Cloud-Based Contact Center Study - Connect First

The Cloud is In Your Future
A Worldwide Benchmark Study of Cloud-Based
Contact Center Applications, Channels and Satisfaction
October 2013

Sponsored by:

© DMG Consulting LLC

Table of Contents
I.
II.
III.

Executive Summary................................................................................................. 1
Survey Demographics ............................................................................................. 2
Benchmarking Results and Leadership Profiles ...................................................... 5
i. 2014 Contact Center Initiatives and Investment Priorities .................................... 5
DMG’s Leader Profile: 2014 Contact Center Initiatives and
Investment Priorities............................................................................................. 13
Transitioning to Being a Leader in Identifying Contact Center Initiatives
and Investment Priorities...................................................................................... 14
ii. Contact Center Applications and Channels .......................................................... 15
DMG’s Leader Profile: Contact Center Applications and Channels ...................... 26
Transitioning to a Leading User of Contact Center Applications and Channels ... 29
iii Cloud Solution Drivers, Concerns and Satisfaction............................................... 30
DMG’s Leader Profile: Cloud-Based Contact Center Concerns, Challenges
and Satisfaction..................................................................................................... 41
Transitioning to a Leading and Highly Satisfied User of Cloud-Based
Contact Center Systems and Applications ............................................................ 44
IV.
Social Customer Care ............................................................................................ 44
DMG’s Leader Profile: Social Customer Care........................................................ 48
Transitioning to being a leader in Social Customer Care ...................................... 49
V.
Final Thoughts ....................................................................................................... 50
VI.
Appendix: DMG’s Benchmark Study Research Methodology .............................. 52
About Connect First .......................................................................................................... 53
About DMG Consulting LLC ............................................................................................... 53

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I.

Executive Summary

DMG’s worldwide survey of 169 enterprise, contact center, IT, operations, sales and
marketing executives, managers and leaders in organizations of all sizes, found that
62.4% of respondents were already using cloud-based (also known as hosted) systems
and applications in their contact center or customer service departments. There were
close to 45 types of systems and applications used in contact centers, all of which are
now available from vendors on-premise using the traditional licensing model, or in the
cloud. (A growing number of vendors also provide a managed service offering, but that
is a different discussion.)
At a fundamental level, the cloud is simply an alternative acquisition or delivery model
for contact center or customer service systems and applications. However, in the world
of contact center and customer service technologies and systems, the cloud has been a
game changer. It is playing a major role in revitalizing a mature technology sector. It has
helped to transform and enhance the competitive landscape for contact center and
customer service applications by making it easier for new vendors to enter the market.
End-user organizations have more choices and flexibility than at any time in the past.
This also presents prospects with a few challenges, as there are now dozens of
companies in many IT sectors vying for their business. When the inevitable happens and
cloud-based markets shake out over the next 5 years, many of these vendors will be out
of business. This study is intended to help enterprise, contact center, customer service
and IT leaders gain an appreciation of the benefits and challenges of using cloud-based
systems and applications in their service environment. It also clearly points out some of
the pitfalls to avoid when working with these vendors.
This benchmark study analyzes three highly interrelated topics:
1. Contact center initiatives and investment priorities for 2014
2. Contact center applications and challenges
3. Cloud solution drivers, concerns and satisfaction
The study also revisits the status of social customer care, a topic that DMG analyzed in a
benchmark report in November 2011, to determine if companies are making progress in
handling these types of posts and inquiries.
This study presents DMG’s survey results and discusses the significance of these findings
for companies as they relate to 2014 investment plans and priorities, systems and
servicing channels. The study also assists companies in determining how to best acquire
the solutions they need to deliver an outstanding customer experience throughout
every step of each customer’s journey. It analyzes the leadership characteristics of
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companies with regard to all four topics, and presents best practices and tactics. In
some cases it also provides hints about pitfalls to avoid, helping managers successfully
build world-class contact center and servicing environments.
This study enables readers to benchmark their company’s performance and plans in
their contact center and servicing environments. It identifies the top investment
priorities for contact centers and customer service organizations for the next 18 months,
to help organizations prioritize their own investment strategies. It reveals which
servicing channels are being used today, and what companies plan to adopt in the near
future. It also delves deeply into the world of cloud-based solutions and provides
transparency into the drivers, challenges and concerns in doing business with cloudbased vendors. This benchmark study is an essential tool for helping enterprises around
the world build their servicing strategies and investment roadmaps.

II.

Survey Demographics

During the summer of 2013, enterprise, contact center, IT, operations, sales, marketing
and other executives and leaders from all over the world were invited to participate in
this survey of cloud-based contact center solutions and applications. Of the 169 people
who opted to participate in this study, 120 (71%) completed it. The study findings
support vendors’ claims that adoption of cloud-based contact center systems and
applications is strong and growing; survey responses show that 62.4% of organizations
are already using non-premise based solutions to support at least some aspects of their
contact center and customer service organizations.
DMG has been measuring and analyzing worldwide adoption of cloud-based contact
center and customer service applications since January 2010. Adoption of cloud-based
systems and applications in contact centers has grown from 31.8% in 2010 to 40.9% in
2011 and 62.4% in 2013. This is not to say that all of these enterprises use only cloudbased solutions. But this strong growth trend does demonstrate that the impediments
and barriers to adoption are decreasing.
These findings are especially significant because the benchmark study participants are
highly representative of the contact center world. The study includes participants with
contact centers in more than 47 countries and 40 US states. Keeping in mind that a
participant could have a contact center in multiple regions, more than 47 countries are
represented in the findings. 62.5% of study participants have contact centers in the
United States; 12.7% have a presence in the United Kingdom; 7.6% in the Philippines;
7.0% in India; 5.1% in Canada; 3.8% in Brazil and Mexico; 3.2% in Australia; 2.5% in
Germany, Ireland and Spain; 1.9% in Belgium, France and South Africa; and 1.3% in

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China, Hong Kong, Luxembourg, Malaysia, the Netherlands, New Zealand, Nigeria,
Norway and Portugal. 24 other countries are also represented in this study, each
accounting for 0.6%.
Companies with contact centers in 40 US states participated in this study. Of those
companies with contact centers in the US, 18.9% had at least one site in California;
13.2% had a presence in Florida; 9.4% were in Texas; 6.3% were in Georgia; 5.7% were
in New York and Ohio; 5% were in Illinois, Michigan and Utah; 3.8% were in Arizona,
Kansas, Kentucky, New Jersey, North Carolina and Wisconsin; 3.1% were in Colorado,
Indiana and Pennsylvania; 2.5% were in Connecticut and Minnesota; 1.9% were in Iowa,
Maryland, Massachusetts, Missouri, Nebraska, Nevada, Oklahoma, South Carolina,
Virginia and Washington; and 1.3% were in Alabama, Tennessee and Vermont. 7 other
states were also represented in the study, each with 0.6%: Arkansas, Louisiana,
Mississippi, North Dakota, Oregon, Rhode Island and Wyoming.
Respondents with 20 unique job functions participated in this benchmark study,
indicating a broad interest in contact center and customer service systems and
applications. 17.0% of the participants were contact center vice presidents/directors
and managers. The second largest group of participants were from IT, 14.4%. 11.8% of
the participants were enterprise senior executives, which is another indication of the
importance of this topic in the market. 9.8% were operations managers; 7.2% were sales
or marketing vice presidents or managers; 6.5% were line-of-business managers and
executives; 5.9% were either contact center senior executives or analysts/researchers;
3.9% were either the chief marketing officer or the chief technology officer/chief
information officer; and 1.3% were fundraisers. 8 additional job titles represented in this
study were: consultants (2), insurance agent, quality assurance, program officer, trainer,
program manager and solutions sales.
Contact centers of all sizes participated in this study. The largest group of participants,
36.4%, had 1 – 49 contact center/customer service seats, supporting the belief that the
majority of cloud-based contact center/customer service solutions users are in small
contact centers. The second largest group of users had 100 – 249 agents, 22.7%. This is
believed to be the fastest growing sector for cloud-based contact center/customer
service applications. Service environments with 250 – 999 seats were the third largest
group of participants, accounting for 20.8% of the responses. Fourth place was
attributed to service organizations with 50 – 99 agents, 8.4%. 6.5% of survey
respondents operated contact centers with 1,000 – 2,999 seats. And, 5.2% of the study
participants had more than 3,000 contact center seats. Although these findings are not
surprising, they indicate that a growing number of contact centers with more than 1,000
seats are adopting cloud-based systems and applications.
The survey asked:

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Figure 1: What is your industry?

Source: DMG Consulting LLC, October 2013

Managers from 23 verticals responded to this study. The high-tech/software industry
had the largest number of respondents, 21.9%. Telecommunications was represented
by 20.7% of survey participants. 8.3% of respondents were from outsourcers; 7.7% were
from financial services, including banking, brokerage and investment management. 6.5%
of study responses were from each of the healthcare and the insurance industry
(property and casualty, life, health, etc.). Consulting and higher education both
accounted for 3.0% of the responses. 2.4% of the participants came from collections,
government or travel and hospitality. 1.8% of the respondents were in manufacturing
companies. 1.2% of the participants were in companies that do benefits management,
consumer products, logistics and utilities/energy. The airlines and fundraising/not-forprofit verticals both accounted for 0.6% of the responses. 4 other industries – Internet
marketing, customer service optimization, online gaming and publishing – were
accounted for in the Other category; each of these industries represented 0.6% of the
responses.
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III.

