Customer Service Vendors Consolidate as Customer Service Democratizes

Today, customers expect easy, effective customer service that builds positive emotional connections. And they expect this type of service from all companies, both big and small, with which they do business.

Companies have to use complex software from different vendors to lay the foundations of their customer service operations. They must integrate and customize this software to make it work in hopes of being able to differentiate their service from their competitors.

Customer service leaders need a simpler technology ecosystem that minimizes the amount of work it takes to stand up a contact center. This would allow all sizes of companies, not only the large ones with deep pockets and IT resources, to offer great service. It would also allow all sizes of companies to focus on people and process improvements instead of configuring and testing complex software.

Three software categories are needed to stand up a contact center:

  1. Queuing and routing technologies. They capture the customer inquiry, which can be via voice, digital, or social channels, and route and queue the inquiry to the right agent pool.
  2. CRM customer service technologies. They enable customer service agents to create and work the incoming service request.
  3. Workforce optimization technologies. They record agent interactions with customers, evaluate the quality of these interactions, recommend targeted training based on quality scores, manage agent schedules, forecast future schedules, and more.

Companies are demanding a simpler, more prepackaged, end-to-end customer service technology ecosystem that allows companies of all sizes to offer good service. They want: 1) to better support omnichannel interactions by passing contextual data across channels so that customers don't have to restart conversations when they switch channels in the course of an interaction; 2) consolidated reporting across all channels, which can be used to staff and forecast agents to control headcount costs; 3) optimized routing based on current agent skills and success rates for similar interactions for higher first contact resolution scores; and 4) targeted coaching based on quality scorecard results.

Vendors are reacting to this demand. Established vendors in each software category have made out-of-category acquisitions. Case in point is Verint Systems, a workforce optimization vendor that purchased KANA, a CRM customer service solution. NICE, another WFO vendor, purchased inContact, a cloud contact center provider.

The nimble cloud contact center vendors are bundling and selling technologies in this ecosystem together. They offer a unified communications infrastructure, robust routing, and queuing engines for interactions of all types. They have integrated WFO software suites for agent quality management, scheduling, forecasting, and contact center performance. Today, they tend to either have adapters to leading CRM systems or they have lightweight case management and knowledge capabilities that can be easily hardened or acquired.

Two companies of interest: Twilio is targeting the contact center market by adding core Q&R services to its platform. But customers need to build out the rest of a full contact center solution on their own. Amazon is leveraging its size and scale with AWS, offering Connect for a fuller contact center, voice-oriented package, and integrations with customer service solutions, in addition to offering Lex for self-service.

What does this all mean? There are only a handful of dominant vendors in each software category. The shift in the market will drive a reduction in best-of-breed components to more integrated suites, so a vendor's longer-term roadmap must reflect this consolidation and migration. Also, keep an eye out for emerging vendors that offer all-in-one capabilities.

Kate Leggett is a vice president and principal analyst at Forrester Research.

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