Frost & Sullivan: Contact Center Seats Set to Decline



Frost & Sullivan forecasts that the total number of contact center seats will shrink from 4.1 million in 2012 to 4 million by 2017. Even so, there are opportunities for vendors in this mature market.

For example, consider hosted solutions. Hosted delivery allows companies to cut costs by buying only the applications and capacity they need, an attractive on-demand value proposition. Hosting also provides companies with business continuity that allows them to support their customer contact operations when disasters strike.

According to Frost & Sullivan research, customers prefer to initiate contact with customer service agents rather than having agents contacting them. In turn, the inbound contact center has been built around the automatic call distributor (ACD), which routes most contacts to contact center agents.

But Frost & Sullivan also feels that the demand for both inbound and outbound contact centers, and by extension the demand for inbound contact routing (ICR) and dialing solutions, will slowly decline in North America.

Even so, there are opportunities for vendors in this mature market. For example, consider hosted solutions. Hosted delivery allows companies to cut costs by buying only the applications and capacity they need, an attractive on-demand value proposition. Hosting also provides companies with business continuity that allows them to support their customer contact operations when disasters strike.

Today's economy has forced companies to focus on acquiring and retaining high-value customers through improving the Customer Experience. These dynamics are impacting the contact center marketplace in the following specific ways:

Relentless Productivity Improvements

Companies continue to look for ways to shrink agent headcount. These methods include inbound and outbound call blending to avoid idle staff, improving agent performance to shorten calls and avoid follow-up calls (first contact resolution), and accurate schedule forecasting. Companies also are increasing the use of internal social communities that allow agents to quickly resolve customer issues.

Frost & Sullivan forecasts that hosted agent performance optimization (APO), which include call recording, customer interaction analytics, performance and quality management, and workforce management, will have the strongest growth of any contact center product segment.

Redoubled Focus on Cost Cutting

Companies are looking for additional savings in the face of revenues and profits that may be less than shareholders' expectations. And IT expenditures, like the contact center and its related technologies, are prime targets for cost reduction regardless of driver. Often, senior management sees contact centers as "infrastructure" that supports their companies' core business, but which does not produce core products or services. Management will look for underutilized applications, personnel, and facilities with a view toward consolidation.

Cloud/hosting ICR helps these executives meet these goals while maintaining a quality Customer Experience. For example, cloud solutions minimize the disruption to operations caused by traditional "rip-and-replace" of one vendor's on-premise software that might occur in the wake of an acquisition.

Shift of Conversations from Agent Voice to Self-service and Social Channels

Customers now tend to initiate interactions with organizations through Web self-service before calling contact centers. Frost & Sullivan research shows that more customers are satisfied with Web self-service than with any other channel, including live agent calls.

Moreover, feedback from third party vendor surveys supports the argument that a large majority of consumers prefer using self-service mobile apps to other channels.

Meanwhile, customer or peer assistance also will increase as more customers become more social. Informal peer or formal company-sponsored social communities enable customers to exchange information, solve problems, and discuss products. These communities also provide benefits to companies by providing insight into the customer, helping build loyalty, and deflecting contacts away from live agents.

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Posted April 23, 2014