Vendors Must Exploit IP to Achieve Contact Center Sales

Transcription

1 Market Analysis Vendors Must Exploit IP to Achieve Contact Center Sales Abstract: Gartner surveys show that scalability, performance, ease of integration and management are the key factors when purchasing contact centers. Vendors must identify how IP technology migration relates to these criteria. By Terry Wright Strategic Planning Assumptions By 2008, traditional call center manufacturers like Avaya, Alcatel, Nortel Networks and Siemens will have announced their intention to discontinue support within five years for system architectures based on time division multiplexing (TDM) (0.8 probability). By 2005, the key distinguishing characteristic of sophisticated contact center operation will be performance management software that consolidates existing control systems within a single management solution (0.8 probability). Recommendations Vendors that are new to this market should offer strategies to migrate customers to an Internet Protocol (IP) infrastructure. To retain their clients, established vendors must respond with technology refresh strategies that encompass IP, but differentiate themselves by emphasizing the importance of proven performance in support of critical business applications. To reduce costs, manufacturers must cease support of current TDM platforms by As users want closer interoperability between their communications infrastructure and their business applications, contact center manufacturers must offer integration with leading customer relationship management (CRM) software and add software licensing to their infrastructure supply business. Anticipating the development of a hybrid networking environment with a mix of IP and TDM, manufacturers need to provide integral softswitch capabilities within contact center software suites, so that even call queuing can be freed of its remaining ties to proprietary physical infrastructure. Publication Date: 14 July 2003

2 2 Vendors Must Exploit IP to Achieve Contact Center Sales Criteria When Selecting Contact Center Technology Contact centers are beginning to acquire their technology from a single vendor to optimize their operations. Vendors that are new to this market will promote a strategy of "pure IP is best" to encourage the replacement of TDM systems. In response, vendors keen to protect their client base and to progressively migrate it to IP technology will be inclined to separate systems from networks and highlight the need for product resilience and vendor experience when dealing with critical telephony applications. Users will generally balance the need to "virtualize" their network against the need to integrate with CRM applications. The ability of vendors to support both requirements is a criterion for making it onto an initial shortlist. Gartner's surveys of those responsible for implementing contact center technology show that the four main concerns when choosing technology are scalability, performance, ease of integration and ease of management. Scalability Gartner's surveys indicate that scalability is the most important influence on the selection of a vendor. Investment has to be protected over at least five years. All vendors find this a difficult issue to address, because size, modularity, adaptability, virtual networking between sites and their relationship to cost are all seen as part of the scalability criterion. Size, Modularity and Adaptability It is not uncommon for traditional TDM systems to be scaled up from an initial 20 agents to several hundred once they are in full operation. Most contact center operations will increase in size between 10 percent and 50 percent per year for the first few years after installation. Systems must allow growth to match changing needs sufficiently closely to reduce the risk of overprovision and unnecessary cost. As contact center operations are modified to meet changing business needs, the handling of tasks, rather than calls, becomes more important. Other channels, such as and Web chat, may be introduced, affecting both the nature and volume of transactions. A key criterion in product and vendor selection will be the ability to frequently adapt contact center resources and to match associated costs with the value derived from customer transactions. Networking, Resiliency and Costs Many organizations have multiple location-dependent operations. The issue of whether to centralize or virtualize resources and the ability to support remote site or agent working add new and important dimensions to contact center procurement strategy. Overall system failure can be mitigated in a virtual network comprising a number of contact centers functioning as a single system, but the probability of partial system failure increases. Although the cost of network provision and operational management may be higher than in a centralized single-site solution, moving to IP technology offers other benefits. The ability to create a virtual solution allows processes to be centralized without disruption to staff, because it is governed by a common management system that extends to remote sites as well as larger sites. IP and broadband access enable remote working. Replacement of expensive ISDN access with IP technology can bring significant savings, while providing better performance and improved working conditions. The transition to IP technology in office infrastructure and

