NelsonHall: Customer Experience Services blog feed NelsonHall's Customer Experience (CX) Services program is designed for organizations who need to understand, adopt, and optimize the next generation of customer service models for their business, including omni-channel services and the application of advanced analytics, alongside traditional voice and other contact center services. <![CDATA[CX Automation in Practice: Reality Check with Webhelp]]>


The inevitable automation of the contact center role has become such as surefire prediction in mass media, by CEOs, and even politicians, that a more realistic view of the industry may seem impossible. In this blog, I look at Webhelp’s assessment of the CX automation landscape and the realistic challenges and opportunities in the market.

Customer-facing automation requires significant volumes

The majority of outsourced customer-facing automation implementations are around text communication. Chatbots, email bots, and increasingly messenger bots, are also an investment focus for CX services providers, offering more applicable business cases and quicker ROI. The challenge, however, is that phone interactions continue to dominate; for example, for Webhelp, voice represents ~85% of all volumes across their European markets. The shift from voice to non-voice is gradual and for many customers the phone remains the preferred channel to contact brands.

While variations between customer segments (e.g. Gen X and Z) and geographies (e.g. China) can place higher priority on text interactions, the biggest markets remain voice-centric. Automating voice-based scenarios are more complex and hence more costly, with the additional step of transcription and with low accuracy in many languages. A voice automation solution requires more than 100 hours of transcription on a given use case.

On the flip side, the growing adoption of messengers and digital voice speakers by customers can create the necessary potential scale of interactions to justify bot development.  

Self-service vs. generic info automation

With the aim of removing repeatable and low-skilled inquiries, companies are investing in developing self-service journeys. Webhelp estimates that ~15% of interactions can be handled with self-service over the brand website with customer portals, FAQs, interactive tutorials and guides, and through mobile apps. The company provides consulting and advisory services to its clients to identify the relevant processes and customer journey steps to support with self-service, and then promote and redirect on the IVR and during live agent interactions. A common challenge here is that many brands struggle to link the web and contact center journeys and track KPIs by merging web and CRM data at scale. The company’s consulting agency, Gobeyond, has conducted such analysis and estimates that this ~15% potential applies across verticals.

The potential of conversational automation

The scenarios where the customer interacts with a robot, receives personal information, and completes the journey without human intervention are even fewer. Webhelp evaluates this potential at ~13% over the next three to five years. The main reason for this low target is that, for a true cognitive bot deployment, the client needs to reach digital transformation maturity; for example, with a CRM ready to connect to AI, centralized databases, and robust CX infrastructure. Other reasons include the high cost of the technical implementation and integration with various systems, the long deployment timeframe which, coupled with significant ambiguities or dynamics in the CX processes, makes them not ‘AI friendly’. A further barrier can be the risk of low customer satisfaction, especially in long multi-step scenarios.

The challenge with customer-facing robots is the need to synchronize the interaction between customer, live agent, and CX systems. In Webhelp’s experience, automation is successfully deployed mainly in back-office activities with heavy legacy of processes which are not aligned to the technology landscape; for example, in financial services.  

Bot training and bot development

One of the advantages of CX services providers is they can offer sizable resources and domain experience in CX to train chatbots, with agents classifying conversations by intent, analysts creating the taxonomy, and data scientists developing the algorithms in-house. Webhelp began offering these services approximately two years ago with its Technology Enablement division. For example, for Merck in France, it developed a voice bot to answer calls from hospitals and pharmacies about medicine availability and expected delivery times. It coded around 300 medicine names and for each medicine, several dosage and packaging variations. It also developed the NLU model to understand the information. The algorithms further identify pharmacists eligible to access emergency stock.

Launched in June 2018, the bot currently handles ~100 calls daily, processing around half of the total volume. The implementation lowered the cost of operation, replacing the need for doctors and pharmacists from the company to manage calls. The company is now developing a web service, activate order taking, and plans to extend the opening hours.

Automation as a CX enabler

The area where automation is likely to bring the biggest immediate impact is in CX agent augmentation. Webhelp’s experience shows that different types of bots and ML analytics can increase FCR by ~15% when applied to QA, can reduce AHT by 25% with assisted response tools such as NBA, and can improve CSAT by leveraging NLP/NLU models to transcribe, classify, and analyze contact drivers. Next, the company has partnered with speech analytics provider Allo-Media to develop a real-time speech cognitive bot to proactively help agents during calls. Webhelp has identified three use cases: in dynamic sales inquiry checklist, customer data recap, and sales enablement materials. It plans to test the cognitive assistance in a lab environment by the end of the year and real-live implementations in 2020.


NelsonHall will publish a Cognitive Customer Experience Market Analysis report in Q4 2019.

<![CDATA[Comdata: How Customer Insights Are Transforming CX in Retail & CPG]]>


A common theme in the upcoming NelsonHall CX Services in Retail & CPG report is the increasing need by sector clients to generate and operationalize insights from their customers. Technology has shifted the power to consumers who are less loyal to brands and change their buying behavior more frequently, creating micro-segments.

However, while having a wealth of data such as customer feedback, retailers are often prone to sitting on them without interpreting and driving their transformation programs. Comdata’s VOC analytics and customer feedback service, ConsumerLive, aims to assist companies in the end-to-end management of customer insights and has implemented it for several retail clients.

ConsumerLive: platform & service combined

Comdata launched the ConsumerLive platform in 2012 with a French luxury brand looking to streamline feedback surveys in the front office and improve re-engagement with customers. Today, it is a cloud-based PaaS tool comprising:

  • Customer and employee feedback collection with alerts on aggregated performance
  • Real-time reporting and dashboards, and KPI monitoring with mobile app access
  • Engagement module to contact customers directly and prioritize targets
  • Data analytics with supporting market research resources.

The company combines the platform with consulting services, where it develops the business model and ROI, maps the customer journey, mines the data on an ongoing basis, and designs, programs, and executes the surveys. It has developed a five-stage approach to implement VOC programs, covering:

  • Winning executive support
  • Structuring the governance of the program
  • Consulting on change management
  • Prioritizing target customer segments and moments of truth in the customer journey
  • Deploying automation such as semantic analysis.

As a best practice, it focuses initially on quick wins to demonstrate the relevance of the VOC program, and then develops business cases for more transformational initiatives.   

ConsumerLive integrates with client CRMs such as Salesforce through an interconnector, building a single database across platforms to centralize customer feedback with other KPIs.

Customer insights is the DNA of CX in retail & CPG

ConsumerLive has ~20 implementations, spanning 50 countries in Europe, APAC, and Africa in 25 languages, and covers both traditional contact center VOC and wider customer journey and brand analysis. The latter is a focus area, particularly in retail, where clients look to monitor the performance of their physical network and e-commerce omnichannel.

Retail and CPG clients usually want to verify initially that the right customer profiles are interviewed and that a certain conversion rate for the campaign is achieved. Next, they are interested in matching KPIs such as customers’ overall satisfaction or intention to revisit against target sub-segments or geographic markets. Sector clients also filter the free-form comments by different topics such as stock availability or staff responsiveness to identify areas for improvement.

Another requirement is to compare customer satisfaction against market averages or across their network, and drill down to the salesperson or contact center agent level. The mobile app enables store managers to see in real-time the store’s performance and manage their staff or re-engage with customers directly through the platform.

For example, for a French retail chain specialized in home improvement with 300 outlets in the country and ~6.5k employees, Comdata developed customer satisfaction questionnaires, deployed monthly scorecards per store, made the survey results available 24/7, and analyzed ~40k verbatim customer responses in real-time. The client has the main KPIs displayed in its headquarters and stores. Since the program start in 2016, Comdata has conducted 1m surveys over email and SMS with 100k responses, and has contacted ~12k dissatisfied customers.

Improving data mining and expanding to social media

On the roadmap for ConsumerLive is a data mining module to correlate historical information such as purchases against customer feedback, and predict customer satisfaction results. It has already implemented the predictive functionality with one client and is now looking to industrialize it with a separate module.

Comdata also wants to expand to social media feedback, bringing online posts to the customer view. It currently works with Trustpilot to publish part of the user responses on social media and continue with more details in a private survey. While a number of ComdataLive clients have tested new survey channels such as SMS and QR codes, all still rely on email surveys which bring the highest conversion rate and the most reliable results.

Customer insights the foundation of retail transformation

In a data economy, retail and CPG clients have significant needs to map brand and CX attributes which actually drive loyalty and quantify customer behavior trends. These insights are the first step to supporting future investments in phygital, experiential retail, or new models such as subscription.


NelsonHall’s CX Services in Retail & CPG market analysis report and individual vendor profiles are available to clients of NelsonHall’s CX Services program.

<![CDATA[Will Crowdsourced Customer Service Get Solv(ed)?]]>


Crowdsourcing and different types of freelanced customer support models pre-date the current household names using these models in leisure and travel, personal transportation, and delivery services. Many of these early attempts died out because of poor business models, or remain effective today but in niche markets (e.g. gaming) or on a small scale (e.g. U.K. mobile network, giffgaff). More recently, with the increased adoption of work-at-home and the evolution of automation, new players such as Directly are renewing their interest in the space.

Now Concentrix is launching its own marketplace platform called Solv, aiming to offer enterprise level quality support using gig workers.

How Solv works

Freelance workers support brands in the Solv cloud platform, handling tickets routed from the client CRM and originating from chat, messengers, social media, or SMS channels. The customers see the number of available agents, the status of their inquiry, and the expected resolution time. They can see the ‘Solver’ responding to the question and their score and chat in real-time with him/her, then approve when the ticket is closed and rate the transaction.

Solvers accept tickets on their desktop or mobile device, review and respond, and are paid per rated ticket. For each ticket the Solver, in turn, rates the complexity of the issue and can see their CSAT rating and earnings.

The clients have management panels to monitor, verify and manage Solvers, track ticket data and performance, and assign a price per ticket.

Initially, Solv tickets will require no customer data and PCI adherence. Concentrix is adamant about maintaining the channel experience and avoiding transfers between Solv and the other channels. In cases where there are no available resources, it will create the ticket flow back into the client CRM.

Concentrix charges companies on a pay-as-you-go basis to create a dynamic on-demand model.

Attracting freelancers

With Solv, Concentrix is targeting independent contractors who look for additional income on a temp or permanent basis, who want greater flexibility, and have a brand affiliation. The ideal applicant will be a superuser with domain and product expertise, digital skills, and can independently manage their work-life balance. With that goal in mind, the company invested in the platform design to make it appealing to a younger, digitally savvy workforce. Similarly, the majority of recruitment for the platform is on social media.

Solvers go through a two-step registration process where they self-assess their skills and perform brand authentication with video tutorials. The freelancers do not participate in traditional training, but Concentrix will co-create content with each brand, while freelancers also access public domain information and resources.

Solvers can support multiple brands, but Concentrix and the client will approve the available workflows. The workers have no minimum or maximum earnings caps. Solv is not open to existing Concentrix agents, to avoid conflict of interest. The company is gradually opening the platform across markets, starting with the U.S., U.K., Ireland, Philippines, and India to carefully adhere to the regulatory environment, but will scale globally and offers 24/7 borderless support.

Official launch this summer

Concentrix is officially launching Solv during the summer months. So far, it has had several pilots, including a technology gaming brand where it replicated the client’s email and chat L-1 technical support on the platform. Within four months, Solv outperformed the contact center with 20% increase in FCR, 14-16% in customer satisfaction, and 18% in productivity.

The pilots showed a lot more feedback information for brands, as each interaction is evaluated: different levels of needs with certain brands insisting on one hour TAT, while others are accepting days. Interestingly, Solvers had better performance when using smartphones vs. desktops.

Solv drew interest from high tech, travel, retail, and fintech clients, primarily looking to redirect social media traffic and create or transform their existing communities of influencers. It is currently in various implementation stages with six clients across different levels of customer care and technical support, with certain types requiring API integration to the client CRMs.

The future of Solv

While Concentrix is still exploring possible service models with Solv clients, it is also looking to monetize it and create additional platform features. It has already identified several next steps in its development roadmap – it plans to use ML algorithms to collect five-stared answers to feed the FAQ and self-service systems of clients; to price tickets by location; to allow users to select their agent; and dynamically route traffic or limit companies and ticket types based on the Solvers’ skills and performance. Another idea is to add tiers of rewards and recognition to build the reputation of both workers and consumers. The company is also investigating with clients the launch of upselling programs without the Solvers accessing CRM data.

Eventually, Concentrix envisions Solv as part of its broader CX ecosystem, operating alongside its brick-and-mortar, work-at-home, and automated support services.

Solv is trademarked by Concentrix.

<![CDATA[Seizing the Automation Opportunity: Alorica’s Automated Discovery Process]]>

One of the first stumbling blocks of business process transformation is identifying meaningful automation opportunities. A typical process will have a management consultant, system expert, or Lean Six Sigma specialist to monitor manual processes for a set time, collect performance data, and make recommendations. Companies supplement this assessment with executive ideation sessions, operational managers’ workshops, and superuser interviews. The traditional way to speed up and improve the accuracy of this approach is to add more consultants over a longer period of time analyzing larger data sets. Yet, despite these efforts, not every process is observed and not all automation opportunities are identified and prioritized.

In this blog, I look at how Alorica employs its proprietary tools and algorithms to streamline ‘the discovery stage’ and recommend effective automation deployment in the front-office.

From manual to automated discovery 

Alorica has developed an automation approach for the discovery stage, calling it ‘One-Click Automation’. Its unsupervised machine learning algorithms measure agents’ desktop utilization on a select group of 10-20 users. The bot monitors the users’ screen toggle, clicks, data entries and entry type, and tracks time per system and per screen, the time duration for performing each step, and the number of used fields. It counts errors, frequency, variance in the time and data entry quality, the end-to-end handling time, the complexity, and importance of the tasks. It also tracks the underlying communication between systems and exchanged information.

The bot does not capture personal data or other input information, remaining non-invasive to the systems. It also does not intervene with the users’ actions. Once the bot collects enough information (~100k data points per LOB, typically in two weeks), it creates a visual map of the observed processes. The process map visualizes the screens, the start and end points, the navigation between them, and the direction with drill-down functionality. For large product portfolios with multiple support processes (for example, in technical support), Alorica requires a bigger user pool to observe.  

Alorica created the discovery bot in its Digital CoE and Innovation Lab (DCOE) in Bangalore, launched in 2018. The automation specialists in the DCOE analyze the discovery bot results, estimate savings opportunities, and recommend and prioritize bot implementations with workflow business process, exceptions adjudicator, and look-up. Because the collected information shows the actual steps and the specific systems and fields to move the data, the created automation workflows make the bot training quicker and more precise. It also provides cost-benefit analysis and ROI calculation for each automation.

Implementations for a healthcare client

For a U.S. healthcare payer client, Alorica deployed the discovery bots on a statistically relavant number of agent desktops for three days, identifying 150 automation opportunities in multiple processes with tasks such as secondary claims research, multifactor case, clinical guidelines, and Citrix login. The algorithm analyzed the events to measure the number of agents who performed the particular process, its recurrence, and time taken. The team compared the results to the agent training guidelines, then Alorica prioritized with the client 11 automation initiatives that delivered the highest time and productivity savings and ROI and CX improvement.

Alorica ran the discovery bots on both for the client’s  voice and non-voice work. For example, in the client’s back-office, the discovery bots analyzes processes for manual data entry from image and PDF claims received over emails and e-fax. Using third-party RPA & AI partner tools, Alorica created bots to capture and auto-populate fields regardless of the screen or source format while blocking certain data or document areas to meet client or compliance requirements such as HIPAA. It also has exception notifications to inform live agents to validate. Another benefit is that these bots runs 24/7. The automation deployed in early 2019 delivered ~70% headcount reduction of the process headcount who translated the data from the claims to the systems.

The company is now targeting other existing healthcare clients and showcasing their India DCOE as a ‘digital workbench’ for back-office processes, leading with automation. For automation opportunities in voice processes, Alorica is working with several travel, retail, BFSI, media and telecom brands.

Automation in the process trenches

The fundamental challenge of which tasks to automate has many dimensions such as high volume, time-consuming processes, sizable FTE involvement, high error rate, or simply, risk aversion by internal IT teams. To address the latter issue, Alorica automation deployments so far are on its own desktops without compromising, changing or modifying core client systems. The company absorbs the investment cost for running the discovery bots to set up a meaningful discussion with the client’s process owners on the possible cost-benefit and ROI.

A less discussed problem with RPA projects is the impermanent state of business processes with dynamic changes of internal rules, product/services, and system environments. The shelf-life of a bot will be quite short and its ROI smaller without human supervisors who in turn need to be prioritized and allocated based on business decisions. The automated desktop analytics model allows the deep learning algorithms to solve at least the first part of the challenge of identifying process impact. To mitigate automation program redesigns, Alorica’s solution is to focus on mature system infrastructure with a steady release roadmap. 

Another challenge to automation is the incentives for the provider. Through the achieved cost optimization and improved performance, Alorica targets a bigger share of the client wallet, looking to take over higher value processes, and switching to performance-based pricing models. For the above-mentioned healthcare client, Alorica structured the pricing by processed claim, decreasing the overall cost by ~50%.

The value of partnering for automation

While broad statements for full automation attract media attention, the real opportunity in most cases is in the learning. Automation is not likely to change a process but improve it and help increase customer satisfaction. Partnering with an outsourcing provider can deliver faster and better discovery in an ideal scenario, where the vendor has the process and domain expertise and quantitative discovery tools. The next step is to expand automation across both captive and supplier network centers to maximize the benefits.

