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April 2003

Discussing the impact of Voice over IP (VoIP) in the contact center in this month's Executive Roundtable are Vickie Marvich, Director of Marketing, Nortel Networks (www.nortelnetworks.com); Gary Barnett, CTO, Aspect Communications (www.aspect.com); and Ralph Breslauer, Executive Vice President, Concerto Software (www.concerto.com).
' The Editors

CIS: Briefly outline the advantages that come from the convergence of voice and data networks and the advantages of using VoIP in contact centers and throughout the enterprise.

Marvich: The main two benefits from using VoIP in the contact center are simplification and the death of distance. For example, it is much easier to add users and make changes in a converged infrastructure. In fact, one of our customers tripled in size last year and was able to support this rapid growth with the same support staff. Also, using a single broadband data connection to reach home agents reduces both the set-up costs and the ongoing monthly communication bills. These are just two of the ways companies can save costs due to simplification. The death of distance adds tremendous flexibility in being able to hire and retain knowledgeable employees, wherever they are ' in a branch office or home office, across the street or around the world.

Barnett: Convergence allows businesses to simplify their infrastructure and reduce costs by maintaining one network instead of two. At the same time, the converged network offers a quantum leap in the quality of customer service by turning every employee in the enterprise into a customer service representative ' all that's needed is an IP phone and connection to the network.

VoIP contact centers offer a number of advantages to the enterprise, including the ability to scale up or down the number of CSRs at a moment's notice simply by adding data lines to the network; the central administration of contact centers regardless of location, giving businesses the ability to take advantage of lower real estate and labor costs by operating remote contact centers; and the ability to add new communication channels including e-mail, chat, Web collaboration and live video.

Breslauer: First and foremost, enterprises must recognize that Voice over IP (VoIP) is a technology, not a business strategy. It must be evaluated to the extent that the technology leads to defined business goals. Even with the emergence of new channels of customer contact such as e-mail and chat, voice communication will continue to play a dominant role in the customer service model. Companies must carefully weigh the positive and negative aspects of VoIP, as any compromise in voice quality can greatly impact customer relationships. 

As has been well documented, IP-based solutions can reduce contact center operational costs and telephony charges. Additionally, VoIP can create greater flexibility in the contact center. Customers can initiate new means of communication through Internet connections such as through a PC and microphone. Companies can also utilize remote agents and build virtual contact centers that allow for increased versatility for agent workforce management and, potentially, lower costs associated with labor. A virtual call center deepens the labor pool, allowing companies to hire the most skilled agents and keeps contact center employees satisfied with flexible locations and work schedules.

CIS: What is the adoption rate of VoIP you seeing among your contact center customers?

Breslauer: Within the U.S., we are seeing a very small but growing number of enterprises and contact centers making VoIP implementations. Other contact centers have chosen a hybrid approach, where some agents use traditional circuit-based networks and other remote agents use the flexibility of VoIP. Interest overseas, particularly in Asia, has been much greater, however actual adoption is still low.

Barnett: We're seeing a lot of interest in VoIP, and companies are interested in getting more out of their existing investment by extending it with hybrid-VoIP technology. If you look at our customer lists you'll see some impressive VoIP implementations in North America and Europe, including companies like Shurgard, Washington Mutual and HVB Direkt ' one of the largest banks in Central Europe. Companies know they will need to move to VoIP, and they understand the benefits, but the majority of companies are at the stage of considering, learning and evaluating VoIP. We'll see adoption start to increase in the next five years.

Marvich: Nortel Networks customers have been successfully using VoIP in the contact center for a couple of years now. Although VoIP isn't used by a majority yet, companies in just about every industry worldwide are leveraging VoIP in the contact center when they see business benefits ' either cost savings, increased revenues or the ability to retain employees. For example, Buca di Beppo was able to improve customer service thereby increasing revenues while saving on operational costs. This is extremely advantageous to its business.

CIS: If you are seeing a slow adoption rate, what do you think are the reasons behind this (or, conversely, what are the reasons behind a high adoption rate)?

Barnett: If you are talking about pure VoIP systems, all vendors in our space are beginning to see early adopters. Obviously, there is a lot of caution in the technology marketplace today given the economic climate, but what we're seeing is that our customers recognize the value of our vision, which lets them leverage their existing PSTN investments while providing a migration path to a hybrid network and then to a fully converged network.

Marvich: When our customers have not adopted VoIP it is usually due to the misconception that the entire infrastructure needs to be replaced in order to leverage VoIP in a contact center. But the good news is that our customer contact solutions are infrastructure neutral. This means the same comprehensive, flexible contact center solution thousands of companies rely upon today can be used in a circuit-switched, pure IP or a hybrid environment without discontinuity or stranded investment. Just as important, it means that an IP contact center can work with our customer's current WAN, no matter which provider. Of course, this WAN should be designed to deliver the quality of service required to support customer calls. 

Breslauer: I think the biggest reason for slow adoption to this point is the lack of control of all aspects of the solution and hence the fear of poor voice quality that results in dissatisfied customers. Clearly, there were issues with VoIP voice quality when the technology was introduced, and regardless of whether those issues have been resolved as VoIP vendors claim, the risk of compromised voice quality still lingers for many. When implementing VoIP from India to the U.S., for example, there are many factors that contribute to the voice quality ' network latency, the call center technology, the IP network equipment, etc. This fear is particularly true for contact center decision makers who recognize that voice interactions are mission-critical.

CIS: Now that the dust is settling on the hype over CRM, what areas have been overemphasized and what areas have been underemphasized?

Marvich: Previously, CRM applications were often viewed as a solution to all business problems involving customer interactions and were implemented with this in mind. Quite often, the importance of integration with the contact center and self-service solutions was minimized if not forgotten altogether. Many companies are currently taking a second look and integrating where needed to create a seamless and consistent customer experience across all customer touchpoints.

Breslauer: The most underemphasized CRM issue is the challenge of viewing customer data when it's most needed ' in the real-time environment of the contact center where it can be used to deliver the most individualized, appropriate customer service. In order to provide an optimum level of service, companies must have a complete view of the customer, regardless of interaction medium ' voice, e-mail, Web chat or fax. It is important that CRM be tightly integrated with front-end customer interaction management software so that business rules can be effectively applied in the contact center. If CRM information is not available at the exact moment a company is in contact with a customer, that data ' which costs time and money to collect and analyze ' becomes a lot less valuable.

Barnett: Too much emphasis was placed on specific front-office applications, and while those applications are certainly necessary, they don't make up a CRM strategy. At the same time that there was a lot of the hype around CRM, not enough emphasis was placed on building a sound strategy for managing customer contacts in a way that allows businesses to run more efficiently and provide quality service for customers. It's clear that the core of any successful CRM strategy was and remains the contact center.

The dust has settled and what companies are now emphasizing which wasn't emphasized enough before is the next generation of tried and proven solutions like workforce management and self-service. Today's workforce management and self-service solutions offer innovative ways to help companies reduce costs associated with managing large workforces and serving tens of thousands of customers, while improving service. These solutions take advantage of advances in supporting technologies like powerful processors and the ever-evolving Web, which simplifies everything from administration to end-user access to applications. Businesses are noticing the confluence of advances in WFM and self-service as well as supporting technologies and realizing that the combination delivers killer applications for customer care operations. The ROI is very easy to measure and businesses are realizing that they cannot go wrong with these applications.

[ Return To The April 2003 Table Of Contents ]

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