January 2004

CIS editors interviewed several high-ranking officials from leading call center and CRM software companies and teleservices agencies and asked them for their views on industry trends for 2004 and beyond. Here is what they had to say:


David Puglia, senior VP, global marketing,
Aspect Communications (www.aspect.com)

' Many companies are aggressively defining their customer management strategies now before buying large solutions and the services to implement them. After all, technology just provides the tools for making a vision reality. Many companies that invested in CRM technologies like SFA learned the expensive lesson that the technology cannot drive behavior or strategy and it can only help you realize a clear vision. So companies looking at contact center solutions aren't as interested in point solutions as they are in integrated, open solutions they can take into the future as their environments change. For companies in the contact center space to leverage this trend, they need to really understand their customers' business processes and then determine the best solution, even if it means starting with a smaller application in the first phase and then expanding the solution from there. Contact center solutions providers need to also understand their customers' end-visions if they want to partner with the customer and sell more than just one application today.
' We're seeing two trends. Within these there are other sub-trends. For example, companies are going for newer versions of proven products, but they are also integrating them with existing technologies and using them in newer, innovative ways. Companies defining their customer strategies are investing in analyzing how their customers contact them, what they are looking for, and how they feel about the service they are getting. As an example of this, one of our customers, a home-shopping giant, actually found that a high percentage of their repeat customers wanted a self-service system instead of a live agent ' they wanted to quickly punch-in an order and get off the phone. The IVR system they implemented resulted in an increase of more than 50K in sales within the first two days alone. This is because they started with the strategy first. Companies that want to improve their customer relationships and thereby increase revenue and profitability would do well to study these trends and evaluate their own businesses in light of them.


Jim Smith, VP, CRM strategic planning and product management, Avaya (www.avaya.com)

' This year, enterprises will be able to capitalize on an array of new customer service technologies as contact centers gain the full benefits of IP telephony, personalized customer interaction and predictive technologies. Avaya sees key trends emerging in 2004 that will raise the bar on customer sales and service. They include:
' Proactive contact capabilities driving brand loyalty: In 2004, enterprises will need to optimize customer interaction in a regulatory environment tightened through new 'do-not-call' rules. Businesses will continue to embrace technologies that help them respect customer privacy and reach out to customers at the right time. Enterprises that can do this successfully will further enhance brand loyalty and satisfaction among customers, an ongoing focus in 2004.
' Maximizing customer service in increasingly distributed enterprises: In the coming year, more enterprises will need to integrate branch and remote office workers into distributed, customer-driven enterprises. With IP telephony, remote agents around the globe will gain access to the same capabilities used by enterprise-based contact center agents, ensuring that all workers operate as one ubiquitous unit. 2004 will see more contact centers evolving to an IP foundation to strongly leverage human assets for competitive advantage.
' Predicting customer needs ' and having the resources to deliver: The continued integration of multimedia channels with predictive technologies enables enterprises to identify customer needs ' and match them with the necessary agents more rapidly than ever. The trend toward advanced, any-channel interaction will only accelerate in 2004, driving new cost savings while increasing customer satisfaction.
' Speech recognition innovations accelerate: More companies will see a host of beneficial innovations in the contact center arena in 2004. The continued advancement of speech applications for self-service, for example, will change the way customers gain information from their contact centers. As speech access technology grows more sophisticated, contact centers will be able to provide unsurpassed mobility, vastly improved natural language recognition and seamless operation.
' Pre-emptive service gains fast traction: In 2004, pre-emptive service will gain fast traction, enabling vastly improved communications to customers, including informing them of receipt of questions or notifying them of improvements to a product. This will serve to increase the bond between enterprise and customer, as only the most relevant information is communicated in anticipation of customer queries.