Benchmarking Results and Leadership Profiles

Benchmarking is an effective method of assessing how a contact center compares to
others in the market for a specific business function or activity. It is a helpful approach
for determining if a company is a leader, follower or laggard in a particular area. This
study evaluates the impact of a very trendy topic – cloud-based solutions – on the
contact center/customer service world, and distinguishes reality from vendor hype.

i.

2014 Contact Center Initiatives and Investment Priorities

As part of this study on practices and plans relating to cloud-based contact
center/customer service solutions, DMG asked companies to rank their contact center
goals and investment priorities for 2014. We have asked similar questions in benchmark
studies in the past, in order to track trends and changing business priorities. An
important finding from this study is that despite major differences in the worldwide
economy, the emergence of social media (which is expected to alter the way that
customers and prospects interact with companies), and the availability of cloud-based
systems and applications, contact center goals have not changed dramatically.
As some believe that the availability of cloud-based contact center/customer service
systems and applications alter companies’ investment priorities, this study queried and
captured the plans of companies currently using cloud-based solutions separately from
those planning to use cloud-based solutions in the next 18 months. The benchmark
study found that the number-one goal for both groups is to improve agent productivity.
It was ranked as the top goal by 55.8% of all survey respondents, whether they were
already using cloud-based solutions or were planning to use them in the next 18 months.
(This was also the top goal for contact centers in 2011.) The rest of the top five goals are
also the same for both groups, but in varying order.
The survey asked:

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Figure 2: What are your top contact center initiatives planned for the
next 18 months? (Select your top three initiatives.)
Answer Options

Rank for companies
that currently host

Rank for companies
that plan to host

Improve agent productivity
1
1
Increase use of self-service
2
3
Add new channels
3
4
Reduce cost of service
4
2
Enhance reporting/analytics
5
2
Achieve consistency of service across
6
8
channels
Build a voice of the customer program
7
6
Add Web chat
8
7
Implement at-home agent program
9
5
Implement a social customer care
10
8
program
Address regulatory and compliance
11
9
requirements
Other
12
8
Note:
Other: CTI integration, globalization or "follow the sun" support, and achieving a highavailability environment

Figure 2 ranks the responses for the two primary groups analyzed in this benchmark
study – those currently using cloud-based contact center systems and applications and
others who were planning to use them in the next 18 months. For companies currently
using cloud-based solutions, increasing the use of self-service solutions was the second
most important goal, as indicated by 45.1% of respondents. Adding new channels, such
as short message service (SMS) and social media, was the third top goal for 2014, as
reflected by 40.8% of participants. Reducing the cost of service was the fourth most
important goal, as reported by 38.0% of respondents. And enhancing
reporting/analytics came in fifth place, as reflected by 29.6% of the relevant population.
For companies that were planning to use cloud-based solutions in the next 18 months,
contact center priorities (goals) were similar to those who are already using cloud-based
solutions, but the order was different for numbers 2 to 5. Enhancing reporting/analytics
and reducing the cost of service tied for second place, each indicated by 50.0% of
respondents. Increasing the use of self-service came in third place with 45.8% of the
responses. Adding new channels came in fourth place, with 29.2%.
The survey asked:
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Figure 3: What are your top contact center initiatives planned for the next 18 months?
(Select your top three initiatives.)


Figure 3 shows the top contact center investment priorities for all respondents
combined – those currently using cloud-based solutions as well as those planning to use
them in the next 18 months. Building a voice of the customer program and
implementing an at-home agent program tied for sixth place, 16.8%. Achieving
consistency of service across channels came in seventh place, 15.8%. Adding Web chat
was in eighth place, 13.7%. Implementing a social customer care program was the ninth
top goal for 2014, as reflected by 10.5% of respondents. Addressing regulatory and
compliance requirements was near the bottom of the list, receiving 8.4% of the votes.
The Other category came in at 3.2%, and was the lowest ranked category. (Three items
fell into Other: CTI integration, globalization or “follow the sun” support, and achieving a
high-availability environment.)

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The survey asked:
Figure 4A: What are your organization’s top contact center investment priorities for
the next 18 months? (Choose all that apply) (Top 15 applications)


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Figure 4B: What are your organization’s top contact center investment priorities for
the next 18 months? (Choose all that apply) (Top 16 to 30 applications)


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Survey participants were asked to rank their top contact center initiatives, which are
their department goals for 2014. Respondents were then asked to identify their top
investment priorities for the next 18 months. The questionnaire provided a detailed list
of contact center/customer service systems, applications and channels. As was done for
the prior question about contact center initiatives, the study captured the responses of
organizations that were already using cloud-based systems separately from those that
were planning to adopt this acquisition model in the next 18 months. The objective was
to first determine the top contact center investment priorities for 2014 and then to see
if the different groups had different investment priorities.
104 respondents answered the question about their organization’s top contact center
investment priorities for the next 18 months. Survey participants were encouraged to
select all responses that pertained to their operating environment, and were required to
indicate if they planned to license (buy) or host the application for each
option/application selected. A total of 655 options were selected by the survey
participants. Regardless of whether they were already using hosted systems or were
anticipating doing so in the next 18 months, a large majority of organizations, 71.3%,
planned to acquire the needed capabilities in the cloud.
The top contact center investment priorities for 2014 are:
1. Interactive voice response (IVR)/touch-tone – 36.5%; 78.9% plan to use a cloudbased solution
2. Tied for second place:
Automatic call distributor (ACD) – 35.6%; 73.0% plan to use a cloud-based
solution
Computer telephony integration (CTI) – 35.6%; 78.4% plan to use a cloud-based
solution
Workforce management (WFM) – 35.6%; 70.3% plan to use a cloud-based
solution
3. IVR/speech recognition – 34.6%; 69.4% plan to use a cloud-based solution
4. Customer relationship management (CRM) – 29.8%; 58.1% plan to use a cloudbased solution
5. Dialer – 29.8%; 67.7% plan to use a cloud-based solution
6. Web chat – 29.8%; 83.9% plan to use a cloud-based solution
7. Recording – 28.8%; 80.0% plan to use a cloud-based solution
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8. Quality management – 25.0%; 69.2% plan to use a cloud-based solution
9. Tied for ninth:
Email response management (ERM) – 24.0%; 68.0% plan to use a cloud-based
solution
Performance management – 24.0%; 76.0% plan to use a cloud-based solution
Social CRM servicing application – 24.0%; 64.0% plan to use a cloud-based
solution
10. Social media listening/monitoring tools – 23.1%; 70.8% plan to use a cloud-based
solution
Interest in acquiring contact center infrastructure, specifically IVR (touch-tone and
speech-enabled), ACD, CTI, CRM and dialer, is at the top of the list; the exception is
WFM, which came in second place, along with ACD and CTI (which often go together, as
they are interdependent). The market is in the midst of a replacement cycle for contact
center infrastructure solutions – ACD, dialer, CTI, IVR and CRM – driven by pent-up
demand resulting from highly restricted investment budgets during the last few years,
new regulations (to a lesser degree, as indicated in Figure 3 above), and the availability
of new cloud-based solutions that are giving companies additional options. When a
company buys a new ACD, it is increasingly common to purchase IVR, CTI and recording
at the same time, particularly if they are migrating from a time division multiplexing
(TDM) environment to Internet Protocol (IP). The interest in updated dialing solutions is
a new phenomenon, but one that is overdue. The attention is coming both from
companies that have used the same dialer for 10 to 15 years and from first-time users.
Workforce management tied for the second top-ranked investment priority for 2014, a
position it shares with ACD and CTI solutions. WFM solutions are used by contact
centers to forecast the volume of incoming (and possibly outgoing) interactions so that
they can determine the number of agents required to handle the volume and create an
optimal schedule. In the past three years, new WFM vendors have entered the market,
giving end users a variety of new options. Additionally, a majority of WFM solutions are
now available in the cloud, making it easier for enterprises to invest in and implement
WFM.
Figure 5 shows an alternative view of the same data shown in Figures 4A and 4B. It
shows 2014 investment priorities and how companies are planning to acquire each of
the applications. This chart makes it clear that hosting is the preferred acquisition model
for all of the contact center applications included in this Figure. With few exceptions,
the proportion intending to host new applications ranges from 64% to 80%+.