<![CDATA[IPsoft Looks to Reduce Time to Value While Increasing Return on AI]]>


NelsonHall recently attended the IPsoft Digital Workforce Summit in New York and its analyst events in NY and London. For organizations unfamiliar with IPsoft, the company has around 2,300 employees, approximately 70% of these based in the U.S. and 20% in Europe. Europe is responsible for aproximately 30% of the IPsoft client base with clients relatively evenly distributed over the six regions: U.K., Spain & Iberia, France, Benelux, Nordics, and Central Europe.

The company began life with the development of autonomics for ITSM in the form of IPcenter, and in 2014 launched the first version of its Amelia conversational agent. In 2018, the company launched 1Desk, effectively combining its cognitive and autonomic capabilities.

The events outlined IPsoft’s positioning and plans for the future, with the company:

  • Investing strongly in Amelia to enhance its contextual understanding and maintain its differentiation from “chatbots”
  • Launching “Co-pilot” to remove the currently strong demarcation between automated and agent interactions
  • Building use cases and a partner program to boost adoption and sales
  • Positioning 1Desk and its associated industry solutions as end-to-end intelligent automation solutions, and the key to the industry and the future of IPsoft.

Enhancing Contextual Understanding to Maintain Amelia’s Differentiation from Chatbots

Amelia has often suffered from being seen at first glance as "just another chatbot". Nonetheless, IPsoft continues to position Amelia as “your digital companion for a better customer service” and to invest heavily to maintain Amelia’s lead in functionality as a cognitive agent. Here, IPsoft is looking to differentiate by stressing Amelia’s contextual awareness and ability to switch contexts within a conversation, thereby “offering the capability to have a natural conversation with an AI platform that really understands you.”

Amelia goes through six pathways in sequence within a conversation to understand each utterance and the pathway with highest probability wins. The pathways are:

  • Intent model
  • Semantic FAQ
  • AIML
  • Social talk
  • Acknowledge
  • Don’t know.

The platform also separates “entities” from “intents”, capturing both of these using Natural Language Understanding. Both intent and entity recognition is specific to the language used, though IPsoft is now simplifying implementation further by making processes language-independent and removing the need for the client to implement channel-specific syntax.

A key element in supporting more natural conversations is the use of stochastic business process networks, which means that Amelia can identify the required information as it is provided by the user, rather than having to ask for and accept items of information in a particular sequence as would be the case in a traditional chatbot implementation.

Context switching is also supported within a single conversation, with users able to switch between domains, e.g. from IT support to HR support and back again in a single conversation, subject to the rules on context switching defined by the organization.

Indeed, IPsoft has always had a strong academic and R&D focus and is currently further enhancing and differentiating Amelia through:

  • Leveraging ELMo with the aim of achieving intent accuracy of >95% while using only half of the data required in other Deep Neural Net models
  • Using NLG to support Elaborate Question Asking (EQA) and Clarifying Question & Answer (CQA) to enable Amelia to follow-up dynamically without the need to build business rules.

The company is also looking to incorporate sentiment analysis within voice. While IPsoft regards basic speech-to-text and text-to-speech as commodity technologies, the company is looking to capture sentiment analysis from voice, differentiate through use of SLM/SRGS technology, and improve Amelia’s emotional intelligence by capturing aspects of mood and personality.

Launching Co-pilot to Remove the Demarcation Between Automated Handling and Agent Handling

Traditionally, interactions have either been handled by Amelia or by an agent if Amelia failed to identify the intent or detected issues in the conversation. However, IPsoft is now looking to remove this strong demarcation between chats handled solely by Amelia and chats handled solely by (or handed off in their entirety) to agents. The company has just launched “Co-pilot”, positioned as a platform to allow hybrid levels of automation and collaboration between Amelia, agents, supervisors, and coaches. The platform is currently in beta mode with a major telco and a bank.

The idea is to train Amelia on everything that an agent does to make hand-offs warmer and to increase Amelia’s ability to automate partially, and ultimately handle, edge cases rather than just pass these through to an agent in their original form. Amelia will learn by observing agent interactions when escalations occur and through reinforcement learning via annotations during chat.

When Amelia escalates to an agent using Co-pilot, it will no longer just pass conversation details but will now also offer suggested responses for the agent to select. These responses are automatically generated by crowdsourcing every utterance that every agent has created and then picking those that apply to the particular context, with digital coaches editing the language and content of the preferred responses as necessary.

In the short term, this assists the agent by providing context and potential responses to queries and, in the longer term as this process repeats over queries of the same type, Amelia then learns the correct answers, and ultimately this becomes a new Amelia skill.

Co-pilot is still at an early stage with lots of developments to come and, during 2019, the Co-pilot functionality will be enhanced to recommend responses based on natural language similarity, enable modification of responses by the agent prior to sending, and enable agents to trigger partial automated conversations.

This increased co-working between humans and digital chat agents is key to the future of Amelia since it starts to position Amelia as an integral part of the future contact center journey rather than as a standalone automation tool.

Building Use Cases & Partner Program to Reduce Time to Value

Traditionally, Amelia has been a great cognitive chat technology but a relatively heavy-duty technology seeking a use case rather than an easily implemented general purpose tool, like the majority of the RPA products.

In response, IPsoft is treading the same path as the majority of automation vendors and is looking to encourage organizations (well at least mid-sized organizations) to hire a “digital worker” rather than build their own. The company estimates that its digital marketplace “1Store” already contains 672 digital workers, which incorporate back-office automation in addition to the Amelia conversational AI interface. For example, for HR, 1Store offers “digital workers” with the following “skills”: absence manager, benefits manager, development manager, onboarding specialist, performance record manager, recruiting specialist, talent management specialist, time & attendance manager, travel & expense manager, and workforce manager.

At the same time, IPsoft is looking to increase the proportion of sales and service through channel partners. Product sales currently make up 56% of IPsoft revenue, with 44% from services. However, the company is looking to steer this ratio further in support of product, by targeting 60% per annum growth in product sales and increasing the proportion of personnel, currently approx. two-thirds, in product-related positions with a contribution from reskilling existing services personnel. 

IPsoft has been late to implement its partner strategy relative to other automation software vendors, attributing this early caution in part to the complexity of early implementations of Amelia. Early partners for IPcenter included IBM and NTT DATA, who embedded IPsoft products directly within their own outsourcing services and were supported with “special release overlays” by IPsoft to ensure lack of disruption during product and service upgrades. This type of embedded solution partnership is now increasingly likely to expand to the major CX services vendors as these contact center outsourcers look to assist their clients in their automation strategies.

So, while direct sales still dominate partner sales, IPsoft is now recruiting a partner/channel sales team with a view to reversing this pattern over the next few years. IPsoft has now established a partner program targeting alliance and advisory (where early partners included major consultancies such as Deloitte and PwC), implementation, solution, OEM, and education partners.

1Desk-based End-to-End Automation is the Future for IPsoft

IPsoft has about 600 clients, including approx. 160 standalone Amelia clients, and about a dozen deployments of 1Desk. However, 1Desk is the fastest-growing part of the IPsoft business with 176 enterprises in the pipeline for 1Desk implementations, and IPsoft increasingly regards the various 1Desk solutions as its future.

IPsoft is positioning 1Desk by increasingly talking about ROAI (the return on AI) and suggesting that organizations can achieve 35% ROAI (rather than the current 6%) if they adopt integrated end-to-end automation and bypass intermediary systems such as ticketing systems.

Accordingly, IPsoft is now offering end-to-end intelligent automation capability by combining the Amelia cognitive agent with “an autonomic backbone” courtesy of IPsoft’s IPcenter heritage and with its own RPA technology (1RPA) to form 1Desk.

1Desk, in its initial form, is largely aimed at internal SSC functions including ITSM, HR, and F&A. However, over the next year, it will increasingly be tailored to provide solutions for specific industries. The intent is to enable about 70% of the solution to be implemented “out of the box”, with vanilla implementations taking weeks rather than many months and with completely new skills taking approx.. three 3 months to deploy.

The initial industry solution from IPsoft is 1Bank. As the name implies, 1Bank has been developed as a conversational banking agent for retail banking and contains preformed solutions/skills covering the account representative, e.g. for support with payments & bills; the mortgage processor; the credit card processor; and the personal banker, to answer questions about products, services, and accounts.

1Bank will be followed during 2019 by solutions for healthcare, telecoms, and travel.

<![CDATA[Concentrix VOC: Measuring CX Transformation]]>

Despite the evolution of contact center technology (think conversational AI), the spread of digital channels (think smart speakers), and the dramatic change in the ways companies interact with customers (think mobile-first), the industry KPIs for measuring the impact of these transformations remain limited. CSAT, NPS, and more recently, Customer Effort Scores (CES) measure different elements of CX: the last interaction, customer loyalty, or journey pain points. However, even in combination, they do not answer two fundamental questions: what are the drivers for this performance and what is their direct effect on business targets?

As companies embark on large-scale digital transformation, increasingly focusing on CX innovation, their need to understand the customer and predict business outcomes becomes the key. In this blog, I look at Concentrix’s ‘Voice of the Customer’ practice and how the company correlates VOC analytics to hard business KPIs and evaluates against future customer behavior.

VOC as an integrated approach

Concentrix acquired its VOC practice through its Convergys acquisition. The VOC practice started in the 1980s and currently has ~280 resources in eight countries supporting ~40 clients in ~90 languages and eight voice and digital survey channels. The VOC offerings include:

  • Program design services, with experts to guide the VOC design of surveys, questions, sampling, reporting, and where and how to apply them in the customer journey
  • Program success services, with specialists to handle day-to-day program management
  • People & culture strategies, with resources to design practices to engage employees in VOC
  • Continuous improvement consulting dedicated to realigning processes, policies, and channels to customer needs based on a range of analyses such as issue and impact analysis, root cause and action planning analysis.

Concentrix also has a proprietary VOC platform, ConcentrixCX, which collects and shares customer feedback and manages sample and quotas after interactions in the contact centers, over digital properties, in physical stores, and during field services. Customer feedback is collected via surveys over the phone, outbound calls with live interviewers, outbound IVR, SMS, mobile apps, as well as the traditional pop-up web surveys and emails.

It has a real-time engine for text analytics performing word and sentiment analysis on unstructured data, for example, open-ended comments. It then color-codes and visualizes with an icon the comment emotion for agent-level users and theme emotions for leadership. The NLU elements of the text analytics generate the categories and themes emerging from the text, with Concentrix analysts building the industry-specific taxonomy and dictionaries. 

Its reporting layer includes functionality such as dashboards, reports, and analytics tools with role-based workflows. The reports are customized for the different user levels with different slices of data and tools available for senior management, operational roles, and customer-facing staff. ConcentrixCX has a desktop and mobile version, deployed on a cloud.

The provider offers the platform in BPaaS modular format and has clients on both services and software (most clients) and services only, where it runs the program on the client legacy VOC tool. The clients are a mix of non-BPO and BPO clients. In some of these instances, Concentrix manages the VOC program for the multivendor network. In addition, to target the VOC market, Concentrix has a separate salesforce with its own statements of work and P&Ls.

Challenges in implementing VOC

In the pure SaaS VOC deployments, clients’ small teams often struggle to implement the customer feedback programs at scale with an outcome focused on transforming CX. Instead, they turn into administrative groups to deploy and run the software. Once companies purchase the licenses and roll out the tool, the generated CSAT and NPS numbers remain in isolation unless the organization procures consulting services to advise on an enterprise-wide plan to increase these satisfaction numbers.

Another challenge is that VOC programs are the remits of CX departments which are still on a maturity curve, usually with a limited mandate. Uplift of NPS requires the transformation of various functions in an organization, from marketing and sales to supply chain and IT. As a result, even if the research or customer service group measures feedback accurately and links it to a root cause, they cannot translate the insights into CX strategic actions.

Unified CX measurement framework

Concentrix identified these challenges, particularly in industries with complex feedback measurement environments such as banking, financial services, and healthcare, and proposes a unified approach which focuses on driving organizational changes and outcomes. For example:

  • The reporting layer of ConcentrixCX has alerts and a case management suite triggering notifications from unstructured text such as words associated with complaints. It also has a one-on-one coaching module for frontline employees with guided performance management flows, individualized scorecards with actual customer responses and links to recordings, and built-in rewards and recognitions
  • ConcentrixCX includes a process improvement tool to extract ideas from employees and push them through a process improvement pipeline. For example, a U.S. healthcare company in 2017, used this feature to identify a 24-hour update discrepancy between its online provider network information and the information available to the agents. The agents escalated suggestions to the digital team via ConcentrixCX and closing the disconnect delivered ~7% decrease in call volumes.

An example implementation of the end-to-end VOC approach is for a U.S. regional bank, where Concentrix ran 17 survey programs across channels with ~400k surveys completed since 2018. For this bank, ConcentrixCX has ~10k enterprise platform users, and over the program, the company made and implemented ~71 recommendations resulting in a 10-point NPS improvement in 2018, projected to drive $20m annual revenue gain.

Next for Concentrix VOC

Concentrix is looking at supplementing traditional modes of surveys measuring transactions to conversational micro-journey opportunities where it gathers feedback more naturally. For example, it is investing in API-based technology which will allow integrating survey questions into various devices such as websites, mobile applications, and connected cars. The advantages in asking questions inside the experience are masking the survey part so it ‘does not feel like a survey’ to the customer and thus increases response rates. These more targeted feedback collections also create a more precise picture of the relevance to the specific stage of the customer journey and identify pain points.

Further, the company plans to expand the attitudinal survey inputs with new unstructured data sources such as speech analytics, chat transcripts, and employee notes into the centralized view of ConcentrixCX and move towards a predictive and prescriptive state.

<![CDATA[Proactive Social Media Engagement: Best Practices from Startek & Aegis]]>

Consumers are evolving their preferred ways of interacting on social media: ‘spontaneous’ stories are replacing produced content, transparency and privacy are driving the spread of private groups and influencing regulatory push, and machine learning is personalizing conversational commerce. The impact on brands is greater need for new types of content, investments in automation and analytics, and creation of quality engagement through communities and micro-influencers.

This is where CX services providers target their proprietary monitoring and analytics platforms, their experience in setting up command centers, and capabilities in building cognitive bots. In this blog, I look at Startek & Aegis’ initiatives in this space.

Orchestrating social media engagement

Startek & Aegis both began supporting omnichannel and social media engagements in the late 2000s. While the Startek side of the business was tool-agnostic using a variety of engagement platforms such as Spreadfast, Lithium, Salesforce Social Studio, and Sprinklr, Aegis identified an opportunity for a specialized customer care social media platform and launched a proprietary engagement suite called AegisLISA.

AegisLISA is a modular platform with different product sets for social media listening and monitoring, chat and email functionalities, campaign management and publishing, analytics and insights with data visualization, combined with knowledge base functionality and app development.

Over the last eighteen months (and more recently following the 2018 merger between the companies), Startek & Aegis have invested in the platform to:

  • Grow new LISA social touchpoints from additional social media sites, blogs, forums, news
  • Integrate social chats and mobile
  • Provide publishing for campaign content
  • Enhance data visualization for community management
  • Add chatbot integration.

One of the more actively utilized LISA features is the ratings and review module, where Startek & Aegis pulls information and prioritizes reviews from sites such as Google My Business, Yelp, and Trustpilot, and responds directly to monitor and preserve clients’ brand reputation. For example, for a warehouse club in the U.S., the company is monitoring their Apple iOS store reviews and Google Play store reviews, taking over from internal IT teams.

Using CX services providers for social media support

The most common path for Startek & Aegis’ social media programs starts with a listening and monitoring stage. Once it triages the posts and provides analytical feedback, the client requests the vendor to step in with customer care in-channel. Startek & Aegis supports the client’s customer service teams, marketing functions, and social and PR agencies of record, providing direct interactions with customers in real-time. This intervention eliminates additional tasks to the customer care teams and allows marketing and digital agencies to focus on producing content.

For experienced CX services buyers, ranging from retail, telecom, consumer electronics, and automotive sectors, their minimum supplier requirements are to support digital and automation initiatives. This shift requires engagement with the wider client organization and social media supplier ecosystem; for example, for a U.S. automotive company, the company interacts on a weekly basis with the CMO office.

More recently, the company is seeing increased demand for social community management, responding to proactive campaigns on social media such as hashtag campaigns and helping with brand promotion. For the automotive client which curates its content to a specific customer profile, Startek & Aegis finds automotive hashtags which are brand-aligned but not official company tags, and proactively engages with the users. 

Augmenting omnichannel self-service

Startek & Aegis is seeing increasing client demand for enhancing omnichannel self-service, including over social media. The company usually starts an evaluation looking at inbound voice and digital volumes and breaking them into categories. It then works with its Ideal Dialog subsidiary, which specializes in research for contact optimization, to understand what can be made conversational from an automated perspective.

For clients with existing social media infrastructure who have started implementing bots in their social channels, Startek & Aegis performs a gap assessment and, for example, proposes additional automation. If the client is at the beginning of their digital automation journey, the company will scope out and develop the bot to integrate with LISA. For example, in the retail and e-commerce sectors, simple automation includes store hours and directions over IVR, chat, and web, with more advanced RPA and machine learning to automate order entries, order tracking, and afterhour responses. For example, for a U.S. consumer electronics client for which Startek & Aegis manages all social media including 50 blogs and forums, it is currently building self-service automation for the most commonly asked questions for the e-commerce RMA process. The bot will operate on email and social media channels and will authenticate the customer and provide real-time account status.

In another example, for an Indian bank, the company deployed an integrated social and mobile cloud-based system to enhance CX across omnichannel, introduced LISA, and optimized operations through silo remediation, function collaboration, and leveraging analytics-as-a-service. As a result, the bank’s digital and social presence organically improved to ~30k followers in one year, digital customer resolution improved to 90%, and the bank was able to reach 200-300k unique customers every month only through its digitization strategy.

Evolving Startek & Aegis’ social media offerings

Startek & Aegis is currently looking to leverage LISA across its client base, expanding on its work in the telecom and automotive sectors and in the APAC region, to take it to the U.S. market with retail, consumer electronics, and digital economy brands. One tactic it employs is dedicated innovation sessions organized with the client as an opportunity to look from a strategic viewpoint at the customer engagement roadmap and digital initiatives.

In its LISA product development, the company is integrating additional social messenger apps which are geo-specific; expanding its reputation management services with a focus on review sites; and developing chatbot capabilities using Ideal Dialogue research to make bots more natural and dynamic, and more able to closely replicate human conversation.

<![CDATA[Chat Services: Teleperformance’s Playbook & Targets]]>


In NelsonHall’s 2017 report, ‘Multi-Channel CMS – Delivering Digital Customer Experience’, I forecast that the chat channel, in all its forms, would become 18% of the global CX services outsourcing market by 2020, growing by 30% CAGR. What fuels this sizable growth are the many benefits to brands offering sales and support over text channels, the advancement of customer-facing automation, the spread of messengers, and above all, the high customer adoption rate. Today, social messengers have more active users than social networks, and while the phone channel is not disappearing any time soon, it has become a social norm to text someone before giving them a call.

In this blog, I look at how Teleperformance develops chat services to reach ~11k FTEs globally, supporting chat in 17 languages for ~140 clients across multiple verticals.

Benefits for customers

Live chat, and increasingly cognitive bots, offer real-time context for customers in their interactions with brands. Text channels (from traditional desktop chat to in-app chat and messengers) offer flexibility, with asynchronous conversation, immediacy with the convenience of mobility, and with voice-to-text technology, low effort and lower attention requirements. Text channels also support rich media such as documents, links, images, and videos enhancing usability in sales scenarios to push coupons and to send guides for customer service. They also offer co-browsing and screen sharing for complex technical support. It is not surprising then that chat often has higher customer satisfaction and a higher conversion rate than voice.

Benefits for companies

For companies using chat for sales and support, it offers a range of advantages:

  • True digital support
  • Global reach – for example, Telepeformance’s third and fourth largest chat populations are in Brazil and China
  • Breadth of services – for example, for Teleperformance, ~65% of chat is customer service, followed by ~27% technical support, 4% sales, and 4% other services
  • It has operational benefits, including higher agent satisfaction by lowering fatigue, better WFM with concurrency and blended delivery, better data capture, and better performance monitoring
  • Also, in certain scenarios, it can lower cost by deflecting calls and increasing productivity.

Benefits for CX services providers

In addition to all the end-user and brand benefits, for CX services providers, chat interactions give the option to bypass language barriers and accent-neutrality issues. For example, the newly formed Teleperformance Digital Integrated Business Services (DIBS) has ~1.8k chat agents in India supporting ~20 international clients.

It also opens opportunities to assist clients with their digital channel activation. Teleperformance DIBS has developed a dedicated voice-to-chat deflection product. It detects the customer’s smart device during a call to a toll-free number. If the phone can support rich text, it offers the customer the option to switch from voice mode to chat mode and sends the customer an SMS with a chat link. Teleperformance aims for a minimum 15% deflection rate, on qualified opportunities, by the deployment of TP voice-to-chat.

Text channels are also the preferred environment where CX services companies deploy traditional chatbots and implement cognitive automation in the form of NLP- and ML-supported bots. For example, Teleperformance DIBS has deployed a cloud-based Chat bot for a Southeast Asian postal and logistics services company with operations in 15 countries. Supported since 2014, the company now has ~ 30% of its chat volumes in purely transactional interactions. Teleperformance deployed automation to help agents with suggested responses and quicker retrieval of knowledgebase articles. In December 2018, it launched a customer-facing bot called Sophie for self-service. As a result, the client experienced ~43% volume containment in chat, 30% improvement in customer satisfaction, and 18% cost savings within a four-month period.

Requirements for chat implementations

Successful chat programs define a channel-specific strategy which encompasses identifying its suitability, selection and integration of required technology, operational management optimization, and the creation of dedicated agent recruitment and training. Teleperformance typically conducts a discovery exercise which assesses details such as proactive vs. reactive chat and level of reporting (following its proprietary 100-page chat playbook which recommends best practices, for example in the suitable number of concurrent sessions, market, and target KPIs). It has dedicated chat success managers to jump-start a chat program, analyze chat performance data, and manage the strategic requirements.

Separate ‘Tiger’ teams specialize in the most popular chat platform integration and customization (LivePerson, Nuance, Oracle, Zendesk, Moxie). There is a chat-specific recruitment framework with checks for typing speed, grammar, and abilities to multitask and respond quickly. For example, two recruiters may engage with the candidate at the same time over chat sessions and track if the applicant answers within 30 seconds. The company also has dedicated training modules including for chat handling skills, writing skills, positive phraseology, and professional vs. social chatting.

An example of a client using chat success managers is an American digital stock agency, for which Teleperformance DIBS supports voice, email, and chat. Starting in August 2018, the chat development team implemented web analytics and proactive webchat based on the customer profile and stage of their shopping experience. Within six months the client had a 47% increase in revenue, an 18% increase in average order value, and a 20% increase in overall sales.

Future of chat CX services & Teleperformance targets

Between the opening of WhatsApp APIs for business, its future integration with Facebook and Instagram, and the dominance of WeChat in China (or similarly, LINE in Japan & Taiwan, Viber in Eastern Europe, Telegram in Iran), text communication will become a game-changer for all B2C brands. While desktop chat still dominates (~60% for Teleperformance) it is gradually being replaced by these newer UIs as companies move to proactively meet their customers on their preferred channel. This change will further the need to perform more complex interactions effectively over chat.

For Teleperformance, the objective in the short term is to add accounts to its voice-to-chat product, to add ~100 client LOBs in chat just in English, and to reach 20k chat agents globally in 2019.

<![CDATA[Enabling CX Digitalization: A Look at CSS Corp's Yodaa]]>


In this vlog Ivan Kotzev looks at CSS Corp’s digital experience suite Yodaa and how it unifies the company’s analytics, automation, and multichannel tools and models for digitalizing support.

<![CDATA[The CX Consulting Race: New Players, New Models, and Tech Mahindra’s Example]]>


NelsonHall has recently published a report on Digital Customer Experience Services, and one of the trends explored is the evolving competition in customer experience (CX) consulting. The traditional ecosystem includes distinct players with clear-cut roles:

  • Big five management consulting firms such as Deloitte or PwC, providing strategy-level advisory which covers CX
  • Niche UX design studios, analytics houses, and consultancies focused on certain aspects such as website user experience or a specific function such as customer journey mapping
  • Pure-play BPOs specialized in outsourced contact centers, who have expert knowledge in transforming customer-facing operations and the managed resources to deliver it
  • IT services companies who bring their knowledge in application development and implementation to front office processes.

Now, with C-level focus on CX and companies embarking on digital transformation journeys, the providers’ roles are changing and the new CX consulting model looks more like a unified framework. This model typically includes:

  • In-house management consulting practice with CX labs and access to (own) market research
  • Design and analytics units with IP such as methodologies and innovation labs
  • Technology development and implementation resources, often with own platform stack, with sandbox environments
  • Contact center operational expertise integrated with client programs, from WFM to digital channel activation, to domain and/or service line optimization.

From customer management services vendors to CX transformation providers

Moving towards this delivery model, the traditional customer management services companies began creating their digital units to combine different transformation functions (e.g. Comdata Digital, Konecta Digital, Sutherland Digital). They acquired (e.g. HGS and Element Solutions); placed consulting capabilities upfront in their GTM strategy (e.g. Sitel’s TSC); spun out a separate consultancy business (e.g. Teleperformance’s Praxidia); or partnered with a management consultant (e.g. Atento and FALCONI).

For the multi-tower BPS players, who already have digital transformation capabilities, it means increased focus on CX by their consulting units (e.g. TCS Interactive, Wipro Digital); the acquisition of CX and UX design firms (e.g. TandemSeven by Genpact; Brilliant Basics by Infosys; The BIO Agency by Tech Mahindra); and beefing up delivery presence in the local market, including through setting up CX innovation centers in core markets. 

The example of Tech Mahindra Consulting

Tech Mahindra’s consulting practice is part of the company’s Business Transformation Services and represents ~5% of the annual BPS revenues (FY17). The practice started in early 2015 and currently has 110 consultants working on ~50 engagements in CX, next-gen operations, risk and compliance, and digital technology transformation across Tech Mahindra’s target verticals in front-office, F&A, supply chain and procurement, and service desk. The team consists of management consultants, BPS practitioners, domain and function consultants, and analysts with industry background. They are spread across India, U.K., Continental Europe, Singapore, Australia, New Zealand, the U.S., South Africa, and a smaller number in the Philippines. It also utilizes external resources, including the company’s own The BIO Agency in the U.K. and the wider Tech Mahindra analytics and application development capabilities.

Its clients include both managed services and standalone consulting projects – e.g. for a South African banking client, where Tech Mahindra BPS provides the automation CoE with 15 resources; and for a leading Telco in New Zealand, where Tech Mahindra BPS provides the automation CoE with eight resources. In fact, the majority of the current work is made up of standalone engagements. There are instances when the initial assignment started as a standalone engagement and then moved on to become managed services. The advantage for Tech Mahindra BPS is that such projects build credibility with the client and open the door in organizations reluctant to outsource their front-office immediately.

In CX, the scope includes some internal optimization activities, but the main services are customer journey mapping, customer-centric design thinking, customer behavior studies, and digital assessments for clients. The practitioners employ techniques such as touchpoint analysis, speech and text analytics, predictive analytics, customer journey re-imagination, process mapping and reengineering, performance management and improvement, client workshops, and observations to develop recommendations, create a transformation roadmap, and write assessment reports, and implement it with operations. For example, for an African telecom with high call volumes and increasing calls per subscriber, Tech Mahindra BPS created and deployed a repeat call measurement and management approach, incident tracking, and controls, and established a SLA productivity framework for the social media team. As a result, within a year, the call volumes dropped by 13% (~142k calls) per month, bringing $1.02m in annual savings. Other projects include RPA CoE and implementations of chatbots for telecom and retail organizations.

In next-gen operation services, in addition to performance management and optimization with methodologies such as Lean Six Sigma, the practice also provides benchmarking and comparative studies such as channel evaluations to map the associated benefits and risks with the adoption of a new digital channel for support. Its more recent focus is on lifting the entire operating model of the client. For example, for a European telecom, the company delivered a 15-month project where it evaluated ~2k processes, identified improvement opportunities, harmonized them in line with the service architecture, and supported the automation activities.

An evolving practice

Tech Mahindra BPS consulting is growing with new areas of delivery such as GDPR, knowledge management transformation, digital supply chain, and change management consulting. In the latter, in large-scale operating model transformations, it embeds a change manager to coordinate between the organization’s stakeholders and manage the transition stage.

It aims to maintain its revenue share as the BPS business expands, providing support for ~40 clients in FY18. It also plans to organize its consultants more closely by geography; for example, it already employs a consulting partner for the Americas and another one for EMEA.

A key target area is automation, with each consultant required to assess RPA and intelligent automation opportunities. The objective here is to create a data-based impact model to predict expected business outcomes. At the moment, the company sees significant traction for this automation drive in service desk processes.

An evolving market

The effects of market evolution are:

  • Increased competition for CX consulting projects, serving as an entry point to a larger BPS deal
  • Widening gap between tier 1 CX services providers and the rest of the contact center vendors
  • Integration of contact center outsourcing in a deeper product or service redesign. 

As BPS providers (both multi-tower or CX services pure-plays) look to offer a broader range of consulting services, their main differentiator from consulting firms is their effectiveness in applying the transformation levers of automation, analytics, people management, and eventually, cognitive services to enable their clients to prepare for the future.

<![CDATA[Arvato CRM’s JV with Saham Group Consolidates EMEA Position]]>

Bertelsmann, the parent company of Arvato CRM Solutions, has announced plans to combine Arvato CRM with the CX services business of the Pan-African Saham Group. The joint venture will have 50/50 ownership, with ~ €1.2bn combined annual revenues and ~48k employees in 25 countries. The deal is expected to close in January 2019.

Saham Group & partnership history

Founded in 1995 in Casablanca, parent group Saham has operations in 27 countries in Africa and the Middle East in real estate, healthcare, education, and outsourcing. In 1999, Saham created Phone Group, focused on CX services for the French-speaking markets, and in 2004 partnered with Arvato CRM. The company has nine contact centers in Casablanca and Marrakech, Morocco; two sites in Dakar, Senegal; one site in Lomé, Togo; and one center in Abidjan, Ivory Coast.

Saham has additional CXS businesses in Egypt and Qatar (Ecco Outsourcing, added in 2015) and in Saudi Arabia (Pioneers Outsourcing, added in December 2017). In total, the group adds ~14k employees in seven countries supporting nine languages.

Global presence & expansion plans

The new, as yet unnamed, provider will have a sizable delivery presence in EMEA:

  • 25k employees in ten European countries: Germany, France, Spain, Portugal, Ireland, the Netherlands, Poland, Romania, Georgia, and Estonia. Arvato CRM’s U.K. business will remain part of Bertelsmann
  • 14k employees in MEA countries: Egypt, Morocco, Senegal, Ivory Coast, Togo, Qatar, and Saudi Arabia
  • 9k employees in Asia (India, the Philippines, Malaysia), and the Americas (U.S., Canada, Mexico, Peru, Colombia). 

Its clients are in sectors including telecoms and high-tech, BFSI, automotive OEMs, retail, CPG, and consumer electronics, social media, travel, transport, and hospitality.

Under the deal, Bertelsmann will receive an undisclosed payment and will appoint a new CEO, Thomas Mackenbrock, who says that the company will be debt-free and has plans to expand its regional footprint further and increase its focus on digital services.

The Middle East & Africa offering growth opportunities

Over the last three years, the Middle East and Africa have seen increased demand for outsourced CX, both in the domestic and offshore markets. The drivers behind it are diverse:

  • More stable political environment in Egypt and Tunisia allowing increased offshoring by multinational providers (e.g. Convergys) and domestic players (e.g. Raya Contact Center, Xceed)
  • Renewed efforts to promote South Africa for support to new markets such as the U.S. and Australia (e.g. WNS, Merchants)
  • Cost pressures in the Gulf countries to outsource front office work benefiting multinationals (e.g. TCS, Sutherland, Aegis, Intelenet)
  • Economic growth creating demand for first-time outsourcing, primarily by telecom clients in Sub-Saharan Africa, creating need for onshore centers (e.g. iSON BPO, PCCI)
  • Expanding English and French offshore work from African destinations such as Nigeria, Cameroon, Madagascar, and Mauritius (e.g. Intelcia, Tek Experts).

The new Arvato-Saham company is well positioned to leverage several of these trends and benefit from demand for domestic, nearshore, and offshore CX services.

The growing attraction of CX services

This transaction is the latest in a series this year that typify the consolidation drive and industry investments happening in the CX services market. Bertelsmann was considering the full sale of Arvato CRM to direct competitors, but the creation of a joint venture shows a level of confidence in the positive trends in the market.

Global CX services are gradually shifting towards higher-value, more complex customer interactions and more digitally-focused contracts. Commercial models in the industry are evolving from per FTE pricing and labor-arbitrage, to outcome-based and gainshare requirements where providers are supporting the digital transformation and CX strategy of clients. One of the effects of this will be further consolidation of providers in 2019.    

<![CDATA[The CX Workforce Challenge & How Vendors Are Responding]]>


In February, industry veteran and CEO of SYKES, Chuck Sykes, commented during the earnings call on CX services market trends: ‘… in the U.S., at least in my time, there is no time in the company's history that I can recall seeing this level of labor challenge. And it actually is something that you're going to see in a lot of developed countries around the world.’* In this blog, I look closer at the nature of the CX workforce challenge.

Pressures on the labor market

Multiple forces have contributed to a CX labor gap, including traditional issues such as the negative reputation of contact center careers and the highly demanding nature of customer service work. However, several factors are putting new and lasting pressures on finding, recruiting, and retaining CX employees:

  • Low unemployment rate. In the U.S., the unemployment rate slid to a near 18-year low; in the U.K., it is around 4%, the lowest since 1975; and in certain parts of Germany, local unemployment rates reached as low as 1-2%
  • Minimum wage increase. Governments, often at the local level, have significantly increased the minimum wage in many U.S. states, Canadian provinces, and the state of Karnataka, India, to name a few. Other countries such as South Africa are working towards introducing a minimum wage for the first time
  • Global delivery network maturity. Very few suitable delivery destinations remain unexplored and offer the required combination of skills, scale, cost arbitrage, security, connectivity, and the other factors for establishing CX centers. Places such as Cyprus, Georgia (the country), Kosovo, and some Sub-Saharan countries are attracting multinational CX services providers willing to pioneer delivery. However, with limited scale, they cannot offer a true alternative to more mature markets
  • Increasing demand for employee skills. The traditional agent profile, with language proficiency and basic computer skills is no longer sufficient. Client programs now seek new hires with an industry background, and demand digital skills and the ability to engage and lead unscripted conversations. The agent who takes inbound support calls is not necessarily the one who works on webchats and is likely different from the one who supports Facebook Messenger inquiries.

