More 2009 Contact Centre Predictions - Datamonitor

My last post ("My Contact Centre Top 5 Predictions for 2009") seems to have had a lot of interest, so thank you to all the readers who liked it.

I was sent today Datamonitor's latest contact centre reports ("2009 Trends to Watch: Contact Center Markets and Technologies", published 22nd Dec) and can recommend it. We have a corporate subscription to Datamonitor and and I've tended to like Datamonitor's research as it's focused more on the market trends and the buyers needs than on the vendors and their products. I also must admit to using them extensively in the past when I was working in consulting and needed insight into sectors of the retail financial services markets.

The report has some very good points to make about potential growth in the contact centre mid-market and around SaaS offerings. It also highlights that the super-large contact centre (so common in financial services) will probably not be driving forward technology spend in the current market conditions in the way that this segment has driven functionality in the past. I'm not sure about Datamonitor's view on the 'rehabilitation of outbound', at least for Europe and the UK. It is true that companies do want to use the outbound phone channel more proactively and better, but most to date have managed to damage their reputation with outbound (See my blog posts: "Barclays, silent calling & we've been here before..." and "Banks criticised by BBC for automated calls "). I fully agree with Datamonitor's view on the importance of business process (see my blog: "My Contact Centre Top 5 Predictions for 2009", though Datamonitor have an interesting and slightly different view) and the potential growth in contact centre analytics. I think they've got some very good insight on those subjects and I've got some interesting things to think about.

In short, I've found this Datamonitor report one of the better analyst assessments of the contact centre market in 2009 and it's well worth buying.

My Contact Centre Top 5 Predictions for 2009

This year I thought I'd do something different to welcome the new year and stick my neck out by making some predictions. I'm often asked what I think the contact centre trends will be in 2009, and so I'll put forward what I think is going to happen.


Making predictions is always a risky business and 2009 looks so turbulent that the risks will increase. I'll have a go, but I am fully prepared that I begin 2010 with a blog post on how I got it wrong!


1. IP Contact Centres will continue to grow rapidly.
I'll start off with a relatively uncontroversial prediction. This is backed by most of the market analysts I've seen, but if 2009 proved anything, then it was that uncontroversial, analyst backed predictions could be totally wrong! The most up to date research I've seen was yesterday on Network World (see: "IP call centers will do well despite VoIP slowdown") where Infonetics' newest report had some interesting statistics. Infonetics predict the market for IP Contact Centre as growing 38% in 2008 and continued growth in 2009. The growth in 2009 could be as low as 5%, but that's still pretty rapid for a relatively mature market segment in recession. Forrester and Gartner have higher figures for growth, but I suspect they will revise them downwards as they reassess them in light of the global economic situation. Still, there is steady momentum towards Voice over IP (VoIP) in all aspects of telephony and I expect contact centre to follow the trend.


2. Fixing customer processes will be a major focus in 2009.
To a certain extent all contact centres (whether using TDM or VoIP for the voice traffic) can now do all the basic things needed, namely answer the phone and provide the agent with some information on the caller. These historically have been what technology spend has been focused on, answering the call (which is all the spend on telephony) and getting usable information to the agent (all the spend on CRM).

The problem is that telephony plus CRM has not not fixed most of the issues customers experience. What matters to customers when they call is (1) did I get my problem fixed? and (2) was it a pleasant experience. I've been interested in 2008 to see the big system integrators start to focus on process (see posts like: "System Integrators write interesting things about contact centre for the downturn!" or "Contact Centres, Process and Six Sigma") and much more focus on the customer experience (see posts like: "HSBC creates 250 UK call centre jobs & offshore in decline").


3. A major contact centre technology provider to fail/ be bought from administrators.
I'm not confident enough to predict who, but the press and blogs are providing quite a selection of possibilities. Nortel has had some rough press (see: "Nortel Drops After WSJ Says It’s Exploring Bankruptcy" and "Juniper: the big winner if Nortel goes under?") to pick just two recent articles and their financial situation is not good. There are still Nortel supporters, and I admire the optimism of the article "Don’t write off Nortel yet", but I can't say I share it. I do agree with the point the article makes that Nortel is underestimated and is still a very technically capable company and is likely to have fewer self-generated problems going forward.

Aspect may also have trouble, despite their alliance with Microsoft (see: "VoiceCon 2008 - IBM, Microsoft & Aspect"), but they haven't had the focus that Nortel has. They have a strong (and lucrative) product in Aspect Workforce Management but their core call centre offerings have seemed to struggle in recent years.