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Figure 5: Acquision Model for Planned Contact Center Applications


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DMG’s Leader Profile: 2014 Contact Center
Initiatives and Investment Priorities
Leading organizations use a formal planning process to identify and communicate their
annual goals and the investment priorities needed to achieve their objectives. In many
cases, these companies employ a 3- to 5-year planning cycle, although investment
decisions for the later years are fluid and are expected to change. The challenge with
these processes is that they occasionally become overwhelming and take up too much
time. If the process is not managed properly, employees can spend too much time
planning and not enough time implementing the changes and investments.
DMG expects 2014 to be the best year for making contact center investments since the
end of the great recession of 2008 - 2009. The United States is on its way to economic
recovery. Latin America is moving nicely and picking up momentum. Africa is growing
rapidly, as is Asia/Pacific. The Middle East and Western Europe are expected to
outperform 2013, and Eastern Europe continues to come on strong. The worldwide
economic recovery, product innovation and new regulatory requirements, along with a
continued desire to reduce risk, are driving a new round of contact center investments.
The top goals in contact centers in 2014 are many of the same goals companies have
been striving to address for years. Improving agent productivity is back to being the
number-one goal. The next four goals are all means to achieve increased productivity –
specifically, increasing the use of self-service applications, reducing the cost of service,
adding new channels, and enhancing reporting/analytics.
Top contact center investment priorities for 2014 are tied to enterprise plans for the
year. Implementing or enhancing an IVR, the top investment priority for 2014, improves
agent productivity, increases the use of self-service solutions, and reduces the cost of
service. Implementing a new ACD, CTI, dialer, WFM application or CRM solution are
investments that should also improve agent productivity while enhancing the customer
experience. These investments, along with the new channels and enhanced reporting
and analytics, should help companies improve the customer journey by increasing
visibility and providing methods of measuring how well an organization and its staff
performs every step of the way. It’s essential for contact center leaders to align the
goals of their department with those of the enterprise.
Here are best practices for identifying contact center initiatives and priorities:
1. Contact center leaders should stay abreast of their enterprise goals. They should
establish a formal process to obtain this information, if one does not already

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exist in the company. (The best-managed corporations have a formal process for
setting and sharing corporate goals on an ongoing basis.)
2. Create a process for sharing enterprise goals with all department employees,
including managers, supervisors and agents. Everyone in the contact center
should be familiar with the company’s goals and objectives.
3. Set up a contact center goal-setting process, and involve all department
managers. The process can be formal or informal, but giving all managers an
opportunity to share their needs will enhance engagement, teamwork and
department performance.
4. Teach managers how to build a business case, including financial return on
investment (ROI) models, to justify investments. It’s a highly effective way of
helping managers prioritize needs, and explains why some investments get
approved while others are rejected.
5. Obtain enterprise investment approval guidelines, and share them with all
managers so that they can use them for building their business case.
6. Compile a list of all department goals and investment priorities recommended by
managers. Using the business cases and ROI models, prioritize the investments.
7. Establish a process for reviewing and modifying the department’s goals and for
enhancing each team member’s goals on a quarterly basis.
8. Work with human resources to establish an incentive and compensation system
that rewards outstanding performance and achievement of goals.

Transitioning to Being a Leader in Identifying Contact Center
Initiatives and Investment Priorities
It’s essential for all employees, and particularly for all customer-facing staff, to be aware
of enterprise and sales goals and objectives, and what is expected of each of them
individually at all times. This knowledge will enable them to do the right things, even
when policy and processes are not clear or known. It can be tough for employees in a
contact center to keep abreast of this information, as agents must often skip companywide meetings because they cannot be spared from the phone. The less ambiguous the
goals and expectations, the better chance the department has of achieving them.

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Therefore, a goal for all contact center managers should be to know their enterprise’s
goals and communicate them to their staff.

ii.

Contact Center Applications and Channels

All of the companies that participated in this study operate contact centers that use a
variety of applications and channels to assist customers. There is a great deal of
discussion regarding the proliferation of channels in contact centers and the pace of
adoption. This study analyzes this issue and identifies which contact center applications
and systems are being used and whether they were purchased or hosted.
The survey asked:
Figure 6: Are you using any cloud-based systems or applications in your contact center
or customer service department?


62.4% of survey participants were already using at least one cloud-based contact center
system or application.
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The survey asked:
Figure 7: When are you planning to implement a cloud-based system or application in
your contact center?


Among the 37.6% who were not yet using a hosted solution, 45.6% were planning to
move in this direction within the next 18 months, 15.8% within 6 months, 8.8% within 7
to 12 months, and 21.1% within 13 to 18 months.
While the results in Figure 6 show that a large percentage, 62.4%, of contact centers are
now using some type of cloud-based system or application, the rapid pace of adoption
over the last three years is impressive. Adoption has grown from 31.8% in January 2010
to 40.9% in November 2011 to 62.4% in October 2013.

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Figure 8: Are you using any hosted/cloud-based systems or applications in your
customer service department or contact center?


The survey asked:

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Figure 9: Which cloud-based contact center systems or applications are you currently
using?


This benchmark study shows that the adoption of cloud-based solutions in contact
centers and customer service departments is not a passing fad. This is evidenced by the
breadth of cloud-based solutions used by enterprises. The survey found that a large
number of contact center solutions were being acquired via the cloud-based model.

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ACD was the top-ranked cloud-based contact center solution; it was utilized by 60.0% of
companies that were using a cloud-based contact center application. Recording was in
second place, used by 52.2% of organizations. CTI was in third place, as indicated by
51.1% of survey respondents who were using cloud-based solutions. Touch-tone-based
IVR, used by 50.0% of survey participants, was in fourth place. CRM applications came in
fifth place and were being used in the cloud by 38.9% of study participants. Web chat
applications were in sixth place, as reflected by 35.6% of respondents. Dialers came in
seventh place with 32.2%. Quality management came in eighth place with 28.9%. Email
response management solutions came in ninth place with 24.4%; and speech-enabled
IVR tied with surveying for tenth place with 23.3%. When the two IVR options – touchtone and speech-enabled – are combined, this category becomes the most used, as
reflected by 73.3% of respondents. This is not surprising, given that IVR solutions have
been available in the cloud longer than most other contact center solutions.
The survey asked:
Figure 10: What channels does your contact center currently support? (Select all that
apply)


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Figure 11: What channels does your contact center currently support? (Select all that
apply)


There has been so much discussion in the market about the need to build multi-channel
contact centers, as well as the impact of social media on traditional call volume. This
study queried participants to quantify and measure both of these opportunities. It also
assessed the channel activities of enterprises that were using premise-based contact
center solutions separately from those that were using the cloud, to determine if the
channels that were being used had an effect on the choice of delivery mechanism.
Figures 10 and 11 make it clear that voice remains the dominant channel, as it was used
by 97.1% of respondents. Also significant is the fact that only 3 organizations do not
support voice calls. Email is the second most common channel used in contact centers,
as indicated by 90.4% of respondents. However, 50 participants indicated that they did
not provide email support in their contact centers. Web chat is the third most common
contact center channel, as reflected by 66.3% of respondents. 35 organizations
indicated that they were not using web chat. Web self-service is the fourth most
common servicing channel, at 47.1%. 55 organizations said that they did not offer Web

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self-service functionality to their customers. IM came in fifth; 41.3% of organizations
supported IM, although 61 organizations did not use this channel. Facebook is in sixth
place; 37.5% of organizations supported this channel, but 65 organizations did not offer
it to their customers and prospects. Short message service (SMS) was in seventh place,
as reflected by 35.6% of the participants. 67 organizations did not support SMS. Twitter
was in eighth place, supported by 34.6% of organizations surveyed, although 68
organizations did not use it. Mobile applications were used by 34.6% of organizations,
and were tied with Twitter for eighth place, although 68 organizations were not offering
this channel to their customers. Video was in ninth place, used by 20.2% of
organizations. However, 83 organizations had not yet adopted this channel.
Social media, particularly Facebook and Twitter, were being used by a substantial
number of servicing organizations, 37.5% and 34.6%, respectively. The number that
support mobile applications is the same as for Twitter, 34.6%. Video remains a highly
limited channel, as is reflected by its last place finish in these channel usage charts and
the relatively small proportion of organization that were using it, 20.2%.
The split between users of premise-based and hosted technology is telling, and another
indication of the rapid adoption of cloud-based solutions. These numbers also say a
great deal about the audience that elected to participate in this study – clearly, this is a
cloud-centric group of participants. There are substantially more voice-based contact
centers currently deployed around the world than cloud-based solutions, yet the survey
findings indicate otherwise. The study indicated that only 45.5% of respondents were
using a premise-based voice ACD, versus 54.5% that were using a cloud-based solution
to provide their voice channel. Based on DMG Consulting research, the worldwide
adoption rate of cloud-based contact center solutions was 5.9% as of the end of 2011,
and is projected to be 10.6% as of the end of 2013.
While these findings are slanted for some channels, this does not appear to be the case
for others. The majority of contact centers that use Web chat host this functionality, as
reflected by the 76.8% of companies that supported this channel. 52.1% of
organizations that used email for support used a cloud-based solution, while 47.9% of
organizations had invested in a premise-based solution. For Web self-service
applications, 55.1% were using a premise-based application and 44.9% hosted this
functionality. IM was supported by a premise-based application for 39.5% of
organizations, and 60.5% were using a cloud-based offering. SMS had a similar usage
pattern: 40.5% of organizations had purchased a premise-based application and 59.5%
were using a hosted solution.
The results for the two social media channels, Facebook and Twitter, are interesting and
indicative of market direction. Neither of these channels has a solution that can be
purchased, which makes their results confusing, as 33.3% of Facebook users indicated
that they used a premise-based application, as did 38.9% of Twitter users. What this

