• December 20, 2018
  • By Donna Fluss, president, DMG Consulting

Thanks to AI and RPA, the WFO Market Surges

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The first half of 2018 was strong for the workforce optimization (WFO) market in general, up 6.4 percent compared to the first half of 2017, and excellent for the contact center segment, which grew by 24.2 percent during this period. The two market leaders, NICE and Verint, which together accounted for 75.5 percent of the total company GAAP revenue in the WFO suite market in the first half of 2018, each experienced strong revenue growth. NICE’s total company revenue increased 9.8 percent in the fiscal first half of 2018 compared to the first half of 2017, and Verint’s revenue grew by 11.2 percent in the same period. Based on our ongoing analysis of this market, the first half of 2018 has been good overall for the majority of WFO vendors.

Total company revenue for the WFO market in the first half of 2018 was $1.685 billion, up $101.7 million from $1.583 billion in the first half of 2017. This 6.4 percent year-over-year improvement represents solid growth for this mature IT sector. However, a significantly larger increase was experienced in the contact center WFO segment. Contact center WFO revenue grew substantially, from $695 million in the first half of 2017 to $863.6 million in the same period of 2018, up $168.5 million, a 24.2 percent increase. Four vendors accounted for a vast majority of the increase in this market sector from first-half 2017 to first-half 2018:

  1. Verint showed the most sizable increase in this segment, up $84.4 million.
  2. NICE experienced year-over-year contact center WFO growth of $30.4 million.
  3. Calabrio’s contact center WFO revenue was estimated to have grown rapidly, up $17.3 million during this period.
  4. A DMG methodology change related to the addition of Genesys at an application level increased these results by an estimated $45.8 million. (It’s important to note that even if Genesys’s estimated contact center WFO revenue were excluded from the analysis, the sector would have grown by an impressive 17.7 percent.)


The WFO market has been in transition for the past several years; the primary applications in the sector, recording and quality management/quality assurance, are mature. While a few of the larger vendors have still been investing in these applications, the pace of change has been unsurprisingly slow. Customers want a growing number of their WFO applications delivered via the cloud, not on-premises. Workforce management was the first WFO application to move to the cloud, but enterprises are increasingly asking their vendors to make many of the other 11 modules available in the cloud as well, and the vendors are responding.

The required architectural changes and pricing model adjustments needed to migrate from on-premises deployments to the cloud have put downward pressure on the revenue and bottom lines of many of the WFO suite vendors over the past couple of years. During this transition, the market experienced a number of mergers and acquisitions. DMG’s 2015 edition of the “WFO Mid-Year Market Share Report” analyzed 45 vendors worldwide; the 2016 edition compared results for 42 providers; and the 2017 edition examined the performance of 39 WFO suite vendors. As the numbers indicate, by the end of fiscal 2017, the WFO suite market had lost six vendors, down 13.3 percent from the high point of 45 vendors. Merger-and-acquisition activity in a mature market is normal, and DMG expects to see more of it in the next 18 to 24 months as the WFO suite market goes beyond consolidations to a much more significant transformation that will involve other IT sectors.

The market’s transformation will be driven in particular by robotic process automation (RPA) and artificial intelligence (AI). This digital transformation is driving companies worldwide to redesign their front- and back-office servicing strategies and operations. Companies (and their customers) want solutions that make it easy to conduct business and deliver a personalized, outstanding experience cost-effectively.


Enterprises need interaction analytics (speech and text analytics) to help them analyze customer conversations that take place in the contact center and, increasingly, other departments. The intelligence provided by interaction analytics (IA) is critical for organizations to discern the nuances in customer interactions. And combining IA with customer journey analytics (CJA) leads to even deeper insights for the enterprise. While it’s great that sales of traditional QM/QA solutions are strong, it’s well past time for companies to transition to the newer generation of solutions. Enterprises need to know what is happening with their customers and prospects at every touchpoint, and the combination of IA and CJA can tell them. Additionally, due to increased worldwide regulations and scrutiny and significantly higher service expectations from customers, enterprises often have only one chance to win a prospect’s business, retain an existing customer, or avoid onerous fines, penalties, and negative exposure in the press or social media.

Artificial intelligence (AI), machine learning, and natural language processing/natural language understanding/natural language generation are just entering the world of WFO. The potential benefits of these AI-based solutions are massive. Consider AI the brain that can oversee the contributions of all 12 WFO applications. While one or two of the 12 WFO applications will be replaced by AI, its primary contribution will be overseeing WFO suites and making sure that the right applications and analytics are applied to each customer touch.

RPA is no longer an option; it’s a necessity, for companies of all sizes. The WFO vendors have been dabbling in RPA for close to 15 years, starting with investments in desktop automation. RPA has taken off in the past three years, and nothing is going to stand in its way because these solutions are delivering great value to enterprises and their employees and customers. Both attended RPA, to automate routine activities and provide real-time guidance for agents during interactions, and unattended RPA, to automate certain end-to-end processes, are being embraced by enterprises. DMG projects growth rates for RPA of 100 percent or more for each of the next five years.


Enterprises need WFO solutions now more than ever, and the rate of growth is expected to increase as this market transforms. The pace of change in business worldwide has never been faster, and customer expectations have never been higher. Historically low unemployment rates in the United States have companies searching for more efficient ways of doing business with their current workforces, and organizations are looking for tools to give them visibility into staff performance and to increase productivity. After several ho-hum years, the WFO segment is poised for a resurgence, and leading WFO suite vendors are investing to meet the current and future needs of the market.

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.

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