Immediate impact & vendors’ initial reactions

The immediate reaction of CX services vendors is to increase agent salaries, often absorbing the initial impact on margins, while re-negotiating the cost structure with existing clients, or at least planning for increases when it comes to contract renewal time. Labor market pressures are also driving more active selection of bids, including walking out of existing underperforming programs (e.g. Conduent, Convergys).

Another approach is to increase use of nearshoring and offshoring, even in industries which traditionally shied away from the model, e.g. brick and mortar retailers, airlines, and utilities. Certain destinations such a Jamaica, Colombia, Romania, Malaysia, and the Philippines continue to benefit, but often by expanding into tier 2 and 3 cities.

RPA and intelligent automation is probably the most underused opportunity, with CX services vendors increasing its adoption across multiple contact center processes, from traditional back-office work to front-office tasks. Providers and clients have significant runway to reach the balance of machine and live agent support and to achieve scale and maturity of automation and cognitive analytics deployments in contact centers. Still, the adoption of this technology will not dramatically alleviate the shortage of skilled agents, as live support moves to higher value, more complex interactions.

Alternative contact center models, employee engagement & the rise of work-at-home  

Employee recruitment, performance management, and engagement combined is another area where CX vendors are making investments to counter labor challenges, utilizing technology and analytics such as recruitment bots (e.g. Alorica), mobile learning (e.g. Sitel), coaching bots (e.g. C3), engagement apps (e.g. Concentrix), and career development (e.g. Teleperformance University).

As part of these strategies, vendors are also increasingly focusing on the work-at-home model. Providers such as Transcom in the U.S., HGS in Canada, and SYKES in Western Europe are actively employing the work-at-home model for full-year programs, gaining access to new talent, often with specific industry skills such as healthcare, insurance, and travel (e.g. Intelenet), or creating presence in untapped labor pools such as Alorica’s military veterans and spouse programs.

Another vendor initiative is opening small-scale urban contact centers to cater for the labor pool in these locations. Such micro centers with less than 50 people are being developed by transcosmos in Japan and Invitel in Germany.

And a further opportunity

Companies managing internal CX operations are facing the same labor market pressures. This situation creates an opportunity for outsourcing providers to differentiate based on their ability to source talent and place it in the right delivery model; but also based on their ability to engage employees, transform the nature of support work, and elevate the role of the CX agent.


* Taken from the Seeking Alpha Earnings Call Transcript: SYKES Q4 2017 Results

NelsonHall recently published its Digital CX Services market analysis report, available to CX Services program subscribers. For access, please contact NelsonHall Client Services Director Keith Maclean.

<![CDATA[Tech Mahindra BPS’ Approach to CX Process Automation]]>


Currently, the level of automation in the front-office is lower than it is for middle and back-office processes, with reasons including the lower cost of handling customer-facing processes, established offshore models for labor arbitrage, and lack of client interest. However, the upside of this relatively slow uptake is that automation can now be applied to multiple areas of CX, including:

  • RPA on manual tasks
  • Workflow automation
  • Knowledge management bots
  • Next-best-action tools and guided scripts
  • Cognitive virtual assistant supporting live agents.

Automation can be applied to a variety of processes, from contact center back-office work to live customer interactions; from traditional calls and emails to chats and social media; and in the internal processes of customer service operations in recruitment, training, coaching, performance monitoring, and compliance. Here I look at how Tech Mahindra’s Business Process Services (BPS) division is approaching the automation of CX processes.

Traditional RPA

For most organizations, there are still a lot of opportunities in their legacy applications to bring RPA and point solutions to remove bottlenecks, eliminate manual errors, and reduce processing time. Tech Mahindra is addressing these needs with a dedicated automation practice. The practice consists of a ~ 90-person RPA team, with another 70 resources involved in platform development, sharing common skills such as .Net, Java, Python, and machine learning.

Tech Mahindra has developed a proprietary automation framework called UNO (Unified NexGen Operations). UNO has two versions: UNO-P, which partners with the big automation OEMs (Blue Prism, UiPath, Automation Anywhere), and UNO-R, the in-house bots and automation models for unified desktop and front office automation. Typical implementations for back-office robots include exception handling, re-try of failed requests, transaction logs, audit trails, and bot monitoring and control. UNO-R's key features include 360-degree customer view, auto tracking, auto sign-in, and assisted automation during live agent interactions. Across both versions, Tech Mahindra has approximately 60 implementations.

Intelligent automation

While two to three years ago, Tech Mahindra’s efforts focused on automation of highly repetitive manual processes, current developments are moving to intelligent automation with ML algorithms such as OCR, orchestration, and automation of running the bots. One area where the company invested in digitalizing the experience through automation is agent training: it converted the training process from trainer-led to an automated platform.

With a proprietary simulation tool, X-PERIO, Tech Mahindra’s BPS division implemented the new agent training process for a U.K. telecom client with ~5k CX employees. The provider lowered the training time from 8-10 weeks by 40%, delivering £350k in annual savings. The training throughput increased from ~82% to ~95%, while automated scoring eliminated the trainer’s qualitative assessment of agents’ floor readiness. In addition, 92% of the learners rated the content highly, and the customer NPS increased by 26 points. The company also uses the data in agent gamification.

Tech Mahindra BPS created bots to tackle frauds – e.g. in the telecom environment, where promotions with new flagship phones result in increased fraud attempts. A fully automated process replaces the previously manual checks, with robots taking data from the registration, CRM, and payment systems and verifying the number of account payments and usage in the last two weeks against a ‘hot names’ list of known fraudulent addresses and numbers. The algorithms then compare against the daily sales and stop those at risk, scheduling and assigning a call back to a live person. As a result, the initial fraud team of 38 members was reduced to 14 analysts who work on optimizing the bot for future fraud trends.

Similarly, in the phone selling process for telecoms, Tech Mahindra BPS replaced the manual quality assurance process with automated audits which matched the requested and offered phone versus customer eligibility. The automated audits cover 100% of daily sales and have no delay, as it operates 24/7. The company has deployments for telecoms clients in the U.K., Australian, and Philippines markets.

Evolution to cognitive services

Conversational bots still need time to reach true maturity, but many of the current applications use contextual bots to address specific business needs. Tech Mahindra has developed a platform, called GENIE, which offers scenario-based learning, real-time feedback, and independent learning where the bot converses with multiple trainees at the same time. For example, traditional mock calls performed before a class of new hires are replaced by the individual conversations with a bot. GENIE asks and answers questions and can be configured on different levels of conversational complexity. It also scores the trainee’s performance on process knowledge such as customer identification steps and productivity (how long the trainee takes to answer).

Tech Mahindra is also looking to replicate its automation algorithms for other industries – one of the benefits of automation is that it allows relatively easy replication of codes and scripts with few customizations required to use it in different areas and industries. Tech Mahindra is now piloting its fraud prevention automation for a financial institution for credit card issuing and expanding the training bot across its entire agent population.

<![CDATA[Teleperformance to Acquire Intelenet, Makes Strategic Bet on India & Analytics]]>


After several months of media speculation, Teleperformance officially announced yesterday an agreement to acquire Intelenet Global Services from the private equity Blackstone for a total consideration of $1bn.

Boost for Indian market

The deal will expand Teleperformance’s topline growth and have a positive impact of around +10% on the company’s earnings per share in 2018 on a pro forma basis, excluding goodwill. For the fiscal year ending March 31, 2018, Intelenet had revenues of $449m, up +10% year on year, and EBITDA of $83m.

Thirty-four percent of Intelenet’s business is in CX Services, and it will expand Teleperformance’s client base with ~110 logos in BFSI, travel, transport, and hospitality, e-commerce, telecom, and healthcare sectors in the U.S., U.K., Middle East, and India domestic. Across 40 delivery centers, the Mumbai-headquartered Intelenet has ~55k employees in India, the Philippines, U.K., U.S., the United Arab Emirates, Jordan, Poland, and Guatemala.

In the last few years, India has been one of the fastest growing destinations for Teleperformance, and the additional Intelenet footprint will create a combined workforce of ~60k in tier 1, 2, and 3 cities, with the main centers in Mumbai, Delhi, and Chennai. Intelenet will also add a sizable domestic market portfolio of ~$150m of annual revenue.

Entry into diversified BPS

Intelenet will also contribute to Teleperformance’s service diversification, bringing F&A, HRO, and industry-specific services such as mortgage origination, risk management, payment remediation in BFSI, revenue cycle management and coding in healthcare, and a variety of transaction processing services for travel and hospitality clients.

All these services will grow significantly Teleperformance’s ‘Specialized Services’ which include receivables management, TLScontact’s visa processing, LanguageLine interpretation services, acquired in 2016, and the consulting arm Praxidia, established earlier in 2018. For 2017 ‘Specialized Services’ represented ~15% or €638m of the total business.

The value-add of Intelenet Knowledge Services

The other key value-add from the transaction is Intelenet’s investment in digital capabilities. Intelenet’s Knowledge Services arm was founded in 2010 to offer standalone analytics, consulting, and technology development services. Across the different teams and primarily India-based, Intelenet has ~200 employees comprised of business analysts and consultants, researchers, project managers, graphic designers, software developers, analytics modelers, and statisticians, and increasingly ML experts.

These resources have created a stack of predictive and prescriptive analytics models and domain-specific platforms, e.g. for fare automation, loss prevention, disruption management, mobility, and workflow automation in the travel and airline space.

A €6bn business by 2022 & disruption among CX Services leaders

For Intelenet, the deal will finally land the company a strategic investor after several ownership iterations since 2000. For Teleperformance, it will firmly place it on track to reach the target of €6bn revenue and EBITDA of €850m by 2022. Teleperformance predicts the transaction will add at least 1% annual like-for-like growth and 20 bps to the margin this year.

At the same time, the impact on the CX Services market is significant, not only because of the scale of the deal, but also in the context of the pending changes in the top 10. Keeping in mind the expected sales of Convergys and Arvato CRM, it shows the increased pressure for CX Services provider consolidation to meet market demand for digital and consulting services and global delivery.

<![CDATA[The End of Telecoms Sector Dominance in CX Services?]]>


For many years, the telecoms sector has been the dominant market for customer experience (CX) services providers. However, over the last few years, consolidation, flat performance, decreasing margins caused by market saturation, new digital models and competitors, and unfavorable regulations (e.g. Eurotariff) have eroded the significance of the telecoms sector for CX services providers. Indeed, a common boast among CX outsourcing executives is their success in diversifying away from the sector.  

And now, the $26bn acquisition agreement between T-Mobile and Sprint, announced last week, looks set to accentuate that trend. If approved, the deal will leave only three national wireless players in the U.S. and will put further pressure on their CX services providers.

Decreasing share & focus on telecoms

The communications industry remains the largest CX services sector at ~24% of the market in 2017 (NelsonHall estimate), but for most of the leading CX services providers it has been steadily decreasing in the last few years, both as a share of business and in absolute terms, as shown here:

Major telecoms brands such as AT&T, T-Mobile, Tele2, O2, Telefonica, BT, Three, and Telstra remain the largest clients for many CX services providers. However, in times of fluctuating volumes, this telecoms top-heavy client base has adversely impacted several providers in their core markets, though typically the overall growth in other sectors has offset the steady decline in communications. Additional factors such as the high level of self-service, where the sector has been a pioneer, simplification of offerings and product ranges, and demand for cost savings through offshoring, have further impacted the size and profitability of the segment.   

Digital opportunities in other, high-growth industries

The telecoms sector has been leading in the adoption of emerging digital channels such as messengers, in the implementation of contact center RPA, and the use of customer-facing automation through bots. However, partially due to the sector’s success in adopting these digital models internally, and partly due to smaller innovation investment funds, many of the most innovative and largest-scale outsourced CX implementations have been in other industries; for example:

  • Videochat and messengers support in the e-retail, banking, and travel sectors
  • Contact center and back-office automation in financial services, healthcare, and energy & utilities
  • Big data analytics for revenue generation in BFSI, e-retail, and consumer electronics
  • Remote diagnostics and self-healing for tech support in high-tech and automotive.

Major tech players such as Amazon, Alibaba, Apple, Facebook, Google,, and Netflix have now reached the scale of outsourced CX operations previously seen only in telecoms. The added benefit for these companies is their global nature, being able to offer multi-market prospects.  

But evolving telcos can be very attractive clients

Nevertheless, the constant evolution of telecoms’ business models, exemplified by Vimpelcom’s new strategy to reinvent itself as a global tech company, or the recent M&A surge to create telco-media behemoths such as the proposed AT&T Time Warner merger, unlock new opportunities. A great example of telco evolution has been AT&T’s purchase of DirecTV in 2015, which consolidated the outsourcing network but also provided new markets and service lines for AT&T core vendors.

The shift to 5G and IoT and the evolving telco’s end-user needs require proactive support, heavy use of automation and machine learning in the contact center, and always-on digital engagement. All these are current investment areas for CX services providers and, even if not straight away, telecoms will eventually reap their benefits.    


NelsonHall’s pending Global CXS Market Forecast 2018-2022 report and self-service forecasting facility provide industry breakdowns by service line, sector, geography, and vendor. For access, please contact NelsonHall Client Services Director Guy Saunders

<![CDATA[Aegis & StarTek Expand Globally with ~$700m Merger]]>


Last week Aegis Global and StarTek announced the creation of a combined company. The merger will see Aegis majority owner PE Capital Square Partners swap shares with the NYSE listed StarTek, to reach a ~55% stake in the merged company. The deal is expected to close by Q3 2018. Here I look at the implications of the merger.

Return to the U.S. for Aegis

For Aegis, the merger follows its sale from Essar to Capital Square Partners in November last year. It also marks the return to the U.S. market, which the company mostly exited in 2014 with the sale of its U.S., Philippines, and Cost Rican operations to Teleperformance.

Aegis kept its core business in India and Southeast Asia, as well as its client and delivery presence in the U.K., Australia, South Africa, Saudi Arabia, Argentina, and Peru, with the latter two countries mainly supporting the LATAM markets. The addition of the Philippines capacity will provide alternative APAC language delivery to Aegis’ multilingual hub in Malaysia and an offshore location for Australia. Today, the provider has ~40k employees in nine countries and ~$388m in revenues.

Global expansion and new verticals for StarTek

For StarTek, the deal expands the business internationally to APAC, U.K., Middle East and LATAM. Its operations in the Philippines, Jamaica, and Honduras support the U.S. market, representing ~42% of the business.

Over the last three years, StarTek has made significant efforts to return to profitability (posting a $1.3m net loss for 2017) and to diversify its client base, which was top-heavy in the telecoms sector. Three of the four leading U.S. telecoms firms form over half of its $293m revenue. It was somewhat successful in this diversification, particularly in healthcare, but the Aegis merger will add new clients and domain capabilities in BFSI, travel and hospitality, automotive, and public sectors. 

Focus on CX technology and multinational clients

Following the transaction, the top three clients of the combined company will represent less than 30% of the total revenue. Telecoms will remain the strongest vertical for the new entity with sizable clients in the U.S., India, Middle East, and Africa. The deal will also enable further penetration of Aegis’ flagship digital channels engagement and analytics platform AegisLISA and increase investments in cloud technology, analytics, and automation. For example, in U.S. healthcare, where StarTek provides receivables management, nurse triage, enrollment, pharma and medical device management, patient customer care and scheduling, Aegis can contribute document digitization and BPM orchestration capabilities.

Without any client or delivery overlap, the merger will boost cross-sell prospects and expand the global multilingual delivery network to a total of ~50k employees in 60 delivery centers in 12 countries. Focusing on multinational clients in telecoms, BFSI, travel, and e-commerce, the new company can offer scale across markets. A significant opportunity is in global e-commerce and retail, where StarTek issued warrants in January for its existing client Amazon to acquire an almost 10% stake (post shares issued after Aegis-StarTek merger), with full vesting tied to future cumulative revenues to StarTek from Amazon of at least $600m over eight years.

While the new management structure, branding, and operational changes have yet to be announced, the deal is expected to realize over $30m annual benefit to EBITDA from revenue and cost synergies by 2020. It will also mark the continued efforts of providers to adapt to an increasingly digital and value-add CX services market.

<![CDATA[Parsing the Customer Journey: How WNS Translates Data to Insights]]>


NelsonHall recently visited WNS’ Analytics CoE in Bangalore. Research & analytics (R&A) services are key activities for WNS, as a first point of entry into new clients, and also as a higher margin activity in existing accounts. Readers of NelsonHall’s Quarterly Updates on WNS will be aware that WNS is looking to increase the level of annuity revenues from analytics contracts. Our visit gave us an opportunity to catch up with the Analytics Practice and learn about future focus areas.

Analytics domain experts with strong sector focus

WNS’ analytics practice has over 2.5k resources dedicated to the company’s six core verticals, developing specialist analytics offerings in marketing, CX, campaign and loyalty management, and risk & compliance. WNS offers both Analytics-as-a-Service and embedded analytics within its BPS services; in both cases, the focus is on co-creating solutions which weave domain expertise with the tools and models to drive business impact for the client’s specific requirements.