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must mean is that these organizations were using a premise-based servicing application
to respond to customer feedback, comments and posts received via Facebook and
Twitter.
Organizations that used mobile applications were split between on-premise and cloudbased applications; 47.2% used premise-based technology while 52.8% were using
cloud-based functionality to deliver support in this channel. Video was the least adopted
channel; it is still considered unknown and risky by a majority of contact centers, which
explains its low adoption rate. 61.9% of organizations that used video had purchased
premise-based solutions, versus 38.1% that were using a cloud-based delivery vehicle.
The study asked:
Figure 12: What channels do you plan to add within the next 18 months? (Select all
that apply)


- 22 -


Figure 12 separates the number of respondents that plan to add each of the channels by
deployment model: on-premise or in the cloud. It also highlights the percentage of
respondents that plan to add the channel in the cloud. 86.4% of organizations planned
to add Web chat in the cloud. Voice was second place with 84.4%. IM and Twitter were
in third place with 82.4%. Facebook was in fourth place with 81.3%. SMS and Web selfservice tied for fifth place with 80.4%. Mobile and email tied for sixth place with 79.5%;
and video came in last place with 66.7%.
This Figure shows the impact of Millennials on enterprises; digital channels, including
SMS, Web self-service, mobile applications, email, IM, Twitter and Facebook, are all
expected to grow substantially in the near future. Voice as a servicing channel is not
seeing the same high rate of growth it experienced in prior years, but is still a primary
servicing channel that is growing. Video remains an emerging channel; while it has many
potential uses, it is still viewed as optional, with limited use and value. There is a great
deal of hype in the market about video, but corporations are clearly not signing up for it,
as yet.
A majority of organizations are planning to add one or two channels to their service
organization during the next 18 months. And if they are going to add a channel, it is
likely, in the 80% range, that they plan to use cloud-based technology. Of the 369
channels that survey participants were planning to install in the next 18 months, 81.3%
are expected to be in the cloud, while only 18.7% are anticipated to be premise-based.
The survey asked:

- 23 -


Figure 13: What channels does your contact center currently support and what do you plan to add in the next 18 months? (Select
all that apply)
Currently support
Premise

Cloud

Total
Supported

Do Not
Support

Premise

Cloud

Total
Supported

Do Not Plan
to Support

Total
Current and
Planned
Channels

Voice

46

55

101

3

5

27

32

69

133

14.9%

Email

45

49

94

50

6

29

35

66

129

14.4%

Web chat

16

53

69

35

6

39

45

56

114

12.7%

Web self-service

27

22

49

55

9

37

46

55

95

10.6%

SMS

15

22

37

67

9

37

46

55

83

9.3%

Mobile

17

19

36

68

9

35

44

57

80

8.9%

IM

17

26

43

61

6

28

34

67

77

8.6%

Facebook

13

26

39

65

6

26

32

69

71

7.9%

Twitter

14

22

36

68

6

28

34

67

70

7.8%

Video

13

8

21

83

7

14

21

80

42

4.7%

Other

0

1

1

78

0

0

0

0

1

0.1%

Total

223

303

526

633

69

300

369

641

Answer Options

Plan to support in 18 months

% Current
and
Planned
Channels

Other: Fax - cloud-based

- 24 © DMG Consulting LLC

Figure 14: What are the top contact center servicing channels for the next 18 months?


Figures 13 and 14 provide a different perspective on current channel usage and
anticipated adoption in the next 18 months. These Figures make it clear that voice
remains the primary servicing channel in contact centers around the world, and that this
is expected to be the case throughout 2014, despite the growing number of
organizations that are not planning to use this channel in their support organization.
Voice accounts for 14.9% of all supported and planned contact center channels. eMail is
the second most common contact center channel, 14.4%. Web chat is in third place with
12.7% of all current and planned channels. Web self-service is in fourth place, 10.6%;
short message service is in fifth place, 9.3%; mobile applications are in sixth place, 8.9%;
Instant Message is in seventh place, 8.6%; Facebook is in eighth place, 7.9%; Twitter is in
ninth place, 7.8%; and video is in tenth and last place at 4.7%.

- 25 -


DMG’s Leader Profile: Contact Center
Applications and Channels
Enterprises need to build servicing environments that can communicate with customers
in their channel of choice. This gets complicated, as the media via which customers want
to interact can change throughout the day or by interaction. A prospect may begin their
journey on a website and, if a company is lucky, end up in a successful sales call with a
live agent. Contact centers need technology and tools that enable them to address their
prospects’ or customers’ needs every step of the way. Companies also need systems
and applications that allow them to analyze every aspect of the customer journey so
that they can identify ways to enhance the customer experience while improving
productivity and reducing operating expenses. As contact centers are typically peopleintensive organizations, as are the back-office operating areas that support them, having
systems and applications that position them to handle large volumes of interactions
effectively is essential for the bottom line of the company and the success of the
department.
Building a multi-channel contact center is not an option; it is a strategic imperative that
is complicated by the ongoing introduction of new channels. As recently as three years
ago, it was acceptable for a contact center to support just two channels, voice and email.
But this is no longer the case. Leading contact centers ask their customers what
channels they want to use, and then provide the necessary support. The more common
channels that customers expect to be available are: voice (live agent and interactive
voice response), email, SMS, Web self-service, Facebook, Twitter and mobile
applications. Leading organizations also interact with customers on both an inbound and
outbound basis, as proactive customer care is a highly effective method of building and
maintaining relationships with customers.
While at a minimum only an ACD that can route and queue interactions is required to
run a contact center, there can be as many as 45 different applications and systems in
these highly sophisticated operating environments. The specific needs of an
organization vary based on the purpose and function of their contact center, but there
are foundational components that should be included in most, if not all contact centers.
These include an ACD or dialer to receive or place calls or other types of interactions; a
voice prompter or interactive voice response system to automate the handling of calls;
some form of customer relationship management (CRM) or servicing application to use
to resolve and track customer inquiries or sales; workforce management to forecast the
volume of interactions and then schedule the properly skilled resources to handle them;
recording to capture all inbound and outbound interactions; and quality assurance to
determine if agents are adhering to internal policies and procedures. The rest of the
systems and applications used by the organization are optional and potentially

- 26 -


differentiating. Analytics is expected to play an essential role in the future of contact
centers, which can make excellent use of these “big data” solutions to capture and
analyze massive amounts of data about the customer journey. See Figure 15.
Companies can now obtain technology and tools using a variety of acquisition models;
they can purchase a license and implement it themselves, use cloud-based solutions,
buy a managed service offering, or use a combination of all of these models. Companies
now have more choices than ever before, and are no longer limited by their capital
budgets.
Figure 15: Contact Center Technology, Systems and Applications

Voice

Web

Email

Fax

Social
Media

Mobile

MANAGEMENT SYSTEMS

SERVICING
APPLICATIONS

Recording

Quality Assurance

VOC/Surveying

CRM Suites

Perform Mgt

Speech Analytics

eLearn/Coach

Text Analytics

Desktop Analytics

WFM

Cust Svc Apps

Campaign Mgt Sys
IT Help Desk
Collections

Switching Fabric

CTI

ACD/Route/Queue Dialer/Campaign Mgt

ENABLING/
COMMON
APPS.
Middleware
Workflow

CORE SYSTEMS

Telesales/Telemktg

SMS/
Chat

VoIP/SIP
TDM

Integration
Security

IVR/Speech Rec

Network Mgmt

Universal Queue

Databases

UC / Presence

Voicemail

Messaging

Data Marts

Field Svc & Dispatch

Config Engine

SUPPORTING SYSTEMS

SFA

Knowledge Mgt

eService Suite

ERMs

Mkt Encyclop

Social C/S Apps

Web Self Svc

Chat/SMS

Collaboration

Content Mgt

Scripting

Letter Writing

Voice Biometrics

ERP/Supply Chain


- 27 -


Here are best practices for building a leading multi-channel contact center:
1. Assess and enhance your company’s servicing strategy and vision. Customer
expectations have been greatly altered by social media and the rapid pace of
digital communications. At the same time, the systems and tools available to
enterprises have improved dramatically, greatly altering and improving an
organization’s ability to deliver great service cost effectively.
2. Secure a senior executive sponsor to support the new vision. Service
organizations of the future are not going to limited by the same boundaries as
traditional contact centers. The role of front- and back-office employees is
changing, enabling companies to deliver better service at each customer touch
point. Changing an organization’s service culture will require support from the
top.
3. Determine which channels to support and the order in which they need to be
introduced. Adding channels is complicated and requires training, substantial
changes in policies and procedures, and new technology investments. Prioritize
channels based on the needs of your customers and prospects.
4. Re-design your telephony environment to support your “contact center of the
future.” This should be done as part of a unified communications initiative. The
enabling technology and applications do not have to be on-site to be effective.
5. Identify the technology, systems and applications that are needed to build your
contact center of the future. Perform a technology gap analysis to identify the
systems and applications required to transform your operating environment into
a flexible multi-channel contact center that is positioned to meet the needs of
your customers.
6. Determine how to remove service barriers. Conduct a far-reaching operational
gap analysis that identifies the changes required to enhance and optimize your
service and support organization.
7. Build the business cases to support the changes. Identify the benefits and
challenges involved in transforming your contact center into a next-generation
servicing environment.
8. Draft a roadmap that lays out the steps for success. Detail all of the steps in the
transformation process, and get buy-in from all relevant departments. Socialize
the initiative widely throughout the company, as it will likely have far-reaching
impacts and benefits.

