Multi cloud Customer Care and the Emergence of Cloud Brokers

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1 Multi cloud Customer Care and the Emergence of Cloud Brokers J.R. Simmons President and Principal Consultant COMgroup, Inc. Jason Alley Solutions Marketing Interactive Intelligence, Inc.

2 Table of Contents Introduction... 3 Cloud based Customer Care... 3 Multi cloud Customer Care... 6 The Multi cloud Customer Care Challenge... 7 Enter the Middleman: The Cloud Broker... 8 Don t Worry: Roles Are Changing, Not Going Away Intrigued? If So, What Next? Copyright 2012 Interactive Intelligence, Inc. All rights reserved. Brand and product names referred to in this document are the trademarks or registered trademarks of their respective companies. Interactive Intelligence Group, Inc Interactive Way Indianapolis, Indiana Telephone/Fax Rev , version 1 Interactive Intelligence, Inc. 2 Multi cloud Customer Care

3 Introduction Cloud based customer care is part of the current hype, but why should you care? The answer is simple: the movement to cloud solutions is both substantial and logical. According to researchers like Gartner, Frost & Sullivan, and Forrester, contact center infrastructure a key customer care component that has lagged behind others due to stringent requirements is now rapidly moving to the cloud. Some reports show that over half of new contact center solutions sold will be cloud based within the next two years. The Communications as a Service (CaaS) model is increasingly fulfilling the standard telephony requirements for customers to make this shift possible. Cloud based telephony is not just a trend; it is riding an unstoppable wind of change driven by logical benefits. Yet with many other customer care and other business applications headed to the cloud, or already in the cloud, a storm of multiple colliding clouds is brewing. The challenge is the delivery of high quality customer care in these turbulent times. In this paper, we will discuss the topic of cloud based customer care, expand on related multi cloud and cloud broker developments, describe how roles are changing and, finally, share recommended next steps for those considering moving part, or all, of their customer care infrastructure to the cloud. Cloud based Customer Care So what makes up a complete customer care solution today? One of the primary components is a business application the customer care organization uses to manage customer relationships in the areas of sales, marketing, service and support, and other industry specific functions. These applications are often packaged Customer Relationship Management (CRM) or Vertical applications. However, internally developed and supported applications are still out there, some with improved graphical user interfaces front ending and automating manual functions to improve efficiency and accuracy. Another key component is a contact center application to enable and manage inbound, outbound and multichannel interactions. In most cases, even smaller contact centers will have a variety of applications related to the technical operation and performance of the unit, such as core routing, report generation, and call recording. Large contact centers may add Interactive Voice Response (IVR), multichannel, outbound dialing, workforce management, and speech analytics. With most solutions offered in the marketplace, a full set of capabilities requires the blending of several products and services, often from different manufacturers and providers. But that approach is changing. Some of the more progressive companies now offer all in one suites where each functional component has been built from the ground up to work together. Analysts see the move from best of breed to full suite solutions as a growing trend. Interactive Intelligence, Inc. 3 Multi cloud Customer Care

4 consistent with the evolution of the premise market, many companies are moving to full suite solutions and focusing on developing strategic partnerships with a smaller number of suppliers In the long term, vendors that offer full suite cloud solutions will have an edge over best of breed cloud solution providers in the contact center market. Frost and Sullivan Business and contact center applications have embraced common and complementary enabling technologies to help better manage the customer experience, operational efficiency, employee satisfaction and overall business performance. This includes things such as mobility, social media, process automation, self service portals, customer feedback mechanisms, and comprehensive reporting, analytics and management utilities. The final part of a complete customer care operation is the integration of business and contact center applications, together with existing backend systems, in order to offer end to end services. This typically includes linking company database(s) with telephony systems. In many cases this touches back office applications such as SAP, Oracle, or solutions developed for vertical markets (electronic heath records, for example). Shown here is a visual representation of these customer care building blocks. Interactive Intelligence, Inc. 4 Multi cloud Customer Care

5 Cloud versions of most of these customer care and back office applications are now available in the marketplace. Market leading software solutions in the premises world have been, or are being, recast into cloud offerings, although some are late to the game. This has allowed cloud start up companies to enter the market and steal share from certain traditional players. This has not gone unnoticed, and traditional players that have lagged to the cloud are now scrambling to bring offerings to market. While many companies are playing in the cloud, here is a short sample list of cloud based customer care solutions, together with their premise equivalents (where applicable). Salesforce and RightNow were the two companies that pioneered the cloud based CRM space, and really the cloud market as a whole as they helped prove out the model. Salesforce continues to run strong independently and RightNow has been acquired by Oracle as their service cloud offering. Salesforce is a cloud only offering. Oracle and Microsoft offer both cloud and premises solutions. Interactive Intelligence is the only market leader in the contact center space offering a cloud service (it fulfills) directly. Avaya, Cisco and Genesys have taken a different strategy by choosing to sell technology to third party service providers who offer cloudbased applications; however, this is expected to change given the significant market shift taking place (revenue and seats) something driven by customer demand. Interactive Intelligence, Inc. 5 Multi cloud Customer Care

6 incontact and Echopass are cloud only offerings based on a mix of internally developed and third party technologies that have capitalized on the absence of the other market leaders. Interactive Intelligence entered the cloud market early and allows customers to deploy the same all in one platform Customer Interaction Center (CIC) in either a cloud or premises environment and migrate between models should business needs, preferences change. Microsoft and IBM offer rich unified communications solutions used to extend the reach of customer care to the general enterprise. Interactive Intelligence offers unified communications capabilities as part of their all in one platform and has also built tight integrations with Microsoft and IBM unified communications solutions to extend capabilities and leverage enterprise investments in this area. Many social media solutions are using a cloud model because it is a natural fit, and other cloud providers are actively acquiring firms with these solutions to increase their ability to provide a full range of customer care tools. This includes companies such as Radian6 (Salesforce.com), Collective Intellect (Oracle), and Heartbeat (Marketwire); although many quality stand alone offerings are available such as Webtrends, Buzzient and Lithium. A question is sometimes raised, Is the shift to cloud solutions being pushed by vendors with products or pulled by clients that see clear benefits? The short answer is both. What is not in question is the size and momentum of this market shift. According to Strategy Analytics, 64% of organizations participating in its survey have increased cloud spending in The most rapid growth is tied to the support of mobile workers, which allows the distribution of an organization s customer care workforce. This is backed by studies from firms such as IDC and Gartner, who predict that 90% of organizations will support corporate applications including cloud CRM on mobile devices by Almost all growth in the CRM market since 2008 can be traced to the cloud model. At the same time, the cloud contact center market is growing rapidly, with most reports showing between 20% and 25% annual growth rates. Initially, the move to the cloud was driven by the business units more so than the IT department. The result was often silos of cloud providers to an organization, with each delivering a valuable service to a specific group, but not always coordinated over a common strategy or network. This is changing now that IT is onboard and the cloud is becoming more central to corporate IT and business strategies. In many instances, applications are being judged from a basis of why not a cloud version instead of blindly maintaining the status quo. Multi cloud Customer Care As some customer care applications move to the cloud, the natural progression is to revisit other related applications. Thus, customers are increasingly looking at the drivers to move their entire customer care infrastructure to the cloud rather than supporting a split of premises and cloud applications. This is needed to produce the benefits tied to a restructured internal support organization and lower cost wide area network designs. It also provides the other well documented cloud benefits such as increased flexibility, faster deployment time, minimal upfront capital expense, and reduced IT requirements. Interactive Intelligence, Inc. 6 Multi cloud Customer Care

