BEST PRACTICES RESEARCH EMEA Contact Centre Systems Company of the Year Award

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1 2014 EMEA Contact Centre Systems Company of the Year Award

2 Contents Letter of Congratulations... 3 Background and Company Performance... 4 Industry Challenges... 4 Visionary Innovation & Performance and Customer Impact of Interactive Intelligence... 4 Conclusion... 7 Significance of Company of the Year... 8 Understanding Company of the Year... 8 Key Benchmarking Criteria... 9 Best Practice Award Analysis for Interactive Intelligence... 9 Decision Support Scorecard... 9 Visionary Innovation & Performance Customer Impact Decision Support Matrix The Intersection between 360-Degree Research and Best Practices Awards Research Methodology Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices About Frost & Sullivan Copyright... 14

3 Letter of Congratulations Frost & Sullivan has a global team of analysts and consultants continuously researching a wide range of markets across multiple sectors and geographies. As part of this ongoing research, we identify companies that are true industry leaders, delivering best practices in growth, innovation, and leadership. These companies have a keen eye to the future, and drive innovation that meets future needs before they become commonly visible, thereby often being first to market with new solutions. They focus on delivering the best products at optimal prices to maximize customer value and customer experience, and by doing so are growth leaders in their respective industries. Identifying such companies involves extensive primary and secondary research across the entire value chain of specific products and/or markets. Against the backdrop of this research, we are pleased to recognize Interactive Intelligence as the Company of the Year in EMEA for Contact Centre Systems. To deliver excellence worthy of the Company of the Year recognition is never an easy task, but it is one made even more difficult due to today s competitive intensity, customer volatility, and economic uncertainty not to mention the difficulty of innovating in an environment of escalating challenges to intellectual property. Within this context, your receipt of this award signifies an even greater accomplishment. Moreover, we recognize that your receipt of this award is the result of many individuals (employees, customers, and investors) making daily choices to believe in the organization and contribute in a meaningful way to its future. We believe that such an achievement should be acknowledged and celebrated. We hope you use this award as a platform for strengthening your brand, building awareness among new and existing customers, and inspiring your team to even greater levels of performance. Once again, we congratulate you on your achievements and wish you great success in the future. We are here to support you on any future endeavours. Sincerely yours, David Frigstad Chairman Frost & Sullivan

4 Background and Company Performance Industry Challenges The global economic downturn and the rise of the cloud have had a direct impact on contact centre system sales across Europe. Contact centre cloud solutions present an attractive alternative to purchasing on-premise systems, enabling customers to use OPEX rather than CapEx funds, scaling economically as needed. The past five years have seen seasoned cloud providers providing feature-rich solutions that compete with legacy system offerings. At the same time, the draw of the cloud has opened the door to new market entrants as well. Contact centre system providers have been challenged with continually adding value to their core systems in order to stem installed base erosion and attract new buyers. At the same time, contact centre system providers have had to find answers for those customers with a growing interest in contact centre deployment options. The answer for many is to offer their own cloud alternatives, which puts further pressure on system sales. Indeed, some on-premise systems providers also have had to counter cloud provider claims that cloud-based solutions are more flexible and offer faster access to solutions that future-proof a customer s investment. Visionary Innovation & Performance and Customer Impact of Interactive Intelligence Criterion 1: Addressing Unmet Needs Interactive Intelligence has one of the broadest portfolios in the industry with an easy formula for adding functionality as a client company s needs change. Interactive Intelligence provides an all-in-one, purpose-built platform that spans IP PBX and unified communications to the contact centre, enabling customers to access the full gamut of business communications services without undo cost and complexity. The company also has a pure business communications focus coupled with a vertical market one which helps address the specific needs of key industry vertical markets businesses. For instance, its Interaction Decisions product answers the unmet needs of doing advanced forecasting and planning for contact centre managers across all industry vertical markets. This product saves users a vast amount of time, with greater accuracy than competing products, freeing up managers to focus on other areas of the business. The initial introduction of the company s real-time speech analytics capabilities focused on ease of use, and enabled contact centre personnel to gain insights in real-time without the cost and complexity of most competing products. Similarly, Interactive Intelligence has introduced core assets to specific industry markets. For instance, when it comes to the Accounts Receivables Management/Collections industry vertical, the company introduced Interaction Collector, a packaged solution targeted at the specific needs of that industry. These applications and others have contributed to the double-digit growth that the company has enjoyed eight of the last ten years.

5 Criterion 2: Customer Purchase Experience One of the keys to Interactive Intelligence s success in EMEA is its tailored, customercentric approach to the sales process. The company has focused on ensuring it has the right in-country talent to support the pre- and post sales process, staffing its teams with people who understand the languages, culture, and needs of the individual regions they are assigned to. The company also brings a consultative approach into the sales process. It has strong technical sales teams as well as sales engineering that understand both the technical and business needs of customers. This means that new customers going through the sales process have a team that understands the entire picture, and are able to translate business needs into technology, making sure that what is being proposed is specific to the customer s business environment. The company also has forged relationships with consultants well versed in the country-specific needs of their clients, who provide expertise and an independent voice for the customer during the sales process. In addition, the design of Interactive Intelligence s CIC platform makes the sales process easier as well. Its open, all-in-one, modular approach allows easy addition of applications and features pre and post sale. Criterion 3: Implementation Best Practices The smooth handoff between pre and post sales is a strong suit of the company, particularly as all teams involved in the sales process are trained on the business and technical requirements of the products. In addition, the open and modular design of CIC also aids in implementation. The platform is more simplistic than many legacy contact centre systems vendor s platforms; it enables Interactive Intelligence applications to be easily added during or after implementation, and its open APIs allow customers to easily add pre-packaged or custom applications. The company backs this design with a strong regional team of technical experts to help deploy solutions, and professional services teams that are adept at communicating requirements with customers and developing solutions and designs around those requirements. The company also puts significant resources into an expanded presence in each country, ensuring it has the right expertise and amount of resources to support smooth product implementations. Besides expansion through continual employee recruitment, it targets expansion through acquisition in different countries to attain in-country expertise. For instance, it acquired a German value-added reseller (VAR), Agori Communications, in 2011, and Brightware, a Dutch VAR, in 2012.

6 Criterion 4: Price/Performance Value Interactive Intelligence gets high marks for providing cost-effective value to its customers. Its integrated, all-in-one, software based, Customer Interaction Center (CIC) platform enables customers to add features without costly rip-and-replace upgrades. It helps reduce costs through simplified administration, customization, and reporting. It also adds value by enabling customers to easily integrate contact centre functionality with broader business applications such as unified communications and business process automation. And the company has a solid track record of proving lower total cost of ownership (TCO) than its competitors, and a rapid return on investment (ROI). In addition, since the EMEA launch of its cloud-based Communications-as-a-Service platform (CaaS), it is one of the few companies that can offer cloud and premise-based deployments at competitive price points, while enabling customers to move back and forth between the two. The 2014 announcement of an additional cloud option, PureCloud, will only enhance options for customers when PureCloud launches in UK, Germany and other European countries during Criterion 5: Customer Ownership Experience From an organizational perspective, Interactive Intelligence provides easy accessibility to product and solution experts and executive management. The company also invests heavily in bringing together customers and partners at its annual 3-day global customer and partner Interactions conference. Interactive Intelligence also is a leader when it comes to investing in market expertise within critical industry vertical markets, such as finance, healthcare, and insurance. The company staffs positions with employees tenured in the industry vertical markets they are responsible for, building or acquiring core software assets to support key industry verticals, and training sales and support staff to support them as well. The products also provide customers with flexibility. For example, applications can be added by licensing and turning capabilities on with a software key. But customers also enjoy having the option of seamlessly deploying part of their operations in the cloud, without having to start over, or using the cloud for periodic or unplanned overflow. Criterion 6: Brand Equity CEO Don Brown likes to say that, We help our customers turn customer service into a competitive weapon. To further this philosophy, the company invests in pre-sales, sales, and marketing personnel in individual countries throughout EMEA, educating customers and prospects as to the company s capabilities. That focus on EMEA is paying-off in terms of brand equity. However, because a higher percentage of sales occur through partners in EMEA, the company also has established a strong combination of direct and indirect channel partnerships that include well-respected companies such as NTT Telecom in the UK, KPN in Benelux, and Telefonica in Spain.

7 One of the key ingredients of this success is in understanding the needs of each market it enters, and supplying the necessary resources to support excellence. In addition to incountry partners, Interactive Intelligence also has 220+ of its own employees responsible for marketing, sales, and support of the company s products working at offices in most major capital cities across EMEA. Conclusion Interactive Intelligence, a very strong contact centre solutions supplier in North America, has clearly captured the attention of buyers in EMEA. With its all-in-one suite of scalable, rich contact centre capabilities, coupled with flexible deployment options and excellent customer support, Interactive Intelligence has achieved 42.9% YoY growth in market share for contact centre systems in EMEA. With its strong overall performance, Frost & Sullivan is pleased to present Interactive Intelligence with the EMEA Contact Centre Systems 2014 Company of the Year award.

8 Significance of Company of the Year To win the Company of the Year award (i.e., to be recognized as a leader not only in your industry, but among your non-industry peers as well) requires a company to demonstrate excellence in growth, innovation, and leadership. This kind of excellence typically translates into superior performance in three key areas: demand generation, brand development, and competitive positioning. These areas serve as the foundation of a company s future success and prepare it to deliver on the two criteria that define the Company of the Year Award (Visionary Innovation & Performance and Customer Impact). This concept is explored further below. Understanding Company of the Year As discussed above, driving demand, brand strength, and competitive differentiation all play a critical role in delivering unique value to customers. This three-fold focus, however, must ideally be complemented by an equally rigorous focus on visionary innovation to enhance customer value and impact.

9 Key Benchmarking Criteria For the Company of the Year Award, we evaluated two key factors Visionary Innovation & Performance and Customer Impact according to the criteria identified below. Visionary Innovation & Performance Criterion 1: Addressing Unmet Needs Criterion 2: Visionary Scenarios Through Mega Trends Criterion 3: Implementation Best Practices Criterion 4: Blue Ocean Strategy Criterion 5: Financial Performance Customer Impact Criterion 1: Price/Performance Value Criterion 2: Customer Purchase Experience Criterion 3: Customer Ownership Experience Criterion 4: Customer Service Experience Criterion 5: Brand Equity Best Practice Award Analysis for Interactive Intelligence Decision Support Scorecard To support its evaluation of best practices across multiple business performance categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool allows our research and consulting teams to objectively analyze performance, according to the key benchmarking criteria listed in the previous section, and to assign ratings on that basis. The tool follows a 10-point scale that allows for nuances in performance evaluation; ratings guidelines are illustrated below. RATINGS GUIDELINES The Decision Support Scorecard is organized by Visionary Innovation & Performance and Customer Impact (i.e., the overarching categories for all 10 benchmarking criteria; the definitions for each criteria are provided beneath the scorecard). The research team confirms the veracity of this weighted scorecard through sensitivity analysis, which confirms that small changes to the ratings for a specific criterion do not lead to a significant change in the overall relative rankings of the companies.

10 The results of this analysis are shown below. To remain unbiased and to protect the interests of all organizations reviewed, we have chosen to refer to the other key players as Competitor 2 and Competitor 3. DECISION SUPPORT SCORECARD FOR COMPANY OF THE YEAR AWARD (ILLUSTRATIVE) Measurement of 1 10 (1 = poor; 10 = excellent) Company of the Year Visionary Innovation & Performance Customer Impact Average Rating Interactive Intelligence Competitor Competitor Visionary Innovation & Performance Criterion 1: Addressing Unmet Needs Requirement: Implementing a robust process to continuously unearth customers unmet or under-served needs, and creating the products or solutions to address them effectively Criterion 2: Visionary Scenarios through Mega Trends Requirement: Incorporating long-range, macro-level scenarios into the innovation strategy, thereby enabling first to market growth opportunities solutions Criterion 4: Implementation Best Practices Requirement: Best-in-class strategy implementation characterized by processes, tools, or activities that generate a consistent and repeatable level of success. Criterion 3: Blue Ocean Strategy Requirement: Strategic focus in creating a leadership position in a potentially uncontested market space, manifested by stiff barriers to entry for competitors Criterion 5: Financial Performance Requirement: Strong overall business performance in terms of revenues, revenue growth, operating margin and other key financial metrics Customer Impact Criterion 1: Price/Performance Value Requirement: Products or services offer the best value for the price, compared to similar offerings in the market Criterion 2: Customer Purchase Experience Requirement: Customers feel like they are buying the most optimal solution that addresses both their unique needs and their unique constraints

11 Customer Impact BEST PRACTICES RESEARCH Criterion 3: Customer Ownership Experience Requirement: Customers are proud to own the company s product or service, and have a positive experience throughout the life of the product or service Criterion 4: Customer Service Experience Requirement: Customer service is accessible, fast, stress-free, and of high quality Criterion 5: Brand Equity Requirement: Customers have a positive view of the brand and exhibit high brand loyalty Decision Support Matrix Once all companies have been evaluated according to the Decision Support Scorecard, analysts can then position the candidates on the matrix shown below, enabling them to visualize which companies are truly breakthrough and which ones are not yet operating at best-in-class levels. DECISION SUPPORT MATRIX FOR COMPANY OF THE YEAR AWARD (ILLUSTRATIVE) High Interactive Intelligence Competitor 2 Competitor 3 Low Low Visionary Innovation & Performance High

12 The Intersection between 360-Degree Research and Best Practices Awards Research Methodology Frost & Sullivan s 360-degree research methodology represents the analytical rigor of our research process. It offers a 360-degree-view of industry challenges, trends, and issues by integrating all 7 of Frost & Sullivan's research methodologies. Too often, companies make important growth decisions based on a narrow understanding of their environment, leading to errors of both omission and commission. Successful growth strategies are founded on a thorough understanding of market, technical, economic, financial, customer, best practices, and demographic analyses. The integration of these research disciplines into the 360-degree research methodology provides an evaluation platform for benchmarking industry players and for identifying those performing at bestin-class 360-DEGREE RESEARCH: SEEING ORDER IN THE CHAOS levels.

13 Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices Our awards team follows a 10-step process (illustrated below) to evaluate award candidates and assess their fit with our best practice criteria. The reputation and integrity of our awards process are based on close adherence to this process. STEP OBJECTIVE KEY ACTIVITIES OUTPUT 1 Monitor, target, and screen Identify award recipient candidates from around the globe Conduct in-depth industry research Identify emerging sectors Scan multiple geographies Pipeline of candidates who potentially meet all bestpractice criteria 2 Perform 360-degree research Perform comprehensive, 360-degree research on all candidates in the pipeline Interview thought leaders and industry practitioners Assess candidates fit with best-practice criteria Rank all candidates Matrix positioning all candidates performance relative to one another 3 Invite thought leadership in best practices Perform in-depth examination of all candidates Confirm best-practice criteria Examine eligibility of all candidates Identify any information gaps Detailed profiles of all ranked candidates 4 Initiate research director review Conduct an unbiased evaluation of all candidate profiles Brainstorm ranking options Invite multiple perspectives on candidates performance Update candidate profiles Final prioritization of all eligible candidates and companion best-practice positioning paper 5 Assemble panel of industry experts Present findings to an expert panel of industry thought leaders Share findings Strengthen cases for candidate eligibility Prioritize candidates Refined list of prioritized award candidates 6 Conduct global industry review Build consensus on award candidates eligibility Hold global team meeting to review all candidates Pressure-test fit with criteria Confirm inclusion of all eligible candidates Final list of eligible award candidates, representing success stories worldwide 7 Perform quality check Develop official award consideration materials Perform final performance benchmarking activities Write nominations Perform quality review High-quality, accurate, and creative presentation of nominees successes 8 Reconnect with panel of industry experts Finalize the selection of the best-practice award recipient Review analysis with panel Build consensus Select winner Decision on which company performs best against all best-practice criteria 9 Communicate recognition Inform award recipient of award recognition Present award to the CEO Inspire the organization for continued success Celebrate the recipient s performance Announcement of award and plan for how recipient can use the award to enhance the brand 10 Take strategic action Share award news with stakeholders and customers Coordinate media outreach Design a marketing plan Assess award s role in future strategic planning Widespread awareness of recipient s award status among investors, media personnel, and employees

14 About Frost & Sullivan Frost & Sullivan, the Growth Partnership Company, enables clients to accelerate growth and achieve best in class positions in growth, innovation and leadership. The company's Growth Partnership Service provides the CEO and the CEO's Growth Team with disciplined research and best practice models to drive the generation, evaluation and implementation of powerful growth strategies. Frost & Sullivan leverages almost 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from 31 offices on six continents. To join our Growth Partnership, please visit Copyright This research is owned by Frost & Sullivan. No part of this research may be disclosed to non-employees of the award recipient without formal written permission from Frost & Sullivan. Furthermore, no part may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording or otherwise, without the written permission of Frost & Sullivan. For information regarding permission, call your Frost & Sullivan account executive or write to: Best Practices Recognition Group Frost & Sullivan 7550 IH 10 West, Suite 400 San Antonio, TX USA

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