WNS’ proprietary framework WADE covers all analytics activities, from identification and management of data sources to data ingestion & storage, data preparation & processing, data consumption, model building, to the business use. Key WNS proprietary IP/products include:

  • Brandttitude: marketing ‘storytelling through data’ platform
  • SocioSeer: social media insights, sentiment, and benchmarking platform
  • InTouch: social engagement platform with customized responses and prioritization
  • OutReach: campaign management platform
  • Unison: omni-channel integration platform with category-level insights, sentiment analytics
  • Aptymize: WNS’ omni-channel personalization engine
  • Commercial Planning Suite: integrated revenue analytics platform for airlines.

Many of these tools have been developed to address a specific client need, bypassing ISV solutions that do not offer the required domain depth and customization flexibility. WNS then expands the use cases to additional clients or new verticals. For example, the Brandttitude platform was initially implemented for a CPG sector client, mapping marketing and brand performance for product managers, but now also has a version for the entertainment industry, comparing artists’ true value and competitive analysis, and is currently being customized for an insurance client.

Infra to insights

In a world where BPS providers have lots of experience in building data lakes and accumulating data across structured and unstructured data sources, a key differentiation is in translating big data into meaningful insights and then operationalizing these insights on behalf of the client, or drawing them to the attention of the relevant stakeholders. For example, in order to maximize ancillary revenue performance for airlines, WNS has developed a library of propensity models that run on airline ticketing data and are able to predict the likelihood of passengers to buy a specific ancillary product.

These models can be further applied on new ancillaries and bundled offerings, creating an ancillary revenue enhancement plan. The results, when applied to the loyalty database, can also be used to identify members who might be interested in redeeming points for ancillary services. This can help in improving the redemption rates of loyalty members with low engagement levels. WNS claims clients have been able to predict high propensity passenger segments with ~3 times the current conversion rates.

From personalization to hyperpersonalization

WNS’ approach with CoE analytics enables it to both address industry-wide challenges and also to go deep into client-specific issues. For example, it developed a personalization engine to help a global high-end hotel chain in their marketing campaigns. The engine segregates customers based on their lifetime value, identifies target segments, creates offers (drawn from 65 different types) for each customer within a segment, and finally estimates the impact of marketing incrementality. This is often in parallel to the models that the client has developed.

WNS runs all five stages of campaign planning for the client, from data gathering, to model building, through to the campaign hyperpersonalization. The campaign analytics services of WNS has been validated as ‘best in class’ by Wharton’s Customer Analytics Initiative. WNS helps with the campaign deployment and monitors performance. The engagement started in 2009 and has delivered nearly half a million dollars in cumulative incremental revenue for the hotel chain.

Proactive analytics to drive CX interventions

Many clients’ requirements with analytics services are evolving from issue identification to issue prevention. Companies are looking for insights on their customers’ future behavior: for example, to be able to map customers’ propensity to post feedback on social media, or predict delinquency or fraud risk.

To support an Australian insurance company wanting to both proactively identify large loss claims and reduce processing time, WNS deployed insurance SMEs specialized in catastrophe modeling, supported by an experienced assessor. Using dimension reduction techniques, WNS selected 71 features to identify ~25% more large claims within 30 days of registration, reducing the average age of large loss claims by ~30%.

What next for WNS in analytics?

A key priority this year and next for WNS is accelerating the use of AI, and this applies to R&A services as well as to BPS service delivery. WNS has trained more than 250 members through its Mastermind training program on AI/ ML. The team is looking at areas such as deep learning and image recognition. For the latter, WNS has a pilot with a P&C insurer using drone images to perform analytics on damage estimation, also automating the identification of risk factors.

WNS’ analytics practice is beginning to reap the benefits of investments in skills development. In 2016 it established a two-year Business Analytics MBA program with NIIT University; the first group of grads from the program are now integrated with the practice.

So what else should we expect? WNS is expanding its partnerships with AI platforms with NLG/NLP capabilities in multiple languages and is eyeing further M&A opportunities, specifically around cognitive analytics, AI, ML, and smart data discovery. This M&A activity will follow a ‘string of pearls’ approach to cater to specific sub-segments and in areas such as marketing and risk analytics.

<![CDATA[How Indian CX Services' Channel Mix Will Change by 2020]]> In our latest CX services research in collaboration with NASSCOM, we have mapped how Indian CX services channel mix will change by 2020, as shown in the following infographic. 

NelsonHall’s Customer Experience Services program delivers the most comprehensive insight for buyers and providers of CX services. For more information, contact Guy Saunders.

<![CDATA[Key Mechanisms to Boost Your CX Services Performance]]> In our latest CX services research in collaboration with NASSCOM, we identified the top 3 mechanisms for improving key CX metrics: Net Promoter Score, First Call Resolution, Conversion, and Turn-Around Time & Average Handling Time, as shown in the following infographic. 

NelsonHall’s Customer Experience Services program delivers the most comprehensive insight for buyers and providers of CX services. For more information, contact Guy Saunders.

<![CDATA[9 Key Stages of Adoption for Next Generation Customer Service]]> In our latest CX services research in collaboration with NASSCOM, we identified the 9 key stages of adoption for next generation customer service, as shown in the following infographic. 

Insights into the differences across client industries and the best practices applied by vendors are available in NelsonHall’s Customer Experience Services program. For more information, contact Guy Saunders.

<![CDATA[Addressing Political Risks & Regulatory Changes: Priorities for CX Services in 2018]]>


In my predictions for the customer experience services industry a year ago, I noted that political risks will replace security concerns as the biggest external threat to the industry. Looking ahead to 2018, regulatory changes and government policies will have a lasting impact on the selection of delivery locations, country investment plans, and market presence. Here I take a closer look.

Governments’ Influence on Labor Cost Has Immediate Impact

In an industry where labor is the biggest cost, government policies mandating increases in minimum wages have immediate impact on contact center operations. The latest example is the province of Ontario, Canada where the minimum wage increased from CAD 11.60 per hour in October 2017 to CAD 14/hr from 1st January 2018 and will jump further to CAD 15/hr in 2019.  Such mandatory wage increases in countries such as India and Philippines are also breaking historical trends, as Concentrix’s CEO Chris Caldwell pointed out in last weeks’ earnings conference call.

While in the U.S. the federal minimum wage has not increased in more than eight years, states and cities are continuing to set higher rates. With low national unemployment and greater need for new hires with sales and digital skills, the combined effect on providers’ U.S. onshore delivery centers can be a push towards optimization. This optimization may involve scalable markets (e.g. SYKES’ move to more urban locations), growing the number of work-at-home (WAH) staff (e.g. HGS’ WAH expansion in Canada), and overall increased investments in automation to reduce exposure to a volatile labor market. The added benefit, of course, is that by eliminating low-skill tasks, agents can be freed to provide more value-add, sales, and retention work.

Politicians’ Focus on Offshoring Requires Attention

Offshoring is an easy target for politicians, and in the last few years the focus has extended from manufacturing to services relocation. In Washington, the topic remains somewhat under the radar amidst the significant taxation and regulatory overhaul targeted by the current administration. The United States Call Center Worker and Consumer Protection Act, continues to be a part, albeit a minimal part, of the legislative agenda with the latest introduction to Congress in February 2017.

However, the effects of these or similar provisions are difficult to predict, with the closest examples coming from Italy, where the 2017 updates of existing legislation had the following effects:

  • Contact center workers being required to inform users where they are physically located
  • Companies being required to inform the Ministry of Labor of any planned contact center relocation within ten days, or 30 days if the relocation is outside the EU
  • Companies having to register with the Italian Communication Authority (AGCOM) any Italian contact center telephone numbers used for business activity.

Still, the Italian example is not fully transferable to other markets due to the low level of nearshoring/offshoring in the country and the previous adoption of similar steps by the private sector.

Data Protection Laws Already Reshaping CX Service Client Requirements

Unlike the possible changes associated with the laws related to offshoring, security and data protection regulations are already affecting the needs of clients. As NelsonHall explained in this blog, the EU's General Data Protection Regulation (GDPR) coming into force on 25th May 2018 requires service providers to help clients design and execute compliance with the new benchmarks of data protection and data security. CX service vendors have been reacting in the last 18 months by allocating additional resource in data governance and change management, and guiding their clients, including their in-house contact centers during the process (e.g. Teleperformance’s GDPR/BCR program).

The EU regulation is likely to set up the global standard for data protection, but similar rules can also be used to limit access to markets, such as Russia’s 2015 data localization law. It requires the recording, storage, modification, retrieval, and other data management of Russian citizens’ personal data to be done from databases located in the territory of the Russian Federation. As a result, small-scale nearshore/offshore support and sales programs covering Russia became untenable.

Similarly, new and expanded cybersecurity rules such as China’s Public Internet Cybersecurity Threat Monitoring and Mitigation Measures further complicate data storage and data governance requirements by asking companies to continuously feed information on cyberattacks and “cyber threat intelligence” to a centralized government database.

Social Media Content Moderation Laws Create Additional Business

Content monitoring and moderation on social media is on the radar of the authorities in several countries in Europe and in the U.S. The German Network Enforcement Act which has fines up to €50m if the social media fails to remove controversial and hate content within 24 hours is in effect from 1st January. It already forced networks such as Facebook to expand their content moderator teams and add capacity with external partners.

U.S. Immigration Policies & Philippines’ Security Troubles Create Opportunities in LATAM

The Philippines is undergoing a decline in BPO-related investments with new seats growth affected by perceived or actual security risks, fueled by Duterte’s hostility towards the U.S. and most recently the rebel activity in the Mindanao region. This slowdown benefits primarily U.S. nearshore delivery with providers boosting their capacity in Guatemala, El Salvador, Costa Rica, and Jamaica (e.g. Alorica’s LATAM investments).

In the U.S., the Trump administration’s policies towards legal and illegal immigration, such as revoking TPS announced this month and the decision over DACA pending for March, continues to grow the pool of English-speaking, culturally-aligned young people who were forced to relocate. This growing resource has the potential to supply the next expansion of nearshore U.S. capacity. 

<![CDATA[CPG’s Digital CX Future: Notes from HGS Forum]]>


I recently attended HGS’ forum on the trends and challenges in CX for the European Consumer Packaged Goods (FMCG) market. In the company’s West London center, clients and prospects including Colgate, Danone, L’Oréal, Nespresso, Nomad Foods, and Mars discussed the ways customer service can drive ecommerce and augment sales.

Digital as a force for disruption and opportunity in CPG CX

As with other sectors, the CPG market is disrupted by digital economy newcomers using direct-to-consumer models via ecommerce. Added to a stagnant mass market, decreasing customer loyalty, and hybrid shopping, this environment increases the importance of good customer experience. HGS’ Lauren Kindzierski, VP of Solutions and Capabilities, highlighted several approaches to enable digital customer experience, which the company has implemented across different verticals:

  • Activate proactive chat to counteract abandoned shopping carts
  • Roll out mobile chat to increase accessibility
  • Launch self-service resources to minimize costs and improve the customer support journey
  • Use SMS notifications for immediate gratification
  • Build predictive analytical models on chat to segment customers.

A best practice for the company has been to ringfence the launch of a digital channel around a single brand to optimize the processes and technology.

CPG companies are also moving along this digital roadmap, with examples such as Nespresso’s own mobile app which allows users to buy coffee capsules, machines, and accessories on the go; or Nomad Foods, which began by fixing its knowledge base before trying self-service, and is currently trialing webchat in the Swedish market.

CPG’s distinctive challenges with digital CX

In addition to the typical riddles of evolving customer preferences and rapid technological life cycles, CPG manufacturers have industry-specific challenges with the adoption of digitally focused CX. For example, the competition for digital placement, including from vertically integrated brands, can limit product visibility and even narrow online shopping lists to selected brands. At the same time, CPG companies must balance their relationships with retailers and the opportunities for direct sales.

Another aspect is ownership of the online customer experience on retailers such as Amazon, where customer issues can stem from products and service. A solution is for companies to use a tool such as Bazaarvoice to analyze reviews. A different set of challenges come from shared product control within the organization, with marketing and product development departments often not tapping into the insights accumulated in the customer service functions, whether inhouse or outsourced. In HGS’ practice, a great approach is to have the customer care team visit the manufacturing plants and share feedback with the engineers firsthand.

Enabling digital channels for Danone and L’Oréal

In 2016, HGS began supporting L’Oréal from its London office, providing customer care for L’Oréal brands for the U.K. and Ireland markets over mail, phone, webchat, email, and social media, where it listens, moderates and responds to users. Over the last two years, the client has gradually shifted ~33% of all interactions to chat, which has higher CSAT compared to voice. By implementing a feedback loop for updates of the website with insights captured in the contact center, the client lowered the complaints rate from 51% to 39%. On social media such as Twitter, Facebook, Instagram, and YouTube, HGS supports 14 L’Oréal brands ranging from ones centered on a teenage demographic to the premium segment. Immediate benefits of the channel are extended hours of operation, and more proactive management, with efforts now focusing on social network influencers.

Another example of the use of digital channels for CPG companies is Danone. HGS has been supporting Danone since 2014 in the U.K. and Ireland, providing customer care, level 1 and 2 technical support, and social media services. Based out of the London center and also with work at home agents, the program supports expecting and new parents with early life nutrition consulting on a 24/7, 365 basis. The team of midwives, a healthcare practitioner, nutritionists, and counselors with experience in child care and first aid cover multiple channels, including phone, proactive and inbound chat, email, and WhatsApp. A separate quality management team ensures the program is compliant with WHO regulations and with the brand’s own requirements for data control and marketing communications management.

The decision to enable WhatsApp came after marketing research with mothers identified it as a relevant channel across all demographics. In July 2016, HGS launched the channel, and within the first hour registered the first five chats. The service is set up to allow users to add Danone’s contact number and initiate the chat sessions. Users can also push images and videos to the agent and, due to the asynchronous nature, can stop and continue the session over time. WhatsApp volumes have already exceeded those of live chat, with lower AHT compared to webchat.

Advancing on the digital journey

For L’Oréal in 2018, HGS is looking to continue to increase its social media teams, is already piloting Sprinklr as the new social media platform, and is building upon the self-service capabilities. Together with the client, HGS is identifying processes suitable for the implementation of chatbots. The company did a trial in 2017 with a hair dye product line, with a chat avatar advising users on color choice. It is also looking to expand live agent support into social messaging. A major question here is between launching with WhatsApp or Facebook Messenger, with the latter already used by the client in France.

For Danone, HGS has recently switched its platform for WhatsApp, with improved reporting and contact management, and is now planning to pilot video conferencing to act as a triage service for healthcare inquiries. Another pilot is underway to replace mailed paper vouchers with e-vouchers. 

<![CDATA[Arvato UK&I: Bringing Digital & Automation to CX]]>


Recently, I had a chance to visit Arvato’s U.K. and Ireland HQ in Slough, ~20 miles (30km) west of London, to witness its customer experience operations and how the company is applying digital channels and automation.

A mix of public and private sector clients

Arvato U.K. & Ireland provides customer experience services, finance and accounting (record to report, order to cash, collections), supply chain management, payroll, HRO services such as hire to retire, and ITO to ~140 clients, predominantly in the public sector. Its public sector footprint includes councils, municipalities, agencies, and central government departments such as the Department for Transport. For some of the councils, Arvato also provides mailroom and face-to-face offices where the company’s employees work remotely or in mobile kiosks to answer queries and accept citizens’ claims. In total across the two countries, it has ~3k employees, three quarters of which are in customer experience services, based in over a dozen locations.

Arvato UK&I private sector clients come from the automotive, fashion, retail, financial services, and most recently telecoms and the IoT space.

Its sizable public sector footprint is not the norm for Arvato, with other markets such as Germany, Spain, France, and Netherlands having less public sector business. Also, customer experience services in the public sector have specific requirements, often more complex and more diverse than a typical customer care program. A municipality phone line covers citizens’ problems ranging from online help, billing, payments, and public services maintenance, to reporting social care issues and people at risk. It also operates in a regulated environment with additional security prerequisites. To address these challenges, in 2016 Arvato developed a business risk positioning tool called Task. Task presents a real-time dashboard which monitors and audits regulatory and financial risks associated with services being managed. The company has adapted Task for the front office to act as a contractual change control manager and tracker of contact center performance, e.g. against FCA rules. The tool itself came about through an innovation ideation exercise open to all Arvato employees.

Bringing automation to the contact center

Arvato began implementing RPA ~18 months ago with public sector clients and currently has ~50 processes fully or partially automated. Developed in-house and in partnership with BluePrism, the company also worked with private sector CX services clients to automate some of their processes in the contact center. For example, for an automotive client, Arvato runs scripts which populate and execute direct debit changes, lowering the cost per transaction from ~£1.20 to 25p. During the first twelve months of the automation journey across programs, it covered 16 processes resulting in ~£125k savings. Arvato is now working with the automotive brand to automate the handling of finance applications coming from the dealerships, and serviced by ~35 FTEs. Currently, an agent verifies if the documents are complete and checks an applicant’s photo IDs and other documents for AHT of 700 sec. Arvato expects this partial automation to eliminate some of these checks, decrease the error rate of the 60 applications processed by an agent on average per day, and lower the handling time to a few minutes. It estimates the automation will result in £750k annual savings. 

