A meditation on SIP, SOA and Software

Today, the blog is thinking about SIP.

This was triggered by one of my customers turning to me yesterday and saying,

"SIP, isn't it just another of the IT industry's three letter acronyms for marketing? Just like SOA really, but even less likely to change things".

Now the blog has looked at SOA before (see posts like: "SOA - bringing CRM, telephony and business together? part 1") and the blog is a strong believer that SOA is a very major change in how IT is done. The downturn has perhaps slowed down the rate of SOA adoption, but nearly all the customers I work with are considering SOA approaches to at least some part of their IT environment.

For the communications industry, I think there is now little doubt of the impact of SIP. I suspect that SIP is going to bring with it a radical series of changes. To a certain extent (and to stretch an analogy), while SOA is the consequence of what client/sever did to the mainframe, SIP is the consequence of what IP has done to networking.

While I wouldn't defend this analogy beyond a certain point, I do think it highlights one interesting truth. The consequences of IP were to open up standards (much as client/server blew apart the vertically integrated architecture of the mainframe) and SIP just takes that to the next level. The impact of SIP may also be as disruptive as those changes were to some of today's business models.

The big thing for me about SIP is that it removes some of the last remaining geographic restrictions on call control. SIP trunking removes the last part of the TDM world, namely that lines had to terminate somewhere and there had to call control near it. To be sure, in the SIP world there still is a need for physical lines, but many of the physical dependencies on call management have gone.

For the call centre industry, this raises interesting possibilities. For example, Avaya have started to show how the use of a SIP session manager might allow them to virtualise ACDs without the application layer approach of Genesys or the network management approach of ICM. For Cisco, the rise of SIP represents a significant opportunity as services at the network layer (such as security) become increasingly important when using such a lightweight protocol. Also, SIP permits video as easily as voice, something that Cisco sees very much as the future. For other vendors, who haven't yet become so comfortable with IP, the rise of SIP represents a fundamental challenge.

Of course, an industry change tends to bring in new entrants and this is where it gets really interesting. I see SIP as ensuring that the future of the voice industry lies with software. That is a view some of the software firms share and is why so many have entered the voice market. I blogged this time last year on Microsoft and Google (See "The future of contact centre - Google, Salesforce, Skype & Microsoft"), but that was primarily from a CRM perspective.


Following VoiceCon this year (which I covered in this blog post), it's clear that so far Microsoft has the most advanced plans for voice of the software vendors. The enabler for this is SIP and OCS 14 leverages a very significant portion of its capability from what SIP enables. It's the capabilities of SIP that that provide OCS with its more interesting capabilities around presence, video and voice integration.

SIP has triggered a very interesting three-way fight. Previously separate areas (voice, data and desktop) are now different aspects of the same question. SIP brings into conflict the legacy voice vendors (with their communications expertise, such as Avaya), the network vendors (who have deep IP protocol vendors, such as Cisco) and the desktop/ software vendors (who understand presence and the desktop, such as Microsoft). It will be very interesting to see who can win this collision of different architectural layers.

Voicecon 2010 Orlando - Microsoft, Cisco, Avaya & SIP...

Most contact centre blogs don't start with Kierkegaard, but his famous quote, "Life can only be understood backwards; but it must be lived forwards", is very applicable to VoiceCon. I find that it is only with sufficient distance from the event (VoiceCon 2010 ran Feb 28th to March 3rd this year) that you can actually get a perspective on what was said. In previous years I've blogged on the main events (see posts like "VoiceCon 2009 - Now that the dust has settled, and IBM and Microsoft" or "VoiceCon 2008 - IBM, Microsoft & Aspect") but this year I want to stand back and take a longer view.

There's a very good summary of what happened on Blair Pleasant's No Jitter blog, and I don't intend to duplicate that here. Similarly, there is some very good ideas for the overall state of the voice industry on Dave Michels No Jitter blog. I'd slightly disagree with his order (I agree virtualisation is very real and very significant, but I wouldn't have put it at number one ahead of the change we're seeing from SIP and the vendor landscape) but I think his sentiments are spot on. Rather, my aim is to think about what was new for contact centres, and what wasn't from a strategic perspective.


Microsoft
This, for me was as important for what wasn't said as what was. There has been a lot of excitement following Voicecon about the release of OCS 14, and most of that is deserved. The capability to do 911, the transcription of voicemails and contextual calling are all nice features for the business user and strengthen Microsoft's case in for enterprise voice/ telephony systems.

What hasn't been commented on so much is the amount of time that Microsoft devoted to the call centre. In the 45mins of the video below, about 9 mins (from about 29mins in to 38mins) a decent proportion of Gurdeep Singh Pall's pitch:

Clarity Connect isn't a vendor I'm that familiar with, but they represent a very interesting Microsoft based approach to the contact centre and the customer service market. I've been previously quite dismissive of Microsoft in contact centre voice (see blog posts like: "Technology firms, Europe and speech recognition") while positive about their CRM Dynamics and CCF offerings (see posts like "The future of contact centre - Google, Salesforce, Skype & Microsoft").

I think my views have changed. Microsoft may not have announced that they are in the contact centre, but there is no doubt about the thrust of OCS 14. Microsoft are a serious voice player and have arrived in the contact centre even if much of the rest of the industry hasn't realised it yet.

Avaya
I think Avaya have to get full marks for managing to make a joke about entropy! It's not a natural subject for comedy, so not mean feat to get a decent laugh at the start of the presentation. The message I got from Avaya was that SIP was the source of profound & fundamental change in the nature of contact centre architecture. I'm inclined to agree and I believe that while SIP may not bring immediate change tomorrow, I think it's likely to fundamentally change how the technology works. Whether or not Avaya will ride this change or be crushed by it (much as Aspect has struggled with IP), I'm less sure. The Avaya Aura architecture looks very powerful, but it is as yet relatively unproven and the Avaya Session Manager is something I need to understand better to have a clearer view on. There's a lot of potential advantages to the Avaya approach and SIP helps explains how they think they can get synergies from their Nortel acquisition. The downside risks, though, should not be underestimated and I feel Avaya still have to negotiate some very tricky changes to achieve their transformation.


Cisco
The contact centre was only briefly covered in the Cisco pitch (from 14mins to 15:30mins in the key note address!) and was focused on the role of social media in contact centre. It was interesting and the role of Twitter, Facebook and so on in customer service is one that excites marketing departments greatly. This will be an area of future activity for contact centres, I have no doubt, but I'm not sure whether it will be a major one. Blog analysis (for instance) has been much hyped and can yield very interesting insights, but only about certain demographics and is still a niche part of analytics. Twitter is perhaps more widely used than blogs and so more revealing but I still think there is a debate to be had as to whether it is going to be a core part of customer service. My suspicion is that where industries are already using it (e.g. airlines) we will see it used by related industries (e.g. rail or toll roads) where customers are disconnected from the PC and reliant on mobile phones. Whether we will see it more widespread than that, I'm not sure.

In short VoiceCon revealed that there are some fundamental changes underway in the voice industry. The organisers have clearly recognised this with the decision to re-brand as 'Enterprise Connect' and I think they are right to. The future looks to me to be about software and communication, and anyone still pushing voice hardware will find it challenging.

Will Broadband make Cornwall a Contact Centre hotspot?

A very interesting article in The Times earlier this week looked at the prospects of high-speed broadband coming to Cornwall.

The plan is that Cornwall, historically one of the remoter areas of England, will receive ultra-fast broadband giving users speeds of between 100 megabits per second and one gigabit per second, making it one of the fastest internet connection areas in the country. The figures to support this are that it will create 4,000 jobs and £250m for the Cornish economy.

Fortunately for Cornwall, this plan does not rely on the UK Government's proposed 50p broadband levy (which the BBC says is scrapped until after the election), but rather on European Union development funds.

The Times article focuses on the benefits this high-speed broadband will bring to 'sexy' industries like digital animation, but I rather think this misses the point and sets Cornwall up for failure. Animation and creative media are growth industries and Cornwall is lovely place, but many of these dynamic, rapidly changing companies will be employing outsiders rather than locals and keeping their head offices in London, especially the media-centric areas around Soho. These companies will put money into the local economy, but they won't necessarily create many jobs for local people. Instead, I suspect that it's industries like customer service that could make the most difference.

It is often not appreciated how dependent the contact centre industry is on bandwidth. It's obvious that you need bandwidth for the volume of voice calls, but less obvious that you need vast amounts of bandwidth for the data that needs to accompany those voice calls so that you can do something useful with them. This is occasionally highlighted by outages (see my past post "Onshore, Offshore & Internet Resiliency" for when a break in sub-sea cabling caused major problems for offshore Indian contact centres) but otherwise not always visible. To a certain extent, the policy of 'build it and they will come' has worked well in other areas. A few weeks ago the Economist ran an excellent article entitled "Fibre in Paradise" looking at the impact optic fibre has had on Bristol, Virgina. The key point for contact centre was,

"...and the fibre brought jobs. In 2007 both Northrop Grumman, a big American defence contractor, and CGI, an international IT consultancy, said they would hire between them 700 technicians, consultants and call-operators at offices in nearby Lebanon, Virginia, part of BVU’s [Bristol Virginia Utilities] fibre backbone. Both cited the area’s universities and low cost of living, but neither would have come without BVU’s investment, which Northrop calls absolutely critical."

It's far from guaranteed, but the likelihood is that if Cornwall wants to create local jobs and boost its economy then building broadband is essential and attracting call centres and back office operations is where they should focus.

The blog is back

Apologies all readers, I've been absolutely laid out with 'flu and not been able to blog for weeks.

I'm back & better now and I've finally got time to blog. The first post should be up and posted tomorrow and I look forward to resuming posting.

Shop direct cut 1,500 jobs - the internet finally takes its toll

It was bad news last week for a lot of people when Shop Direct (one of the UK's largest catalogue retailers) announced that it was cutting 1,500 jobs in its call centres. This is another very big cut, as it was only a year ago that Shop Direct cut 1,150 jobs from their warehousing operations.

The sad thing is that some of these job losses were, perhaps to a certain extent, inevitable.

I was always interested to see how much of their business was phone based (I did do a little work with them some years back). The management at the time told me that for the demographics they targeted with their catalogue the phone was the primary channel of communication. Most of these demographics were mid to lower income people and as a result they did not use the internet extensively and preferred to phone in their orders when a physical catalogue arrived.

I was dubious that this was sustainable indefinitely, but even in the mid-2000s, the primacy of the phone channel seemed to be holding true. It's very interesting therefore to read that in five years the proportion of online sales has gone from 18% to 60%.

My suspicion is that an aggressive bundling of internet and TV solutions by UK service providers (such as Sky and Virgin) has increased internet penetration into demographics where previously internet was seen as either unnecessary or too expensive. The steady fall in price of PCs also probably helps, but I suspect that it is the role of UK service providers that has so fundamentally changed the channel mix for firms that do indirect and distance selling.

The one thing that could have changed some of this is the integration of the contact centre with the web channel. Co-browsing technology is well established, as is click to call and other ways of assisting customers on the web site. There are some startling statistics (anything from 40% - 70%) of the number of shoppers who start to fill a basket on a website but then don't go through to checkout. Offering them help if they get stuck, or an easy way to ask a question, could dramatically improve the number of completed transactions in the web channel. It doesn't necessarily require a huge contact centre but is an example of how a contact centre that adds business value is still very necessary for a business that has the internet at the core of its channel sales strategy.

Google Nexus - the need for a contact centre

Google is generally seen as a very slick operation, which is why this blog is more than a bit surprised to see them miss-step so badly on customer service for the new Google Nexus smartphone.

I understand fully that Google believes it can change the world, and (generally speaking) Google has been right so far that it's technology has changed things. On customer service, though, there is more than a hint of arrogance in Google's idea that customer service should be done the way Google does things, not the way customers want to do them.

Most consumers want to know that their problem is being fixed and that the company takes it seriously. Offering customer service by e-mail and forum doesn't give that experience to customers. For a more technical user group running websites and so on, e-mail and forums can be more than adequate and very cost effective for Google. For a mass market product (even one target at early adopters) it seems to be a unique approach to support. I have no view on the volume of complaints, but headlines such as "Google Faces Deluge of Nexus One Complaints" in PC World hardly do Google any favours or suggest they understand the market they've just entered. Blogs have been even more direct, for example Gizmodo talks of "Nexus One's Lousy Customer Support Shows Google's Weakness".

It's been interesting to see that even web retailers like Amazon, who traditionally have driven as much support to the web or e-mail channels as possible, still see a significant role for the contact centre. It may not be the first level of customer service they offer, but once the first line has failed to resolve the question Amazon do see the need to provide real time, interactive service to customers. Voice is the ideal channel for this, with web chat a distant second and for both a contact centre is ideal.

