Magazine article CRM Magazine

Workforce Optimization Enters the Analytics Era: As the Sector's Products Evolve, the Challenge for Vendors Is Getting Customers to Bite

Magazine article CRM Magazine

Workforce Optimization Enters the Analytics Era: As the Sector's Products Evolve, the Challenge for Vendors Is Getting Customers to Bite

Article excerpt

THE WORKFORCE optimization (WFO) market is experiencing growing pains as its products evolve from their traditional role, optimizing staff performance, to a new one--enterprise analytics. Since the core WFO applications--recording and traditional quality assurance--have high market penetration, change is necessary for this market to continue to grow. Leading and contending vendors have been preparing for this development by introducing analytics solutions, but they have to persuade their customers to buy them, which is turning out to be a lot harder than they expected.

THE MARKET SLOWS DOWN

The first half of 2015 was tough for vendors of contact center WFO. Total company GAAP revenue for the 45 WFO competitors decreased by $8.6 million, or 0.5 percent, from $1.713 billion in the first half of 2014 to $1.705 billion in the first half of 2015. After many years of growth, the market contracted ever so slightly. While not a total surprise--the rate of organic growth for contact center WFO has been slowing down--the results are nonetheless disappointing. These numbers are also an indication of what to expect in the future unless the sector becomes more acquisitive, as it has been in the past, or adoption of the new analytics solutions picks up dramatically. The question is, what will vendors do, and what impact will it have on their customers?

CHANGING DYNAMICS

The primary challenge for the contact center WFO market is that there is little organic growth. Vendors are striving to keep their customers and are fighting over competitive replacements. But some unique market dynamics are having a negative impact on total market revenue while helping some of the smaller companies grow. The market leaders have some of the highest-priced solutions. They may lose an incumbent client to a smaller WFO contender for many reasons, including poor service, lack of flexibility, and the fact that the price of a new solution from the smaller contender is often significantly lower.

While the market potential for traditional WFO applications is small, the opposite is true for the newer analytics applications--speech and text analytics, desktop analytics, contact center performance management, and customer journey analytics. …

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