- 28 -


Transitioning to Being a Leading User of Contact Center
Applications and Channels
The current generation of contact center systems and applications can dramatically alter
the performance of many service environments. Sophisticated and flexible routing and
workflow solutions enable timely resolution of customer issues. Real-time applications
provide managers with data that may have taken a week to obtain in the past. And
analytics provides knowledge and perspective that was not previously available.
Leading organizations should immediately implement a customer journey initiative that
enables them to capture, analyze, improve and track the performance of all
departments that touch or impact customers. The output of this analysis (which should
be performed on an ongoing basis) will help to break down organizational barriers that
have negatively impacted service delivery and the cost of support.
Implementation of Session Initiation Protocol (SIP) will help to eliminate voice and data
silos and allow applications previously limited to contact centers, such as recording and
quality assurance, to be used in other operating areas. If properly designed, SIP can also
significantly reduce carrier costs and enhance the entire service infrastructure of the
corporation through the introduction of presence, a technology that improves the
immediacy of business interactions.
Service leaders appreciate the need to build and implement a social customer care
program that is integrated with their traditional contact centers, to ensure that all
corporate responses are provided in the same voice. At the same time, companies
should use proactive customer care programs so that they can easily interact with
customers in their channel of choice on an outbound basis.
Leading contact centers of the future will be positioned to absorb additional channels
and applications as the need arises. They will be constantly looking for ways to improve
their own performance as well as that of other departments and business partners,
activities that will be enabled by performance management solutions that provide
quantifiable metrics and KPIs.

- 29 -


iii:

Cloud Solution Drivers, Concerns and Satisfaction

A confluence of events is altering the contact center technical and operational
landscape. An important contributor to these changes is the introduction of a broad
range of new contact center systems and applications. All categories of contact center
or customer service applications are now available in the cloud. More importantly, the
cloud-based delivery model has created new opportunities for vendors to enter and
successfully compete in the market, something that had become somewhat cost
prohibitive in some of the major technology categories, such as ACDs, dialers and CRM
applications.
The survey asked:
Figure 16: Why did you purchase a cloud-based contact center solution? (Please
choose all that apply.)


- 30 -


Among current users of cloud-based contact center solutions, 66.3% were attracted by
the ease of scaling up and down. 59.3% of responses cited the desire to avoid a major
capital investment. 47.7% of survey participants wanted to decrease their total cost of
ownership. 45.3% were intent on decreasing their reliance on internal IT resources.
41.9% hoped to take advantage of the ongoing technology refresh without additional
investment or a forklift upgrade. 40.7% of respondents wanted the ability to handle
virtual and geographically dispersed locations and at-home agents. Supporting
enterprise disaster recovery and business continuity requirements was a driver for
39.5% of participants. 34.9% of companies that currently hosted were hoping to acquire
an improved feature set. 29.1% of organizations invested in cloud-based contact center
solutions to avoid a long-term capital investment. 24.4% of companies purchased a
cloud-based contact center solution to benefit from the solution breadth. This is tightly
tied to the answer about improved product feature set, which came in seventh place.
22.1% of respondents were looking for improved reliability/system up-time. Ability to
integrate with third-party applications was a priority for 18.6% of study participants; the
ability to integrate with other cloud and premise-based applications remains a
differentiator, and DMG expects to see significant investment in this area by leading
cloud-based vendors in the next three to five years. 15.1% of organizations selected a
specific vendor due to their reputation. 14.0% were interested in the vendor’s ability to
perform custom integrations. 11.6% of respondents were interested in security and ease
of doing business with a vendor. And only 4.6% of respondents purchased a cloud-based
contact center solution due to the vendor’s experience in meeting their vertical/niche
requirements.
The survey asked:

- 31 -


Figure 17: Why have you decided to implement a cloud-based contact center solution?
(Please choose all that apply.)


This question was asked of companies that planned to implement a cloud-based
solution in the next 18 months. This group of responders was given the same list of
benefits that was presented to survey participants who said that they were planning to
host in the next 18 months. The top answer to this question, selected by 60.7% of
respondents who were planning to host, was to decrease reliance on internal IT
resources. The second most common response, as reflected by 57.1% of the participants,
was to benefit from ongoing technology refresh, without additional investments and
forklifts. The desire to avoid a major capital investment was the third most common
response, 53.6%, among companies planning to host. 50.0% of responses selected
- 32 -


breadth of the solution, the fourth most commonly anticipated benefit. Decreasing total
cost of ownership, disaster recovery/business continuity, and ease of scaling up and
down came in with a three-way tie for fifth place, as reflected by 46.4% of responses.
Improved feature set was the sixth most commonly expected benefit, 42.9%. Ability to
handle virtual and geographically dispersed locations and at-home agents ranked
seventh, 35.7%. Ability to integrate with third-party applications and avoidance of a
long-term capital investment tied for eighth place, 28.6%. Improving system reliability
and up-time performance was in ninth place, 25.0%. Security was in tenth place, 21.4%.
Eleventh place was shared by ability to perform custom integrations and ease of doing
business with a vendor. Vendor reputation was in twelfth place, 3.6%, and no one
selected experience in meeting vertical/niche expertise.
The survey asked:
Figure 18: What are/were your biggest concerns when considering a cloud-based
contact center solution? (Choose all that apply.)


- 33 -


Figure 19: What are/were your biggest concerns when considering a cloud-based contact
center solution? (Choose all that apply.)
Answer Options
Security
Dependence on vendors
Ability of vendor to meet SLA
requirements
Platform reliability/up-time
Connectivity and dependability of carriers
Network bandwidth and reliability
Quality of Service (QoS)
Total cost of ownership
Ease of integration with third-party
applications
Location of data centers
Disaster recover/business continuity
Loss of control
Financial viability of the vendor
Ability to administer system in-house
Ongoing maintenance and support
Breadth of system features and
functionality
Other

Rank for companies that
currently host
1
2

Rank for companies that plan
to host in next 18 months
1
2

2

3

3
4
5
6
7

4
9
5
4
7

8

4

9
10
10
11
12
12

9
6
4
10
8
9

13

7

N/A

11


The benchmark study asked this question separately for companies currently hosting
and those that planned to host in the next 18 months. The results are combined in
Figure 18. Security remains the number one concern among companies who are hosting
and those that plan to host, 48.0%. This category was rated as a top concern by close to
half of all participants in this study. Dependence on vendors was the second-ranked
concern for companies, 43.0%. Ability of vendor to meet SLA requirements came in third
place, 42.0%. Platform reliability/up-time came in fourth place, 39.0%. However, if this
category is merged with the one above, ability of vendor to meet SLA requirements, it
will have been prioritized by 81.0% of respondents, making it the top concern about
moving to the cloud. This is an issue that organizations around the world should note; its
prominence in the responses clearly indicates that it is an area of weakness for cloudbased contact center vendors. (DMG’s ongoing research into the cloud-based contact
center infrastructure market confirms that platform reliability either is or has been a

- 34 -


serious issue for most of the vendors as they mature, and is therefore an area that
differentiates the offerings.)
Network bandwidth and reliability came in fifth place, 34.0%. Quality of Service (QoS)
came in sixth place, 33.0%. Connectivity and dependability of carriers came in seventh
place, 32.0%. Ease of integration with third-party applications came in eighth place,
31.0%. Total cost of ownership was number nine in the list of top concerns about
moving to the cloud, as reflected by 29.0% of the responses. Loss of control came in
tenth place, 25.0%. However, taken together with the second-top-ranked concern about
cloud solutions, dependence on vendors, these combined related categories increase in
prominence to 68.0%, making this an important area of apprehension for end-user
organizations. This should make it clear to vendors that they need to allay these
concerns by offering relevant programs.
Disaster recovery/business continuity is the eleventh area of concern, 23.0%. Location
of data centers came in twelfth, 21.0%. Ability to administer the system in-house was in
thirteenth place, noted in 18.0% of the combined responses. Three categories tied for
last place, 17.0%: financial viability of the vendor, ongoing maintenance and support,
and breadth of system features and functionality. Financial viability is much more
relevant when licensing an application, as the acquirer typically makes a five-year
financial commitment and needs to be sure that the vendor will remain in business for
this entire period. With cloud vendors, the arrangement is often pay-as-you-go, and
users are mostly at risk for the cost of transferring their operation to a competitor's
system.
Figure 19 shows the ranking of answers to the question regarding top concerns about
moving into the cloud for the two groups, companies that currently host and those that
plan to in the next 18 months. These findings reveal interesting inconsistencies when
compared to the cloud-based purchase drivers in Figures 16 and 17. Security is the topranked concern about moving to the cloud for all organizations, yet it was one of the
lowest ranked drivers of the decision to purchase a cloud-based contact center
infrastructure solution. This is an important disconnect that prospects of these solutions
should explore. It indicates that security remains an area of strong concern for users of
cloud-based solutions. Dependence on vendors was the second biggest concern among
users and prospects of cloud-based solutions. Ability to meet SLA requirements tied as
the second-place concern for companies currently using cloud-based contact center
solutions, and came in third place for companies that planned to use these solutions in
the next 18 months. Platform reliability was the third-ranked concern about using cloudbased solutions for all current users; potential users of this acquisition model ranked it
fourth. The high ranking of this category is an indication that platform performance
remains an area where the vendors need to make improvements.
Connectivity and dependability of carriers ranked as the fourth most important concern
among current users of cloud-based solutions, but came in ninth place for companies
- 35 -


