

Also, many analysts are waiting to see what the company does with technologies it gained in its acquisitions of CyberTech and Merced Systems in 2011. Bucci says the CyberTech acquisition in particular holds the most promise by strengthening NICE's position in the European small and midsized market.

The Winner

No surprise here, as Verint Systems continues to dominate the industry, with an overall score of 4.1—three-tenths of a point higher than NICE, its closest rival—and top scores in depth of functionality (4.5), company direction (4.4), and customer satisfaction (4.1). In 2011 the company added more analytics and voice-of-the-customer capabilities to its already powerful Impact 360 WFO suite, and padded its offerings with the acquisitions of GMT and Vovici.

"While their product strategy continues to evolve…Verint's acquisition strategy and the execution of its market expansion tactics [are] nothing short of brilliant," Stockford says.

"Like NICE, Verint has an offer for every WFO application," Bucci adds. "The difference is that Verint provides superior integration and ease of use."

One to Watch:

Aspect Software dropped off the leaderboard this year, but remains a company to watch because of a clear, well-articulated company direction and an enviable customer base. Its strong workforce management products have dominated the company's WFO sales, but that might not be enough, according to analysts. "Aspect is the market leader with WFM, but weak in QM and has no serious solutions for speech, feedback, surveys, and e-learning," Bucci says. But then again, it might not need them. "Aspect's unified approach to workforce optimization is state-of-the-art, and the company continues to demonstrate innovative thought and leadership," Stockford asserts.

Contact Center Search

The Market

As in recent years, social media integration, the benefits of cloud versus on-premises solutions, and a rise in company acquisitions continue to be hot topics in the contact center search sector.

"We see on-premise contact center vendors being increasingly pressured to perform given the low cost and flexibility of cloud vendors," notes Rebecca Wettemann, vice president of Nucleus Research. "We'll see more acquisitions moving forward as the industry continues to consolidate; we'll also see new innovation and investment as text mining technology goes more mainstream."

Mitch Kramer, senior vice president of the Patricia Seybold Group, a technology research and consulting firm, notes that the hottest trends in the contact center search sector involve the integration of social media and the rise of the social contact center. "Organizations must be aware of customer conversations about their brand and their products on the social Web," Kramer says. "Customers expect that organizations will interact with them through social channels, [and] these interactions are performed by contact center staff."

The Leaders

Coveo Solutions saw a slight drop in customer satisfaction and company direction scores this year, sliding from 4.0s in both categories to 3.9 and 3.6, respectively. It saw a large jump in depth of functionality, however, rising from 2.0 last year to 4.1. In fact, in 2011, Coveo's Insight Solutions for Customer Service was hailed as a trendsetting product by KMWorld magazine. In addition, IBM Netezza awarded Coveo its 2011 Valued Partner Award.

John Ragsdale, vice president of technology research for the Technology Services Industry Association (TSIA), praised Coveo for its "incredibly powerful search platform that allows users and customers to easily filter content to find the exact right answer from an ocean of content in any format."

Keeping it from the top spot, however, is its low company revenue score.

A new category addition, eGain received strong scores, with a 4.0 in customer satisfaction and a 3.9 in depth of functionality. Kate Leggett, senior analyst of customer service at Forrester Research, notes that the company offers "good search [capabilities] that are a fundamental component of [its] multichannel customer service capabilities."

New enterprise search features, combined with its knowledge management and multichannel suite, make eGain a "must-have" vendor for enterprise short lists, according to Ragsdale. For company direction, eGain received a 2.8. One of the company's drawbacks, according to Kramer, is that it lacks a formal release cycle for its software.

Last year's winner, RightNow Technologies, which was acquired by Oracle in 2011, saw a decline from its record 5.0s in customer satisfaction, depth of functionality, and company direction. It received a 4.0 in customer satisfaction, a 3.4 in depth of functionality, and a 2.9 in company direction. Analysts had mixed reviews about developments in the company over the past year. Wettemann notes that RightNow offers a "strong technology [that has been] strengthened now by the investment of Oracle." In contrast, Leggett points out that the natural language capabilities provided by RightNow's acquisition of Q-go are "not well integrated with the overall product."

