IP Contact Centers Approach Maturity

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1 Decision Framework, S. Blood, T. Wright Research Note 11 December 2002 IP Contact Centers Approach Maturity Enterprises should evaluate IP-based contact-center applications and next-generation architecture solutions. The financial rewards for early adopters may be worth the risk in some customer service environments. Core Topic Enterprise Networking: Voice Applications Key Issue How will convergence influence voice and call processing applications through the five-year planning period? Surveys of end-user requirements across Europe show that certain system considerations are paramount in the selection of call and contact-center technology. Figure 1 System Considerations Affecting Choice Existing Relationship Running Costs Price Ease of Management Ease of Integration Overall Performance Scalability Importance Rating Source: Gartner Research Scalability is regarded by enterprises as the most-important consideration. In Gartner's experience, most call centers grow by between 10 percent and 50 percent per year for the first few years after initial implementation. The call-center industry is still populated by private branch exchange (PBX) infrastructure vendors such as Avaya, Nortel Gartner Entire contents 2002 Gartner, Inc. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice.

2 Networks, Alcatel and Ericsson. These vendors have many years experience in developing scalable platforms based on circuitswitched, time division multiplexing (TDM) architectures. Coupled with purpose-designed, automatic call distributor (ACD) technology from vendors such as Aspect Communications and Rockwell First Point Contact, enterprises have scaled call-center solutions into many thousands of agents. Note 1 Vendors and Products Avaya MultiVantage IP Contact Center Cisco Systems IP Contact Center CosmoCom CosmoCall Universe Aspect Communications IP Contact Suite Genesys Labs IP Contact Center Nortel Networks IP Contact Center Solution Siemens HiPath 5000 ProCenter Alcatel OmniTouch IP Contact Center IP-based contact centers are specialist communications software applications that use TCP/IP protocols and packet-switching technology, to support telephony and traditional Internet communications channels over a common LAN or WAN infrastructure (see Note 1). They represent new opportunities for established and new vendors to offer affordable, multichannel solutions for all sizes and architectures of contact center. Although vendors will claim their IP-based solutions are scalable, enterprises should actively seek references that have been operational as a contact center for at least six months. In Gartner's experience, there are few IP-based contact-center locations with more than 100 seats and few IP-networked solutions with more than a few hundred seats. IP contact-center applications are currently targeted at the lower end of the market. Even if the size and scalability of the solution is not critical to the initial choice of solution, IT operations should still evaluate the testing methodology and tools used to carry out benchmarking to support vendor claims of scalability. New technology cannot be deployed without customers taking risks. Early adopters should expect implementation and management costs to increase during a trial and should phase in migration. This should be included in the project finances. If vendors are keen to use customer locations as references, customers should include the value of marketing during pricing negotiations. IP-based contact centers can be optimized only if a converged network infrastructure is offered throughout the organization to the desktop. Enterprises may have to run new cabling in parallel to the existing voice cabling, to ensure a recovery path to legacy technology should the IP solution fail. Managers will need to maintain changes to network routing plans and ACD scripts to ensure calls are balanced between legacy and IP platforms. Enterprises may need to consider outsourcing contracts to handle any overflow resulting from reduced service levels during the migration. Overall Performance is critical to the call center when supporting real-time, customer-facing business processes. Downtime caused by technology failure not only affects the 11 December

3 service level to the customer but also represents wasted staff resources and limits return on investment. If call-center applications are slow, or fail, confidence in new technology will suffer. This is especially true for high-volume transaction centers where cost control is paramount and productivity variances are measured in seconds. Today, most call-center management user interfaces have been "ported" to server-based applications supported by TCP/IP, with proven results. However, technology must now also manage the throughput of high volumes of telephone calls, which have traditionally been carried out on proven, circuit-switched architectures. References using legacy call-center technology will show greater evidence of scalability than the newer, IP-based solutions, simply because the legacy products and markets are more mature. When evaluating the implementation of a multichannel contactcenter operation involving a variety of technology forms, early adopters should be careful to carry out a risk assessment prior to implementation. Although IP contact-center technology will scale over time, it will be at least five years before it replaces traditional, circuit-switched architecture in all market segments (0.8 probability). Ease of Integration is a key factor when enterprises evaluate IP-based technology, because the technology must be integrated with enterprise applications and the corporate network infrastructure. To link proprietary call-center infrastructure and enterprise application software at a computer-telephony interface (CTI) level, vendors have created adapters commercially available software applications that enable faster implementation of call control functions and management information at the agents desktop. It will include features such as call answer, hold, transfer and release into the agent's customer relationship management (CRM) application. Most adapters include the ability to present customer information based on caller identification through the network or an interactive voice response application. Adapters for IP-based architecture are faster and more cost-effective to produce because of the adherence to Internet-based standards (see "Internet Standards Challenge Contact Center Architectures," T ). Most legacy call-center vendors have worked with the leading CRM suite vendors to create adapters. BT has developed an integrated communications suite called Contact Central, comprising a CRM platform from Siebel Systems software and IP-based contact-center architecture from CosmoCom (see "BT 11 December

4 Launches Multichannel CRM for Small and Midsize Businesses," FT ). IP-based contact-center architecture also offers easier integration with corporate network infrastructure, enabling enterprises to extend customer service operations to remote branch offices or home-worker locations. Enterprises don't have to implement an IP-based contact center to take advantage of network convergence because most traditional vendors offer IP extension capabilities. However, IP-based architecture enables enterprises to manage the underlying infrastructure supporting a networked contact-center operation as a single application. This is more difficult today because of the limitations of hardwarebased TDM technology and because network access and transmission costs are higher. Gartner expects that all contact centers will eventually migrate to an IP architecture. However, although distributed operations will benefit the most in the end, moving them to IP technology now exposes enterprises to the most risk. Ease of Management is a key requirement for all call-center market segments. In large call centers, supervisors and managers need to optimize the efficiency of the operation in real time. This requires configuration tools and management information systems that enable changes to be made rapidly. Vendors operating at the high end have developed a wider range of complex tools to satisfy this market. At the lower end, the tools need to be less-sophisticated and easier-to-use. Small-and-midsize call centers do not have full-time administration staff, so changes are made infrequently. Most IPbased contact-center applications have been developed for the high-end market by vendors with greater experience in this segment. Consequently, enterprises deploying low-end, IP-based contact centers will find some solutions complex to operate and manage. Gartner expects that these management requirements will be addressed by systems integrators and value-added resellers, which will develop integrated administration and reporting functions within enterprise desktop applications. IP-based contact-center architecture is more powerful when managing multisite environments. Gartner estimates that networking capabilities introduce resource efficiency savings of at least 15 percent, which is a compelling proposition. Today, enterprises have to make large investments in CTI suites to manage multiple call-center locations as a whole. This weakness in traditional architecture is overcome when using IP-based contact-center technology, because all resources can be managed as a single entity, regardless of physical location. 11 December

5 Price is less of an issue because technology represents, on average, only 10 percent of the total ongoing costs of running the call center. However, at the lower end of the market, traditional call-center technology has been prohibitively expensive because vendors have not been able to scale down proprietary architecture. A price/performance gap existed, which TDM architecture could not address. Standards-based hardware and software is removing this obstacle and enables vendors to move to a pricing model based on software seat licensing, irrespective of size of contact center. This means that IP contact-center technology will be acceptable to the smaller operation either corporate departments or small-to-midsize businesses. The low end (that is, centers with fewer than 20 agents) is where Gartner expects to see the greatest growth through 2006 (0.8 probability; see "Call Center Market Trends: Western Europe, (Executive Summary)," TELC-WW-EX-0474). Running Costs are also less-important because investment in technology yields improvement in agent performance and efficiency, which has a greater impact on the overall total cost of ownership of the call center. This applies to large and small call centers alike. However, using a single management system to implement moves and changes in system configuration within IP networked solutions will make a significant contribution to overall savings in operational costs. Early adopters of software should remember that applications are more expensive to manage in the early deployment phases as vendors find and eliminate software bugs and rationalize the code. IP contact-center applications are no exception. Developers may need to issue weekly "bug fix" software releases until the software has stabilized. Enterprises with 24-hour operations will find software release management difficult to accommodate. Existing Relationships are more important in a larger call center, where investment in technology runs to millions of dollars and disruption to normal working practices through changing technology costs too much. Gartner finds that enterprises in Western Europe are open to the idea of replacing legacy technology with IP-based solutions. This would favor new entrants. There is no particular brand loyalty in this key area and, from a technology perspective, emerging Internet standards for both telephony and contact-center applications mean that enterprises are no longer locked into the incumbent PBX vendor for contact center applications. Enterprises should evaluate vendors and service providers on their ability to understand the 11 December

6 business process, and whether they supply technology that maximizes the return on investment. Acronym Key ACD Automatic call distributor CRM Customer relationship management CTI Computer-telephony interface PBX Private branch exchange TCP/IP Transmission Control Protocol/Internet Protocol TDM Time division multiplexing Bottom Line: The IP-based contact center is not yet fully mature and there are too few references for customer service locations with more than 200 seats. Enterprises with operations fewer than 200 seats should evaluate IP-based technologies alongside traditional architecture in their next request for proposal. Enterprises with low-volume, small-scale, distributed contactcenter operations should evaluate IP-based contact-center technologies as a replacement for existing technology. In all scenarios, adoption of IP-based contact-center applications is only possible if the network infrastructure is capable of supporting voice over IP. Although distributed environments will benefit the most, some enterprises may have to concede that upgrading to IP-based contact centers is only cost-effective as part of a network infrastructure program. 11 December

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