Decision Matrix: Selecting a Hosted Contact Center Service in the US

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1 Decision Matrix: Selecting a Hosted Contact Center Service in the US "As we conducted our research it was clear that LiveOps is on many companies' radar screen, including other service providers noted in the Decision Matrix. LiveOps was the competitor mentioned most often, either as a potential threat, or as a company that was viewed to have transformational impact on the contact center space," said Ian Jacobs, senior analyst for Ovum and author of the report. "LiveOps is certainly a company we would recommend to our clients in the mid- for consideration." Ian Jacobs, Sr. Analyst, Ovum

2 EXECUTIVE SUMMARY In a nutshell This report explores the competitive dynamics within the multi-tenant hosted contact center service market in the US and helps businesses select a vendor based on its technology strength, reputation among customers, and impact on the market. Ovum provides a complete view of vendor capabilities and advises on those that businesses should explore, consider and most importantly shortlist. MARKET DEVELOPMENTS Hosted versus premises-based contact centers Over the last two years, under extreme pressure to retain customers, increase customer loyalty, and reduce overhead costs, enterprises have been forced to rethink their customer care strategies to find the right balance between effectiveness and efficiency. At the heart of this strategy is the contact center the front line in customer service for most enterprises. It is imperative for contact centers to remain competitive and flexible as business needs evolve. Given the new investment philosophy, a growing number of enterprises are looking towards hosted contact center services to reduce capital outlay and to access a wide range of technology options despite shrinking budgets and limited in-house expertise while focusing on developing new business processes and creating more flexible staffing plans. Access to new features/functions and expertise, more economically palatable usage-based opex models, and improved scalability and flexibility make hosted contact centers an attractive option for enterprises today. Moreover, quick deployment timeframes and cloud-based service have made it relatively easy for enterprises to implement. Adoption of the hosted model will also be driven by changes in the traditional on-premises switch market. Many existing contact center deployments are built on top of technology nearing end-of-life. At the same time, market consolidation means that many companies are re-evaluating their technology infrastructure. Not just economic advantages - -as-a- IT discussions. Propelled by the proven scalability of on-demand customer relationship management (CRM) and enterprise resource planning (ERP) applications, enterprise comfort levels with hosted technology especially multi-tenant hosted have risen dramatically in the past 24 months. This has started to pay off in the hosted contact center space, partly because the timing of that rise in comfort coincides with a feeling of inert IT innovation due to slow spending. This rise in comfort also means that enterprises are prepared to see hosted contact centers as more than just a cost-saving move. While few enterprises to date have truly taken advantage of it, hosted contact centers can prove to be positive disruptors for enterprise processes. At heart, hosted contact centers enable enterprises to do new things not just to do the same things via a new telephony model. center solution. They can devote more attention to developing strategic campaigns and refining business processes. Because they have outsourced the contact center technology and much of its management, enterprise workers that used to spend their work days managing contact center IT infrastructure are now freed up to focus on projects that drive greater value to the business. These workers could, for instance, create and roll out a new debt collection initiative to recoup small debts, or refine cross-sell campaigns to make them more effective. Larger enterprises will likely recognize these possibilities first, particularly since they are the most likely to engage professional services firms to help them in other areas. As the hosted model gains traction in larger

3 enterprises, hosted service providers will need to either beef up their own business consulting services, or recruit a strong base of partners to help customers identify openings for such process re-engineering. Multi-tenant hosted moves quickly upstream Larger enterprises or mid-sized enterprises with larger contact centers have begun to find the idea of a hosted contact center service more attractive. This makes for a marked change from even 18 months ago, when truly multi-tenanted contact centers rarely topped 1,000 seats and the average deployments were closer to 100 seats. Figure 1 illustrates how different-sized enterprises are attracted to different types of deployments, including dedicated hosted and on-premises managed services. This figure shows the current state of the market in the US; adoption of the multi-tenanted hosted model by large enterprises has yet to catch fire in many other parts of the world, at least not to the degree it has in the US. Fig 1: Evolution and size bands of hosted contact center services in the US The hosted contact center service Decision Matrix Ovum provides guidance for enterprises looking to deploy hosted contact center solutions, and places Matrix: Shortlist shortlist for hosted contact center service selection. This category represents the leading solutions that Ovum believes are worthy of a place on most technology selection shortlists. The vendor has established a commanding market position, with a product that is widely accepted as best -of-breed.

