Outsourcers rethink horizontal functional strategies in light of global recession

The current economic crisis is forcing outsourced contact center providers to revisit tried and trusted methods of providing their services to clients, asserts a new Datamonitor report, Managing outsourced contact center functions during the economic slowdown (Strategic Focus). With prospects and existing clients looking for more creativity than ever in how their products / services are represented, outsourcing vendors need to determine new ways of delivering customer service, marketing & sales, technical support and debt collection.

A clear signal that the recession has impacted both outsourcers and their clients relates to a change in customer service delivery goals. No longer is increased revenue generation cited as a principal objective; rather, the need to ensure a maximum degree of end-user satisfaction is key.

The domain of technical support is no longer the commodity it once was, with more consumers globally using devices and solutions that are more complex than ever. However, according to Datamonitor, this is an area in which contact center outsourcers have the chance to win significant business in the coming years.

“There exists significant opportunity for contact center vendors in the field of technical support. Clients selling any type of technology are tired of the headaches related to recruiting savvy customer service personnel who can address end-users using multiple channels and guaranteeing excellent levels of interactions. A savvy outsourcer, using a combination of offshoring and automation, can not only take on and improve the technical support end-user experience, but also do so at a reduced price. In the technology sector, where margins are constantly being squeezed, this is an important success factor”, said Peter Ryan, Datamonitor lead analyst for contact center outsourcing.
More information on the service and support industry can be found at www.supportindustry.com

Report Shows How Contact Centers Can Protect Investments While Migrating to All-in-One Communications Software Suites

BenchmarkPortal, an independent research firm specializing in contact center best practices, has published a report showing how contact centers can protect existing investments, while making a phased migration to all-in-one communications software suite solutions. The report builds on previous research that demonstrates total annualized costs for all-in-one communications software suites can be less than half that of multipoint solutions following acquisition.

Key findings from the report include the following:

*There is a sizeable experience base of contact centers that have migrated to all-in-one communications software suites over time.

*Migration to all-in-one communications software suites is generally no more difficult, and is frequently less difficult, than other IT initiatives within contact centers.

*Approximately four out of five managers with multipoint solutions feel that a gradual migration strategy would make adoption of an all-in-one communications software suite more attractive.

*There is not a unique roadmap, but rather a matrix of considerations that contact centers should take into account when considering migration to an all-in-one communications software suite. These include:

--Age of existing multipoint solutions
--Degree to which multipoint solutions are embedded into existing infrastructure, processes and customer-facing technologies
--Management's knowledge and resources for handling technology migration
--Human and cultural factors
--Budget
--Number of remote offices
--Overall technology roadmap

More information on the contact center industry can be found at www.supportindustry.com

Contact Center Performance Management Grew by 53% in 2008 Despite Worldwide Economic Slowdown

DMG Consulting, a provider of contact center analytics research and market analysis, has published the 2009 Contact Center and Enterprise Performance Management Market Report.

Sales of contact center and enterprise performance management solutions are growing at a healthy rate, despite the worldwide economic slowdown. Seat counts grew by nearly one-half million in 2008, an increase of 53% from the prior year. The number of agents using some form of CCPM solution -- a packaged application, quick-start basic capabilities, or full functionality -- continued to increase in calendar year 2008. There were an estimated 1,969 worldwide implementations of CCPM and 1.4 million contact center performance management seats in use as of December 31, 2008.

The smaller CCPM modules and packages are designed to be implemented in 1 to 3 months, a fraction of the time it would take to implement a full solution. Examples of these new packages include solutions targeted for first call resolution (FCR), root cause analysis, next-best action, coaching, real-time reporting and rewards and incentive management. In addition, new packages are being introduced for sales and other enterprise activities, such as sales incentive compensation, up-selling and cross-selling, and sales performance and analytics. These packages provide quicker implementations, fewer resource requirements, lower costs, and more rapid ROI. They also come with a pre-defined set of KPIs, which is an important feature that users are requesting.

