Intelligence Report. Enterprise IT and Services NICE Systems Pushes the Envelope with a Real-Time Customer Engagement Platform

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1 Enterprise IT and Services NICE Systems Pushes the Envelope with a Real-Time Customer Engagement Platform Europe +33 (0) Or visit our Web site: 1

2 Enterprise IT and Services NICE Systems Pushes the Envelope with a Real-Time Customer Engagement Platform August 01, 2014 Ken Landoline Current Analysis Principal Analyst, Unified Communications and Contact Center Quick Take Competitive Positives Adds credibility to NICE s claims of real-time customer service leadership Real-time engagement enables intervention before damage is done Ensures growing requirement for regulatory compliance is done in real-time Engage Platform incorporated latest IT standards and capabilities Advanced Interaction Recorder consolidates four servers into one, improving TCO Competitive Weaknesses Users will require additional professional services to implement real-time technologies Channel re-training and certification required for selling enhanced real-time services Standard pricing for the NICE Engage Platform not yet provided Event Summary July 30, Nice Systems announced the NICE Engagement Platform supporting 100% real-time analytics, enhanced speed and lower cost. The platform enables businesses to include real-time interaction data and analytics into processes, creating a highly scalable real-time customer engagement center. NICE s patent-pending technology reduces latency in the contact center tenfold and increases recording capacity ten times previous levels. General availability is planned for December Europe +33 (0) Or visit our Web site: 2

3 Analytical Summary Perspective Very positive on NICE Systems announcement of the NICE Engagement Platform, because it is a natural complement to the company s previously introduced NICE Real-time Voice Authentication and NICE Fraud Prevention Solutions. NICE has been a leader in the development of real-time speech and data analytics customer care solutions, and this broader, all-encompassing application across all channels bolsters the company s already strong leadership position in this area. Competitors must be focused on delivering similar solutions to maintain or strengthen their own market positions or quickly lose ground to NICE. Vendor Importance High to NICE Systems, because NICE Engagement Platform adds further credibility to NICE s claim of having the industry s leading real-time customer engagement suite capable of optimizing customer interactions during the interaction rather than correcting service issues afterwards based on historical data. In addition, NICE s patent-pending technology makes interaction data available for virtually every contact center channel application simultaneously in real time. At the same time, latency has been reduced tenfold and recording capacity has increased to support ten times more channels per server, making TCO a strong competitive differentiator. Market Impact High on the customer care market, because eventually contact centers and customer care operations will be driven by predictive analytics which depend on real-time inputs for maximum effectiveness. NICE Systems now has a substantial lead on the competition in this area and appears to be exploiting that market advantage by providing leading-edge real-time solutions to satisfy the requirements of many high-end enterprises seeking such solutions to gain competitive advantage. There is little doubt that the entire industry will need to move in this direction and follow NICE s lead. Competitive Strengths Competitive Positives NICE has claimed a superiority in real-time analytics to assist contact center users in understanding their end-user customers and turning data into actionable activities that can improve service and levels of customer satisfaction. The recent announcement adds believability to NICE Systems claims of real-time analytics industry leadership and will make this real-time analytics claim more difficult to dismiss by competitors. Real-time customer engagement bolsters the effectiveness of a customer service operation by allowing contact center operators to catch potential problems and issues in process and initiate corrective actions in real time in order to nip a problem in the bud. This can change negative situations into potential positive activities, including enhancing customer satisfaction and creating cross-sell and up-sell opportunities. NICE Systems advantage in successfully implementing real-time solutions ahead of the competition will cement the company s reputation among customers as a thought leader in multichannel customer care technology. Europe +33 (0) Or visit our Web site: 3

