2012 2012 North American Hosted WFM Product Differentiation Excellence Award 2012 Frost & Sullivan 1 We Accelerate Growth
Product Differentiation Excellence Award Hosted WFM North America, 2012 Frost & Sullivan s Global Research Platform Frost & Sullivan has over fifty years of experience as a global research organization. Today, its 1,800 analysts and consultants monitor more than 300 industries and 250,000 companies. The company s research philosophy originates with the CEO s 360-Degree Perspective, which serves as the foundation of its TEAM Research methodology. This unique approach enables us to determine how best-in-class companies worldwide manage growth, innovation, and leadership. Based on the findings of this Best Practices research, Frost & Sullivan is proud to present the 2012 North American Product Differentiation Excellence Award in Hosted WFM to ac² Solutions. Significance of the Product Differentiation Excellence Award Key Industry Rarely have customer contact organizations been more challenged in ensuring service level adherence as they are today. Consider the following key factors: More valuable and demanding customers. A slow growth economy has made existing customers more valuable than in the past as there are fewer fresh prospects to replace them. Customers know this and they expect companies to be available when they want them. Moreover, customers ability to impact organizations brand, reputation, and sales has increased markedly via social media. The mobile shift. More customer interactions are moving to mobile, including multichannel smartphones. Customers no longer wait until they arrive home to conduct personal business. Multi-tasking customers today tend to be more impatient when using these devices as they are on pay-perminute plans. At the same time, strict laws limit how companies go about contacting customers on wireless devices. Self-service impacts. Most customers now begin their interactions via web self-service. Frost & Sullivan s research shows that this channel has the highest level of customer satisfaction. In addition, if customers cannot accomplish their tasks in self-service, they will want them resolved quicker and expertly by live agents, with minimal or no escalations or repeat calls. Multichannel proliferation. Customers are now using multiple channels to connect with companies. Chat, both text and now video+voice, SMS/text, and social media, are supplementing and sometimes even supplanting live agent voice. The next generation favors text-based, including speech-totext, over voice channels. 2012 Frost & Sullivan 2 We Accelerate Growth
Increased agent skills. Agents must have superior comprehension, customer service, sales, writing, and soon, video skills. They may need product or service expertise as well. In addition, growing Hispanic and Asian populations, coupled with increased buying power, requires more agents who can communicate effectively in these languages. More virtual experts. Companies are beginning to see the productivity benefits of having experts who serve customers in person, such as field reps and mortgage specialists, also be available via contact center channels. Individualized access on customers terms. Customers are seeking a more personalized experience with companies. They want the option of deciding when and how to be contacted by live agents. They also want to be able to communicate with the same agents that they had interacted with previously. Cost control pressures. Companies are optimizing their existing resources. Labor represents approximately 70% of contact center operating expenses, not including facility and real estate costs. Accommodating employees requires more investments in technology. More complex work scheduling environment. The contact center work force has expanded to include home-based agents. Family and medical leave legislation, military service, and volunteer work impact employee availability. The need to reduce agent churn has forced managers to be more flexible with scheduling, including enabling employees to select their hours. Meanwhile, Workforce Management (WFM) solutions have been a prime tool to ensure service levels through enabling staff forecasting and scheduling. Although WFM solutions are more effective and versatile compared to spreadsheets, forecasting, staffing, scheduling, strategic planning and performance management models and methodologies built into these solutions can severely constrain the effectiveness and accuracy of a WFM team, and result in waste and poor customer service. Typically, WFM tools utilized weighted moving averages for forecasting and Erlang C or simulations for staffing and scheduling. Yet these outdated methods are no longer accurate and effective enough in today s complex and demanding customer contact environment. Indeed, there are reports of customer dissatisfaction. Some firms therefore do not use their system s forecasting functionality; instead, they manually edit their schedules. Erlang C assumes zero abandonment for staffing level calculations; yet that is not realistic in today s contact centers. And customer contact organizations risk expensive overstaffing and working with inaccurate service level, abandonment and occupancy forecasts. Meantime, WFM software allows schedules to be developed one at a time using crude heuristics resulting in non-optimal schedules with excessive agent shortages, overages and waste. Managers often improve their WFM systems' schedules manually, which adds to 2012 Frost & Sullivan 3 We Accelerate Growth
managers time. Understandably, companies are concerned about the efficiency of their agent schedules, waste, and the amount of budget and time these processes require. WFM solutions also have been delivered via on-premise licenses, as opposed to cloud/hosted Software-as-a-Service (SaaS). They are also being bundled into Workforce Optimization (WFO) suites. While these methods provide customers with more control and cost savings, respectively, they have downsides. Consider these factors: Because of limited flexibility to meet changing market needs, organizations risk buying more licenses than needed, resulting in resources wasted on shelfware. WFO suites may have less-than-optimal WFM solutions. Key Benchmarking Criteria for the Product Differentiation Excellence Award For the Product Differentiation Excellence Award, the following criteria were used to benchmark ac2 Solution s performance against key competitors: Unique Features/Functionality Quality/Complexity Customization Matched to Target Markets Needs Brand Perception Decision Support Matrix and Measurement Criteria To support its evaluation of best practices across multiple business performance categories, Frost & Sullivan employs a customized Decision Support Matrix (DSM). The DSM is an analytical tool that compares companies performance relative to each other with an integration of quantitative and qualitative metrics. The DSM features criteria unique to each Award category and ranks importance by assigning weights to each criterion. The relative weighting reflects current market conditions and illustrates the associated importance of each criterion according to Frost & Sullivan. Fundamentally, each DSM is distinct for each market and Award category. The DSM allows our research and consulting teams to objectively analyze each company's performance on each criterion relative to its top competitors and assign performance ratings on that basis. The DSM follows a 10-point scale that allows for nuances in performance evaluation; ratings guidelines are shown in Chart 1. Chart 1: Performance-Based Ratings for Decision Support Matrix 2012 Frost & Sullivan 4 We Accelerate Growth
Unique Features/Functionality Quality/Complexity Customization Matched to Target Markets Needs Brand Perception Weighted Rating BEST PRACTICES RESEARCH This exercise encompasses all criteria, leading to a weighted average ranking of each company. Researchers can then easily identify the company with the highest ranking. As a final step, the research team confirms the veracity of the model by ensuring 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. Chart 2: Frost & Sullivan s 10-Step Process for Identifying Award Recipients Best Practice Award Analysis for ac² Solutions The Decision Support Matrix, shown in Chart 3, illustrates the relative importance of each criterion for the Product Differentiation Excellence Award and the ratings for each company under evaluation. To remain unbiased while also protecting the interests of the other organizations reviewed, we have chosen to refer to the other key players as Competitor 1 and Competitor 2. Chart 3: Decision Support Matrix for Product Differentiation Excellence Award Measurement of 1 10 (1 = lowest; 10 = highest) Award Criteria Relative Weight (%) 20% 20% 20% 20% 20% 100% ac² Solutions 10 10 8 9 8 9 Competitor 1 8 8 9 9 10 8.8 Competitor 2 8 9 8 8 9 8.4 2012 Frost & Sullivan 5 We Accelerate Growth
Criterion 1: Standout Features/Functionality WFM solutions must have standout features that attract and retain customers. ac² Solutions signature product is the Advanced Workforce Optimization (AWO) portal. AWO offers: Regular time-series and special event forecasting, what if forecasting and scenario analysis, as well as automated forecast accuracy tracking Concurrent optimal scheduling Comprehensive strategic planning using advanced time series forecasting and staffing models Forecasting and scheduling for multiple skills, sites, and channels Agent and supervisor schedule management, including exceptions, shift swapping, overtime, vacation planning, and volunteer time off Schedule assignment also by agent availability, preferences, and bidding Home agent schedule management Real-time adherence and contact traffic tracking, plus dashboards and scorecards Criterion 2: Quality/Complexity WFM software must be built with sophisticated and adaptable technologies to successfully execute its functions, and to allow for future upgrades and new features. In addition, hosted WFM applications have to be reliable and secure. AWO has been written with advanced technology, much of which has been patented. These include: Time series forecasting models such as Box-Jenkins ARIMA and exponential smoothing (10 versions) for accurate forecasts; Artificial intelligence-based best pick module to automate model fitting and selection, forecasting and scheduling; Staffing models to capture customer abandonments in determining the required staffing levels, and forecasting service levels, abandonment rates, average speed of answer (ASA) and agent occupancy accurately; Integer programming optimization models for the concurrent optimal scheduling feature; Sophisticated discrete event simulation for skills-based scheduling to capture ACD routing configurations, agent skills, skill levels, efficiency and preferences. AWO s attributes stem from ac² Solutions background and management. The firm was founded by professionals from Bell Laboratories, IBM Global Services, and Rutgers University. Its president, Dr. Turgut Aykin, and his peers, developed new forecasting and staffing optimization methods that were engineered into AWO. ac² Solutions continues to innovate. It will be coming out with an upgraded forecasting module, and performance optimizer. An integrated skills and routing management with the performance manager is planned for release next fall. 2012 Frost & Sullivan 6 We Accelerate Growth
Finally, the firm delivers AWO securely via the cloud; it has three server locations, one in Denver, Colorado, one in Dallas, Texas and one in Hazlet, N.J. The system has achieved availability/uptime statistics for the past 24 months of 99.97%. The total outage is six hours over the past 24 months. It supports system security, compliance, and standards/certifications, with SSL and one-way hash-encrypted passwords. Criterion 3: Customization Customer contact solutions must fit customers needs rather than the other way around. With hosted applications, a tradeoff exists between the degree to which it can be customized while maintaining economies of scale and flexibility. ac² Solutions has achieved balance by making the AWO available table d hote through the AWO Portal, or a la carte via forecasting, concurrent optimal scheduling, strategic planning, agent workstation, real-time adherence and performance optimization modules. Clients can sign up for any combination, which can work with their existing applications. Software customization is also available. For hosting, ac² Solutions employs multitenant architecture but it also offers dedicated hosting. There are clients that prefer the assurances associated with dedicated hosting, even though it costs more. Criterion 4: Matched to Target Market Needs There must be a close alignment between existing and anticipated marketplace needs and wants and the features, sophistication, and pricing of the solutions aimed at them. Marketplace validation provides the most accurate and objective criterion to judge both the product/service and the supplier. In this spirit, ac² Solutions targets and has achieved success with Fortune 500 companies. Most of its clients have +1,000 agents together with several small to mid-size clients. The firm s clients have had considerable success with ac2 s solutions. For example, Delta Airlines saw a 73% reduction in excess agent time, 100% elimination of agent shortage, and a 12% schedule cost savings. In essence, the market has validated ac² Solutions technology. The privately held firm s revenue grew from expanded existing and new clients. Criterion 5: Brand Perception ac² Solutions has been developing brand awareness through advertising, articles, case studies, media interviews, a very informative web site, analyst briefings, and event participation. It also has a sales program aimed at its target customers. The firm has a unique and strong value proposition built on feature and technology excellence. 2012 Frost & Sullivan 7 We Accelerate Growth
ac² Solutions is, however, up against often better-known competitors (most of which bundle WFM into WFO suites and sell them directly via premise licenses, or indirectly through hosted providers). They include: Larger WFM OEMs. Examples include NICE/IEX, Verint, Aspect, Calabrio, Genesys, and Envision Telephony. Third-party cloud/hosted all-in-one suites vendors. These include: Echopass, HP, incontact, TeleTech, and Verizon. They resell competitors WFM products. OEM-hosted solutions. Most OEM WFM solutions are sold through premise licenses, but there is a small but growing list of them that are or will likely be hosted. In this rank are Aspect and injixo. ac² Solutions has to push back against the convenience of WFO suites and all-in-one platforms, as inferior as they may be in WFM solutions. Like other suppliers, it also has to get past the IT departments to reach senior management. Once inside, its message that organizations can optimize their most valuable resource (i.e. their agents) via an advanced solution that is affordably and flexibly cloud-delivered and has potentially strong receptivity. Well-known customers like Dell, Delta Airlines, and Intuit validates its message. Conclusion ac² Solutions has devised and executed a sophisticated set of WFM solutions that have permitted the company to differentiate itself in the marketplace. Its features and functionality align with the market zeitgeist, more so than other applications that have been built on older, ineffective and less versatile models and methodologies. ac2 s WFM technologies, many of which have been patented by ac² Solutions, enable organizations to handle customers that are more demanding, multichannel growth, and a complex work environment. Rugged and secure hosted delivery makes these tools affordable and scalable without consuming costly and scarce IT resources. ac² Solutions stands out in the hosted WFM market with a truly differentiated product whose time has come. Indeed, the company s validation is the success it achieves for its clients. Based on Frost & Sullivan s independent analysis of the North American Hosted WFM space, ac² Solutions is recognized with the 2012 Product Differentiation Excellence Award. The CEO 360-Degree Perspective TM - Visionary Platform for Growth Strategies The CEO 360-Degree Perspective model provides a clear illustration of the complex business universe in which CEOs and their management teams live today. It represents the foundation of Frost & Sullivan's global research organization and provides the basis on which companies can gain a visionary and strategic understanding of the market. The CEO 360-Degree Perspective is also a must-have requirement for the identification and analysis of best-practice performance by industry leaders. 2012 Frost & Sullivan 8 We Accelerate Growth
The CEO 360-Degree Perspective model enables our clients to gain a comprehensive, action-oriented understanding of market evolution and its implications for their companies growth strategies. As illustrated in Chart 4 below, the following six-step process outlines how our researchers and consultants embed the CEO 360-Degree Perspective into their analyses and recommendations. Chart 4: CEO's 360-Degree Perspective Model Critical Importance of TEAM Research Frost & Sullivan s TEAM 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 seven of Frost & Sullivan's research methodologies. Our experience has shown over the years that companies too often make important growth decisions based on a narrow understanding of their environment, leading to errors of both omission and 2012 Frost & Sullivan 9 We Accelerate Growth
commission. Frost & Sullivan contends that successful growth strategies are founded on a thorough understanding of market, technical, economic, financial, customer, best practices, and demographic analyses. In that vein, the letters T, E, A and M reflect our core technical, economic, applied (financial and best practices) and market analyses. The integration of these research disciplines into the TEAM Research methodology provides an evaluation platform for benchmarking industry players and for creating high-potential growth strategies for our clients. Chart 5: Benchmarking Performance with TEAM Research 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 50 years of experience in partnering with Global 1000 companies, emerging businesses and the investment community from more than 40 offices on six continents. To join our Growth Partnership, please visit http://www.frost.com. 2012 Frost & Sullivan 10 We Accelerate Growth