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Spending up, but what will contact centers buy?

Is there a killer contact center application? Most experts believe it's VoIP, but some contact centers don't see the business case for it -- yet.

Spending on contact center technology has been stagnant for the past three years, to the point where revenue growth has been restrained by out-of-touch hardware and applications.

The time for a technology refresh, however, may be at hand.

While contact centers may not be in for a spending spree of Y2K proportions, enticing new technologies can simultaneously increase productivity and the bottom line.

"It's all coming back to life, people are ready to spend again," said Lori Bocklund, president of Strategic Contact Inc., an independent consulting agency in Beaverton, Ore. "There's a need to get things done. There's a lot of pent-up demand."

Contact centers may soon be opening their wallets to everything from voice over IP (VoIP), to speech recognition and analytics, to performance management technology.

"The mantra of the contact center is to do more with less," said Donna Fluss, principal with DMG Consulting LLC of West Orange, N.J. "The best products are those that improve the bottom line. It's going to be about cost reduction before anything else, but these products have to also increase revenue and improve productivity."

VoIP: Killer app or budget killer?

VoIP is going to be at the top of most wish lists, said Don Van Doren, founder of Vanguard Communications Corp., of Morris Plains, N.J., an independent consulting company that focuses on the contact center.

"It's a hugely important issue, and part of its importance is that all contact centers will have to go there sooner or later," Van Doren said. "As existing gear ages and contact centers start moving to new equipment, it's going to be IP based. All the vendors are focusing R and D on IP architectures. Things are clearly moving that way."

Van Doren said smart companies will take advantage of any impending technology refreshes to bring contact centers in line with recent business objectives. He cautions, however, the initial cost of VoIP is high and a return on that investment may be far out.

"There may not be a business case for it right now for some," Van Doren said. "For others, it's a no-brainer."

Communications Data Services (CDS) of Des Moines, Iowa, an order fulfillment service provider for publishers and direct marketers, is one of those contact centers in no rush for VoIP.

"VoIP's maturity and reliability have not been proven to us," said Marc Francisco, senior product manager for customer service systems. "It would be a significant investment for us to rebuild our network to accommodate VoIP."

Francisco said CDS just opened a new contact center site and considered VoIP before rejecting it, adding that there were no plans to revisit it in the near future.

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"I don't see significant savings to justify transferring our existing contact center to VoIP. We've got a reliable network in place right now, and the costs and T1 charges don't outweigh that right now," Francisco said.

With VoIP, Francisco said, contact centers wouldn't have to share bandwidth between data and voice traffic; no more separate circuits or management systems. He said CDS would need to see larger contact centers use the technology successfully and reliably for him to reconsider.

"The last contact center I visited kept its old systems as a backup because there were so many problems with VoIP," he said.

VoIP, however, may be as close to a killer app as the contact center has right now, especially for multisite centers.

"VoIP is the number one driver. This is the biggest time for change in the last 20 years and the catalysts are VoIP and speech recognition," Bocklund said. "Anecdotally, a lot of clients are seriously considering their need [for VoIP]. You have to take a long-term view."

Analytics is the word

Speech-based, self-service types of contact center applications are also going to attract dollars in the next six to 12 months. These applications use speech recognition to provide customers with voice access to information and transactions.

Van Doren cautions that speech recognition is costly and companies should evaluate what types of customer responses they need before they proceed.

"Spending will likely move slowly and more cautiously here," Bocklund said, adding that speech scientists have to nail the technology, or it may be more of a headache than it's worth.

CDS, however, said it shaved 30 seconds off its average customer call times (they average less than two-and-a-half minutes) with its interactive voice response system rolled out last November. The technology identifies the customer and details the reason for their call before it is routed to an agent.

"We quickly realized quality ROI that justified more enhancements," Francisco said. "Customers haven't seen it as a negative, either."

Speech analytics, on the other hand, may be the utopia of contact center technologies. This capability adds some structure to customer responses and can help companies spot flaws in their marketing messages. Fluss of DMG Consulting said vendors like Nice Systems Ltd. of Israel and Witness Systems Inc. of Roswell, Ga., and others have analytical technology that structures customer response via keyword searches and thematics to spot trends in conversations.

That information is fed to a data warehouse where trends are identified. For example, if there is confusion with a company's marketing message that is generating customer calls, the technology will catch it and enable someone to repair it, ultimately reducing call volume, eliminating ineffective marketing and increasing closure rates on sales, Fluss said.

"With speech analytics, there are only about 25 applications on the market right now," Fluss said. "But all the RFPs [requests for proposals] going to vendors have some kind of analytics element to them. It's extremely compelling -- and new."

Look inward

Contact centers are also looking inwardly at technology that optimizes the performance of agents, departments or overall sites. Bocklund said there is huge potential in performance optimization software that is essentially a scorecard for contact center performance.

"As investments go, it's climbing the list of priorities," Bocklund said. "This kind of reporting results in more revenue and more savings."

Van Doren added that performance optimization goes beyond training and quality monitoring, and contact centers must assure that agents are up to speed with a company's objectives. "The ability to understand what people are doing and present them with information is important going forward," Van Doren said.

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