3 networks should be justified separately from investment in contact centers. However, if an organization is already moving to IP technology in its network fabric and making remote working easier, the likelihood of it adopting an IP-based contact center is higher. Small and Midsize Businesses The small and midsize business (SMB) sector often requires small, single-site implementations. Historically, systems based on TDM architecture could not be scaled down while maintaining acceptable prices. Standards-based hardware and software are helping to remove this obstacle, enabling vendors to move to a pricing model based on software licensing by seat and by technology, irrespective of the size of the contact center. This means that IP technology will become more acceptable to smaller contact centers in corporate departments and those in the SMB sector. The low end of the market (fewer than 20 agents) is where Gartner expects to see the greatest growth through to For more information, see "Call Center Market Trends: Western Europe, ," TCEC-WW-MT-0109 and TCTE-EU-MT Performance As productivity in customer-facing parts of a business (for example, sales, service or debt management) may be measured in fractions of a second, continuity of the contact center operation is vital. The more a solution is scaled up, the greater the fear of downtime or delays in response. Vendors must understand that the culture of service and support within the world of IP data communications is different from that in the voice-centric TDM world (and in contact centers in particular), where any downtime is not acceptable. Users have expressed doubts about the resilience and scalability of new IP-based solutions compared with traditional TDM-based platforms. Vendors' only defense is the long-term operation of solutions that have been scaled up. Recently, solutions with more than 1,000 agents in both single and multiple-site networks have been configured. While recent implementations may constitute much-needed evidence of IP technology's scalability, they cannot be considered as absolute proof in terms of "five nines" ( percent) operation. Only sustained periods of trouble-free use will demonstrate the resilience of new IP-based platforms in protecting continuity of operation (including in-built protection from accidental interruptions by service personnel). Even if the size and scalability of the solution is not critical to the initial choice of solution, IT managers will still need to formally evaluate vendor claims of scalability and cost of ownership arguments. Although IP contact center technology will scale up over time, it will be five years before it finally replaces traditional circuit-switched TDM as the standard architecture. For more details, see "Software Suites Will Dominate Europe's Call Center Market," TELC-WW-DP Doubts about the resilience and scalability of a converged IP fabric are barriers to its adoption in contact centers. Only the commercial benefits of moving to IP-based systems will overcome these barriers. Vendors should use large customer locations or networks as references in their marketing material and when negotiating with prospective customers.

4 4 Vendors Must Exploit IP to Achieve Contact Center Sales Ease of Integration Contact center resources need to be managed according to business rules rather than the rules that apply to communications resources. The ability to match available resources and skills to customer-facing tasks becomes vitally important for business, not just a "nice to have" feature. In this context, systems should be judged by the degree of integration with customer-facing applications and their ability to manage contact center resources seamlessly through the screen displays of CRM software, with actions governed by business value, not just call costs. While users look for seamless integration, this should not be at the expense of future system expansion or flexible integration with legacy systems. Most contact center vendors have worked with the leading CRM vendors to produce software that makes integration with enterprise applications easier. Adopting a standards-based IP architecture makes this simpler. In the United Kingdom, BT's Contact Central product is a good example of the kind of initiative that users find attractive. Marketed as an all-in-one entry-level package for SMBs, it integrates an IP contact center communications software suite from CosmoCom with Siebel's enterprise desktop application. Pivotal had earlier completed a similar integration with Interactive Intelligence. These solutions are aimed at the higher end of the SMB market, with reference points from 40 to 150 agents. Organizations should evaluate the costs of implementing bundled solutions and the time to implement them, and compare them with separate technology acquisitions and subsequent custom integration. Vendors should look to provide bundled CRM solutions through their system integration and CRM partners. Ease of Management As people represent about 70 percent of the total cost of running a contact center, managers need to monitor the activities of staff, identify falling service levels and resolve potential transaction backlogs as they begin to occur. This requires configuration tools and management information systems that allow changes to be made in real time. The ability to respond to business need through the rapid reallocation of resources across a virtual network is becoming a key requirement of management systems. The limitations of hardware-based TDM technology make managing the infrastructure that supports a networked contact operation as a single application technically unfeasible. Current (incomplete) TDM networking solutions also have inherently higher network access and transmission costs, because of costly leased line or ISDN services. Enterprises don't have to implement IP technology to take advantage of network convergence, because most traditional vendors offer IP extension or network gateway capabilities, but Gartner believes all contact centers will migrate to an IP architecture eventually. The savings brought by network convergence and the ability to provide remote offices and workers with a consistent solution for all desktops are the most attractive benefits of choosing an IP-based solution. New entrants to this market and vendors without high-end experience must make their management systems as accessible as possible, because established TDM solution vendors will use their experience of management systems within their IP products. Vendors operating at the high end must have a range of complex (but easy to use) tools. At the low end, desktop-to-desktop management tools need not