The Winner

Autonomy etalk grabbed the top spot with a large jump in depth of functionality from 3.3 last year to 4.5 this year. Customer satisfaction also increased from 3.5 to 4.0. Analysts seemed to take a skeptical approach to Autonomy's acquisition by HP, however, as reflected in its company direction score, which slipped from 3.5 to 2.7. "Autonomy has created a very robust search platform, popular with direct customers and OEM'd by multiple industry vendors," Ragsdale says. "Some of those relationships are at risk since the acquisition, so the coming year will be an important time for Autonomy's visibility and market share."

Wettemann says her firm will also be tracking Autonomy's performance under HP. "HP doesn't have a good track record of late, particularly with software," she maintains.

One to Watch: InQuira, which was acquired by Oracle, slipped off the leaderboard this year. Its biggest dip was in company direction, which fell from 4.8 to 2.7. "We're looking to see how Oracle continues to develop the product and leverage the technology given its application portfolio and other acquisitions," Wettemann says. "The key areas to watch in 2012 will be new customer wins, any customer churn, and how InQuira fits into the overall Oracle product road map.

Enterprise Feedback Management

The Market

This year, the enterprise feedback management industry continued to mature and incorporate new technologies as more companies seek to better understand their customers. "This was a big year for the EFM technology market," says Andrew McInnes, customer experience analyst at Forrester Research. (He has since left the company.) "We saw significant advancements in existing products, with vendors beefing up social, mobile, and text analytics capabilities. We also saw an uptick in VC [venture capital] and M&A activity, which has accelerated the rate of development and put EFM on a collision course with adjacent markets."

John Ragsdale, vice president of technology research for the Technology Services Industry Association (TSIA), says it is imperative for vendors to include capabilities in their solutions beyond survey tools. "The challenge for EFM vendors is to be sure they are incorporating more than after-phone surveys into the mix, since there is more focus today on leveraging social media and ideation to understand customer attitudes," Ragsdale says.

The Leaders

Allegiance fell from the top spot this year. It received a 3.8 in depth of functionality—a 0.7 decrease from last year. According to McInnes, although Allegiance demonstrated "solid EFM software and articulated compelling product visions," it lacked capabilities in key areas, such as role-based reporting.

"[Allegiance] needs to better integrate functionality from legacy products, such as Inquisite," writes McInnes in his report, The Forrester Wave: EFM Satisfaction and Loyalty Solutions, Q3 2011. "Significant R&D investment and strong product leadership put success within reach, but much remains unrealized."

Allegiance received strong scores of 4.1 and 4.7 in customer satisfaction and company direction, respectively. "Allegiance has excellent leadership and an aggressive strategy for expanding its services and building leadership in the space," notes Bruce Temkin, managing partner of the Temkin Group, a customer experience research and consulting firm.

MarketTools pulled itself out of last year's three-way tie as a one to watch and made it to the leaderboard this year. The company received a whopping 4.5 in depth of functionality. Ragsdale says MarketTools offers a "rich set of offerings, ranging from graphically oriented survey tools…to rich analytics and loyalty tracking."

MarketTools was acquired by TPG Growth in 2011. As with many acquisitions, analysts tend to take a conservative approach when rating the early effect on company direction, reflected in the 3.5 score.

"MarketTools…successfully combines technology with market research capabilities," Temkin says. "But [it] needs to show that its acquisition hasn't dramatically weakened its strategic direction."

RightNow Technologies held steady in customer satisfaction, receiving a 3.8 once again. Depth of functionality went from 2.3 to 2.9, and it leaped a whole point to 3.6 for company direction. Analysts hope its acquisition, for $1.5 billion, by Oracle last fall will strengthen RightNow's offerings.

According to Temkin, RightNow is an excellent vendor but does not often position itself as a standalone voice-of-the-customer (VOC) platform. "Hopefully the company can retain its strong customer focus as part of the Oracle empire," he says.

The Winner

Vovici, which was named a one to watch in 2010, surged to the front of the line this year with a 4.3 in depth of functionality, a 4.0 in customer satisfaction, and a 3.6 in company direction.

Acquired by Verint last year, the pair has "great synergy for both firms and their customers," says Ragsdale. He also praised Vovici for offering a "rich, intuitive application design," and its OnDemand model "keeps costs and complexity low."

"Kudos to Verint for leading the way towards offering the market a practical customer intelligence platform," says Leslie Ament, vice president of customer intelligence and client advisory services, Hypatia Research. "Integration will take time, but the fundamental functionality for a VOC/EFM platform is now in-house."