Expertise in automotive CX

In both U.K. and Ireland, Arvato supports several automotive brands offering customer experience services alongside back and middle office support. For example, it has supported Groupe Renault in the U.K. since 2007, and in other European markets since 1999. Arvato U.K. provides customer care over phone, chat, email, social media, web, and white mail, as well as outbound lead generation and marketing, supporting both end customers and dealerships. Beginning with voice and email, Arvato expanded to proactive web chat and social media to generate more leads, with ~60% of new leads now coming over chat. Using the multichannel environment, in 2016 alone, Arvato delivered £3.5m in new car sales from 3.6k leads.

For a German automotive OEM, Arvato also performs proactive outreach to car owners to notify them about due service checks. The company receives automated tickets to prompt phone calls to owners to arrange the visit. As next steps, it is working to push messages over SMS. Arvato has also set up a dedicated team to support the electric vehicle line for the client, where agents work as ‘case managers’, handling prospects from the mailing of marketing brochures to vehicle purchasing, installation of the charging station at the customer’s premise, and ongoing post-sales support.

Digital opportunities ahead

In typical fashion for a Bertelsmann company, Arvato national divisions operate quite independently. Arvato U.K. has developed an adjacent business in cyber security around remote monitoring. Focused mainly on existing public sector clients, the company is now expanding it to the private sector, and was recently awarded a program with a U.K. telecom for L1 and L2 technical support for their home and small office connected security systems. It is also identifying opportunities to productize and further develop Task and deploy customer analytics and next-best-action capabilities, particularly in the retail and automotive space, to boost upsell and loyalty management.

In digital channels, the company is currently targeting a customer-facing automation with a chatbot pilot for a fashion brand. For the German automotive brand, it is looking to launch video chat in 2018, which will connect customers at planned pop-up shops with the agents at the Slough headquarters. It is also investigating opportunities to use VR in agent training to immerse agents in the brand experience.

<![CDATA[Omnichannel, Bots & the Future of CX: Q&A with Head of Prosodie-Capgemini, Erwan Le Duff]]> This month, Capgemini is launching a new version of its omnichannel cloud platform, Odigo™. I interviewed Erwan Le Duff, Head of Prosodie-Capgemini, about the new platform features, the evolution of self-service, and the future of customer experience. Below is a video of highlights from the interview, followed by a brief introduction to Odigo and a full transcript of the interview.



Odigo at a glance

Odigo is a modular platform targeted towards customer care, sales, and service desk processes for end users, company employees, and citizens in the public sector. It has approximately 350 clients in 17 countries and handles over three billion interactions per year, primarily voice, but also chats, email, video chats, social media messages, SMS, and IoT transactions. It has four modules:

  • Odigo Contact Center for omnichannel routing, recording, WFM, and quality monitoring
  • Odigo Concierge, an omnichannel (voice and digital) bot, designed for self-service and qualification
  • Odigo Campaign suite to push messages for marketing campaigns and notifications
  • Odigo Analytics for customer insights.

Capgemini is releasing version 2.0 of Concierge with a chatbot developed completely in-house to enhance next-generation user qualification and self-service. Powered by NLP (Natural Language Processing), the chatbot processes customer questions and answers via texts, images, videos, documents, links, and mini applications, including choice buttons and selection carousels. It is offered as a web and app widget on a mobile SDK, and also on Facebook Messenger.

The machine learning algorithms at the core of the bot learn from interactions and prompt call backs, or schedule an appointment. In case of an unresolved issue, the bot can escalate to a shadow agent in real-time to provide the customer experience and train machine learning. Its API is open and the company can integrate it with existing databases, e.g. CRMs such as Salesforce, Microsoft Dynamics, Oracle, and Zendesk.

Capgemini has been implementing natural language-based IVRs for over 10 years and currently has 25 clients across sectors in English, French, Spanish, and other European languages.


What are the main differentiators of the platform and the new version?

Erwan Le Duff (ELD): It is highly scalable. This is one of the main differentiators, as we see today, more and more large-scale companies are looking for cloud solutions. They’ve been looking for CRM cloud solutions in the past, and are now looking at the cloud for interactions. We are addressing the needs of several thousand agent clients in a multi-country environment. We are also building the platform as open as possible to ease the integration of future channels, but also to help integration with the client IT systems.

We also provide end-to-end solutions. We can come to a client, analyze their current customer experience and current data, look at the customer journeys and transform them, measure the impact for the organization, and provide the technology in parallel to start automating, to deliver true omnichannel experience and break the silos that exist within all organizations.

Concierge v2.0 is really designed to address self-service needs, which are emerging everywhere, by introducing an omnichannel bot.

What drives these developments in self-service?

ELD: We see customers asking for self-service, obviously, but they are also asking for simplicity, quick responses, and 24/7 service. We see this emerging in all sectors. From the companies’ standpoint, there is clearly an interesting business case to automate part of their low-value requests. Depending on the client, we estimate that they represent between 15% and 30%. If they are able to automate part of those requests, it will free up time for agents to deliver more added value, outbound, or campaign management work.

Can you share more about the current implementations?

ELD: We started some months ago with a client in the insurance sector, where we looked at one of their service lines and reimplemented both a chatbot and a voicebot to manage the full process. A customer who wears glasses can call or chat with their insurance provider to know how much they will be reimbursed when they change their glasses. The system identifies the user, guides them through the process, including on the doctor’s paper prescription, and supplies the information. The bot then offers a short list of opticians based on geo-location data or pushes promotions for online sales.

Are you targeting any specific segments?

ELD: We see demand across sectors, but it is true that today some sectors are moving fast and need to transform the customer experience. For example, banks, insurance, retail, and finally, the public sector (we’re seeing this in few countries, including France). It is starting to become cross-sector and the reason is that the number of interactions is consistently increasing and clients are looking at potential automation as a kind of El Dorado.

However, what I say to clients every time is that before starting to look at automation and implementing bots we need to make sure we truly understand the call motives and make sure we focus on the right tasks. This is where our 10 years of experience in implementing the natural language part, including into the IVR, is a big help to understand the requests.

What prevents organizations from achieving omnichannel delivery?

ELD: Some of them are still organized in silos. The same people that manage the voice channel, don’t necessarily manage the email, chat, social media. We see this structure disappearing, but organizations need to fix it quickly. The second reason is the need to look at the agents and the agent experience, and have a strong vision and policy on how to organize channel management from the agent viewpoint. It is potentially a big change, and it may be easier when operations are outsourced.

Do you think the market has moved on from the initial chatbot hype?

ELD: We had a number of clients experimenting with automating certain processes because it frees resources and can increase customer satisfaction. However, it is not only a matter of technology. It is about understanding the call motives, implementing it on the right use cases, and more importantly, making sure the engine is strong enough and uses the right sectorial corpus to very quickly reach 95% natural language recognition. But organizations need to implement it in a true omnichannel situation. You can’t just have a standalone chatbot, because the customer may need to be transferred to a live agent or they may not like talking to a voicebot. It needs to be truly integrated into the omnichannel strategy.

Where do you see the balance between human-assisted and machine support?

ELD: People will be more used to speaking to Amazon Echo and Google Home, and this will increase adoption. Still, all companies know that the voice channel and talking to a human for certain inquiries is the only way to add sales. So, this element will stay, probably focused on more added value and more complex cases, but it will remain. We’ve seen in the last two years pure internet players with only digital channels now coming to voice. In four to five years the market can move to more automation, maybe even 50%, but not the majority of interactions.

Automation will potentially reduce the client’s need for agent support, but there is no way to stop this change. Most of the discussions we have with clients are not around removing 20% of the cost in the contact center, instead it’s about addressing increasing volumes and improving the customer experience. At Capgemini, we are proactive with clients to deliver a solution that will help them now and bring benefits in the future.

And finally... What are the next steps for the platform? What capabilities are you looking to add?

ELD: We started client tests with voicebots to finalize the omnichannel part the platform. It will be available in the next couple of months and will offer the same capabilities as the chatbot, based on the same foundations and data access. Our goal is to design the dialogues to adapt to the interface in a similar manner to the text bot, and at the same time, to fully integrate with Odigo modules.

We will continue to develop more connectors to third parties such as Salesforce. The last piece is to expand the use of AI and reinvest in NLP. For NLP, we want to further improve the solution to answer more complex inquiries, and we want AI to be used more and more for real-time, advanced routing of interactions, and ease agent experience by assisting them.

<![CDATA[Transforming a Contact Center to a Profit Center: CSS Corp Client Study]]>


Post-sales support functions are typically cost centers: large, labor-intensive operations with significant overheads and no financially attributable benefit to the bottom line. This environment is changing, with  organizations gradually understanding the revenue generation opportunities in support services such as technical support and afterlife maintenance. I recently had a conversation with CSS Corp about one such example.

Growth through improving performance

CSS Corp began supporting this North American networking OEM in 2003. The client manufactures and sells a range of networking equipment, from hubs and routers to servers and security devices, for the home and small business. At the start, CSS Corp was one of multiple suppliers managing ~30% of the call volumes through centers in India, and eventually Utah and Manila. On the back of CSS Corp’s performance, together with the customer, they have launched a premium tech support offering, a white labelled support service line, and expanded from voice to email, chat, and (over the last two years) remote diagnostics. Today, CSS Corp handles ~55% of the call volumes for the client with approximately 300 employees.

From FTE-based to revenue-based model

The initial pricing model was straightforward FTE-based, dependent on volume forecasts. As CSS Corp analyzed the operation, it identified optimization opportunities primarily with the support process. The client had tried in the past by changing the lifetime warranty policy for its routers to 90 days and pushing sales for warranty extensions, but with limited results. CSS Corp’s proposal focused on the entire experience for the connected home, where the router is just one piece. It offered to sell a premium tech support package covering the out-of-scope and out-of-warranty routers, as well as every connected device in the house. If the issue cannot be resolved or it is due to a faulty product, the customer is entitled to a complete refund.

In turn, the commercial outsourcing model is also modified to transaction-based. The client pays only for the handled interactions at a lower rate compared to FTE pricing, and on top, CSS Corp pays a certain percentage of the generated revenue from the premium tech support sales.

Impact on the provider

For CSS Corp, this shift required changing the operations, with a robust analytics capability to monitor and forecast performance, and a new profile for the support staff. From narrowly-focused technical support agents proficient solely in routers, CSS Corp recruited engineers with competency both in hardware and software to answer the new types of issues escalated by customers. These engineers are supported by a knowledge base and troubleshooting guides, covering the wide spectrum of the constantly expanding connected ecosystem. The company also established a dedicated IoT showroom to test and play with new devices and software. In addition, the team had to have sales skills to identify prospects, overcome objections, and close subscription sales.

The right client

Moving to such a model, incorporating variable costing with revenue generation sharing, requires a certain type of client. Ideally, one with experience in outsourcing partnerships, a level of maturity within the customer experience operations, the necessary volumes, and a higher value product. It fits well with networking OEMs where, for example, if the end user contacts the company several times with support inquiries for their router, the standard profit after tax of 4%-5% will be lost. This approach also requires the product and marketing departments to be more flexible and find creative ways to amend their entitlement and warranty policies.

Addition to the bottom line, and next generation technical support

Between July 2014 and December 2016, the client experienced 275% reduction of its support costs with a comparable volume, and currently receives $0.58 revenue per call handled by CSS Corp while maintaining CSAT of over 92% and NPS above 75%. Through improved training and proactive engagement with the customer during the subscription period, CSS Corp increased the conversion rate from 4.5% to 9.5%, and grew the average sales value by ~37%.

In the last two years, the support team is receiving more targeted and complex customer calls related to smart homes and, more recently, voice-controlled connected devices. CSS Corp is addressing this evolution of the market and customer expectations by continuous training, but also by driving active delivery frameworks. It analyses logs for the interoperability of devices, creates self-service troubleshooting guides for the users, and enables omnichannel support through the company’s proprietary Activai mobile app. CSS also recently started a pilot over social media.

<![CDATA[Omnichannel Entropy from a Customer Experience Perspective: Macy’s Journey]]> The traditional (and now universally accepted as outdated) model for multi-channel support looked something like this, with differences primarily between the types or number of channels:

However, as customers became digital and mobile, the model has shifted to something like this:

This model originated with marketers and retailers, where omnichannel means the ability to purchase in the physical store, online, via the phone, or mail order. However, as channel technology matures, as markets are disrupted by new economy brands and, above all, as customers radically change their behavior, the omnichannel relationship between customers and brands has also evolved from this simplified understanding. The current picture resembles a unified environment, allowing fluid migration of customers across interlinked channels, easily switching between self-service and assisted support, live and virtual agent, digital and non-digital channels.  

From Channel Proliferation to Channel Entropy

When, at the end of 2016 and early this year, we conducted our study of multi-channel customer experience, voice search was hardly on the radar. Very few CX vendors were looking to the space and there were no implementations. Today, an increasing number of providers and their clients are planning pilots or already running implementations over Amazon Echo and Google Home. They have recognized that the opportunities of the channel are significant, while its adoption is rapidly growing: from the untapped market of users without ability or skills to operate the traditional GUI of the internet, to the fact that voice search has a captive audience, required to link their account information.

At the same time, when we looked at voice, which had been predicted to all but disappear in the contact center over the next few years, the reality of outsourcing providers and clients shows that, while in steady decline, voice will remain the largest part of their revenues and more than half of their interactions until 2020. As voice calls move to chats and simple, repetitive interactions become automated, calls handled by agents become longer, more involved, and more complex. This entropy is affecting most channels, creating new use cases and addressing new customer needs – and at the same time, making the consistent customer experience across channels more difficult.

Macy’s Omnichannel Journey

In the retail sector, the significant adoption of online discovery, buying, and support, makes achieving this balance even more prevalent. For Macy’s, which manages three separate brands with unique identities and customer focus, the combination of 825 physical and speciality stores, voice and digital channels for sales, customer care, and collections across several service lines and products, the key factor when enabling a new digital channel is making sure it resonates with the customer. The company has had chat support for over seven years and has introduced social media in the last two, but still the majority of the traffic continues to come from voice.

Consistent with the market, Macy’s is seeing an increase in chat and social media interactions, reflecting changing customer expectation. While Macy’s customers may differ in their preferences for self-service or live assistance, voice or digital, they are all having less time to spare, are almost always connected, demand greater personalization, and expect frictionless service. As a result, social media and chat are a big part of the company’s future sales and support strategy.

In addition to customer care, Macy’s currently uses proactive chat for cross-selling and conversion on its websites, and earlier in the year has officially launched a virtual agent. The chatbot was developed with Microsoft, and piloted in June for the desktop checkout web page, answering the top questions identified from live chat data. The bot has now expanded to the mobile version. Although in the early stages, the trial has shown consistent customer effort scores, resolution rates, and acceptance by users. Macy’s is now looking to expand the bot to social messengers and other sections of the FAQs.

Analytics, Automation & AI: Key for the Next 3 Years

Macy’s forward-looking and cautious approach to channel enablement is reflected in many of the client interviews we conducted for our multi-channel and retail and CPG customer experience studies. As shown in the graphic below, clients are predominantly satisfied with the multilingual capabilities of their providers, and their experience in reducing costs, implementing new channels, and creating dedicated centers of excellence for them. However, vendors are not yet meeting expectations in delivering effective benefits in the areas of analytics, RPA, and AI. 

Client satisfaction with a range of CX benefits compared to their future importance 


The omnichannel environment creates an enormous amount of data, which a human analyst and traditional statistical tools cannot process. The leading CX vendors realize this change and are actively investing in the space. Ability to use machine learning algorithms, to deliver real-time insights, and to automate contact center processes will be the biggest differentiators in the near future, not just for outsourcing providers but for all CX organizations. From a channel perspective, it means that whether a brand is using chatbots or video or remaining primarily voice, these capabilities are needed to provide a true unified channel experience.


On 28th September, Brian Stout, Senior Vice President Omnichannel Support at Macy’s Department Stores, and Ivan Kotzev, CX Services Lead Analyst at NelsonHall, recorded a buy-side webinar: Macy's Omnichannel Journey - from Voice to Chatbots. The webinar is available for NelsonHall’s Buyer Intelligence Group members. For membership details, contact Vicki Jenkins.


<![CDATA[Hungry for Hungary? Why the Country’s Talent Feast is Attracting International Investment]]>


I was privileged to be invited recently to a customer and analyst event in Budapest, Hungary hosted by Cielo. Great, I thought – I’ve never been there, maybe I’ll see the Danube and a few historic buildings. And from that perspective, Budapest did not disappoint; it was understandable why there were so many tourists visiting, enjoying the hot September weather. But the event itself was a real eye-opener to the potential of this city and country, why it is a very cosmopolitan place to live and work, and why so many international organizations have set up offices/call centers here.

So what attracted an organization like Cielo to set up a delivery center (DC) here? On the second anniversary of the opening of its Budapest DC, Cielo’s Matt Jones explained why. At the time, when Cielo was hiring 10,000 professionals annually across 20 countries, many being in central Europe, it needed a DC location that would best serve its mix of clients. Cielo looked at a number of cities: Kiev, Ukraine; Prague, Czech Republic; Warsaw, Poland; and Budapest, Hungary. Of these, Budapest proved most suitable for Cielo’s DACH clients (those in Germany, Austria and Switzerland).

A number of criteria were taken into consideration.  To ensure Cielo could live by its “we become you” high touch mantra for all of its European clients, it needed to hire qualified talent with strong bi- or multi-lingual capability. The table below shows the comparison between Budapest, Prague and Warsaw.