CJ Johnson, senior VP, CCC Interactive Corporation
(www.cccinteractive.com)
 
' I strongly believe that our market will show significant growth in 2004. As the economy continues its upward trend, corporations will look to outsourcing non-core competencies to further improve their profitability. 
' The call center outsourcing arena will benefit greatly from this due to the infrastructure and state-of-the-art technology available and being purchased today by many call center outsource providers.
' Many call center technologies have improved their product to enhance the overall service abilities and efficiencies of agents. The next year will bring fierce competition among technology suppliers, and a drive by call centers to continue these enhancements.
 


Doug Berry, VP and
general manager of Epicor's Clientele Group. (www.epicor.com)

' There is no doubt that hosted CRM will become more prominent within the SMB market in 2004. Hosted CRM is already gaining incredible momentum ' so much so that vendors are acquiring one another in an attempt to gain footing in the hosted CRM market.
' Thus far, hosted CRM has primarily been a one-size-fits-all offering and buyers should be wary of hosted solutions that don't adequately meet their integration and customization needs both at purchase time and in the future.
' Traditionally, hosted solutions have offered a cost-effective alternative for companies dipping their toes in the CRM waters. But as their CRM needs mature, they often outgrow the functionality or are overly constrained by lack of customization or integration capabilities. Furthermore, should they ever decide to bring the solution in-house, the implementation expense can be prohibitive.
' In 2004, buyers considering hosted CRM should look at solutions that offer customization and integration capabilities and that are structured to account for the inevitable growth and change they will encounter in the future.

Terry Ryan, president and CEO, HigherGround, Inc. (www.highergroundinc. com)

' Employee costs (wages, healthcare, overhead, etc.) will continue to rise while technology costs will continue to decrease. Hence, there will be an increased emphasis on doing more with less in order to get more efficient work at a better quality from employees and increase the ROI to companies.
' Since turn-over is costly, programs will be put in place to increase employee retention, some of which will translate into training programs and the utilization of agent feedback. Feedback will be accomplished by recording and watching what an agent is doing on the screen while conversations take place. Computer-based training (e-learning) and classroom training will be emphasized. Software programs will modularize course material so that a trainer can quickly and easily design courses for large or small groups, individuals and even other trainers. E-learning programs will become more intuitive so as to challenge the level an agent is at, and actually move the agent up or down levels of difficulty based on his or her responses. The programs will also recognize how a person learns and direct him or her to questions or scenarios that enable learning in a way that is most meaningful to him.
' Customer retention is recognized as key, therefore getting feedback from customers and monitoring the customer experience in a timely fashion will become increasingly important.
' Customer surveys will be used in conjunction with agent evaluations to provide a view of both the agent and the customer ' the whole experience.
' Grading of the customer experience by a representative organization or by an independent company will come into play.
' Follow-up will be key. If it is determined that a customer had a bad experience, the analysis will include tracking and reviewing all recordings of that customer, reading e-mails, and following up on all interactions.
' The databases queried will have all the contact points for a customer, including e-mail, phone numbers and fax. As a result, tools that offer quick and easy retrieval of the data will be essential.
' The faster a determination can be made about the overall health of a customer, the faster a strategy can be put together to address the situation. So simple-to-use reporting tools that integrate information from multiple data sources will be imperative. These reporting tools should provide a complete understanding of what is happening through the use of business intelligence or a derivative, which in essence provides the ability to get the right information at the right time in the right format.
' Also, full-time recording will overshadow quality monitoring. A more complete analysis can be accomplished if all the calls are recorded just as better analysis can be accomplished by analyzing every e-mail, rather than a random sampling. The more information that can be collected, the better the resulting problem-resolution strategy will be. More recordings equal better analysis.
' Important factors will include: user-friendly programs that easily integrate technologies and data; data that include multi-channel, multi-contact, structured and unstructured data (multiple systems, formats and types of data), and multiple locations and countries; technology that provides statistics and multi-dimensional graphing and charting with live data for proactive responses, thus moving away from the 'rear view mirror' approach; software programs that become more interdependent and will include solutions such as workforce management, CRM, telephony systems, etc.; and business intelligence applications that will associate all these features and capabilities.