7 The logic of pushing everything to the cloud led Gartner Research Vice President Tiffani Bova to state (in a speech in mid June) that she would not purchase a single core server if starting up a small to midsize business today. From her point of view, the capital cost, daily support tasks, and ongoing reinvestment are a drain on the firm s resources and unnecessary with the number of quality cloud options for almost every need. Of course, putting every business application into the cloud will create a multi cloud environment for almost every business. Last December, Forrester declared that Multicloud becomes the norm as its top prediction for In a blog report by Holger Kisker he stated: As companies quickly adopt a variety of cloud resources, they ll increasingly have to address working with several different cloud solutions, often from different providers. By the end of 2012, cloud customers will already be using more than 10 different cloud apps on average. Customer care is no exception. A growing number of companies are actively moving, or looking to move, some or all customer care applications to the cloud including CRM and contact center suites. The Multi cloud Customer Care Challenge This multi cloud movement leads to one of the most significant challenges now facing organizations the need to gracefully blend cloud services delivery and to integrate functionality across complimentary platforms. The first challenge area is primarily a network engineering task based on careful traffic engineering and factoring in response time requirements. Depending upon the location of the cloud applications, the network links may be high speed physical/dedicated connections, private network circuits (such as MPLS), or logical connections through the Internet, often using Virtual Private Network (VPN) technologies. Application Integration for Customer Care a Historical Perspective The benefits of integrating the core business intelligence with real-time applications such as telephony have been clear since early Computer Telephony Integration (CTI) efforts delivered simple screen pop services in the 1980 s. Thus, a parallel of the multi-cloud integration challenges has existed with premises-based solutions for quite some time, especially within contact centers. To avoid the manually intensive processes of the original proprietary CTI solutions, a series of industry standards led to the development of CTI middleware software and middleware vendors. The value of their role was to reduce the number of unique integration code sets each vendor had to create in order to become compatible with a wide variety of products. In the premises-based world, the applications related to customer care such as call recording and workforce management were the first and most cost-effective integration projects. This was followed automating some of the processes related to information retrieval to produce features such as screen pops for agents and Interactive Voice Response (IVR) systems for self service. These premises-based solutions often required product-specific middleware. Interactive Intelligence, Inc. 7 Multi cloud Customer Care

8 The second challenge area is more complex: the functional integration of the applications. This is not a new requirement exclusive to cloud providers; application integration is often one of the more expensive and complex tasks facing any organization. If a customer has implemented a single customer care application in the cloud (CRM, for example), then a cloud to premises link and integration is necessary. If all customer care applications are moved to the cloud, including the core contact center communications functions, then integration between the multiple clouds is required and, in most cases, cloud to premises links will still be necessary to integrate with legacy systems/data until they are fully retired. This new multi/hybrid cloud, environment is not always as controlled or flexible as premises based environments when it comes to application integration. Most cloud solutions are designed to have all clients share a single instance of the application software effectively, a multi tenant configuration. Where a premises based solution usually would have a single integration, a cloud solution may need dozens of integrations. To make it affordable and supportable, many well developed cloud software offerings utilize browser based code, although this can create a security challenge. Software solutions using more complex integration software may not be able to reliably link with the specific mix of cloud providers and premises solutions used by a customer. Some cloud offerings have eliminated these issues by taking a single customer, multi instance approach through the use of virtualization software. The third challenge area is related to ongoing operations, including billing and contract management. Cloud service providers may have different contract terms, billing cycles and mechanisms, payment methods, support procedures and upgrade/update cycles. While much of the technical complexity is removed from IT, the management of various cloud services is a reality customers are adapting to. Collectively, this challenge is helping to drive the formation of a completely new type of business the cloud broker. Enter the Middleman: The Cloud Broker Lately, many market forecasters have predicted the rise of the cloud brokers. For example, Forrester s Kisker stated Cloud orchestration will become a big topic and an opportunity for service providers and The cloud broker is a new business model managing the flexible sourcing of internal and external cloud resources on behalf of a company. Gartner s Bova presented on cloud brokerage and aggregator services at the Ingram Micro Cloud Summit 2012 in Scottsdale, Arizona and stated that Once customers move up to four cloud services they need channel partners reinvented as cloud services brokerages in a big way. Interactive Intelligence, Inc. 8 Multi cloud Customer Care

9 Channel partners will continue to play an important role in this new hybrid, multi cloud world. Traditional channels are recognizing the cloud as a strategic part of their customers business and are rapidly evolving to address the new collective opportunity. We are also seeing traditional and new types of IT service providers embracing the Cloud Services Brokerage model and looking to include Interactive Intelligence CaaS as part of their CSB offering. This is certainly an exciting time for cloud service providers, channels and customers alike. Ben Miller, Director of Channel Development at Interactive Intelligence This is logical due to the role of a cloud broker, which may start as a way to minimize integration issues and to reduce the number of service contracts. The next logical step for the broker (and in demand by clients) would be to front end other issues such as support. This may lead to the natural extension into consulting services, valued added applications and customized delivery. For a contact center, with its potential need to incorporate many clouds to operate properly, the cloud broker could be a key way to streamline the many moving parts of a complete customer care solution. In many respects, the cloud broker plays the same role that system integrators have served in support of multiple premises based systems. According to Gartner s Daryl Plummer, when we introduced cloud services brokerage in 2009, we described a concept about intermediation between services. The value was in having a third party take on a lot of the work of aggregating, integrating, customizing, or governing (nee managing) cloud services on behalf of the end consumer. The cloud broker could produce other advantages as well. For example, the ability to provide services in a comprehensive manner without having to coordinate contract end dates of the different solution providers, handling presence in multiple international countries as a seamless service, creating cost effective multiple carrier solutions, and providing bridge services when firms are acquired or sold. A challenge that might drive some cloud brokers to more success than others will be how well they address the security of multi cloud communications and the protection of client information. In any case, the lack of standards for cloud services will help drive the growth of the cloud broker/integrator. Shown on the following page is a visual representation of the cloud broker concept in the area of customer care. Interactive Intelligence, Inc. 9 Multi cloud Customer Care

10 Don t Worry: Roles Are Changing, Not Going Away A multi cloud customer care environment brings change to many elements of the business, although properly managed it is not as disruptive as it might seem. For example, roles may change within the firm s IT department, but the need for internal IT does not disappear. Instead, the IT staff can focus more on strategic elements such as planning and internal business consulting instead of the break/fix support role associated with the traditional role of technology owner. IT staff will need to manage the providers and brokers, but that is a relatively minor change from the old tasks of managing vendors and system integrators. What should change is the role of these suppliers they need to act and be treated more like strategic partners rather than commodities. My biggest fear moving to the cloud was loss of control, having to trust someone else. I knew we needed to develop a relationship with a partner instead of a typical vendor. We weren t just looking to pay for a service and wanted to partner with someone we knew had a stake in our success. While not sure anyone was going to care about our issues and business as much as we do, I was pleasantly surprised. The relationships developed have been key to our success. Director of IT, Healthcare Company Interactive Intelligence, Inc. 10 Multi cloud Customer Care

11 In many cases, despite the rise of cloud brokers, an organization will need to create a mixed blend of cloud (and possibly premises) providers. This means the IT department will need to be able to create an extended team of trusted suppliers that can work together in planning and supporting the full solution in support of the corporate strategy and related goals and objectives. Intrigued? If So, What Next? The possible benefits look good to you and moving your customer care infrastructure to the cloud may have merit. Now it is time for an organized and thorough process. It is important to carefully evaluate the service offering, the proposing organization, the infrastructure/configuration, and the contract documents. In many cases, this is best accomplished with a formal RFP, but in any case it is wise to compare. With hundreds of potential providers and a large variety in how the services can be delivered, it is important to start with a clear definition of your goals and requirements, including all known and anticipated integration points. The evaluation process must factor in: True life cycle costs. Cloud based services follow a high op ex (operating expenses) and low cap ex (capital expenses) model. This requires a complete understanding of all cost elements, including usage charges and non contract fees, to ensure a proper comparison to alternative delivery options. Solution design. There a many different ways to configure a solution, including a variety of network connections and business continuity options. Look for a vendor that can create the right solution based on your needs not their capabilities. Contract terms and service level agreement (SLA). Like most agreements, the one produced by the vendor may be one sided. Negotiate for fair protections and assurances that don t put your operation at risk. Product/services roadmap. Even if the supplier is a good fit today, this is a rapidly evolving field and it is important to find a vendor that will adapt to your needs and incorporate new capabilities when you need them. Flexibility and willingness to customize. Fixed one size fits all solutions may be cost effective (at least for the vendor) but are more likely to disappoint in the long run. It is important that a cloud supplier provides the same ability to align with your requirements that you would get from a quality premises solution. Security and risk mitigation. Cloud security is achievable, but it takes a diligent approach and verifiable procedures. Proven track record and experience. Vendors that have successfully delivered on their promises will have the references to back them up. Look for a vendor that understands your business. Select the right partner(s) with the right mix of services appropriate for your specific needs and the cloud can be a great location for your customer care infrastructure. Interactive Intelligence, Inc. 11 Multi cloud Customer Care

12 Conducting this kind of thoughtful planning and evaluation is critical to the success of multi cloud customer care initiatives. Consultants can bring multiple departments together in a productive way and infuse valuable subject matter expertise to help you develop a sound plan and make more informed decisions. If multi cloud customer care is something you re serious about, I d highly recommend enlisting the help of such experts. Jason Alley, Solutions Marketing at Interactive Intelligence Interactive Intelligence, Inc. 12 Multi cloud Customer Care

13 COMgroup, Inc. COMgroup, Inc. is an independent consulting firm providing strategic planning, requirements definition, system design, business process analysis, procurement, and project management services for all types of voice, data, and video communications technologies. We focus on engaging and educating our clients while we analyze workflow and communications, with a goal of improving performance regardless of the underlying technical components. Learn more about COMgroup at inc.com. Interactive Intelligence, Inc. Interactive Intelligence Inc. (Nasdaq: ININ) is a global provider of unified business communications solutions for contact center automation, enterprise IP telephony, and business process automation. The company has developed an all in one IP communications software suite that s scalable and standards based, offering single platform architecture with inherent multichannel processing to deliver comprehensive applications minus the cost and complexity introduced by multipoint products. Founded in 1994 and backed by more than 4,500 customers worldwide, Interactive Intelligence is an experienced leader delivering a comprehensive solution set composed of premise based and on demand Communications as a Service (CaaS) offerings, including software, hardware, consulting, support, education and implementation. Interactive Intelligence, Inc. 13 Multi cloud Customer Care

14 The Authors J.R. Simmons is President and Principal Consultant of COMgroup, Inc., and a board member of the Society of Telecommunications Consultants. With 36 years of experience, including 27 years as an independent consultant, he provides a broad range of in depth telecommunications experience. J.R. is recognized as an industry expert with special skills both in contact centers and cloud communications. Reach J.R. at inc.com or by phone at Jason Alley has both a broad and deep background in the area of customer interaction. He served as a product manager and strategist for the first six years of his career with companies such as Nortel, Aspect and Hipbone (a web collaboration company acquired by Kana). Jason spent the next ten years of his career consulting with enterprise customers and suppliers for Vanguard Communications and a company he later founded, SmartContact Consulting. Jason now serves on the Solutions Marketing team at Interactive Intelligence. His unique blend of end user and supplier experience equips him with a fresh, comprehensive perspective something he strives to infuse in every project. Jason holds a bachelor s degree in business economics from UCLA. Interactive Intelligence, Inc. 14 Multi cloud Customer Care

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