4 Consider the vendors in this category have good market positioning and are selling and marketing their products well. The products offer competitive functionality and good price/performance, and should be considered as part of the technology selection process. Explore solutions in this category have less broad applicability, and may have limitations in terms of to meet specific requirements, and may be worth exploring as part of the technology selection process. Fig 2: Hosted contact center services in the US Decision Matrix To mirror that reality as closely as possible, we split the Decision Matrix into two halves: the large enterprise half on the right, and the SME half on the left. We have used a dividing line of approximately 500 seats in either a single location or a virtualized environment with multiple sites to split the market, and have created one for each category. It should be noted that we believe tomer base could fall on both sides of the divide, so we have given the company a rating in each category. Technology assessment Figure 3 shows the leading vendors in each of the technology assessment categories. As expected, the assessment market leaders radar.

5 Fig 3: Market leaders analysis: technology assessment End-user sentiment End-user sentiment scores, derived from an independent survey of hosted contact center decision-makers and practitioners that have deployed or formally evaluated hosted contact center services, serve as a direct

6 Fig 4: Market leaders analysis: end-user sentiment LiveOps: hosted contact center services radars LiveOps entered the hosted contact center service market as part of a strategic vision to transform the way companies wo virtual, distributed business processes, now or in the future. -pronged approach LiveOps has taken, starting with its call center outsourcing business with a network of more than 20,000 independent at-home agents who are primarily focused on direct response, direct marketing, and sales for financial, healthcare, insurance, and retail customers. To support those agents and the millions of calls they take annually LiveOps developed its own multitenanted hosted contact center platform. LiveOps On-Demand Contact Center Platform, the productized outsourcing business with its own home-grown platform, LiveOps was approached by multiple customers and partners to package the platform separate from its agent business. LiveOps understandably heavily relies on the

7 platform, LiveOps has a vested interest in innovation by continually building out new features and functionality. The platform comes in two flavors: a premium package and a basic package. The premium offer includes full recording of all calls, advanced reporting, and analytics, as well as advanced customer surveying. The premium package also includes numerous integrations, including a bi-directional integration between tions with existing legacy contact center infrastructures as well as VoiceXML-based interactive voice response (IVR) environments. It also includes pre- Salesforce Enterprise Salesforce.com instance for viewing on that platform. LiveOps was founded in 2000 and has been growing at a brisk rate reportedly profitable and with revenue climbing approximately 30% year-on-year. While still relatively new to the platform arena, the company has drawn a great deal of attention. In briefings with other service providers for this Decision Matrix, LiveOps was the competitor mentioned most often, either as a potential threat down the road or as an example of an outsourcer taking seriously its transformation into a product-focused provider. Fig 10: LiveOps radars Recommendation: shortlist (SMEs); explore (large enterprise) deployments, Ovum has taken the unusual step of providing two recommendations for the company. For

8 mid-sized contact centers, Ovum has pl LiveOps has clearly focused a great deal of attention on keeping its existing customers happy. It was the only company to be in the top-three ranked providers in every single category in our customer sentiment survey. In fact, the company dominated that area of the Decision Matrix, receiving the top score in six of the ten customer sentiment categories, including diverse areas such end-to-end solution, service levels and vertical specialization. Those strong scores, combined with some high scores in key technical assessment categories including platform and interoperability, should place LiveOps firmly on the shortlist for enterprises with between 200 and 400 agents especially those looking to incorporate work-at-home, remote, or branch agents into their routing strategies. Additionally, enterprises looking for the ability to rapidly scale their agent pools up or down based on near-realtime conditions, and those that desire to put routing strategy creation and modifications into the hands of business users, should also be closely looking at the LiveOps platform. For enterprises with 500 agents or more, LiveOps could prove an appropriate solution, es pecially for enterprises that have firmly placed their bets on the software-as-a-service model in their enterprise applications. This means enterprises with large Salesforce.com or RightNow Technologies deployments in their customer service organizations should explore the applicability of LiveOps to their specific requirements. existing customer base. Such scores are not at all uncommon in decision matrices for companies with score, reflecting the splash that this newer market participant has already made in the hosted contact center space. Ovum believes that LiveOps could become a better fit for the lower reaches of the very large contact center market if it created tighter partnerships and integrations, and potentially signed OEM deals, with web-based channel providers and workforce optimization vendors.

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