CLOUD CONTACT CENTER: CUSTOMER- CENTRICITY WITH GREATER AGILITY & LESS COST

Transcription

1 CLOUD CONTACT CENTER: CUSTOMER- CENTRICITY WITH GREATER AGILITY & LESS COST July 2017 Omer Minkara Vice President & Principal Analyst, Contact Center & Customer Experience Management Report Highlights p2 p5 p8 p11 Cloud adoption by contact centers increased by 63% between 2013 and Companies are struggling to realize expectations driving cloud investments due to a lack of welldesigned strategies. 92% of the Best-in- Class optimize data flows to empower agents with relevant information and personalize customer conversations. Best-in-Class organizations are 57% more likely to regularly test and ensure their activities scale based on changing customer traffic. This report will highlight the trends in cloud technology adoption by contact centers. Specifically, we ll illustrate the top factors driving companies to invest in a cloud-based infrastructure, and the results associated with this strategy. The findings will also provide an overview of three sets of vital capabilities that help organizations maximize returns from investments in cloud technology.

2 2 Cloud Contact Center: Customer-Centricity with Greater Agility & Less Cost Cloud adoption is steadily increasing; almost one out of two contact centers are currently deployed in the cloud. Many companies lack a well-designed strategy that is necessary to bring all the fruits of cloud technology to bear. Cloud Technology Adoption Is on the Rise Between March and May of 2017, Aberdeen surveyed 322 contact centers regarding the key trends and best practices influencing their activities. This was a follow-up to similar studies between 2013 and 2015, surveying 748 businesses in total. One of the most striking findings when analyzing the year-over-year trends across these surveys was the increase in cloud technology adoption (see sidebar on next page) Figure 1. Figure 1: Cloud Adoption is on the Rise 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 30% 30% Actual Planned Actual Adoption Trend 69% 63% 58%? 49% 40% Source: Aberdeen Group, July 2017 Percent of respondents, n=1,070 As illustrated in the figure above, contact centers increased their adoption of cloud technology by 63% between 2013 and 2017 (30% vs. 49%). Planned adoption rates differed in various degrees from the actual adoption rates the following year; it is therefore unlikely that we ll observe the planned adoption rate of 82% become reality in However, the trend line suggests that 2018 will likely be the year in which more than 50% of contact centers will be deployed in the cloud. 82%

3 Cloud Contact Center: Customer-Centricity with Greater Agility & Less Cost 3 Cloud vs. On-premise For the purposes of this research, Aberdeen defines a cloud-based contact center deployment as one where the company contracts with a third-party provider to deploy and manage part of, or the entire, contact center infrastructure. This requires no investment to purchase hardware, or software, needed to manage the contact center activities. Rather, the company would pay license fees to the thirdparty based on numerous factors, such as the number of licenses and the number of applications used. This adds flexibility to the business as the company reduces its fixed costs in favor of variable costs. In comparison, an on-premise deployment model requires the company to invest in hardware and software to host and manage customer care applications within its own facilities. This results in the company incurring more fixed costs. What Drives Cloud Technology Adoption? Companies invest in cloud technology for a myriad of reasons. Before we get into these reasons, let s take a brief look at the different models of cloud contact center deployment - Figure 2. Figure 2: A Closer Look at Contact Center Deployment Models Private Cloud Users 17% Hosted Cloud Users 7% Hybrid Cloud Users 9% SaaS Users 16% On-Premises Contact Centers 51% Percent of respondents, n=322 Source: Aberdeen Group, July 2017 As depicted above, there are four different types of cloud deployments (see sidebar on next page for details). These four types can be grouped into two main categories: public cloud and private cloud. The former refers to contact centers working with third-party providers to host and manage all or parts of the contact center infrastructure. The latter refers to companies hosting and managing all the cloud contact center infrastructure within the company premises.

4 4 Cloud Contact Center: Customer-Centricity with Greater Agility & Less Cost Definition: Cloud Contact Center Aberdeen defines two cloud contact center deployment models: Public cloud: Contact center applications are hosted on a thirdparty provider s premises and managed entirely or partly by the provider. There are three different forms of cloud deployments within the public cloud. These are: Software as a Service (SaaS): A third-party provider is responsible for application management and control; the company only manages the data Hosted: A third-party provider hosts applications in the cloud on servers owned by the Cloud provider, but the business is responsible for managing the software Hybrid (private and public): Contact center applications run simultaneously in the public cloud and in-house. This group is categorized within public cloud because part of the contact center infrastructure is provided by a third-party provider In-House/Private: Contact center applications are hosted within the company premises where the organization is responsible for managing and controlling these applications on company-owned computing hardware. Overall, companies using a cloud-based infrastructure for application (e.g. workforce optimization (WFO) and automated call distribution (ACD)) delivery do so for several reasons Table 1. Table 1: Why are Companies Investing in the Cloud? Cloud Technology Benefits (n=322) Expected Achieved Adopt a flexible financial structure by converting fixed 79% 38% contact center deployment costs into variable costs Provide agents with access to better applications that we 74% 44% can t afford in-house Increase uptime through a more redundant carrier 70% 46% integration Reduce reliance on IT team and use previously-allocated 68% 48% IT resources within innovative projects Enhance security and compliance 65% 50% Reduce operational (setup, maintenance, and update) 61% 57% expenses for our contact center Source: Aberdeen Group, July 2017 As illustrated in the table above, among the top reasons why companies invest in cloud technology are financial agility and agent empowerment. Data shows that 79% of contact centers move from on-premise to the cloud in anticipation of converting fixed costs (such as upfront investments in hardware and software needed to run an on-premise contact center) to variable costs. We also see that 74% of contact centers expect to empower their agents with access to applications that they might not otherwise be able to afford due to the steep up-front investments required for an on-premise model. Together, these two factors signal that companies are turning to cloud technology primarily for financial gains and operational efficiency. In fact, the percentage of companies citing improved uptime and reduced IT reliance as goals driving their cloud technology investments supports this assertion. Besides the top expectations driving cloud technology investments, another interesting set of findings in Table 1 is the

5 Cloud Contact Center: Customer-Centricity with Greater Agility & Less Cost 5 The Aberdeen maturity class framework places companies in one of three categories based on their self-reported performance across key metrics: Best-in-Class: Top 20% of respondents based on performance Industry Average: Middle 50% of respondents Laggard: Bottom 30% of respondents Sometimes we refer to a fourth category, All Others, which combines Industry Average and Laggard organizations. difference between expected versus achieved results. When organizations that moved to a cloud-based contact center model were asked if they achieved the goals in Table 1, 48% of companies indicating financial agility as an objective were successful (38% divided by 79%). Similarly, 59% of companies indicating agent empowerment through better applications as an objective responded that a change in deployment model helped them achieve this goal (44% vs. 74%). Does the percentage of companies not enjoying the desired benefits of cloud technology mean that the technology is failing to deliver expected results? Not quite. Best-in-Class Lead the Way in Use of Cloud Technology The top reason why companies fail to achieve desired results from investing in a cloud-based infrastructure is the lack of a welldesigned strategy. How do we know this? Because, compared to others, Best-in-Class firms (see sidebar) address the challenges inhibiting their ability to achieve their objectives. As a result, they observe the results demonstrated in the table below. Table 2: What Makes a Company Best-in-Class? Company Performance (n=322) Best-in-Class All Others Customer retention rate 77% 48% Year-over-year improvement in customer 29.6% 1.2% satisfaction rate Year-over-year improvement in first contact 18.9% 1.7% resolution rates Year-over-year improvement in agent utilization rate 16.8% -1.6% Year-over-year improvement (decrease) in average handle time 15.1% -4.7% Source: Aberdeen Group, July 2017