Whilst the three cities were strong regarding qualified and bi- or multi-lingual talent, Budapest better matched the languages used by its clients and had the greatest number of universities from which to source talent for itself and on behalf of its clients. In 2015, Cielo’s Budapest DC opened with three employees. Now it has 63 employees, speaking 18 languages (many employees speaking three or more), supports 17 clients hiring in 41 countries. The availability of local talent has enabled Cielo’s DC to scale quickly based on client demand.

The availability of such talent has been a key factor in other shared service centers (SSCs)/DCs being located in Hungary, as it is now the third largest SSC market (with over 100 SSCs) after Poland and the Czech Republic, as business process outsourcing has taken off in the region, with ongoing investments coming from Western Europe or the U.S.

Another advantage for Budapest is its location in the center of Hungary, at the crossroads of three main pan-European transportation corridors. According to HIPA (2017), Hungary has more than 1,800km of built motorways (with 690km planned), the third highest road density in Europe, and the fifth most dense rail network (7,712km). With 5 airports too, Budapest is a two-hour flight from most places in Europe.  Budapest’s geographic accessibility was another key reason for Cielo to locate its European DC there.

Hungary also has the highest rate of broadband penetration among the V4 countries (a cultural and political alliance between the Czech Republic, Hungary, Poland and Slovakia) at 133% of the EU average, and the world’s third fastest 4G network speed (this maybe something to do with the fact that five of the major global network/telecommunications companies are located there), giving potential investors something to consider.

Cielo’s clients supported from its Budapest center come from the following sectors: engineering, technology, manufacturing, FMCG, pharma, medical devices, diagnostics, healthcare and insurance.  Hungary itself has a strong presence in automotive engineering (with a $26.5 billion production value) with the likes of Audi, Mercedes Benz, Suzuki and Opel (and a further 39 of the top 100 automotive suppliers) operating from there, mainly based in western Hungary. The technology sector is strong, with 15 of the largest global technology companies (including IBM, Oracle and SAP) having a presence in Hungary, all having been there for over 10 years. The food industry is also a strong sector, with nine large companies investing in Hungary in 2016-17 (including Nestlé). This offers Cielo the opportunity to grow its client base in Hungary further, in industries with which it has a strong track record.

With the Hungarian government offering state aid (cash grants or tax allowances) mostly in either western or eastern Hungary in the areas of investment, training, R&D, and employment tax allowances, Hungary is likely to continue to attract international organizations to set up a presence there, giving Cielo further opportunity to grow.

So, at first glance, it seems that there are plenty of appetizers on Hungary’s menu to attract investors into the country. However, closer inspection reveals that some things are not so appetizing about the country’s labor market. Hungary is proving to be a highly competitive location in the war for talent, and over 70% of organizations are already struggling to attract the right candidates (source:, 2017). Motivators cited by candidates are a good salary, fair management/leadership, a stable workplace, fair working hours, and an interesting job. Candidate pain points are lack of useful information in job descriptions to make informed decisions about the role, and no communication from the hiring organization at the end of the hiring process. suggests that organizations need to embrace the concept of candidate experience, develop persona-based employer branding, leverage technology to speed up the recruitment process, provide the right information to candidates, and offer interesting roles.

Cielo, being one of very few talent acquisition vendors located in Hungary, is uniquely positioned to leverage its expertise with Hungarian-based organizations. So, Cielo – what are you waiting for?


<![CDATA[Customer Experience in China: Teleperformance Welcomes the Digital Leap]]>


NelsonHall recently attended Teleperformance’s annual analyst event in Xi’an, China. The location was selected to highlight the strong growth of Teleperformance in China, and to showcase latest initiatives to extend its influence in this very distinctive customer experience market.

Early entrant in China’s BPO market

Teleperformance entered Beijing in 2007 with ~300 employees. The initial focus was on multinationals requiring a high-quality standard of support for the domestic market and eventually offshore support for Japan. Today, the company has ~5.5k employees and ~5k seats with two sites in Beijing, and one each in Nanning, Kunming, Foshan outside Guangzhou, and Xi’an. Together with the company’s visa application processing service, TLScontact, it has 21 locations nationally. The company’s revenues from the country increased fivefold since 2013.

The different locations in China have their own specific offerings, with a clear differentiation between tier 1 and tier 2 cities. For example, Beijing offers language capabilities in north Asian languages, and Teleperformance hires native speakers or near-native speakers to support Japanese and Korean markets. Others such as Nanning cater for Vietnamese, while Foshan offers Cantonese language capability (and Teleperformance can recruit from the larger labor pool nearby). And others such as Kunming, where Teleperformance opened its 400-workstation site in June 2016, provide unique greenfield opportunities. In this tier 2 city with a population of six million, Teleperformance is the only multinational customer experience service provider, and the only other major contact center is run by the state-owned China Telecom.

One of the last delivery destinations offering scale

From a customer experience services perspective, China is one of the last countries where providers can achieve large scale delivery. The northwestern city of Xi’an is a good illustration. Teleperformance entered the eight-million metropolitan area three years ago, starting with 100 staff, to become currently its largest Chinese center with 3k employees supporting domestic and multinational clients in the e-commerce, logistics, and high-tech sectors. Xi’an is an attractive city for BPO, serving as an educational hub for the province and boasting a high-tech and engineering history with a dedicated economic and technology development zone, available office space, the support of the local government through tax incentives, and overall cost savings of ~10% compared to Beijing.

The challenges for entering a market such as Xi’an are twofold. The first is the unique business environment where private enterprise and foreign investments can be established under the economic plans of the state and party. Even before the company’s official entry into the country, Teleperformance founder Daniel Julien traveled to China, including Xi’an, and selected an experienced country CEO, Joseph Wai, who previously worked with locally-owned BPO companies. For a market where even global multinationals such as Google and Facebook cannot enforce their position, the importance of the local executive team should not be underestimated.

The challenges of the Chinese labor market

The other challenge is the labor market. The BPO sector is an unknown for young Chinese graduates. The direct competitors for agent roles are not other BPOs or contact centers but the wider service economy. Teleperformance addresses this issue by promoting its career development program, which offers quick progression opportunities, the strength of the brands it supports (seen as a prestige factor by applicants), its social program (which in Xi’an includes a transport service), and even the modern setup of its centers, consistent across the locations.

For management roles, factors such as limited English skills and difficulty of relocating due to residency benefits tied to a city, but above all the historical lack of customer experience culture in China, necessitate the selection of management talent from within.

Customer service in China is undergoing a shift

The customer experience services market in China is highly fragmented, with thousands of local contact centers supporting even nationwide brands on low cost, low standard models. Traditionally, state-owned service companies have very limited practice in customer experience, and private brands similarly have made only limited investment in support, including basics such as 24-hour operations or non-voice channels. This situation is changing rapidly.

Migration from a manufacturing to a service economy, raising wealth creation by the private sector, an exponentially increasing urban middle class population, and digital enablement are combining for the first time to create a need for providers of international standard customer experience services such as Teleperformance. This shift is being seen by Teleperformance, which began to add domestic clients in the last two years, including some of the largest national e-commerce brands. One of these e-tailers has asked Teleperformance to host customer experience roundtables to establish best practices.

A digital leap in customer experience through WeChat

Probably the biggest opportunity in the Chinese customer experience market is the high adoption rates of mobile and digital technology. With ~700m mobile internet users currently, with double-digit year-on-year growth in user numbers, and significant growth in levels of internet usage, the country has embraced digital entertainment, gaming, shopping, payment, travel, and communications. The flagship of this digital wave is the instant messaging platform WeChat. Tencent’s WeChat dominates Chinese internet with an estimated 880 million monthly active users. WeChat is a ‘super app’, an ecosystem of apps for messaging, calls, social networking, media consumption, shopping, payments, video, music streaming, and gaming. It is a preferred internet entry point and the main communications channel between B2C and C2C. Its proliferation in the offline world is achieved through widespread usage of QR codes, with payments over the platform reaching everything from online purchases and utility payments to personal fund transfers and gifts such as ‘virtual red envelopes’ (based on the Chinese tradition of hongbao, where money is given to family and friends as a gift).

For domestic brands, WeChat is the channel of choice to market, sell, and now support. Teleperformance is also focusing on the channel. It has developed integration between its proprietary CRM platform TP Client and WeChat, and is currently working with clients to pilot customer care voice and chat programs before the Q4 seasonal sales peak and the 11th November shopping day.

Teleperformance’s continuing growth in China

China will remain a target market for Teleperformance in the coming years. The company wants to create its own pipeline of potential locations supported by government incentives and considering factors such as accents and language capabilities. The share of domestic logos is expanding, with clients realizing the benefits of working with global providers, and fueled by the evolving customer experience culture. A key part of this growth is WeChat, where it aims for more client programs, and eventually to add automation functionality.

<![CDATA[Reshuffle in the European Customer Management Services Market: Comdata Acquires French Provider B2S]]>

On June 8th, Italian BPS provider Comdata announced the acquisition of the French group Izium, which includes the CMS provider B2S, for ~€200m. The acquisition will be the first entry for Comdata in France and will lift the company to a top 5 CMS provider in Europe with estimated proforma revenues of ~€750m for 2017.

Entry into a mature and healthy French CX market

Under the deal, Comdata will acquire 100% of the Izium group’s subsidiaries:

  • Contact center service provider B2S, offering customer care, technical support, sales, and collections to the French market from 10 onshore and offshore locations in Morocco and Madagascar
  • Colorado Consulting, a CRM consulting firm supporting the French domestic market and French multinationals abroad with a strong luxury brands portfolio
  • BCust, a call center technology and CRM system integrator
  • CMS, a B2B debt collections business.

Together the four firms have ~6k employees, 150 clients, and 2016 revenues of ~€180m. Maxime Didier, founder and majority shareholder of Izium, will reinvest in Comdata Group, becoming the second largest shareholder (11%) after PE Carlyle Group (~80%).

The French market is attractive for Comdata as the third largest in Europe (NelsonHall est. $3.1bn for 2017) with an established mix of onshore and offshore delivery. It also has better average margins compared to Italy and Spain and interesting sales opportunities for first-time outsourcers and even in mature segments such as telecoms and media.

Prospects in provisioning and middle office support

Comdata also looks to utilize sales opportunities to expand the customer facing services of B2S with its own experience in back office management for customer service. It offers order management, claims processing, service provisioning, field support, middle office, B2C collections, and document management for telecom and energy clients in Italy. Comdata has been supplying these services to several of the clients since the early 2000s.

In other sectors, such as banking, Comdata operates as the de facto front and back office, offering document processing, digitalization, and account management. For example, for an Italian online bank, Comdata delivers post-sales support, account and claims management, and collections. As part of this service integration, Comdata has reengineered support processes and applied automation to achieve efficiencies.

This approach for an incremental increase of the share of wallet also relies on the B2S client base in new verticals (automotive, retail, and travel) and on cross-selling in geographies for telecoms, BFSI, energy, and utility multinational clients.

Fast track to the top 5

Following the investment by Carlyle Group in 2015, the Milan-based Comdata embarked on an active M&A path combining in-market consolidations to diversify its sector exposure and win market share and add capacity, with the goal of entering the largest European markets:

  • In 2016, it acquired the Spanish CMS provider Digitex, which added ~16k employees in Spain, Colombia, Mexico, Peru, Chile, Guatemala, and El Salvador
  • Later in 2016, it bought the Turkish CMS vendor Win Bilgi Iletisim, with ~3k staff in Istanbul and Eskişehir
  • In 2017, it expanded its Spanish footprint with the ~600 staff call center Overtop Projects

Comdata growth plans

Comdata expects to close its French acquisition by August, start the integration process, and eventually rebrand all its acquisitions to a single brand.

Comdata sees increased client requirements for scale of operations in both onshore and offshore, vendor consolidation, and pan-European support. That is why it aims to become a top 3 vendor in each of the markets it operates and plans to grow through organic and active M&A in Continental and Northern Europe.

<![CDATA[Amelia Enhances its Emotional, Contextual, and Process Intelligence to Outwit Chatbots]]>

IPSoft's Amelia


NelsonHall recently attended the IPSoft analyst event in New York, with a view to understanding the extent to which the company’s shift into customer service has succeeded. It immediately became clear that the company is accelerating its major shift in focus of recent years from autonomics to cognitive agents. While IPSoft began in autonomics in support of IT infrastructure management, and many Amelia implementations are still in support of IT service activities, IPSoft now clearly has its sights on the major prize in the customer service (and sales) world, positioning its Amelia cognitive agent as “The Most Human AI” with much greater range of emotional, contextual, and process “intelligence” than the perceived competition in the form of chatbots.

Key Role for AI is Human Augmentation Not Human Replacement

IPSoft was at pains to point out that AI was the future and that human augmentation was a major trend that would separate the winners from the losers in the corporate world. In demonstrating the point that AI was the future, Nick Bostrom from the Future of Humanity Institute at Oxford University discussed the result of a survey of ~300 AI experts to identify the point at which high-level machine intelligence, (the point at which unaided machines can accomplish any task better and more cheaply than human workers) would be achieved. This survey concluded that there was a 50% probability that this will be achieved within 50-years and a 25% probability that it will happen within 20-25 years.

On a more conciliatory basis, Dr. Michael Chui suggested that AI was essential to maintaining living standards and that the key role for AI for the foreseeable future was human augmentation rather than human replacement.

According to McKinsey Global Institute (MGI), “about half the activities people are paid almost $15tn in wages to do in the global economy have the potential to be automated by adapting currently demonstrated technology. While less than 5% of all occupations can be automated entirely, about 60% of all occupations have at least 30% of constituent activities that could be automated. More occupations will change than can be automated away.”

McKinsey argues that automation is essential to maintain GDP growth and standards of living, estimating that of the 3.5% per annum GDP growth achieved on average over the past 50 years, half was derived from productivity growth and half from growth in employment. Assuming that growth in employment will largely cease as populations age over the next 50 years, then an increase/approximate doubling in automation-driven productivity growth will be required to maintain the historical levels of GDP growth.

Providing Empathetic Conversations Rather than Transactions

The guiding principles behind Amelia are to provide conversations rather than transactions, to understand customer intent, and to deliver a to-the-point and empathetic response. Overall, IPSoft is looking to position Amelia as a cognitive agent at the intersection of systems of engagement, systems of record, and data platforms, incorporating:

  • Conversational intelligence, encompassing intelligent understanding, empathetic response, & multi-channel handling. IPSoft has recently added additional machine learning and DEEP learning
  • Advanced analytics, encompassing performance analytics, decision intelligence, and data visualization
  • Smart workflow, encompassing dynamic process execution and integration hub, with UI integration (planned)
  • Experience management, to ensure contextual awareness
  • Supervised automated learning, encompassing automated training, observational learning, and industry solutions.

For example, it is possible to upload documents and SOPs in support of automated training and Amelia will advise on the best machine learning algorithms to be used. Using supervised learning, Amelia submits what it has learned to the SME for approval but only uses this new knowledge once approved by the SME to ensure high levels of compliance. Amelia also learns from escalations to agents and automated consolidation of these new learnings will be built into the next Amelia release.

IPSoft is continuing to develop an even greater range of algorithms by partnering with universities. These algorithms remain usable across all organizations with the introduction of customer data to these algorithms leading to the development of client-specific customer service models.

Easier to Teach Amelia Banking Processes than a New Language

An excellent example of the use of Amelia was discussed by a Nordic bank. The bank initially applied Amelia to its internal service desk, starting with a pilot in support of 600 employees in 2016 covering activities such as unlocking accounts and password guidance, before rolling out to 15,000 employees in Spring 2017. This was followed by the application of Amelia to customer service with a silent launch taking place in December 2016 and Amelia being rolled out in support of branch office information, booking meetings, banking terms, products and services, mobile bank IDs, and account opening. The bank had considered using offshore personnel but chose Amelia based on its potential ability to roll-out in a new country in a month and its 24x7 availability. Amelia is currently used by ~300 customers per day over chat.

The bank was open about its use of AI with its customers on its website, indicating that its new chat stream was based on the use of “digital employees with artificial intelligence”. The bank found that while customers, in general, seemed pleased to interact via chat, less expectedly, use of AI led to totally new customer behaviors, both good and bad, with some people who hated the idea of use of robots acting much more aggressively. On the other hand, Amelia was highly successful with individuals who were reluctant to phone the bank or visit a bank branch.

Key lessons learnt by the bank included:

  • The high level of acceptance of Amelia by customer service personnel who regarded Amelia as taking away boring “Monday-morning” tasks allowing them to focus on more meaningful conversations with customers rather than threatening their livelihoods
  • It was easier than expected to teach Amelia the banking processes, but harder than expected to convert to a new language such as Swedish, with the bank perceiving that each language is essentially a different way of thinking. Amelia was perceived to be optimized for English and converting Amelia to Swedish took three months, while training Amelia on the simple banking processes took a matter of days.

Amelia is now successfully handling ~90% of requests, though ~30% of these are intentionally routed to a live agent for example for deeper mortgage discussions.

Amelia Avatar Remains Key to IPSoft Branding

While the blonde, blue-eyed nature of the Amelia avatar is likely to be highly acceptable in Sweden, this stereotype could potentially be less acceptable elsewhere and the tradition within contact centers is to try to match the nature of the agent with that of the customer. While Amelia is clearly designed to be highly empathetic in terms of language, it may be more discordant in terms of appearance.