There is always the chance that Microsoft will buy one of these vendors (or perhaps private equity as with Siemens) but I'm not sure I see other obvious candidates. It's possible that SAP or Oracle might move in, as both have bought small IP contact centre companies in the past (SAP bought Wicom and Oracle bought Telephony@work) but that seems less likely.

4. Offshoring to decline further for front line customer service.I think it's hard to see further offshoring as going to be well received by consumers. Offshoring of call centres was perhaps already in decline for reasons of brand reputation and cost (see posts like: "HSBC creates 250 UK call centre jobs & offshore in decline ") and I think consumers will be very hostile to brands that are seen to be destroying jobs. In the banking industry this will be a particular issue, as with the banks potentially dependent on government, the views of politicians may suddenly be very important.

I think offshore for non-customer facing activities, like IT, may well go offshore more rapidly. The signs are there (see "Lloyds TSB offshores IT, not call centre ") and Barclays has been doing this for a while and I think this is an area where offshore may prosper.

5. Predictions will be wrong!
OK, this is a bit of a cheap one, but there is a serious point. In very turbulent times, the range of possible outcomes for a given set of events increases substantially.

The predictions I've made look the most probable, but I'm prepared to apologise profoundly if against my expectation, 2009 turns out to be the year of TDM offshore contact centres!

Happy Christmas & New Year

Just a short post to all readers of the blog to wish them a Happy Christmas & New Year, and to suggest they spare a thought for all of those in contact centres who will be working over the festive period....

System Integrators write interesting things about contact centre for the downturn!

The title says it all, but I was pleasantly surprised in the past week to see that both Accenture and IBM had written some interesting white papers on contact centre. I'm often deluged by vendor whitepapers but these are usually from the smaller niche product vendors. It's quite nice instead to see something from the big boys.

I was sent the IBM whitepaper via the Call Centres.net website. Call Centres.net is an Australian and APAC focused site, but the content is good and often worth comparing with what we see in the European market. The site is run by Dr. Catriona Wallace, one of APAC's leading authorities on call centres and she has a very good blog that's well worth reading.

What I found interesting about the IBM whitepaper was that it focuses on the customer service process. You can download the whitepaper here , as I thought that a focus on the end to end processes was one of the things that too many contact centres don't worry about. To be sure there's always a focus on the applications, but less often is there a good understanding of how the customer process flows between those applications. This is important, as process is often a greater determinant of customer experience than the capabilities of any application. I appreciate that a system integrator with a portfolio of SOA offerings might be have a vested interest here, but it's still a good study and applicable outside of the sample of Australian contact centres it studied.

The Accenture study looks at the impact of poor customer service. The idea that poor customer service leads to loss of customers and loss of revenue makes sense but has been challenging to prove. Their findings are that,

"...Service again ranked above price as a global driver of customer churn, according to Accenture’s fourth annual study on customer service satisfaction, titled “High Performance in the Age of Customer Centricity.”

The study is based on a survey of more than 4,100 consumers in eight countries across five continents. Through the survey, consumers provided feedback about customer service across the full range of customer service channels, including use of the telephone, e-mail, corporate websites, mail, online chat and on-premise services.

In total, two-thirds (67 percent) of respondents reported moving their business to other companies as a result of poor service in a variety of industry sectors, up from 59 percent of respondents in last year’s survey. Underscoring the sharp increase in consumers switching business providers is an overall erosion of customer loyalty. Half (50 percent) of respondents in this year’s survey reported that they switched providers in multiple industry sectors during the year, taking an average of $4,000 worth of business with them, by their own estimate, each time they took business elsewhere."

That service is more important than price for customer retention should come as no surprise, but it is nice to have experience supported by research.

The challenge is what this means for business. It seems to me that there is a strong case being made here that investing in customer service in the downturn is likely to be more profitable than an across the board cost cutting program. I found it interesting that outsourcing was (at least in the IBM study) only one way of fixing service issues and that approaching outsourcing from a purely cost reduction point of view was likely to fail. Outsourcing to fix process problems (either BPO or BTO) seemed more likely to succeed and the Accenture study provides the evidence for how that might show up on the balance sheet.

Finding good news in contact centres

I know it's boring if I begin every post with a regret that I haven't had much time to blog, but it's true and it's why the posting frequency has dropped so much.

The news these past few weeks has been particularly gloomy, so I thought I'd look for something more cheery than most of the economic reporting.

The first story that caught my eye was "Call centre leads to 500 new jobs" on the BBC. Amidst all the gloom (and persistent stories of offshoring), comes the news that an Indian telecommunications firm, Tech Mahindra, is opening a 500 seat call centre in the North East of England. Very good news for that part of England, as that is the region where the failed bank Northern Rock was located and so there are good contact centre staff to be had there. It's also an illustration that offshoring was only ever sensible when there was an effective labour arbitrage to make it worth while. I suspect also that it supports the views of Sramana Mitra and her controversial article "The Coming Death Of Indian Outsourcing" in Forbes (covered on this blog at: "Indian Outsourcing, is it in decline? "). In some ways a decline in outsourcing is probably a good thing for Indians as it means that the country is getting richer and adding more value than just competing on cost.

Another story I liked was in Finextra and was "Bank of Montreal plans move to green call centre". In its own quiet way it is a useful corrective to the popular/media view that all banks are in meltdown. I liked Bank of Montreal when I worked with them (as I also liked Scotiabank) and it's good to see that they're both being green and managing to keep their contact centre going.

Congratulations to Cisco's own contact centre team

I've been finding it really hard to get the time to blog lately. Some of this has just been the amount of travel. It's not been the sort of long-haul air travel that really makes things difficult, just the general travel you get when you have a customer facing job.

Fortunately, one of the reasons I don't have more travel is the role played by Cisco's contact centre (called the CIN - Customer Interaction Network). Although we're known for having a contact centre product, we're less well known for having a very capable multi-media, globally integrated contact centre for our own customer service and support operations.

It was therefore very good to see our contact centre team recognised at on the 18th and 19th November, at the UK's Customer Contact Association (CCA) annual convention in Edinburgh. Cisco was won the Best Organisational Influence category, which is aimed at recognising organisations that have demonstrated excellence in understanding and responding to customer needs through innovative measurement methods.

Obviously we're delighted with this recognition and it's very encouraging to see that how we use our won products is regarded as worth recognising within the industry.

Abbey National - did an IVR survey lead to a customer getting locked out their account?

This blog sometimes flirts with the idea of news, rather than just comment, and I couldn't resist this story. I saw it today in the Scotsman (though it's also more detail here in the Daily Mail).

In brief a Mr. George Bates, a 23 year old Abbey National customer, phoned his bank to arrange an overdraft. He claims to have found that the operator was rude, unhelpful and with a heavy Asian accent that was difficult to understand, so at the end of the call he used the automated post-call survey to register his displeasure. A lot of banks use IVRs (Interactive Voice Response Systems) for this as it suits the "push 1 for...., push 2 for...." type of menu that an IVR provides. Anyway, Mr. Bates pushed ones and twos for low scores and finished his call.

When he called back the next day his problems began. He couldn't access the phone bank with his password, the ATM swallowed his card and when he got into his branch he found his identity had been changed from the 23 year old Bristol carpenter he is, to that of a 33 year old Ugandan divorcee. His direct debits had also been cancelled and he was incurring bank charges for missed payments. Abbey have now apologised and offered £200 compensation, but Mr. Bates is still unhappy.

There are some lessons from this story worth pondering.

The first is what price does a bank place on its reputation? I've blogged on this before (see: "Are call centres so bad they hinder business?" or "Barclays, silent calling & we've been here before... "), but contact centres can damage an organisation's reputation very quickly. It seems a mystery that such an important part of a customer's experience of an organisation should be managed as a cost centre and yet other functions that drive reputation and brand (e.g. marketing or PR) should be seen as investments or necessary expense.

The second is that while it's admirable that agents should be given continuous feedback on their performance, they really should not be able to take revenge on customers who score them poorly. There's a whole set of issues here, from the granularity of the feedback given to agents to the level of access to customer data that agents have. Supervision, audit trails and analytics might also be points to think of here in terms of how organisations control agent behaviour.

The third and final point is that the public do not much like offshore contact centres. This is an image that the offshore industry has acquired and has not managed to shake off. I'm sure that had a British call centre worker done this the story would have been much less newsworthy, but as it's an Indian call centre (and Abbey have five UK call centres and only two Indian ones) this fits a lot of popular myths about the offshoring industry.

There may be a view that "all publicity is good publicity" (and you certainly couldn't buy the press coverage this story is getting), but I suspect that Abbey will want to change the way it runs its contact centres as they will not want their reputation damaged in a credit crunch that has hurt the reputation of UK banking so much.