6 6 Cloud Contact Center: Customer-Centricity with Greater Agility & Less Cost Additional Best-in-Class Performance Findings Research shows that in addition to the benefits illustrated in Table 2, Best-in- Class cloud contact centers outperform their counterparts in year-over-year improvement of the following metrics Agent productivity Best-in- Class: 25.1% versus All Others: 4.1% Customer lifetime value Best-in-Class: 15.9% versus All Others: 7.8% Average cost per customer contact Best-in-Class: 10.9% versus All Others: -2.2% Number of quality SLAs met Best-in-Class: 9.7% versus All Others: 2.4% Aberdeen used the five metrics in Table 2 to gauge the performance of contact centers currently using a cloud-based infrastructure. The findings revealed that the Best-in-Class retain 60% more of their clientele, and improve first contact resolution rates by 11.1 times more than All Others year-over-year. Improvement in customer retention rates shows that these top performers have found ways to become more adaptive in meeting and exceeding customer needs. The same top performers also grow agent utilization rates and shorten average handle times by far greater margins compared to their peers. Improving average handle times and first-contact resolution rates requires agents to be empowered with the right tools and information to solve customer issues. As such, these findings validate that Best-in-Class firms indeed accomplish the objective of empowering their agents with better applications to do their jobs. Earlier we saw that of the organizations that adopted cloud technology with the goal of driving financial agility, only 48% indicated they realized this objective. The findings on Best-in-Class performance sheds light on why that is. Data shows that Best-in- Class users of cloud technology enjoy a 10.9% annual decrease in service costs, compared to 2.2% increase by others. This 13.1% delta is proof that when paired with the right strategy, cloud helps contact centers reduce costs. Hence the 52% of companies using cloud technology those that indicate not achieving expected financial gains should follow the lead of the Best-in-Class. Key Capabilities Changing the deployment model of a contact center, by itself, has minimal impact on long-term performance results. Cloud technology provides organizations with numerous benefits, such as the ability to scale up and down based on changing customer traffic. However,

7 Cloud Contact Center: Customer-Centricity with Greater Agility & Less Cost 7 when a company falls behind in monitoring and predicting changes in customer traffic, scalability provides little help. Just because cloud provides certain benefits, it doesn t mean that companies are using them. Make sure you understand the benefits of cloud technology, and establish activities to utilize them. For example, a contact center might schedule 300 agents the first week in June. However, data from historical trends and recent customer traffic might suggest that only 200 agents are needed for that period. Unless the company employs relevant forecasting activities, it will schedule 100 more agents than it needs. This means that the company will incur unnecessary labor costs and will pay unnecessary license costs for these agents even though using a cloud-based infrastructure allows the company to scale down and save the cost of these 100 licenses. Best-in-Class firms use a series of activities to optimize their processes in order to take full advantage of the benefits of cloud technology Figure 3. First among these activities is tailoring conversations throughout the customer journey. Specifically, this refers to analyzing customer data captured through systems such as interactive voice response (IVR), and using automated workflows to connect the right customer with the right agent through the proper channel. The latter (proper channel) is particularly important, as different buyers have unique preferences. For example, once the company determines that a buyer prefers having a conversation through text messages to speaking on the phone, the company will interact with the buyer through text messaging. An important note to remember when implementing these capabilities is that companies must also be able to assess the nature of particular customer issues, and route customers to channels that are most likely to efficiently address their needs. For example, a complex product question will likely require a phone

8 8 Cloud Contact Center: Customer-Centricity with Greater Agility & Less Cost conversation instead of a text message. Figure 3 shows that almost all Best-in-Class firms have this capability in place. One of the many benefits of using cloud technology is agility. This refers to making changes based on evolving business needs - without the need to incur significant up-front fixed costs or require significant involvement of the IT team. Figure 3: Best-in-Class Firms Know Their Customers & Empower Their Agents 100% 80% 60% 40% 92% 92% 82% Use customer contact data to direct customers to the right channels Percent of respondents, n=322 70% Automatically provide agents with relevant knowledgebase articles through the agent desktop Best in Class 77% 76% 67% All Others Centralized knowledgebase of product / service information Another near-universal capability across the top performers is providing agents with ease of access to relevant knowledgebase articles. This is vital, as Aberdeen s May 2017 Contact Center Workforce Optimization: Productive Agents, Happy Customers & Reduced Costs study shows that, on average, agents spend 15% of their time seeking relevant information to do their jobs. This is partially due to agents needing to use three different applications during a typical interaction. To that end, the Best-in-Class are 31% more likely to provide agents with access to relevant insights (e.g. account data) on a single screen. 58% Access to all customer information on a single screen Source: Aberdeen Group, July 2017 In addition, the top performers automatically recommend relevant knowledgebase articles to agents through the agent desktop. This allows agents to quickly resolve the customer s issue, rather than spending time browsing through the knowledgebase seeking the relevant article. This in turn reduces average handle times and increases customer satisfaction.