What makes this particularly interesting as Google struggle with customer service, is the hint that Amazon might be moving into providing contact centre infrastructure for third parties. The story comes from Tech Flash "Amazon.com to sell call center service to other companies? " and wonders if Amazon is looking at customer service as a logical extension to the Amazon cloud services. Given Amazon is one of the leader is web services and these already include storage, relational databases and payment services, customer service would be a logical and very interesting addition.

It would be ironic if while all the attention was focused on Google's customer service failings, the real customer service cloud revolution was quietly taking place at Amazon....

Dimension Data Benchmarking Report 2009

I've always covered the The annual Cisco & Dimension Data Speech survey but I've not focused so much on the Merchants contact Centre Benchmarking report. That's perhaps a mistake as a quick read of this summary of
the latest Dimension Data Global Contact Centre Benchmarking Report would show. The report came out last week so this data on contact centre performance is hot off the press. Here are the some of the major themes and findings from 2009:

A MIXED BAG FOR OPERATIONAL PERFORMANCE - Looking at aggregated operational performance data always requires a degree of license. Overall, we would summarise this year’s operational performance as ‘mixed’ - there have definitely been no great strides forward or any significant decline in standards.

CALL VOLUMES STILL ON THE RISE - Overall call volumes have risen slightly this year, contradicting predictions of the demise of contact centres as self service and contact avoidance initiatives are developed. Growth in call volumes is more pronounced in emerging markets. Since the onset of the Global Economic Crisis there has been a clear shift in the reasons for customer contact.

COMPLEXITY FOR AGENTS - Average Handle Times have continued to creep up but we believe that this is largely down to the migration of the simpler, commoditised transactions to self service channels which continues to increase. This obviously leads to front line agents having to handle more complex interactions that often require a greater degree of empathy, communication skills and access to the relevant information.

STILL WORK TO DO ON MANAGEMENT INFORMATION - Management Information (MI) reported at board level under the guise of Strategic MI is still too focused on service levels. Instead of focusing on the inner workings of the operation, strategic MI focuses on outcomes. We believe this is an issue across the industry and we are still measuring the wrong things for the wrong reasons.

PROCESS OPTIMISATION REMAINS PRIMARY FOCUS - From a customer and agent perspective, the ongoing trend towards more End-to-End Process Automation is good news. Through increasing the number of processes that can be handled within contact centres, hand-offs will reduce as will operational costs.

OUTSOURCING STILL A COST DECISION - While we continue to see the role of outsourcing maturing, the top three reasons for outsourcing are all cost related. Cost remains the biggest driver for adopting an outsourcing strategy, but it is encouraging to see results that indicate a more balanced approach to outsourcing decisions.

CUSTOMER LIFETIME VALUE IS BACK ON THE RADAR - Over the past 12 months there has been a positive indicator trend suggesting that organisations are looking to improve the way they show how Customer Lifetime Value is impacted by customer interactions taking place in the contact centre.

CHANNELS ARE STILL TOO SILOED -Organisations are still not using customer insight across the organisation. It’s a clear and disappointing indicator of the extent of the challenge facing the industry to deliver a joined up end-to-end experience.

WHY NOT MEASURE COST PER INTERACTION? - A third of all contact centres report that they do not measure the cost per interaction of agent assisted telephone calls. When you consider that this is the most accurate means of determining the cost effectiveness of an operation, it is a worrying trend that we have not seen improve in recent years.

SEGMENTATION BECOMES MORE SOPHISTICATED (BUT FEWER PEOPLE ARE DOING IT) - More companies are using increasingly sophisticated methods of segmenting and differentiating their customers. There appears to be a very real desire to generate more value from customer interactions. What is worrying though, is the drop in the number of companies using segmentation.

HOME-WORKING BECOMES A REALITY - The number of home-working agents is generally growing in more mature markets across the globe. A large proportion of respondents are considering home-working, signifying a major shift in approach to employee management, where benefits include lower staff turnover and cost, improved productivity and reduced travel through the use of technology.

HOSTING AND ‘ON-DEMAND’ BECOMES MAINSTREAM - Most contact centres are still owned and managed within the organisation. The number of centres owned by organisations continues to drop year on year. With hosted technologies more secure and easier to manage than in the past, we expect to see an increase in the number of hosted centres due to the economic climate and convenience of the technology.

All very interesting, and probably well worth getting the full report from the Dimension Data/ Merchants site.