Steve Brubaker, Sr. VP - corporate affairs, InfoCision Management Corp. (www.infocision.com)

' When looking for a teleservices provider, carefully consider the organization's experience and make sure the infrastructure is in place to protect you from
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'Industry Trends' continued from previous page
the significant liabilities existing in a hyper-regulated environment.
' When your teleservices partner understands your regulatory concerns, you will certainly sleep better at night knowing you are protected.
' Marginal players that do not have the resources or expertise to face these new challenges will soon be driven from the marketplace. However, those teleservices agencies that have made the critical investments necessary will grow and provide even better service for their clients.


Matthew Self, VP, call center application development, Oracle Corp. (www.oracle.com)

' In 2004, CRM implementations will focus on delivering deeper integration of customer-facing business processes from marketing, sales and service into manufacturing, inventory, fulfillment, financial and personnel administrative systems. Organizations that focus on consistent rationalization of customer data and how they move through business processes will realize the greatest success and return on their investments. Solutions that are based on the unified information architecture will not only leverage a single source of truth regarding customer data, but will achieve significantly higher business process efficiency for a lower cost of ownership.
' Call centers will become increasingly focused on maintaining customer relationships, including using relationship strategies to drive incremental sales. We're also seeing larger budgets for call centers, although those organizations are doing more than ever to get the most return on investment ' standardizing processes wherever possible to gain efficiencies and reduce costs. And when companies do begin to spend their increased budgets, we're seeing them look much more closely at multichannel integration, advanced e-mail response systems, IP telephony as an infrastructure for automating remote response groups, and survey capabilities.


Tom Cardella, CEO, Precision Response Corp. (www.prcnet.com)

' We are finally beginning to see a true economic recovery. For the teleservices industry, the outlook is optimistic as companies take into consideration the value-add of outsourcing. For Precision Response Corporation, our success will be determined by our ability to operate efficiently and effectively, while providing the highest quality product for our customers. As competition within the industry tightens, organizations that are lean in bureaucracy and agile in nature are best positioned for growth. It is without question that international competition will be the hot button for 2004.
' With pricing pressure on the rise, customer care providers will be faced with the challenge of differentiating themselves within a high-commodity market. I believe that quality of services and customer satisfaction will ultimately drive future trends in this arena. There are a number of inherent risks as well as cost factors associated with offshore operations that may prove to outweigh the advantage of a less expensive labor market.
' To this end, I believe domestic operations will remain strong and programs that better lend themselves to the U.S. labor market, such as voice services, will be far less influenced by offshore operations. Providers like PRC, that can offer customers an end-to-end solution that marries top-notch service with a blended service model of domestic and international operations, will likely remain market leaders.


Erik Hille, VP of marketing, Primus Knowledge Solutions (www.primus.com)

' The good news is that people are generally reporting that 'things are getting better.' Not only are a handful of new companies considering CRM point solutions, but many companies that previously had a 'quick-fix' solution in place are reconsidering those decisions as well. For 2004, licensed solutions are going to make a comeback.
' Mind you, hosted solutions will remain in the marketplace (and will continue to do well), but they will have to increasingly share the limelight with licensed solutions as well.
' One of the drivers that will push licensed solutions back into the proverbial picture is that the quick fix solutions previously implemented were often short on functionality. As companies reevaluate these decisions moving forward, they will increasingly be looking for additional functionality.
' A part of this increase in functional scope is room for expansion both in terms of transaction volume or in terms of media channels covered. Please note that while some premium will be paid for the increased functionality, companies will continue to expect heavy discounts.
' Finally, we are going to see an increased focus on the incorporation of integrated mobile messaging into customer service and marketing interactions. In Europe, this trend is already manifesting itself because two-way SMS messaging has moved into the mainstream. Look for this trend not only to continue, but to be replicated in North America.


