Are call centers cool again? The first Top Ten for customer engagement operations
Traditional IT services have flatlined as the focus has shifted to digital solutions, where the customer is front and center to emerging interactive ("digital") technologies. Having that ability to lead the customer front line and support those customer needs with real-time speed and intelligence is core to business operations.... and service partners which can deliver this has never been so crucial. So are call center providers back in vogue, or is this merely a blip as we transition to a world where we don't need many human beings anymore?
The contact center operations (BPO) services industry is growing at 4% globally, despite razor-thin margins and intense competition. So, why do pundits declare the call center on the brink of implosion into a piece of software, while the stagnant IT services market escapes criticism for perpetuating a “people-centric” model? While contact center BPO growth is hardly setting the world on fire, it’s been steady over the last several years, even though the majority of contact centers worldwide are still in-house. The fact that there’s still a $65 billion market for outsourcing this work begs the question why these investments are simply going away. Contact center leaders like Teleperformance and Concentrix have recently made sizeable investments in bolstering service delivery (acquiring Intelenet and Convergys, respectively), reflecting the relative importance of this market segment. The recent development in which SYKES acquired Symphony demonstrates the optimism that automation can grow, not cannibalize, the contact center business. The latter, in particular, signals a promise that contact centers can use RPA expertise to scale and complement traditional contact center services business as they pivot to become more strategic providers.
Other large business services firms are gravitating into the customer engagement market, sensing an opportunity to disrupt deals with a hybrid intelligent automation/global talent approach. Most of the Indian-heritage IT services firms with strong BPO delivery arms are gravitating back to contact centers, as they see the potential for aligning intelligent automation and cognitive assistant solutions with their global base of talent for supporting their enterprise customers. Some examples of this are with the likes of Tech Mahindra in telecoms and Infosys with order management. Cognizant, Wipro, and HCL - for example - are also competing for call center work. BPO firms that have been more focused on non-customer centric areas are gravitating aggressively back into the market, such as WNS, EXL, Hexaware, and Genpact. Even IBM has recently flirted with a few opportunities, despite selling its call center business, and we even cam close to featuring Accenture in our new Top Ten, but the firm was very adamant that is did everything but the contact center piece.
Contact centers are ripe for a renaissance, and automation is a big piece of this transformation. The common retort that a contact center with automation is an oxymoron is false. Perhaps it’s our legacy view of contact centers and automation that is oxymoronic—and it’s time to let go of that legacy. When “digital” is ultimately about new ways of doing things, the contact center is in a more precarious and important position than ever. The contact center for companies that want to stay competitive in a hyper-connected economy must learn how to embrace intelligent engagement, using the key change agent of automation to become a strategic hub that empowers both customer service professionals and the customers they support.
Enterprises must navigate the changing of the guard for intelligent customer experience services
As the dust settles on our latest Top Ten, an assessment of the Customer Engagement Operations market, we’ve been fielding lots of questions about what this ranking means from a competitive standpoint. Our final top ten chart was chock full of what you might consider to be the usual contact center suspects, but also sprinkled with some interesting up-and-comers, as well as familiar names that aren’t necessarily known for competing in this space -- the intelligent customer engagement services that are evolving out of the contact center. The promise of digital customer engagement and the vast amount of data in contact centers has brought back a resurgence of excitement for services that have evolved out of the legacy call center, and traditional labor focused legacy services are slowly but surely shifting to embrace automation, analytics, and digital interactions to provide a balanced, more intelligent customer experience.
It's clear that this isn’t your dad’s customer care BPO market. While suddenly every service provider we talk to wants to carve out a name in this space, there are different roles each will play and fit into within the ecosystem. This report focused on the interactions management and operations piece of the puzzle, but actually, the three pillars of the value chain are intrinsically linked, with front office convergence creating demand for operations to leverage strategy, and vice versa.
Pivoting to the digitally enabled front office means that customers are demanding more strategic input from partners at all points of the customer lifecycle. The recent investments we’ve seen from service providers for digital and design assets are complementary or integrated services to customer engagement operations. Thus, the services market is looking a lot less like a linear value chain and more like a cyclical system (ee below), where the contact center feeds strategy and design with customer data and analysis, where marketing, sales and support blur as one “experience,” and RPA, smart analytics and AI fuel the whole digital front office with greater efficiency, intelligence, and intuitiveness to customer needs. Our next HFS Top Ten reports will take a deeper look into the market for CX strategy and design, and marketing and sales services.
It’s a seismic shift particularly for organizations that are aligning to OneOffice and thus why we see such a different competitive set than we have in the past. Fundamentally different capabilities are coming into play in the realm of intelligent customer engagement, with bold moves like SYKES acquisition of Symphony Ventures shaking up the space with some real RPA capabilities. Firms like Infosys, Tech Mahindra, HCL, Wipro and CSS Corp are actually embedding automation into engagements, often in the form of cognitive assistants. We even see some action in this space from the likes of Accenture, which have come in with a CX consulting slant and then operationalize to support the design, or have an industry-specific capability that they’re supporting with customer interaction operations.
It’s worth noting that while the traditional contact center players tended to score well in the execution categories, there was a difference in the ranking for the innovation investment and capabilities, which was largely led by more IT focused firms. Thus, while now we still see the traditional service providers winning overall and in the voice of the customer in this market, in the future it may not be the usual suspects, but the providers that leverage niche and complementary capabilities, digital marketing, and CX design assets for their operations to be winning in the future. The demand from customers has fundamentally changed to shift away from low-cost, low-value services to seeking a partner that can help to deliver on a holistic digital customer engagement strategy, and many service providers are stepping up to the challenge.
The Bottom Line: In order to develop a truly customer-centric digital organization, you need the right partners in the right places of the digital front office
We expect the waters to muddy further as the impact of digital self-service, RPA and intelligent automation and AI accelerate. While on the one hand an existential threat, it is also the opportunity to breathe new life into a services market that for too long had been a race to the bottom for FTE based pricing. The convergence of services in the front office space means that enterprises need to choose their partners wisely. As an enterprise buyer, you will need to evaluate your partners and decide whether the partners you have today are the ones to help on your journey to deliver on intelligence customer experience. You will also need to open up to emerging business models and shed legacy contracts in order to really embrace an outcomes-focused front office that caters to its customers.
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