that plan to host. DMG cautions prospects of these solutions to pay close attention to
the ratings assigned by current users of cloud-based solutions. This category was ranked
high as a concern because connectivity and dependability have proven to be challenging
in cloud-based contact center infrastructure implementations.
Network bandwidth and reliability was ranked in fifth place for both current and
prospective users. Quality of Service (QoS) was the sixth top concern for current users,
and in fourth place for prospects. This is an indication that QoS is less of an issue than
anticipated. However, users and prospects alike are cautioned to perform a formal QoS
assessment of their operating environment prior to implementing a cloud-based contact
center solution, to ensure that they have the necessary bandwidth to handle the
incremental traffic. (If not, address this requirement prior to implementing the
solution.)
Total cost of ownership was ranked seventh by current users and prospects. Ease of
integrating with third-party applications came in eighth place for current users, and tied
as the fourth-place concern for prospects. DMG is seeing a trend where more
companies want their cloud-based contact center application vendors to be able to
perform integrations.
Location of data centers ranked number 9 for current users and for companies that plan
to migrate some of their solutions to the cloud. Disaster recovery/business continuity
tied as the tenth-rated concern for current users, and ranked number 6 among
prospects. Loss of control also came in tenth place for current users, but was in fourth
place for prospects.
Financial viability was near the bottom of the list for both current users and prospects; it
was ranked 11 and 10, respectively. Ability to administer the cloud-based solution inhouse (by themselves) was not a high priority for either current or perspective cloudbased users. It came in twelfth place for current users and eighth place for companies
that were planning to invest in cloud-based solutions. Ongoing maintenance and
support tied for twelfth place for current users, and tied for ninth place for prospective
users. Breadth of system features and functionality came in last place, ranked thirteenth
for current users but tied for seventh place for companies that planned to acquire a
cloud-based solution in the next 18 months. These findings make it clear that the
priorities of prospective users of cloud-based contact center solutions are similar to
those of the current group of users.
The survey asked:

- 36 -


Figure 20: What are the top challenges in dealing with your cloud-based contact
center vendors? (Please choose all that apply.)


The study delved deeper into end-user concerns by asking the companies currently
using cloud-based contact center solutions to identify their top technical and
operational challenges in dealing with their vendors. Figure 20 provides these insights,
which logically map to concerns about the vendors. The top challenge is platform
reliability, as reflected by 32.9% of responses. This issue is near the top of the list of
concerns, as well as being the number-one challenge in working with a cloud-based
contact center vendor. The survey findings indicate that this is an area where prospects
need to pay a great deal of attention when making a selection. It is also an area that
current users and prospects should address when negotiating their contract. The
vendors will want to avoid this topic, but it’s one that is worth the effort, as it can make
or break an implementation.
Responsiveness to change requests and inability to perform custom integrations tied for
second place in this category, each representing 26.3% of the responses. These tie back
- 37 -


to concerns about dependence on vendors, as shown in Figure 18. Companies that are
accustomed to managing their own contact center applications need to adapt to their
vendor’s way of doing business when migrating to cloud-based solutions. This is an
important consideration, as some vendors are more responsive than internal IT teams,
and others are not. SLAs should be put in place to address responsiveness to change
requests, to ensure that end-user and vendor expectations are clear and can be met.
Add-on fees came in third place, 25.0%. One-fourth of all cloud-based contact center
application users were seriously displeased with their vendor’s approach to additional
fees. Due to the competitiveness of the cloud-based contact center infrastructure
market, many vendors low-ball their prices in an attempt to win business, and after
closing the deal they demand additional fees for services that the client thought were
included in the base pricing. This is a general problem with software acquisitions, and a
common complaint. Prospects need to be aware of this issue and should spend the time
to make sure that they have identified all needed functionality and costs prior to signing
their contract.
Inability to integrate with third-party applications came in fourth place, 18.4%. This is
not a surprise for the cloud-based market, and is a capability that some of the vendors
are striving to strengthen. As indicated above, this is an area of differentiation between
the vendors.
Lack of contact center expertise came in a strong but disappointing fifth place, 15.8%.
The good news is that the percentage is relatively low, which means that many of the
vendors have staff resources who know how these systems work, as well as best
practices for helping organizations roll them out and succeed in using them. Pace of
innovation was in sixth place, 14.5%. Product capabilities came in seventh place, 13.2%.
Offering a cloud-based solution with the promise that all upgrades are included does not
necessarily mean that the product is feature-rich or updated frequently. This is the case
for most of the cloud-based markets, not just contact centers.
Scalability ranked number eight in the list of challenges; however, the percentage of
users that selected this category was only 11.8%. Billing was identified as an area of
concern by 7.9% of the respondents. Customer service and support was a challenge for
6.6% of the responses, as was provisioning, the ordering process for cloud-based
contact center solutions. And it was good to see that some respondents did not have
any concerns, 9.2%.
The study asked:

- 38 -


Figure 21: Please rate your satisfaction level with your cloud-based contact center
solution provider in each of the following categories:


The study asked users of cloud-based contact center systems and applications to rate
their high-level satisfaction with seven major categories: implementation, training,
system upgrades, innovation, responsiveness, pricing and service and support. The
primary finding is that the satisfaction results are lukewarm. On average, end users are
neither very negative nor particularly pleased about any aspect of their relationships
with their cloud-based vendors.
Respondents were asked to use a five-point scale, where 5 was most satisfied and 1 was
least satisfied. The weighted score tells the story. The weighted averages ranged from a
high of 3.6 for the implementation to a low of 3.2 for ongoing service and support. A
majority of the responses – system training, innovation, responsiveness and pricing –
- 39 -


were in the 3.3 range. This Figure makes it clear that the vendors have a great deal of
work to do in all satisfaction categories.
The survey asked:
Figure 22: Please rate your satisfaction level with your cloud-based contact center
solution in each of the following categories:


As was the case with the high-level satisfaction categories in the Figure above, the
satisfaction scores that drilled down into the specifics were also just lukewarm.
Respondents who were currently using cloud-based solutions were asked to evaluate
the performance of their cloud-based contact center systems and application provider
in 13 areas: ease of use, scalability, agent interface, supervisor interface, platform
reliability/availability, security, breadth of offerings, robustness of feature set and
functionality, multi-channel capabilities, disaster recovery/business continuity,

- 40 -


value/cost of ownership, and reporting and analytics. The rating scale was the same as
above, where a five was the high score and one the low.
End users were most satisfied with ease of use and system scalability, 3.8. However,
ease of use is not an important investment driver, as discussed above. Scalability also
received a satisfaction score of 3.8. Agent interface came in second place with a
weighted score of 3.7. Supervisor interface was down slightly with a rating of 3.6.
Platform reliability and security received scores of 3.5. Six categories – breadth of
functionality, robustness of feature set and functionality, multi-channel capabilities,
integration capabilities, disaster recovery/business continuity, and value/cost of
ownership – all received a very lukewarm satisfaction score of 3.4. Reporting and
analytics came in at the bottom with an average satisfaction score of 3.2.
These results show a barely acceptable level of satisfaction with essential elements of
cloud-based contact center solutions. They also show some similarities to satisfaction
levels with premise-based applications. For example, this is the case for reporting and
analytics, which frequently rank low for satisfaction and value/cost of ownership.
Since the cloud-based contact center systems and application market is growing rapidly,
the low satisfaction scores are somewhat acceptable, albeit disappointing. Improving
customer satisfaction is a goal that all of the vendors should strive to achieve,
particularly as the cloud-based contact center application sectors are crowded and end
users have many vendor choices.