9 Cloud Contact Center: Customer-Centricity with Greater Agility & Less Cost 9 Recommendations on relevant knowledgebase articles are made with the help of analytics. Technologies such as desktop analytics, speech analytics, machine learning and artificial intelligence contribute to the process of determining who the customer is, the nature of the issue, and the knowledgebase article that is most relevant to the situation. Personalizing customer conversations and empowering agents are vital activities. But how will organizations know if their efforts are paying off? Figure 4 shows the activities Best-in-Class firms use to measure and manage their performance. One of the many benefits of using cloud technology is agility. This refers to making changes based on evolving business needs without incurring significant up-front fixed costs or requiring significant involvement of the IT team. Best-in-Class firms understand the benefits of this advantage; they are 26% more likely to provide contact center leaders with real-time access to agent and team performance (88% vs. 70%). This allows leaders in these businesses to identify strengths and weaknesses in a timely fashion. Empowered with this information, contact center leaders can act to mitigate their weaknesses and maintain their strengths.

10 10 Cloud Contact Center: Customer-Centricity with Greater Agility & Less Cost Figure 4: Generate Timely & Accurate Visibility into Your Performance 90% 88% Best in Class All Others 85% 85% 70% 70% 66% 64% 50% 30% Provide contact center managers & executives with real-time access to agent and team performance Analyze repeat customer contacts to determine common customer issues Enable contact center leaders to generate tailored reports on activity results Percent of respondents, n=322 Source: Aberdeen Group, July 2017 To ensure that contact center leaders can act quickly and efficiently, Best-in-Class firms also provide executives with tailored reports containing the insights needed to make strategic business decisions. For example, while a supervisor might need more detailed visibility, such as average handle time for agents in a specific team and SLA compliance by channel, a contact center leader might need this information for all teams and all channels. If necessary, tailored reports allow these leaders to drill down and learn more about specific trends or issues. One of the most direct ways of knowing if contact center activities meet and exceed customer needs is by determining the number of repeat inquiries. If customers repeatedly contact the business about the same issue, this is a clear indicator that the company is struggling to address the issue, and must determine relevant steps (e.g., coaching, training and new technology or processes) to fix it. Companies can determine the number of repeat inquiries by monitoring contacts (e.g., calls or chat sessions) with a customer in a short period of time. Technologies such as speech analytics and desktop analytics help analyze phone conversations, chat transcripts, and agent notes to provide further insight into

11 Cloud Contact Center: Customer-Centricity with Greater Agility & Less Cost 11 customer issues, and ascertain whether or not any follow-up contact with the customer was regarding the same issue. The third set of activities that help the Best-in-Class achieve expected results from their cloud technology investments are related to quality management. This refers to measuring and managing contact center activities to ensure they meet objectives such as SLA commitments. It also refers to ensuring compliance with regulations such as PCI DSS and HIPAA. Figure 5 provides an overview of the activities top performers use for quality management. Figure 5: Best-in-Class Firms Excel in Quality Management 90% 85% 77% Best in Class All Others 75% 70% 59% 57% 61% 50% 30% Systematically protect and prevent against fraudulent activity in real-time Percent of respondents, n=322 Test contact center activities at least weekly to ensure they scale to accomodate customer traffic Regularly back up customer data used to support contact center activities Source: Aberdeen Group, July 2017 We discussed the ability to scale up and down as a benefit of cloud technology. Figure 5 shows that Best-in-Class firms are 57% more likely to conduct at least weekly tests to ensure their activities scale according to varying customer traffic (77% vs. 57%). In turn, they are rewarded with benefits such as 10.9% year-overyear improvement (decrease) in service costs, 9.7% increase in