5 be as sophisticated. But, in the absence of full-time administration staff, changes will be made infrequently, so management solutions must be intuitive. 5 Conclusions and Recommendations IP's dominance of contact center technology is inevitable, but as users refresh their technology, there is little need for them to remain loyal to a particular vendor. Vendors must position the technology and use its strengths in combination with users' selection criteria. During the selection process, users will draw up a shortlist of vendors that understand both the business application and networking context of their specific needs. Over the next five years, vendors selling IP-enabled TDM solutions should emphasize how users can separately migrate their contact centers without compromising the continuity of their management systems. Users can buy low-cost adjunct server and software products from market entrants. Once integrated, these products take advantage of existing infrastructure. To compete, established vendors need to offer their similar products, or lower the price of their hardware and software bundles. The performance, scalability and resilience of a contact center product depends as much on the quality of associated networks, pre- and post-routing services and remote access techniques as on the deployment of technology within an organization. Successful vendors will show both cost containment and performance improvement benefits within an overall solutions design and be able to implement it and support it effectively. Vendors must demonstrate how return on investment can be optimized within a proposed strategy. Userswanttobeabletoincreaseordecreasethecostoftheirinfrastructure,andadd or subtract channel types as their business needs change. Enterprises will become increasingly resistant to purchasing technology assets that may not be utilized fully. They will look with increasing favor at solutions with low initial cost from vendors willing to accept some of their business risk. Infrastructure vendors should introduce flexible technology upgrade plans that extend beyond the "buyback" arrangements used to retain major accounts during technology refresh periods. Managed services will become more popular as organizations try to make their costs more flexible (see "NSPs to Dominate Call Center Outsourcing," COM ). Some managed service providers offer this kind of solution within their outsourcing contracts. Lead infrastructure vendors should respond and offer outsourced services as well as technology products. Companies are increasingly measuring performance is terms of value to the business, not just the number of calls handled and their cost. Continuing investment is becoming reliant on the depth of integration achieved between the contact center and enterprise application software. Performance management software that consolidates existing contact center systems within a single management solution is becoming the key means of differentiating products for sophisticated contact center operations. Vendors able to offer more expansive analytic features will be the preferred suppliers of underlying technology or services. It is vital to reinforce an established brand, or identify and associate a brand with enterprise application software and service competencies in vertical industries, regions or customer-facing operations. Examples of this last category include help desks, customer services, sales, marketing, credit control and Web self-service.

6 6 Vendors Must Exploit IP to Achieve Contact Center Sales Vendors that have developed large-scale IP-based solutions for multiple sites should make full use of them in their marketing. But for these references to be valid, they must have at least six months of trouble-free operation. When buyers emphasize the importance of both infrastructure and the migration to IP technology, vendors must demonstrate their virtualnetworking capabilities as well as expertise in integrating business applications. Vendors whose brands are traditionally associated with the supply of resilient contact center or telephone systems will have an edge over theirrivalsinthisarea. Many enterprises operate independent, application-specific contact centers and see no reason to centralize or virtualize their resources. In these circumstances, vendors should stress continuity and the commonality of management systems to retain an account while it moves to IP technology. Contact centers with legacy systems from more than one vendor need to rationalize systems and unify management software. New entrants should emphasize these needs as a reason to move away from "old" architectures and appoint a new preferred supplier. Established vendors must focus on their proven expertise in integrating business applications. Key Issue How do enterprises select and implement communications solutions and how must vendors position themselves to be successful? This document has been published to the following Marketplace codes: TELC-WW-DP-0561 For More Information... In North America and Latin America: In Europe, the Middle East and Africa: In Asia/Pacific: In Japan: Worldwide via gartner.com: Gartner, Inc. and/or its Affiliates. All Rights Reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice