Authored by Jon Arnold from J Arnold & Associates
Anyone following the contact center space knows how important customer experience (CX) has become, but also how difficult it can be to do it well. Most contact centers recognize that some degree of modernization is needed, but this isn’t a simple matter of deploying leading-edge technology and flipping a switch. New technology doesn’t exist in a vacuum, and contact center infrastructure is typically a complex mix of elements and custom integrations.
Contact center systems can be Jenga-like in construction, where pulling out pieces to accommodate newer ones may or may not lead to collapse, so modernization must be carefully considered. Before doing that, however, the drivers for modernization must first be understood, as this will dictate what changes are needed. Making those changes will have implications for what’s already there, so there’s more involved than just looking at what’s on offer from the vendors.
The starting point really needs to be the “why” for modernization. Most contact centers have been using legacy-based systems for a long time, mainly because their operational model for providing customer service hasn’t changed much. The status quo is largely defined by being reactive to inbound inquiries, and engaging with customers primarily over the phone. This model works very well – until it doesn’t – and that’s the reality all – not most – contact centers are struggling with.
When the fundamentals of that model change, operations must change as well, but most contact centers have lagged, hence the rush now for modernization. Today’s model is built around more extensive and more meaningful customer engagement, and there’s no going back to the status quo. Inbound inquiries still constitute most instances of customer engagement, but with today’s technology, there’s a growing need for outbound communication as well, along with proactive communication that goes beyond just resolving inquiries.
Equally important is the shift to multichannel communication. Telephony will always be important – nothing beats the directness of voice – but it’s now just one of several channels that customers use, expect and even prefer. Not only that, but many of the newer channels are digital, something that legacy-based systems were never built to support.
"...The conventional notion of “customer service” is still valid, but it’s really now a subset of CX..."
These are just some of the factors that have given rise to the CX concept, which has become a strategic imperative for so many businesses. The conventional notion of “customer service” is still valid, but it’s really now a subset of CX, which reflects a more holistic view for how customers engage with your organization, as well as how the broader market engages with your brand. Customers are still at the heart of CX, but those same capabilities for engagement also apply to potential customers, who will hopefully become new customers after having a good experience with you.
When businesses shift emphasis from customer service to CX, it should be clear that the status quo for operating the contact center cannot hold. A new model is needed, and that’s a key trigger for contact center leaders to modernize. Figure 1 below provides some metrics to support just how important CX has become.
CX isn’t the only driver for contact center modernization, but being top-down, it tends to take priority. Brand reputation matters a lot to management teams – especially public companies – and CX goes beyond what agents do to solve problems for customers in the moment. Those interactions will always be core to any contact center, but it’s the impact of those interactions after the fact that management really cares about. Good CX drives vanity metrics like CSAT and NPS, but also business-level metrics like sales, margins, market share, wallet share, etc.
Any and all of these factors make the case for modernization, so the “why” should be clear for contact center leaders. As noted, taking those steps to modernization is not a straightforward, linear process like changing a light bulb. New technology will need to be adopted – that’s a given – but new thinking will be needed as well. In this regard, a modernization effort is a great opportunity to re-imagine the contact center, as well as to re-cast operations in the broader light of CX rather than just retool everyday operations.
Aspirations to modernize can really energize contact center leaders, but more often than not they will face practical realities that need to be managed. Two of these are highlighted below, and to varying degrees, these are near-universal issues facing most contact centers.
The main takeaway for Figure 1 is that on-premise remains the dominant deployment model for U.S. contact centers. As a caveat, the definitions for these options can be fluid, and it’s even fair to say that survey respondents aren’t themselves totally sure. That aside, it’s well-established that a major portion of the installed base remains on-premise, and only a small portion is truly cloud-only. Cloud migration can be a lengthy process, and the on-premise segment will include hybrid deployments with a mix of both models.
This is an important factor, since modernization requires cloud migration, even if just to some degree. Contact centers can modernize while remaining fully on-premise, but it’s harder to do, and isn’t a good long-term plan. Most vendors have gone all-in with cloud, and those supporting on-premise deployments are doing so with an eye to cloud wherever possible. This makes for a complex market dynamic, but for those who want to fully support the CX imperative, some degree of cloud migration has to be in the plans.
Figure 2 spells out a different, but equally important reality for developing a modernization plan. With roughly two out of three inquiries being telephony-based, contact center investments will be heavily skewed to this channel. The numbers don’t lie, but contact center leaders can’t anchor their thinking to telephony if they’re going to modernize on the basis of improving CX.
"With roughly two out of three inquiries being telephony-based, contact center investments will be heavily skewed to this channel."
Telephony will remain core for customer engagement, but CX is very much about digital engagement, and that means using other channels as well, namely webchat, mobile messaging, video, and a host of social media platforms. Not only will these channels likely be the preferred modes for customer engagement, but effective modernization will mean being able to support seamless integration across these channels, often during the same session.
"Telephony will remain core for customer engagement..."
Being willing and able can be two different things, and for many contact centers that will be the case here. When CX becomes a driver for modernization, most contact center leaders will be more than willing. They are well aware of the constraints posed by legacy technology and premise-based systems, and may have already been charting their own course for modernization.
While it’s possible to do some modernizing within this framework, the CX impact will be more incremental than transformational, and for those who really want to be able, a more future-forward response will be needed. A key element of that response will be recognizing the holdbacks to modernizing – namely being premise-based and telephony-centric – and addressing them in ways that drive CX rather than simply addressing the operational needs of the contact center.
As Principal of J Arnold & Associates, Jon is an independent research analyst providing thought leadership and go-to-market counsel with a focus on the business-level impact of disruptive communications technologies.