DMG’s Leader Profile: Cloud-Based Contact Center
Concerns, Challenges and Satisfaction
The cloud-based contact center systems and applications market is relatively new,
which explains the low satisfaction scores and serious concerns and challenges facing
this market, though it does not justify them. The cloud-based contact center
infrastructure concept is highly compelling and is attracting the attention of users from
contact centers of all sizes. However, because cloud-based customers are not typically
tied into a contract for more than one year and many are on a month-to-month basis,
these vendors will have to figure out how to greatly improve their satisfaction ratings
across all categories if they want to keep their clients. Specifically, the findings in this
benchmark study point out many of the areas where improvements would be greatly
appreciated by end-user organizations.
End users are attracted by the flexible and scalable cloud-based acquisition model, but
as is always the case, they want secure, functionally rich applications that perform
without disruption, are easy to use and integrate, and come with ongoing innovation.
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They also want to deal with vendors that use fair pricing models so that they are not
faced with surprises and unexpected extra costs.
Leading users of cloud-based contact center systems and applications are already
increasing their expectations of vendors. Early on in the adoption cycle, for example,
lack of integration with third-party applications was acceptable, as was the slow pace of
innovation. This is no longer the case. A review of the decision drivers for cloud-based
solutions makes it clear that prospects and customers expect solid, dependable and
reliable solutions that are very secure and supported by highly qualified resources.
Best practices for succeeding with a cloud-based contact center implementation are:
1. Put everything in writing. Once a vendor is selected, they will be in a huge rush
to get your organization into production. Do not get pulled into the vendor’s
urgency. Be sure to address all technical and operational concerns prior to
signing the contract, just as you would with a premise-based vendor.
2. Identify needed integrations, customizations and additional functionality during
the selection process. Carefully assess the selected platform to be sure that it can
do everything that is required. If it cannot, document the required changes and
include them with their delivery time frame in your contract. Since most cloudbased vendors prefer standardization, they are not readily able to handle
customizations. So, expect custom work to take time and carry a substantial cost.
3. Carefully evaluate the security features of the application. Early in the selection
process, involve IT and your data security people to determine if the cloud-based
contact center solution meets your organization’s security guidelines.
4. Perform a network assessment to ensure that you have the proper bandwidth.
Conduct a formal network capability assessment to make sure that your data
network can support additional activity. If it does not have the necessary
capacity or it seems to be borderline, add the bandwidth prior to beginning the
implementation.
5. Pay careful attention to the service level agreements. Just because the vendor
has used an SLA successfully with other companies does not mean that it will
address your specific needs. Review the vendor's standard SLAs and ask for
modifications, if they’re essential to your company. However, if you ask for
something extra, be prepared to pay for it.
6. Carefully assess the dependability and reliability of the vendor’s delivery platform
and data center(s) prior to finalizing your selection. Most of the cloud-based
contact center infrastructure vendors (and many other application vendors) have
experienced platform issues as they have learned to scale their solutions. (There
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is a steep learning curve that most vendors do not anticipate.) Ask the vendors
for their performance statistics. Check how frequently they have experienced
serious performance issues and how they have addressed them. Also, carefully
review the vendor’s practices for sharing platform performance issues with their
customers.
7. Address carrier and delivery issues early in the process. This will require, but not
be limited to, determining if you are going to continue to use your traditional
voice and network carriers or migrate to those preferred by your cloud-based
vendor; retain your 800 numbers; use a SIP gateway; need to install a multiprotocol label switching (MPLS) pipe; etc.
8. Make sure that the selected application comes with tools that allow your
company to monitor and, if need be, administer the application from your site.
The vendor may (or may not) have day-to-day responsibility for system moves,
adds and changes, or other administrative and reporting functions. However,
even if they do, your organization is ultimately responsible for handling your
customers’ needs. Be sure that your organization can administer the application
and make the required changes, if it becomes necessary.
9. Plan for a formal implementation process, and get all necessary resources lined
up for cut-over. Even though you should not have to implement a substantial
amount of hardware when doing a contact center cloud-based implementation
(although there may be some), the cut-over should be handled as carefully as
any other implementation. Draft the project plan, set dates, get internal and
external resources lined up (including training managers, supervisors, agents and
IT). Do not skip steps just because the solution is being implemented in the
cloud.
10. Train the staff in the use of the application. Train your staff right before the
implementation, and be sure that you have ongoing support available to help
employees with questions for a week or two after cut-over.
11. Set up a team to address issues that arise during the implementation. The team
should include representatives from the vendor, data center, carrier(s), contact
center, IT, and any other relevant departments.
12. Establish a formal process to address problems. Do not leave anything to chance.
Set up a formal process that includes a clearly documented escalation and
resolution process, before it is needed.
13. Document the meaning of success. Be sure to document and share your
organization’s definition of success, so that the vendor can properly plan and
allocate the necessary resources to get the job done to your satisfaction.
- 43 -


Transitioning to Being a Leading and Highly Satisfied User of
Cloud-Based Contact Center Systems and Applications
Obviously, the primary difference between implementing premise and cloud-based
solutions is the location of the hardware and software. When using a cloud solution the
application (and associated hardware) is typically maintained in the vendor’s data
center (likely a third-party data center.) However, just because the system or application
is installed and maintained at a separate location does not mean that the end-user
organization is not responsible for its performance, as it relates to their company and its
customers. The end user’s contact center and IT department is ultimately still
responsible for any system used. This seems to run counter to the current thinking
about cloud-based solutions. However, this is what differentiates the leading end-user
organizations from the rest of the pack: Leaders “own” and are fully responsible for
their solutions, regardless of where they are based and who has title to the hardware
and software.
Leading contact centers find and acquire the systems and applications they need to
meet their business needs. As the cloud-based market matures and these vendors learn
how to keep their environments up and running 24x7, it is becoming less significant
where these solutions are physically located and more important how they are utilized
and managed by end-user organizations. There is a misconception that if a solution is in
the cloud, the user of the application can be totally hands-off and is not accountable for
its performance. This is a costly error that can result in high-profile service failures. If the
service organization goes down and is not online and available to handle inquiries or
sales calls due to a system performance issue at a cloud-based vendor, the end-user’s
customers will not care that the interruption was the fault of a third-party provider.
Leading organizations have a person or team that is responsible for their cloud-based
application. This person remains actively engaged in the ongoing monitoring and
performance of the solution. While they are a member of the organization’s team, they
also need to be viewed as an active member in good standing of the cloud-based
vendor's team. This approach will not eliminate all issues, but it will allow the
organization to take necessary actions on a timely basis when problems arise.

IV.

Social Customer Care

The last section of this benchmark study was dedicated to questions about social
customer care, an emerging function that DMG has been following and analyzing for

- 44 -


years. The questions in this study were intended to determine if enterprises had made
any progress in improving their handling of social media interactions. Although a large
volume of posts, comments and tweets are “noise,” – feedback that does not require an
answer – enterprises need listening devices and strategies to identify, capture and
respond to social media comments that do require a response. DMG issued a worldwide
benchmark study on this topic in November 2011 that identified the opportunities and
challenges facing companies as they were attempting to integrate the handling of social
media channels.
The study asked:
Figure 23: What social media channels are used for customer service? (Please choose
all that apply.)


Facebook is the most frequently used social media channel by organizations, as
reflected in 52.6% of the survey responses. Twitter was in second place, as indicated by
46.3% of the responses. LinkedIn was in third, 28.4%. YouTube was in fourth, 23.2%.
Community forums and blogs tied for fifth place, 22.1%. Message boards came in sixth,

- 45 -


16.8%. Google+ was in seventh, 14.7%. Tumblr was in eighth, 5.3%. Pinterest and
MySpace tied for ninth, 3.2%.
The findings for this question are not surprising, but it is interesting to compare the
results of this benchmark study to the one that DMG did in November 2011, to see if
company social media servicing channels are changing. Figure 24 ranks and compares
the results of this benchmark study to the study from November 2011. Most of the
channels are ranked the same, although there are slight differences in priorities.
Additionally, Pinterest was just getting started in 2011.

Figure 24: Comparison of Social Media Channels Used for Servicing in
2011 and 2013
2011 Study
Rank

2013 Study
Rank

Facebook

1

1

Twitter

2

2

LinkedIn

3

3

Community Forums

4

5

YouTube

5

4

Blogs

5

6

Message Boards

6

7

Google+

7

8

MySpace

8

10

Tumblr

9

9

N/A

10

Answer Options

Pinterest

The survey asked:

- 46 -


Figure 25: What department is responsible for responding to social media comments
and feedback on a daily basis?


Marketing is the lead organization responsible for responding to social media comments
and feedback on a daily basis, as reflected in 41.1% of the responses. Corporate
communications/public relations is the second most likely department to handle social
media interactions in a company, 20.0%. The contact center and customer service
departments tied for third place, each with 12.6% of the responses. The executive suite
(executive communications) came in fourth place, 3.2%. A dedicated social media
support team and a third-party consulting/advertising/marketing company tied for fifth
place, 1.1%. It’s also important to point out that 8.4% of survey participants indicated
that they did not have a department responsible for handing social media interactions.
Figure 26 compares the findings for this question in 2011 to those from the 2013
benchmark study. A lot has changed in the two-year period. Marketing has solidified its
- 47 -


position as the go-to department for handling social media interactions, even though a
majority of the feedback that requires responses is customer-service-oriented.