One to Watch:

It's a three-way tie again, this time between Confirmit, Medallia, and Mindshare. Once again, Confirmit and Medallia fell short of the leaderboard. Ragsdale says Confirmit offers "a sophisticated platform, but its user interface could be more intuitive." Medallia has a "clear focus on internal innovation," writes McInnes, but its solutions might not be "appropriate for clients who want to manage all aspects of their VoC programs through self-service." Despite its slip off the leaderboard, Temkin says Mindshare has "a clear vision of its target market…which keeps the company's product road map on track."

Outsourcing

The Market

Social media was the watchword within the confines of the outsourcing community over the past 18 months, according to Peter Ryan, a lead analyst at Ovum. Outsourcers knew they had to take their high-volume, call-handling know-how and transfer it to social, Web-based support. Among outsourcers, there has been a a "drive toward thought leadership and not just solutions," Ryan maintains. Companies are beginning to realize that it's not so much about increasing the number of agent seats through acquisition as it is about recognizing and implementing diverse service capabilities.

"The companies that will be leaders in the years ahead are those that understand the major shift in communication patterns for customers today and deliver consistent cross-channel support," notes Elizabeth Herrell, a vice president and principal analyst at Constellation Research. Sitel and Convergys, a company with prime placement this year in the outsourcing category, are among the enterprises eyeing change and planning solutions accordingly. Outsourcers that rely only on "offering lower fees—due to wage differentials in various countries—do not have a sustainable long-term vision," Herrell says.

The Leaders

Sitel, a strong performer in depth of services last year at 4.0, slightly upped its game in that category to a 4.1. It gained industry recognition as winner of a 2011 North American Frost & Sullivan Award for Competitive Strategy Innovation in contact center outsourcing, which praised Sitel for its intelligent Web engagement solution and Sitel Cloud monitor—wedding structured communication, voice of the customer, and operational measurements in support capabilities.

Sykes, last year's one to watch, worked its way to the leaderboard, nabbing a stellar 4.5 in customer satisfaction to boot. Sykes bought ICT for $263 million in 2010, leaving analysts scratching their heads as to how things would shake out. However, this year Sykes landed a respectable 4.1 in company direction. "The firm has broadened their offerings," notes John Ragsdale, vice president of technology research for the Technology Services Industry Association (TSIA), dabbling more in managed services with solid management of "social media and online communities for global technology firms." Analysts expect much movement in 2012, with Ryan pinning it "as a very solid player to watch."

Last year's winner, Teleperformance, took top honors in company direction, with a score of 4.4. One analyst says Teleperformance has "operationally and strategically raised the bar in the outsourcing industry," while other analysts tout its global-mindedness and product innovation."

Teleperformance also has a track record of retaining its leaders, which keeps costs down and increases profitability." Fall brought Teleperformance an industry nod, when it received a 2011 EMEA Frost & Sullivan Award for Company of the Year. This is a firm with a serious plan of strategy, and, according to Ryan, "a structure conducive to keeping people involved."

The Winner

Convergys takes the top spot in the outsourcing category, receiving a whopping 4.7 in customer satisfaction and 4.1 in company direction after sitting at 3.5 last year. Ragsdale makes note of Convergys's "incredibly rich research division, giving them better data on customer satisfaction and loyalty practices" than some of their competitors.

Herrell concurs, commenting that Convergys is an outsourcer that "made investments in supporting the multiple-channel customer, including social media sites."

Convergys led the pack on the leaderboard with a 4.4 for depth of services, pumping up its solution portfolio through Customer Interaction Technology, designed to clear up a contact center's pain points via selectable solutions.

Convergys opened contact centers in Colombia, Costa Rica, and Jamaica, while increasing its home-agent program by 20 percent in 2011. Nevertheless, one analyst credits Convergys's legacy, but says its future will rely on "how they position themselves in the eye of the investors."

One to Watch:

West flirted with the leaderboard this year, but settled in as our one to watch in the outsourcing category. Late in 2011, West acquired HyperCube, a provider of tandem switching services to telecommunications providers, for an undisclosed amount. The general analyst consensus is this player remains strong in its game and is well positioned for growth. According to Thomas Whittle, an analyst at NelsonHall, despite West's diminishing focus on customer management services, the company is ahead of the curve and has made a "strong investment in automation, integration, social media, and WAHA [work-at-home-agent technologies]."


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