Guest Author, Esteban Kolsky is the Principal and Founder of ThinkJar
I am constantly asked, especially this time of the year, what is going to happen next year. The question comes from everyone I talk to: practitioners, management, consultants, service providers, and system integrators – even other analysts. And, while it is an interesting exercise to compare notes (we all have our biases and visions of where we are going) to me is far more interesting to aggregate all of them and create a picture of where the industry, the investment, and the growth is going.
The first thing anyone trying to see the future needs to do is to define the market we are forecasting. While Gartner, IDC, and Forrester (as well as Ovum, Frost & Sullivan, and many other analyst firms that track numbers) put Customer Service around $3.5 Billion, the reality is that there are three markets (or rather, sub-markets if you may) that work differently, grow at different rates, and are even investing in different things.
First, there is the traditional “Call Center” market. Large B2C organizations with huge call centers make the bulk of this group. These organizations are focused on making their call centers (some of which have thousands of agents working there in round-the-clock shifts) operate at top efficiency; the interactions they handle, with few exceptions, are simple, easy to solve, and numerous – very large volumes. They may experiment in other channels, but mostly focused on the call center and not interested in tying them all together (due to the value for the organization in regards to the investment necessary –I hate to call it ROI).
Second, there is the “Contact Center” market. This is what I used to cover as eService in the early 00s at Gartner and still cover today (in spite of the change of name to Web Customer Service – which is not, since it encompasses more than the web – but I digress). These organizations handle more complex transactions, and intricate channel management and integration. The ideal scenario is a multi-channel, multi-function contact center that can handle any interaction between customers and organizations. Automation remains the ultimate goal for cost-reduction. Focused on customer satisfaction, not the most efficient operations necessarily, but remains competitive on costs given the latency (email) and multi-tasking (chat) nature of their operations as well as the potential for automation.
Third, there is the “Cloud” market. This is a nascent market that started about 2-3 years ago; it is seeing more and more startups and established vendors interested. They focus on a mix between efficient low-cost (leveraging the cloud) and effective high-touch (via cross-channel resolutions) to deliver the best of both worlds: a satisfied customer that is cheap to manage. The complexity of their operations is varied, and in some instances we are seeing voice being integrated tightly into it, but the early state of the market means that there are not established models or best practices for their implementation.
Now that we have properly identified the different markets – where are they going in 2012? Simple.
Call Centers are investing in, what else, improved efficiency. Workforce Management and / or Workforce Optimization are key initiatives, together with IVR (speech recognition and better automation) and outsourcing. Who invests where depends on each organization and how mature they are and where they are going. Their overall goal is to create a better setup where IVR can take some of the volume away and where they can have either the lower-cost (outsourcing in most cases) or the best agents available (WFM and WFO).
Contact Centers are going to be investing in understanding what wondrous new channel – Social. More specifically, since we already tried and proven that Twitter is not very good for Customer Service other than escalation and Facebook suffers from lack of volume, communities. It is not about deploying communities, it is about understanding them and what they can do to help a customer service organization deliver more effective interactions, at a lower cost point (high touch, low cost). The budget that is left it going to replacements and enhancements to existing implementations. There is limited interest in cross-channel reporting and management – but no tools that make it easy yet, nor a lot of understanding of what the return value is for the investments; mostly pilots and small projects to figure out cross-channel right now.
Cloud is where the fun is going to be. As I said earlier, very small market – but with lots of potential. Right now, mostly experimental. The lack of a cloud infrastructure in the organization (non-existent internal architecture as well as incipient understanding of the effects of cloud computing in the enterprise) makes it not yet proven or trusted. However, there are some service providers in this market that have proven over the last few years, there is “something “there. That something is what we will find out in the next 2-3 years before jumping into it. I see the most potential, both for vendors and organizations, in understanding and adopting this model. Time and patience are the requirements, understanding is the constraint.
As for investment growth rates (the other perennial question this time of the year) I can say that the Call Center is going to have the traditional 3-6% growth, Contact Centers will fare a tad better at 5-8% growth, and Cloud will have incredible growth in the double-digits (if not triple). Alas, if you consider its current level of investment, not as impressive in dollars.
What do you think? Is this where your organization is? Are your goals and budgets different from these? Are you building a different model to provide Customer Service?
Would love to know, just post a comment or contact me to chat.
About the author:
Esteban Kolsky is the Principal and Founder of ThinkJar, an advisory and research think-thank focused on Customer Strategies. Follow Esteban @ekolsky.