More information on the contact center industry can be found at www.supportindustry.com

Study Shows 95% of Companies Value High Quality Customer Experience

COPC Inc. (Customer Operations Performance Center Inc.) and SOCAP International (Society of Consumer Affairs Professionals) released results of their benchmarking study for customer care. Of the companies surveyed, key findings reveal:

98% provide customer service and/or post sales support

80%-plus utilize more than one support type

21% don't measure customer satisfaction

24% measuring customer satisfaction do not consistently achieve defined performance targets

65% have an external customer service center

95% have a quality monitoring process

89% do not utilize offshore support sites

33% use "temporary" agents to reflect the degree of seasonality in their business

More information on the contact center industry can be found at www.supportindustry.com

Strapped Companies Looking to Get More From HR Technology

Watson Wyatt’s 2009 HR Technology Trends Survey found that 61 percent of employers are taking steps to optimize their current service delivery models (which includes their mix of HR technologies, call centers and vendors). A third (33 percent) are reviewing and updating all vendor contracts, and only 27 percent are staying the course. Watson Wyatt’s survey was conducted in February and March 2009 and includes responses from 181 large employers.

When asked to rank the top three factors that would prevent changes being made to HR sourcing strategies, 43 percent of respondents cited transition costs as the most important, followed by the lack of a business case (31 percent) and avoiding disruption in current service (11 percent).

The survey also found that companies are using a variety of Web 2.0 technologies such as social networking (23 percent), podcasts (19 percent), blogs (21 percent) or wikis (15 percent) to communicate internally with their employees. For these companies, the level of satisfaction is high -- approximately three in five (59 percent) are satisfied with their use of podcasts, half (49 percent) are satisfied with their social networking technologies, and two out of five (40 percent) are satisfied with their use of blogs and wikis.

More information on the service and support industry can be found at www.supportindustry.com

IT Reacts to Global Recession with a 'Back to Basics' Agenda

While the hype in manufacturers' brochures and web sites is all about the "new, new things," IT decision-makers buffeted by the global recession are setting their priorities on the basics -- backup and recovery, security, and even more server consolidation. This conclusion is based on a study this month covering 1,500 IT decision-makers in 12 countries, conducted by RONIN Corporation, a global research and marketing consulting firm.

The study's objective was to check out the "pulse" of the marketplace in terms of the impact that the recession is having on companies and how this, in turn, is impacting IT. The bottom line is that although IT departments are impacted a little less than their companies as a whole, they are changing their priorities and reducing their spending.

A typical company expects to be spending 15% less on IT than in 2008. 6% of this reduction will be in external spending -- with hardware vendors, software companies and the like -- and 9% will be reductions on internal expense. Internal cost saving will come from hiring freezes, layoffs and improvement in the cost structure of the data center.

There are also fundamental changes in the IT adoption of new technologies. In 2005, 47% of IT groups believed they had an environment which was either "leading edge" or "advanced." By 2008, this had dropped to 25% and in 2009 is expected to drop further to 18%. Thus 82% of companies expect to have an IT environment which is either "mainstream" or worse. This has manifested itself in a "back to basics" approach where spending is devoted to the infrastructure -- backup and recovery, security, server consolidation and virtualization. Only 5% of companies are viewing SOA or cloud computing as a spending priority for 2009.

Another major change is in the way that executive management views IT. In 2008, 48% of executives viewed IT as "a service to the company" and only 20% viewed it as "a cost to be controlled." In 2009, this has changed with "a service to the business" dropping 8 points to 36% and "cost to be controlled" jumping up 13 points to 33% of the total.

More information on the IT industry can be found at www.supportindustry.com

IP Contact Centers: customer retention has become the key benefit

Traditional contact center infrastructure vendors face few greenfield opportunities in the large enterprise market in mature geographies. This, according to independent market analyst Datamonitor, has caused them to change their sales and marketing strategies, focusing much less on the benefits of the transition from time division multiplexing (TDM) to internet protocol (IP) and much more on topics such as unified communications (UC) for the contact center and ways to connect the enterprise with the branch and the contact center. The report says that IP contact center vendors have begun to offer unified product lines, aiming for common administration and reporting, common user interfaces and functionality far beyond basic routing.

An IP contact center is any contact center that does not use traditional circuit switching; that is, all calls are voice-over-IP or are converted from TDM to IP. An IP contact center leverages the intrinsic benefits of IP communications, including the fact that either or both voice and data communications can be efficiently routed to any customer service agent with access to an IP connection. Through the use of SIP, IP contact centers can detect and route customer communications based on SIP-controlled presence management in place of the traditional automatic call director (ACD).