12 12 Cloud Contact Center: Customer-Centricity with Greater Agility & Less Cost number of quality service-level agreements (SLAs) met, and 13.8% decrease in number of customer complaints. Top performers are also 23% more likely to regularly back up customer data (75% vs. 61%). This is an important business continuity measure that serves as a risk mitigation measure as well as a customer experience enabler. For example, a customer might call to cancel a subscription service. If the business doesn t back-up records of customer conversations, it might risk not seeing this information and send a bill to the client. This, in turn will frustrate the customer and might risk potential litigation. Also, maintaining records of previous conversations helps companies obtain views into the customer journey, allowing contact centers to personalize conversations. As such, the seemingly technical step of backing up customer data can be considered a supporting step to ensure delivering omni-channel conversations (see sidebar). For organizations across heavily regulated industries (e.g., financial services, insurance, and pharmaceuticals), ensuring compliance and managing fraud are important priorities. Once again, the Bestin-Class are leading the way in those areas. Figure 5 shows that these top performers are 44% more likely to have a process to protect and prevent fraud (85% vs. 59%). This is done in a number of ways, including managing the agent desktop so that when the customer is inputting credit card information, the agent can t see it. Another way is authenticating customers through technologies such as voice biometrics before allowing balance transfers from a bank account or making changes to an insurance policy. Recommendations Companies have consistently been increasing their adoption of cloud technology over the past several years. While cloud has significant potential to help companies improve performance, this

13 Cloud Contact Center: Customer-Centricity with Greater Agility & Less Cost 13 potential is only unlocked with the right strategies. In fact, almost half of contact centers that made the move to a cloud-based contact center report that their performance fell short of expectations. As evidenced through findings in this report, this is due to these companies not incorporating a well-designed strategy when implementing and managing a cloud contact center. We recommend companies aiming to maximize investments in cloud technology incorporate the following activities to reap optimal results: Optimize data flows, and get information management right. To personalize customer conversations, you need to first build a unified view of customer data across all systems. To empower agents, you need to understand what type of information they need and when they need it, so you can make it easier for them to access it. Measure your performance to ascertain whether or not your activities are producing desired results. As you work to improve your future performance, don t forget the past. Put insights from past interactions into use by analyzing how they impacted operational efficiency and the customer experience. Enable leaders in your business with tools such as reporting and analytics for timely visibility into issues that must be resolved for better performance. Make sure you regularly test your ability to use the benefits of cloud technology. While scalability provides an important edge for cloud contact centers, data shows that only 60% of cloud users have a process in place to regularly test their performance in this area. Repeat such activities regularly to ensure you fully realize the benefits of cloud technology

14 14 Cloud Contact Center: Customer-Centricity with Greater Agility & Less Cost For more information on this or other research topics, please visit. Cloud Contact Center: What's the Right Model for You; July 2017 Speech Analytics: Convert Voice of the Customer into Business Success; November 2017 Agent Productivity & Performance Management: A Look into Best-in-Class WFO Strategies; November 2016 Related Research The Intelligent Contact Center: Master Low- Cost & High-Impact Customer Interactions; August 2016 Smart Customer Service: Four Steps to Long- Lasting Customer Bonds with Omni-Channel; March 2016 Omer Minkara, Vice President & Principal Analyst, Contact Center & Customer Experience Management About Aberdeen Group Since 1988, Aberdeen Group has published research that helps businesses worldwide improve their performance. Our analysts derive fact-based, vendor-agnostic insights from a proprietary analytical framework, which identifies Best-in- Class organizations from primary research conducted with industry practitioners. The resulting research content is used by hundreds of thousands of business professionals to drive smarter decision-making and improve business strategy. Aberdeen Group is headquartered in Waltham, MA. This document is the result of primary research performed by Aberdeen Group and represents the best analysis available at the time of publication. Unless otherwise noted, the entire contents of this publication are copyrighted by Aberdeen Group and may not be reproduced, distributed, archived, or transmitted in any form or by any means without prior written consent by Aberdeen Group