Carl E. Mergele, CEO, SER Solutions, Inc. (www.ser.com)

' Unlike 2003 when contact centers were consumed with an onslaught of regulatory compliance issues, 2004 will be a year when contact centers recommit to serving the needs of their customers.
' Contact centers will focus on developing strategies that increase customer loyalty and retention. They will mine their databases to discover new and better ways to cross-sell and upsell their products and services. These proactive customer care programs will necessitate the more formal integration of inbound and outbound operations including a single point of administration and operation reporting.
' Contact centers will invest in technologies to support their renewed focus on increasing operational efficiencies and expanding their quality assurance and customer care initiatives.


Peter Durlach, president, Unveil Technologies, Inc. (www.unveil.com)
 
' Throughout 2003, self- service was consistently cited as a top spending priority of enterprise IT departments. In 2004, we will see the arrival of a new breed of smarter speech applications that represent a major shift in the conventional approach to self-service.
' This shift is based on the understanding that self-service is not simply about automation rates, and certainly not speech accuracy rates. It is about successfully responding to your customer's needs in the most cost effective manner. 
' Built on actual call data, these new applications will be deployed in half the time of today's speech systems. Once deployed, they will automatically adapt to caller interactions, reducing the cost of ownership issues associated with speech technology. They will give callers the freedom to interact in a more conversational, natural manner than is possible with today's directed dialog systems.
' Most importantly, instead of operating as an independent silo in the call center, speech self-service will evolve to provide seamless integration with live agents 'enabling contact centers to optimize their handling of customer interactions while providing callers with a high-quality continuum of care across integrated resources.
' In 2004, speech self-service will''get smart,' not simply through the improvement in technology, but by applying technology in ways that complement and extend investments in agent training.


William E. Meade, Jr., president and CEO, StarTek, Inc. (www.startek.com)

' We believe that the business process outsourcing industry is in the throes of a continuing and long-term transition to a more complex organizational structure accompanied by more demanding service requirements.
' Important elements of this transition are the persisting trend to offshore outsourcing, vendor consolidation and accelerating price pressures. Buyers of outsourcing services will simplify their stable of service providers, retaining those that are better aligned or more attuned to their strategic needs.
' Offshore is here to stay. Providers will need to service clients from a number of geographic and distribution centers worldwide and provide the same standard of service regardless of the point of implementation.
' The recent do-not-call legislation will intensify competition as excess capacity in facilities and people will lead outbound callers to accelerate their efforts to enter the inbound arena to cover overhead expenses. This will probably sharpen pricing, leading to further financial pressure and continued industry consolidation.
' On balance, while we expect the general environment for outsourcing services to improve this year, those providers, like StarTek, that offer demonstrated value-added services, strategic account management and flexible program design will benefit and thrive from the systemic and far-reaching changes that we expect.


Oscar Alban, principle market consultant, Witness Systems (www.witness.com)

' Providing high-caliber customer experiences remains one of the core focuses for the majority of customer contact centers. Supporting this effort, contact center performance optimization software ' which includes customer interaction recording, performance analysis and e-learning solutions ' has become pivotal in helping organizations ensure their customer focus remains on track. Research indicates that in the year ahead, this focus will extend to other areas of the business as they embrace this type of technology to help identify the 'root cause' of customer frustration.
' Today, more companies are extending the use of recording technology to outside the contact center. Because activities outside the center are often the catalysts that drive call volumes, performance optimization software is further proving its value ' enabling companies to quickly identify the root cause of call spikes. For instance, recording solutions can identify trends ' such as where and why errors occur ' enabling organizations to make adjustments, often before customers are ever impacted. An example: a leading provider of broadband services has estimated that it can save more than $2.8 million a year by decreasing billing-related calls into the contact center by just five percent.
' Leveraging performance optimization software to determine root cause is becoming a key initiative, extending well beyond the customer-facing call center to the entire enterprise. The ability to pinpoint root cause issues proactively will become an even more important focus in 2004, as companies place a greater emphasis on driving quality experiences throughout the enterprise and maximizing existing technology resources to optimize performance.

For information and subscriptions,
visit www.TMCnet.com or call 203-852-6800.

For information and subscriptions, visit www.TMCnet.com or call
203-852-6800.

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