The sluggish economy has led to a change in strategy in the contact center: the focus has shifted from customer acquisition to customer retention. Clients' budgets are tightening and consumer confidence is in decline along with consumer spending. This is making it difficult for enterprises to gain new business, and they are concentrating on current customers, improving customer service and seeking out contract renewals and upgrade opportunities. Customer service quality and customer intimacy are becoming increasingly important to achieve good customer loyalty rates.

Core IP contact center features and functions are important and customers still consider functionality when making their purchasing decisions. But, the difference between choosing vendor A and vendor B rarely comes down to which technology provider can implement specific-agent recall routing rules or which one has a scripting engine for canned email responses.
More information on the contact center market can be found at www.supportindustry.com

In a Tightening Economy, U.S. SMBs Use More Information Sources, Especially the Web, to Learn About IT Products, Technologies, and Suppliers

Under increasing economic pressure, small and medium-sized businesses (SMBs) in the U.S. are using more diverse information sources to first learn about IT products, technologies, and suppliers and, once aware, gather more information. Despite the growing use of the Internet as a source of information, a trend that will continue, word of mouth still receives high mentions by SMBs, according to a new IDC study.

Among key highlights of IDC's research are the following:

--Word of mouth is most often cited by small businesses (SBs) and medium-sized businesses (MBs) as how they initially become aware of IT products, technology, and suppliers. However, vendor Web sites and word of mouth tie for first place as a source of more detailed information for both SBs and MBs.

--SMBs differ far more by vertical industry than they do by company size regarding places where they become aware of technology as well as sources for more detailed information. Communications firms cite the highest average number of sources, while banking/finance firms averaged the lowest.

--SMBs differ a great deal by cluster regarding the information sources that they utilize.. A well above average share of SMB 2.0 firms mention online sources for both becoming aware of and gathering IT information.

More information on the service and support industry can be found at www.supportindustry.com

Forrester Lowers Outlook For US IT Purchases In 2009

US business and government purchases of IT goods and services will decrease by 3.1 percent in 2009, compared with the 1.6 percent annual increase previously projected by Forrester Research, Inc.. With the US economy dropping at an annual rate of 6.3 percent in Q4 2008 and most professional economic forecasters reducing their predictions for 2009 US real GDP growth, Forrester has revised its forecast for technology spending in the US to reflect these changes. Forrester expects growth in IT investment will resume in Q4 2009 and gather strength in 2010.

Forrester uses several metrics to determine the health and size of the IT market on a quarterly basis. The data in the new Forrester forecast report focuses on IT purchasing -- how much computer and communications equipment, software, IT consulting and integration services, and IT outsourcing businesses and governments buy from technology vendors. It is one of the most important metrics for evaluating the health of technology vendors.

The new Forrester forecast report makes the following predictions:

Computer equipment will fall even more in 2009. Forrester expects that US business and government purchases of computer equipment will drop by 6.8 percent in 2009, on top of a 4 percent decline in 2008. However, growth is expected to bounce back in 2010 to 7 percent.

Communications equipment demand will shift from 2008 growth to a big cut in 2009. A mixture of enterprise demand for videoconferencing and mobile technologies and telco demand for 3G wireless and broadband equipment kept purchases growing by 3.7 percent in 2008. Both factors will erode in 2009, leading to a 7.8 percent decline, but growth will revive modestly in 2010 to 4.8 percent.

Software purchases will decline slightly in 2009, with license revenues falling. Since about half of software purchases each year are maintenance fees and subscription fees that grow at relatively constant rates, the flat growth of total software purchases means that license revenues will continue to fall in 2009. The picture will improve in 2010, with growth of 6.3 percent.

IT consulting and systems integration services will slip in 2009. Cutbacks in the project portfolio of most companies will lead to a decline of 2 percent in 2009 for IT consulting and systems integration services. The outlook for 2010 remains positive, with 7.4 percent growth expected in 2010.

IT outsourcing growth will remain moderate in 2009 and 2010. IT outsourcing turned out to be weak in 2008, with 2.8 percent growth as economic uncertainty froze potential clients, increased competition and smaller-scale projects cut prices, and the recession caused prospects to wait to see if prices would get even lower. These same forces will continue through the first half of 2009, with revenues starting to improve in the second half of 2009 and in 2010. Growth in 2009 will be small but positive at 2.1 percent, improving to 6.8 percent in 2010.

More information on the IT industry can be found at www.supportindustry.com