4 For many enterprises operating in market segments such as health care, financial/insurance services and government, regulatory compliance in the customer care environment is a primary operational concern. Catching non-compliance issues in real time enables companies to eliminate fines and penalties by avoiding compliance issues before they become problems. Applications such as NICE System s Engage Platform ensure the growing requirement for regulatory compliance is done in real time and agents can be prompted to fix an issue before regulations and industry requirements are breached. With the real-time Engage Platform, NICE has introduced a series of technological advancements. In recording technology, there is enhanced TCO through server consolidation, real-time streaming and recording up to 5,000 channels per server. In addition, systems now offer high-speed disaster recovery and streamlined administration. Finally, a new centralized license management capability will improve a customer s operational efficiency by allowing user licenses to be shared across locations. All these are enhancements to TCO for users. In the contact center marketplace, live agent calls are an expensive proposition that can cost an enterprise anywhere from $8 to $25 per call depending upon the function of the contact center, the expertise of the agent and the vertical market in which it operates. Real-time analytics offers attractive expense cutting implications for enterprises by reducing the length of customer interaction calls while avoiding potential issues before they occur. NICE s unique real-time Engagement Platform can assist enterprises in reducing the volume of calls and total call times substantially, saving millions of dollars per year. Competitive Weaknesses Competitive Concerns Users may require additional professional services to implement advanced real-time technologies which could add to the overall cost of the technologies themselves, and which are not yet clearly quantified. Prospects for these new services must thoroughly understand the overall cost of these deployments before planning their purchase and implementation. This could delay end-user acceptance and demand for these new applications until all the economic contingencies are understood. Sales channel re-training and certification will be required for selling and implementing enhanced real-time services, because this new offering has many implications regarding TCO and the general economic advantages of real-time solutions. While it is well understood that providing an economic advantage is a powerful selling tool in the contact center business, the channel must be well trained to present these complex concepts to prospective users. This will take time and money on the part of NICE Systems. Standard pricing for the NICE Engage Platform and migration paths for existing customers have not yet been provided in any detail. Although the new platform has some powerful attributes in terms of operational advantages, customer satisfaction, licensing and total cost of ownership, without an understanding of the relative cost of the solution, new and existing customers will not be in a position to evaluate the true value and TCO of implementation. Response & Recommendations NICE Systems should implement a customer and channel education program to introduce the benefits of real-time applications to customer service executives across vertical markets which have a proclivity to require high levels of analytical speed and efficiency in their centers. NICE Systems must also set up training for channel participants selling into these verticals. The uniqueness of the Europe +33 (0) Or visit our Web site: 4

5 NICE solution offers the company a competitive advantage that should be exploited immediately before major competitors enter the marketplace with similar applications. Major NICE competitors such as Avaya, Cisco, Genesys, Unify and Verint should counter NICE s real-time application announcements, as well as related real-time analytics offerings, with their own plans to tackle this market with real-time authentication, fraud prevention, speech analytics, mobility and compliance solutions that automate decision making and make it a natural process at the lowest level in the customer care process. Otherwise, they will, by default, lose their positions as contenders in the customer service and security marketplace. NICE Systems should develop and share with customers and prospects a product roadmap to assist them in planning their transition from operating a simple customer service center with limited traditional application capabilities to the contact center of the future that includes real-time decision making during transactions. NICE s customers will benefit from a full understanding of the intricacies and benefits of system upgrades based on case study analysis. NICE could generate significant future revenue streams through a formal customer education program. Buyer Actions Enterprises wishing to implement the real-time capabilities available in the market place today and couple that with real-time analytics should be prepared to staff their contact center properly with budget and business analyst resources capable of assessing and acting upon the acquired information. Otherwise, extensive professional services may be required to manage the process, which will add to the cost substantially. Businesses should assess their customer service requirements to understand how adding more real-time customer information to the process, in the form of fraud prevention, authentication, compliance applications as well as big data and analytics, may enhance sales, customer service and customer retention. For many organizations, historical analysis of data and basic customer profiles may suffice and little value may be added by enhancing their service levels with real-time solutions given the added cost. For others, real-time sophistication may be required to gain or maintain a competitive advantage in the marketplace. Potential buyers of advanced, real-time customer service applications should ensure that their channel(s) of choice are well-trained and certified to assist in the planning, purchase and implementation of such services, which may require a broad perspective of technology, security, privacy and legal matters that pertain to such systems. References from other purchasers should be solicited and verified. Users may require additional professional services and/or in-house staff to implement advanced customer authentication technologies beyond resources already available within their organizations. This could substantially increase contact center operating costs that may not be recovered by the economic benefits offered by the new services. Therefore, a business case analysis should be developed prior to implementation of these services by each prospect. Analytical Perspective We are very positive on NICE Systems announcement of the real-time Engage Platform offering. With real-time capabilities across a multitude of applications including fraud prevention, authentication, speech analytics, mobile management and compliance, the platform is designed to take full advantage of the value enterprises can generate from customer interactions in a contact center setting. Furthermore, to optimize customer acceptance and utilization, NICE customers are able to deploy Europe +33 (0) Or visit our Web site: 5

