DEBUG: PAGE=domain, TITLE=NelsonHall Blog,ID=1469,TEMPLATE=blog
toggle expanded view
  • NelsonHall Blog

    We publish lots of information and analyst insights on our blogs. Here you can find the aggregated posts across all NelsonHall program blogs and much more.

  • Events & Webinars

    Keep up to date regarding some of the many upcoming events that NelsonHall participates in and also runs.

    Take the opportunity to join/attend in order to meet and discover live what makes NelsonHall a leading analyst firm in the industry.


Subscribe to blogs & alerts:

manage email alerts using the form below, in order to be notified via email whenever we publish new content:

Search research content:

Access our analyst expertise:

Only NelsonHall clients who are logged in have access to our analysts and advisors for their expert advice and opinion.

To find out more about how NelsonHall's analysts and sourcing advisors can assist you with your strategy and engagements, please contact our sales department here.

CMS in 2017: Delivery & Transformation and Industry-Specific Predictions for the Year Ahead

go to blog home

Search posts by keywords:

Filter posts by author:

by Vicki Jenkins & Ivan Kotzev

NelsonHall’s principal Customer Management Services analysts take a look at how the CMS market will shape up in 2017, with predictions for CMS delivery & transformation from Ivan Kotzev, and industry-specific predictions from Vicki Jenkins.


1. CMS Delivery & Transformation Predictions

For CMS, 2016 marked a substantial shift in the global market. Several high profile acquisitions reshuffled the global top 10 providers. Client requirements shifted towards higher value, comprehensive customer experience offerings. There was continuing growth in both offshore and onshore centers, and entry into new delivery markets. And the ongoing advance of analytics and automation, both technology and application, further changed the front-office.

In 2017, several of these trends will proceed at a greater pace, while external factors such as political risks have the potential to disrupt growth plans in specific delivery countries or client industries.

Consolidation: more of the same, bigger

In 2016, most of the M&A activity in CMS was strategic growth. Delivery scale still matters, and in 2017 vendors will continue to buy market share and contact center seats. A steady trend towards transformational customer experience is forcing clients to narrow their list of CMS suppliers, pressuring vendors to grow their footprint in the U.S. and key European markets and offer a global service in APAC and LATAM. Likely acquisition targets include U.S. and Indian providers.

Development and targeted acquisitions of digital marketing capabilities

In 2016, CMS vendors bought analytics, automation, and industry-specific capabilities, but some of the newest targets have and will be in the area of digital marketing. The main reason for this is the greater blending of sales and support in a predominantly digital customer experience. In turn, this causes buyers of contact center services to spread further among customer services, marketing, and sales departments. As a whole, clients are more ready to look at the end-to-end customer experience, which requires pure-play CMS providers to offer digital services beyond just support.

Automation of the desktop and more examples of virtual agents

The current investments in desktop automation and next-best actions for the customer-facing agents are gradually spilling over to more verticals, more services lines, and hybrid and fully automated virtual agents over text channels. By the end of 2017, the majority of the global top 10 CMS providers will have at least one fully automated virtual agent implementation.

Investment focus on machine learning and NLP resources

This level of automation is based on machine learning and NLP resources which vendors will add aggressively in 2017, either through in-house team development or partnerships in the AI start-up space. Machine learning algorithm developers, predictive modelers in R, and language analysts, all with industry experience, will be even more highly sought after than in the last year.

Self-service will mature to a separate revenue stream, while support over messengers will reach N. American and EMEA customers more decisively

In 2017, CMS vendors will continue to make more than three-quarters of their revenues from voice channels but, driven by client requirements, self-service will develop to a key channel in their offerings.

The new year will also finally deliver multiple outsourced support examples over Facebook Messenger, Viber, and WhatsApp for N. American and European customers.

Political risk will replace security concerns as the biggest external threat to the industry

The plans of the new U.S. administration for the healthcare sector, the Brexit terms, and the policies of the Prime Minister of India and President of the Philippines have the potential to disrupt entire delivery markets and industry sectors making multi-shoring, diversified vertical portfolios, and FX hedging vital.

Conservative growth

NelsonHall predicts 2017 year-on-year global CMS market growth to be ~4.5%, with factors such as increased adoption of digital services and stress on improved customer experience to drive demand for higher value services and revenue generation service lines, while automation and self-service will cannibalize part of the revenues.


2. CMS Industry-Specific Predictions

Retail Banking

  • Use of RPA and cognitive technologies will increase, initially in support of agent assistance. Automation will be utilized in the front office, reducing cost and improving interaction turnaround times. RPA and cognitive also impact processing services, e.g. facilitating speed of origination for banking products
  • Revenue generation will continue to increase in importance as a driver of CMS in the retail banking sector, driven by use of analytics and cognitive technologies, though cost reduction and the need for increased CSAT will continue to be key drivers for retail banking CMS
  • Voice interaction will remain high due to the complexity of many retail banking interactions, though there will be a reduction over the next few years due to deflections to webchat. Email will continue to be used for sharing of documents. Social media and video chat will increase in importance.

Retail & CPG

  • Revenue generation will continue to increase in importance as a driver of CMS in the retail and CPG sector. CMS will increasingly be used in support of proactive sales and enhanced two-way communication with customers
  • Customer retention will continue to be a major focus for retail and CPG organizations, and loyalty program support needs will grow
  • Webchat and social media will overtake email in channel usage, and website content, including video, will become a more integral part of service delivery
  • Analytics usage will continue to grow, along with the need to better understand buying patterns, with AI beginning to be incorporated into service delivery.

High Tech

  • Increasing CSAT, cost reduction, and process improvement will remain primary drivers of CMS in high tech, and revenue generation will increase in importance through paid technical support programs, to service out of warranty and out of warranty scope customers
  • Customer retention will increase in importance as more high tech clients offer VIP and white glove customer care to customers, and the high tech sector continues to grow competitively. Cost reduction will increasingly be driven by ensuring that only complex calls are routed to highly skilled technical support agents, while less complex calls are routed to level 1 agents
  • As high tech organizations increase adoption of video chat, the channels will shift and customer experience will be enhanced; customers will be able to show agents complex issues they are experiencing, and will be provided with faster service which is more likely to resolve issues in the first call. Video chat and online ‘how to’ videos will also reduce expensive truck rolls. Analytics and video chat will increase in use, to aid efforts to reduce product returns
  • Risk-reward models will increase in use, particularly in sales/renewals of subscriptions.


Vicki Jenkins is NelsonHall’s lead analyst for industry-specific CMS markets, and Ivan Kotzev is the lead analyst on CMS delivery and transformation. To find out about NelsonHall’s extensive research plans for CMS in 2017, contact Guy Saunders.

No comments yet.

Post a comment to this article: