Workforce Management Market Climbs, but Vendors Are Still Leaving Money—and Market Share—on the Table

Thanks to greater adoption in the back office, the use of workforce management solutions (WFM) in contact centers is showing steady gains, according to a new report from DMG Consulting.

DMG says that in 2014, the WFM sector grew by 11.2 percent, an increase of 900,556 seats, with vendors NICE Systems, Verint Systems, and Aspect, combined taking a 60 percent share. DMG predicts that WFM revenue will increase by 13 percent in 2015 and 2016 and by 12 percent in 2017 and 2018. Future gains will be driven by replacement of older systems, updated technology, and increased ease of use.

While the figures reflect a bright future for the WFM market, Donna Fluss, founder and president of DMG Consulting, says there could be even bigger improvements. Fluss has strong words for many top vendors that she feels have been dragging their feet when it comes to system refreshes. In fact, Fluss says emerging vendors who are quicker to respond to user requests for improvements could seriously disrupt the market.

WFM Finds Favor in the Back Office

While WFM solutions can be used in a various business cases, the technology started to gain traction when vendors turned their attention to back offices.

“WFM vendors realized that if they modified their WFM solutions they could start selling it to the back office,” Fluss says. “The potential in the back office is that there are two to three times the number of people there than there are in the front office."

WFM is most commonly used by the back office to help forecast contact center volume, which in turn, helps managers know how many people need to be scheduled. However, it’s not as easy to say that there are X numbers of calls coming into the contact center, there are other factors involved. 

“You need to figure out where your service level should be and take into consideration things like the amount of abandonment and average talk time. Plus, what is the average work time, average handle time, absence rate, occupancy rate, etc.?” Fluss explains. “These are very sophisticated applications, and a lot of intelligence has to go into them.”

Doing the Math

WFM applications are driven by mathematical algorithms, primarily what are known as Erlang algorithms, which Fluss maintains are more applicable to the front office than the back office.

In the back office, delays in processing are not as critical as they are with agents taking calls on the frontlines. That issue calls for a different mathematical equation, according to Fluss.

The issue can be traced to how WFM systems work in the first place. Fluss explains that Erlang algorithms were designed many years ago for directory assistance to predict the arrival rate of directory assistance calls, to mathematically address the need for 411 calls, non-interrupted short calls.

WFM vendors have been using modified forms of Erlang for years, and many have not updated their algorithms, according to Fluss. “Vendors that are using Erlang to try to forecast back-office work are making a big mistake. It’s not a good approach," she says. “As it is, it’s not a perfect fit for contact center calls, but [it] was the closest match. Now you’re adding other channels when this is barely good enough for calls."

That gap, though, could translate into what Fluss calls a “huge opportunity” for WFM vendors to develop more accurate algorithms and, in turn, increase sales. 

It Don’t Come Easy

In addition to ill-fitting algorithms, Fluss says leading WFM solutions are very hard to use and outdated—some reporting functions are 20 years old—putting off potential sales.

“Users are not exactly happy with a lot of these solutions and aren’t quick to replace these WFM solutions because they are difficult to use,” she says. “There’s no excuse for the complexity of some of these solutions, particularly given the technology that’s available today.”

Besides implementation, WFM solutions have to be kept up to date, something that Fluss says has to be done not once but on a “moment by moment basis.”

Fluss says once users figure out how to use a WFM solution they’re not quick to replace it, which hasn't led to a lot of new sales. In turn, vendors didn’t update their solutions.

“The vendors didn’t want to invest in WFM solutions because they didn’t think they would be able to make a return on their investments,” Fluss says. “But now that they see that there’s a back-office market, they are making some investments."

Fluss points out, though, that solutions "are in desperate need of a total refresh.”

If You Snooze You Lose

Despite cross-over use to the back office, and some technology tweaks, more work needs to be done, she says. “Leading vendors need to make substantial investments to enhance the functionality, the accuracy, and the usability of their WFM solutions.”  

Upstart companies are picking up the slack and gaining favor in the market, according to Fluss. Among them are Calabrio, Noble Systems, Intradiem, WorkFlex, and Teleopti.

“If a vendor can build a better mousetrap and come to market with an easy-to-use, highly sophisticated, and more accurate WFM solution, they can capture the market,” Fluss says.