6 the real-time Engage Platform on-premises or as a cloud service to match their specific requirements and to capitalize on NICE System s customer care and real-time analytics experience in customer care environments. Not until now, with the NICE System s Engage Platform, could enterprises analyze virtually all interactions across multiple channels in real time. This allows users to apply a rapid decision-making process based on their understanding of the context of the interaction combined with customer profile information, agent performance data, and other relevant information from their own historical enterprise databases and customer relationship management (CRM) systems. The Engage Platform uses real-time analytics to understand the context of a call and to guide the agent with best practices to provide appropriate service, and it assists agents by matching the right offer to the agent s sales and service skills and the customer s specific wants and needs. The Engage Platform combined with Nice System s previously announced real-time voice biometrics technology (NICE Real-Time Voice Authentication) and the NICE Real-Time Contact Center Fraud Prevention offering, which can authenticate a caller s identity and anticipate and corroborate fraudulent incidents in progress, has great potential to change the way operations are handled in the customer care environment. Together, these technologies have the potential to supplement contact center security, beyond the levels ever before possible. The addition of predictive analytics, generally defined as the science of mining and analyzing patterns in historical transactional and real-time streaming data to identify business risks and opportunities, is a relatively new technology just beginning to catch the attention of contact center executives, and NICE Systems is leading the way in these efforts. Additionally, NICE s patent-pending Seamless Passive Enrollment Process removes a major roadblock to previously introduced speech authentication offerings by removing the requirement of enrolling users by the prerecording of a speech print. The new and improved system can enroll customers based on previously made and/or recorded calls and passively register customers without any extra planning and work on their part. The system can then analyze a caller s voice in the first few seconds of introductory remarks of a subsequent call, match speech patterns to previously recorded customer service calls and known fraudster lists, and notify the customer service agents in real time whether they are speaking to the customer or a pre-identified fraudster. The NICE Engage Platform offering puts these industry-leading techniques into a unified and tightly integrated solution, giving NICE a leadership position in multiple real-time applications. This can be coupled with NICE s real-time analytics capabilities to give NICE a major competitive advantage in selling to enterprises with stringent requirements for fraud prevention, customer security and regulatory compliance. Having said that, it is important to understand that the market is somewhat narrow for such sophisticated solutions today and NICE will have to package, price and sell these products through a strong and well-trained distribution channel and professional services team capable of educating the marketplace on the virtues and financial benefits of real-time voice authentication, fraud prevention and other real-time applications. While NICE will be kept busy fulfilling the requirements of the most sophisticated security-conscious customer care providers today, such as large financial institutions and credit card providers, the market will narrow in the future unless NICE is able to develop packaged product offerings that push the demand to the mid-size contact center market and cultivate a customer education system to educate the marketplace on the financial and customer retention benefits of a strong, real-time authentication and fraud prevention solution coupled with real-time analytics and big data capabilities. Ultimately, contact centers and customer care operations will be driven by predictive analytics which depend upon real-time inputs for maximum effectiveness. NICE Systems now has a substantial lead on the competition in this area and appears to be holding on to that marketplace advantage for the time being. Europe +33 (0) Or visit our Web site: 6