Figure 26: What department is responsible for responding to social
media comments and feedback on a daily basis, 2011 vs. 2013
2011 Study
Rank
3

2013 Study
Rank
1

Corporate communications/PR

4

2

Contact center

1

3

Customer service

2

3

Executive communications

6

4

Dedicated social media support team

5

5

Third-party consulting/advertising/
marketing company

8

5

Sales

7

N/A

Each department sets its own social media strategy

11

N/A

Answer Options
Marketing


DMG’s Leader Profile: Social Customer Care
The findings of this benchmark study do not support general industry claims that social
customer care activities are being performed by leading organizations. Marketing has
continued to pick up more responsibility for social media in many organizations. But
marketing has never been interested in responding to customer service issues, so DMG
is increasingly seeing the formation of dedicated social media support teams. These
teams frequently report to marketing and are separate from customer service and the
contact center. It is likely that marketing is setting up a new dedicated social media
team to handle the service inquiries in order to avoid having to work with customer
service or the contact center on this activity. Unfortunately, internal politics are moving
organizations in the wrong direction, one that could expose the company to risk.
The ideal way to handle social media interactions is to build a social customer care team
using fully trained and knowledgeable customer service or contact center employees
who know the company’s servicing and operational policies and procedures and are
comfortable interacting in social media channels. It is likely that these employees are
Millennials who grew up on social media, but any employee could potentially meet the
criteria. Additionally, the social media responders support staff needs to be highly

- 48 -


sensitized and trained to avoid social firestorms and help their company avoid negative
news stories. This team should report to both marketing and the service organization.
This new servicing team needs a very complex and sophisticated set of tools to allow
them to do their jobs and keep track of their responses. It’s is also important for
customer service, and contact center employees in particular, as well as marketing and
sales, to have visibility into what the social customer care staff is doing and saying in
public forums. The market is still waiting for the delivery of functionally rich social media
CRM or servicing applications, but this is an area of active development in the market.

Transitioning to Being a leader in Social Customer Care
It doesn’t take much to be a leader in the area of social customer care; the most
important characteristic of leadership today is an organization that has a formal process
to ensure that social media interactions directed at their company are properly handled.
This can be accomplished with many different options and approaches, which is part of
the challenge.
DMG has seen some companies do a good job handling their social media interactions.
These companies are using listening devices, a variety of text analytics functionality,
routing and queuing software, and some type of servicing application to handle inquiries,
posts and comments. But leading organizations also need to address the politics that are
hampering the proper handling of social customer care within the servicing framework.
Alternatively, organizations should totally rethink their servicing strategy. This is a good
idea, anyway, as most companies have been delivering service the same way for the 20
to 30 years since contact centers started to enter the market.
Social customer care is an area that deserves much more attention than it is receiving in
most companies today. The channels are proliferating, as shown in this benchmark
study. Facebook and Twitter are not standard support channels in most enterprises,
even though customers think they should be. Most organizations have not yet
developed formal policies and procedures for handling the communications received
from social channels.

- 49 -


V.

Final Thoughts

This benchmark study answers and quantifies a few of the most frequently asked
questions about contact centers. It provides companies with detailed guidance about
2014 contact center initiatives and investment priorities, to help them with their 2014
goals, plans and budgets. It reveals which channels are currently being used and what
companies plan to use in the future. It proves that more than half of companies,
specifically, 62.4%, are already using cloud-based contact center systems and
applications. And 45.6% of the hold-outs are planning to move some of their
applications to the cloud by the end of 2014. The study also takes a fresh look at the
impact of social media on customer service, and finds that most companies are still very
slow to build social customer care organizations. This is a mistake, as social media is a
primary communications channel for Millennials, and it’s an error that a vast majority of
companies are making.
This study proves that voice (phone calls) is still the number-one supported channel;
97.1% of respondents support it. Email in second place (90.4%), Web chat in third
(66.3%), and Web self-service in fourth place (47.1). The study also shows that some of
the newer channels are on the rise, as they should be. Facebook (37.5%), SMS (35.6%),
Twitter (34.6%) and mobile (34.6%) are all making a sizable impact. Video is a laggard,
with only 20.2% of organizations adopting this channel. Organizations reviewing these
numbers may use them to justify their slow migration to newer channels. While it is
acceptable to continue to provide support in the traditional channels, DMG encourages
all companies to start the discussion with their customers about how they want to be
supported. Supporting customers in their channel of choice is increasingly becoming a
strategic imperative, and is already a differentiator. While DMG’s research has found
that few customers will drop a relationship with a company due to limited support
channels, we do believe that prospects are increasingly taking into consideration the
ease of doing business (including the choice of support channels) when selecting
companies that they want to work with.
This analysis provides a detailed list of top contact center initiatives for 2014. While
analysts and pundits can debate the issue, the number-one goal for contact centers and
service organizations in 2014 is to improve agent productivity, as indicated by 55.5% of
the responses. There is nothing wrong with this objective, given that the vast majority of
service organizations are people-intensive, and executives have a fiduciary responsibility
to keep their costs down and profits up. The number-two goal for companies in 2014 is
to increase the use of self-service solutions (45.3%). This is a highly effective way to
improve agent productivity. By giving customers and prospects good alternatives to live
support, companies can improve agent productivity. Of course, this will work only if
companies build voice, Web and mobile applications that give their customers quality
service. The third top goal for companies is to reduce the cost of service (41.1%). This is
- 50 -


tied to the first two goals. If companies improve agent productivity and increase the use
of self-service, they will decrease the cost of service. The fourth goal for 2014 is to add
support for new channels (37.9%).
This study also shows which contact center systems and applications are in use and
what is going to be adopted during 2014. Based on the results of the study, it appears as
if 2014 is going to be a very good year for contact center investments. This is a great
indication that the economy is well on its way to recovery, as during the recession
service organizations lost out to revenue-generating departments when enterprises
were making investment decisions.
It is very interesting to note the large percentage of companies that plan to use cloudbased applications in the future, instead of traditional premise-based applications. Users
of cloud-based contact center systems and application are only lukewarm in their
satisfaction with these applications, but they are not giving up, and the solutions are
getting better as adoption increases. However, cloud-based contact center
infrastructure vendors should pay attention to these results. Since their customers are
not locked in, they are going to need to do a better job of satisfying them if they want to
retain them for the long run.
There is a great deal happening in the contact center and customer service market.
Service organizations of all sizes around the world are making investments in their
future. They are investing in their strategy, people, technology and processes as they try
to figure out how to deliver a great customer experience cost effectively. One thing is
for sure: The cloud is going to play an increasingly important role in the future of these
organizations. It may not be right for everyone, but it is certainly proving to be an
effective way of acquiring contact center and customer service systems and applications
for a growing number of contact centers.

- 51 -


VI.

Appendix: DMG’s Benchmark Study Research
Methodology

DMG’s research goal is to obtain an unbiased response to our surveys, to provide
readers with a benchmark of how other companies are performing or handling the
issues addressed in each study. To achieve this goal, DMG invites enterprise, contact
center, sales, marketing, operations and IT managers, decision-makers, leaders and
executives to participate in our surveys. We use a variety of outlets for inviting
participants, including DMG’s highly qualified newsletter list, online trade publications,
newsletters that are read by our target audience, and other relevant lists, based on the
content of our studies.
DMG strives to obtain a representative group of participants that reflects the contact
center market. Therefore, we reach out to small, mid-sized, large, and very large contact
centers and organizations. Participants from around the world are invited to share their
thoughts and opinions with us on the topic of the study.
DMG requires a minimum of 100 complete responses in order to provide high-quality,
representative results. To achieve this goal, we often receive input from 200 or more
participants, some of whom answer only a portion of a survey. All participants are
invited to receive a free copy of the survey study as a thank-you for their participation.

- 52 -


About Connect First
Connect First is an award-winning SaaS telecommunications and cloud contact center
software provider that focuses on customer satisfaction and elegant hosted solutions.
Connect First offers a robust platform, designed and supported by a team of highly
experienced engineers, designers and business analysts, and backed with personalized
in-house customer care. Solutions include Cloud Routing, Inbound ACD, Outbound
Dialing, Call Tracking, Interactive Voice Response (IVR), Voice Broadcast, Disaster
Recovery, Predictive Dialer, Real-Time Telemetry, CDR Reporting, Live Agent Chat and
more. Through a consultative approach with each customer interaction, Connect First
builds customized solutions to meet the needs of a discerning customer base. Visit our
website at www.connectfirst.com or call 888-965-1588 for more information or to
arrange a free consultation with a contact center solutions expert.

About DMG Consulting LLC
DMG Consulting is the leading provider of contact center, back office and analytics
research, market analysis and consulting services. DMG’s mission is to help end users
build world-class, differentiated contact centers and back office operating environments,
and to assist vendors in developing high-value solutions for the market.
DMG devotes more than 10,000 hours annually to researching various segments of the
contact center and back office markets, including vendors, solutions, technologies, best
practices, and the benefits and ROI for end users. DMG is an independent firm that
provides information to executives, contact center managers, the financial and
investment community, and vendors in the market. For more information, visit
www.dmgconsult.com.

- 53 -


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