However, the appearance of the Amelia avatar remains key to IPSoft’s branding. While IPSoft is redesigning the Amelia avatar to capture greater hand and arm movements for greater empathy, and some adaptation of clothing and hairstyle are permitted to reflect brand value, IPSoft is not currently prepared to allow fundamental changes to gender or skin color, or to allow multiple avatars to be used to develop empathy with individual customers. This might need to change as IPSoft becomes more confident of its brand and the market for cognitive agents matures.

Partnering with Consultancies to Develop Horizontal & Vertical IP

At present, Amelia is largely vanilla in flavor and the bulk of implementations are being conducted by IPSoft itself. IPSoft estimates that Amelia has been used in 50 instances, covering ~60% of customer requests with ~90% accuracy and, overall, IPSoft estimates that it takes 6-months to assist an organization to build an Amelia competence in-house, 9-days to go-live, and 6-9 months to scale up from an initial implementation.

Accordingly, it is key to the future of IPSoft that Amelia can develop a wide range of semi-productized horizontal and vertical use cases and that partners can be trained and leveraged to handle the bulk of implementations.

At present, IPSoft estimates that its revenues are 70:30 services:product, with product revenues growing faster than services revenues. While IPSoft is currently carrying out the majority (~60%) of Amelia implementations itself, it is increasingly looking to partner with the major consultancies such as Accenture, Deloittes, PwC, and KPMG to build baseline Amelia products around horizontals and industry-specific processes, for example, working with Deloittes in HR. In addition, IPSoft has partnered with NTT in Japan, with NTT offering a Japanese-language, cloud-based virtual assistant, COTOHA.

IPSoft’s pricing mechanisms consist of:

  • A fixed price per PoC development
  • Production environments: charge for implementation followed by a price per transaction.

While Amelia is available in both cloud and onsite, IPSoft perceives that the major opportunities for its partners lie in highly integrated implementations behind the client firewall.

In conclusion, IPSoft is now making considerable investments in developing Amelia with the aim of becoming the leading cognitive agent for customer service and the high emphasis on “conversations and empathic responses” differentiates the software from more transactionally-focused cognitive software.

Nonetheless, it is early days for Amelia. The company is beginning to increase its emphasis on third-party partnerships which will be key to scaling adoption of the software. However, these are currently focused around the major consultancies. This is fine while cognitive agents are in the first throes of adoption but downstream IPSoft is likely to need the support of, and partnerships with the major contact center outsourcers who currently control around a third of customer service spend and who are influential in assisting organizations in their digital customer service transformations.

<![CDATA[Closing the Gap in Healthcare: TeleTech’s Approach]]>


In April 2017, TeleTech acquired healthcare BPS provider Connextions for $80m. The acquisition makes healthcare the second largest vertical for TeleTech, expected to reach ~21% of their annual revenue at ~$300m. I spoke with TeleTech recently to discuss the acquisition and their focus on the healthcare space.

TeleTech’s Healthcare Business at a Glance

TeleTech’s healthcare clients include payers, providers, pharma and medical supplies, medical devices and wellness brands. The company supports these clients from 20 domestic, nearshore, and offshore centers and with ~10k associates, including work-at-home. The size of the support population has grown eightfold over the last four years, adding ~2k roles in 2016 alone, including 900 licensed agents to support Medicaid and Medicare open enrollment.

For the top U.S. healthcare plans, TeleTech offers services in consulting, platform design and integration, revenue generation, and member care services. With its long-term client relationship in the space, TeleTech provides enrollment, sales support, member services, provider, and dental and vision services, and wellness outreach. For example, on the consulting side, TeleTech has helped a healthcare payer redesign their training curriculum to reduce the training time and improve the speed to proficiency, bringing cost savings and being utilized by TeleTech staff and the competing vendor agents.

The Connextions Value Proposition

Connextions was part of Optum since 2011 and offers member acquisition, retention, and customer care services to healthcare plans such as Medicare, Medicaid, individual and group, healthcare providers, and pharmacy benefits managers. The acquisition added new logos for TeleTech to reach ~20 core clients in the sector.

The company gains ~4k agents across the U.S. TeleTech expects the deal to add approximately $115m in revenue annually and to be EBITDA accretive in 2017, bringing the total customer management services business to ~$1.2bn by 2018 from the 2016 level of ~$924m (total company revenue was $1.275bn). Connextions also brings its proprietary healthcare CRM bConnected with embedded workflows, HIPAA compliance and security features, and capability to send the caller a microsite with plans comparison. It also extended the services portfolio with healthcare financial member services, back office and claims support, and telehealth.

U.S. Healthcare is the Most In Need of Customer Experience Improvement

The U.S. healthcare industry is behind the leading sectors in customer experience, with customers facing a limited and complicated enrollment process, lack of visibility of benefits, and disconnected support for member services. TeleTech leverages its experience in other industries to identify opportunities for improvement in healthcare. For example, for a medical and health network in L.A., it provides a single hub for information with a unified phone number for patient access to the hospital, clinics, and doctors, with ~40-50 agents offering concierge level services by locating providers based on proximity and past performance.

The open enrollment for Medicare and the private healthcare exchange, which are inherently seasonal, require quick ramp up of licensed agents in January to facilitate the shopping experience and convert leads until mid-February when the period ends. To license an agent for all 50 states costs upwards of $5k, in addition to training. TeleTech addresses this challenge by placing licensed agents to other programs in the off season, offering a work-at-home model, and working closely with schools of licensing agents. As a result, it is able to scale and bring back experienced agents who require less time to train, at a fraction of the cost of a new hire, and have on average a 25% improvement in their conversion rate year over year.

Another approach is employing new channels and technology in the telesales process. For example, for a healthcare client, TeleTech deployed a private chat channel for outbound call agents to offer customers the option to connect on a mobile device or desktop PC and continue the interaction on the digital channel with co-browsing functionality to draw, highlight on the screen, and send documents. On webchat, TeleTech has added historical information for past interactions with the customer, e.g. time spent on the website, pages viewed, and plans selected – thus giving context to the agent. With these chat capabilities, TeleTech experienced an NPS improvement of ~10-15%, better conversion rate than phone sales, and an increase in self-service adoption.

Remote Support Opportunities & Wellness Outreach

The requirements for healthcare providers and insurers are moving gradually to a more comprehensive view of the healthcare experience with strong use of analytics and digital technology. For example, six months ago, TeleTech started a program to provide video support for patients discharged to their homes to deliver a decrease in readmission rates and improvement in patient satisfaction with their healthcare experience. The patient gets a tablet with a video call button directly connecting with an agent who can see the patient in their home and on the CRM platform carry out an inventory of their medications, vital signs measurements, and check on the patient status and notify a care team if required. Beginning with a dozen agents, the company is looking to combine the current onshore and work-at-home model with offshore support.

TeleTech is also looking to wellness outreach as a strong opportunity to increase the value of healthcare and close some of the gaps for healthcare customers. For several clients, it delivers medication adherence, which includes data analysis for gaps in maintenance medication, and engaging the member with a phone call to understand the issue and offer alternatives. In turn, the medication adherence impacts the 40 metrics forming the healthcare plan star rating.

Under this changing perception of the market, and empowered by senior executive support, TeleTech is actively pursuing similar opportunities for a more holistic approach to healthcare services.

<![CDATA[Virtual Assistant I Am! CSS Corp Looks to Yodaa]]>

The idea that the future model of customer experience includes a high level of automation is already widespread. A whole ecosystem of developers and vendors is catering to an emerging mass market of bots and virtual assistants. And users and brands are discovering more applications of automated support over text and voice as bot libraries grow rapidly.

While the learning curve for users is a lot quicker than for command-line or form-based interfaces, and we all adapt to conversational interfaces, businesses have a window of opportunity to provide an efficient and effortless customer experience. In this window, technological capabilities and business processes will need to stop playing catch-up and start meeting rapidly evolving customer expectations.

Technical support in the IoT and connected home world

Most of the media coverage is on the use of virtual assistants in marketing, sales, or basic customer care. However, in technical support, the undercurrents of IoT and the connected home will drive an even quicker adoption and ROI. The multiple connected devices spreading around the home and the office increases potential set-up failures and interoperability issues, raises support costs, and (as OEM device margins decrease), lower support funds. The networked relationship between customers, products, and brands creates more complexity while simultaneously expanding to the early and late majority of the market. In turn, these user segments perceive product quality a lot more in terms of product experience; for example, the ability to self-install or receive instant support versus the actual technology. Combined, these factors aggressively force technical support down the virtual assistant and natural language path.

CSS Corp’s Yodaa: the Cotelligent virtual assistant

As a specialized technical support vendor, CSS Corp looked to address this reality with a new engagement platform with a common interface called Yodaa. Yodaa includes pre-packaged modules for premium tech support, analytics, virtual assistant, knowledge management, and mobile app, powered by machine learning and NLP.

CSS Corp developed Yodaa with three questions in mind:

  • Is the platform intelligent enough to eliminate a call – i.e. can it identify a pattern among the registered issues and problems to proactively feed the product developer?
  • Is the platform flexible enough to evolve – i.e. can it learn from the new issues that arise?
  • Is the platform independent enough to remove the need for human intervention – i.e. can it create a fix by itself, for example with a return merchandise authorization, to identify the type of request and automatically trigger the process and push notification updates to the user?

These challenges might be part of a typical RPA integration: what CSS Corp adds is the substitution of human decision making with that of Yodaa. For example, when dispatching a new device, it goes through some 20 different checks such as validating the serial number, checking the warranty period and the bill of payment. Under a business process automation all these steps can be performed by a machine, but for support steps (e.g. in case of a dispute management), Yodaa uses natural language processing and text mining to remove human intervention, and applies machine learning to train itself to modify the business rules on a per case basis.

Over a four-month period this year, CSS Corp implemented the platform with a global gaming brand which consistently requires resolution of a high number of complex inquiries with a range of issues following a typical new version release. Before the release launch, agents created standard operating procedures within the platform’s drag and drop flowchart builder. After the launch, Yodaa learned from the live chat and email interactions how to (e.g.) access a new game level or reset settings to resolve gamers’ inquiries. So far, the vendor has been able to eliminate between 15-25% of the interactions associated with the new version release.

Still at the early stages of this engagement, CSS Corp expects Yodaa to deliver on average 50% reduction in call, email, and chat interactions for technical support, to improve agent productivity by up to 30%, and increase the customer satisfaction by 25%.

Bringing Yodaa to the call center with Amazon Connect

To jumpstart the adoption in the contact center, CSS Corp will integrate Yodaa with the newly launched Amazon Connect cloud-based contact center solution. Amazon Connect places phone, email, chat, messenger, and voice search interactions on a single CRM which enables the virtual agent to learn from one data source, answering simple queries and routing the complex ones to human agents. For clients with an existing knowledge base and standard operating procedures, Yodaa will search throughout for answers, but in the case of new or unsupported questions, it employs information retrieval techniques to obtain appropriate responses from the web. The ambition is for this continuous learning to eliminate and deflect an increasing number of questions, making human agents highly specialized subject matter experts. 

Technical support for the voice-enabled channels 

The next steps for the Yodaa developers are improving deep learning, and adding new business processes and verticals, e.g. pharma. Another focus area is support over the voice-enabled channels such as Amazon Echo, Google Home, and Apple HomePod. The company is working on adding skills and integrating NLP to resolve technical support questions addressed to voice engines. It has already set up demos where Alexa is guiding the user on how to set up a router or on the status of their device delivery. 

<![CDATA[HGS Turns to Sheila & Veronica to Help Enhance the Digital Customer Experience]]>

NelsonHall recently attended the HGS Analyst and Advisory Summit in NYC. The event combined client perspectives with an update on the company’s healthcare business, a review of the latest offerings within its DigiCX suite of digital services, and discussion of the changing nature of customer experience (CX).

Optimizing the healthcare payer member experience

In 2015, HGS acquired a majority ownership in Colibrium, an Atlanta headquartered health plan marketplace with its own proprietary Healthcare CRM overlay. Today, Colibrium has ~10m members across its ~50 deployments. Through the merger Colibrium benefited from HGS’ healthcare experience in several ways:

  • Payer, provider, and broker front and back office services
  • Large-scale clients
  • Offshore, nearshore, and onshore work-at-home (WAHA) delivery model supported by 12k employees, of whom 1.1k are qualified nurses.

HGS’ ambitious plans for the healthcare industry include adding additional clinical services for both the payer and provider markets, obtaining the required license for claims coding and clinical work in all 50 states, and expanding the WAHA model.

The larger challenge in the space is how to acquire, engage, and retain plan members, who are digitally connected, have little plan loyalty and trust in the system, and believe that healthcare is expensive, confusing, and hard to understand. In an environment where customers can purchase life insurance on their mobile, shop for pharmaceuticals across national borders, and have wearables for health monitoring, outsourcing providers such as HGS can stand out by offering a unified experience. For the healthcare providers, HGS aims to deliver regulatory expertize, cost optimization, and scalability during the peak January-February season. In the next stages, it plans to generate richer business insights by analyzing usage activity, member behavior, and VOC.

But for the digital members, HGS is looking for a new approach to the member lifecycle. This includes driving online traffic and lead generation for open enrollment, engagement through click to chat and web portal shopping, support from a human or virtual assistant called Sheila (running on messengers and webchat), as well as self-service set-up, nurse concierge, and proactive support and extension to the wellness industry.

Design thinking for digital CX

In the middle of last year, HGS officially launched DigiCX. DigiCX is a suite of multi-channel CX services including chat, social, email, SMS/text, and messaging channels under an automation and analytics framework. The identifier of DigiCX is the self-service lead. HGS looks to enable digital transformation through an “outside in” and “inside out” design thinking approach that champions self-service and automation, which in turn fund the required investments in tools and consulting resources. For example, the company is working with a global CPG company to conceptualize and create a chatbot avatar for sales and level 1 service queries. For a high-end consumer electronics brand, a recent HGS win, the provider automated 48% of customer emails such as order status and product registration, and for technical support uses NLP to guide customers to troubleshooting videos. The next phase is an SMS bot to automate shipping status inquiries. The bot will be called Veronica.

The combination of customer-facing automation, self-service, and digital channels carries a number of direct business impacts. It lowers costs on average by ~20% in the first phase, adds new channels to meet customers where they naturally prefer, extends the hours of operation, yields more business and VOC insights on the product and services, generates new revenue streams, and improves customer satisfaction.

From their implementation experience, HGS has identified several take-aways:

  • It is important to focus on the outcome and handle the whole engagement, but start with a quick deployment
  • Automation may cannibalize voice volume, but as new channels open it will increase interactions and the overall business pie will expand
  • Identify customer conversations, not messages or calls. Pivot to automated conversations and keep the live agent support using analytics to decide when to turn it on/off
  • More and more clients bundle customer care transactions with digital marketing and sales.

Investment in current channels and future analytics

HGS is actively adopting the emerging channels of social messengers such as WhatsApp and Facebook Messenger. Markets such as North America show significant opportunities for messengers to be the default sales and support interface. While the asynchronous nature of messengers empowers customers in the support processes, HGS is initially eyeing the sales processes. The company is working with technology partners and clients to optimize consumer lead generation, where the interaction begins in the messenger and then a live or automated agent identifies the moment of truth to drive the contact through the sales funnel process. As the early market examples have shown, communication over messengers increases advocacy for the new generation of digital consumers.

With the support of machine learning, bots are integrated into live conversations over messengers to manage a larger share of the customer lifecycle, giving responses and finding answers, moving away from objective to subjective ones. As a CX provider, for HGS this means a further push towards the IT path with customer interaction analytics, rich media analytics, predictive modeling, NLP, and cognitive computing. The company is boosting its technology competencies through partnerships with AI start-ups and own analytics platforms looking to integrate machine and human led interactions as the optimal way to transform CX.   

New objectives for outsourcing clients

An undercurrent of all these consumer and technological changes is the shifting focus of outsourcing clients. As Chris Lord, HGS Global Head – DigiCX, Growth, Strategy and Marketing, highlighted, the target contacts in the client organizations are changing to product owners and marketing execs, and their expectations are for the provider to have the domain insights and expertise to merge CX with sales. As more senior leadership conversations switch towards uplift and new sales, the goal for HGS is to measure the ROI from the digital transformation by delivering a business case with an incremental value proposition.


<![CDATA[Augmented Humans Will Expand the Digital CX Frontier: Lessons from Sitel Summit]]>


Last week, NelsonHall attended the Sitel Summit in Miami. Titled ‘Expanding the Digital CX Frontier’, the event was an opportunity for Sitel to update the analyst community on their new structure, introduce new senior executives, show its new global HQ, and share first-hand experiences of successful CX digital journeys.

From contact center company to a group of global CX services

Almost two years after French Acticall acquired Sitel, the company is changing to an ecosystem of ventures where the contact center business is a part, albeit the largest one by a measure, along with:

  • The Social Client: a digital and social marketing consulting company
  • Learning Tribes: learning and development company
  • Customer Insights: an analytics unit
  • Premium Tech Support division
  • Novagile: a technology and software development company
  • Extens: a consulting practice.

These brands are run separately, with their own P&L, strategy, and target markets as a way to preserve the entrepreneurial DNA, stay close to the clients and be innovative and diversified. This is an approach which Acticall maintained in continental Europe throughout its history of M&A and spin-offs. The unifying objective is to create a ‘toolbox in customer experience’, as the CEO, Laurent Uberti described it.

While the challenges of competing strategies and disparate sales and marketing will emerge, the financial backing of the Mulliez family allows the company a longer investment horizon. Over the last year, the Mulliez family, with its $95bn multinational ownership in retail and distribution, has provided the initial support to finance the Sitel acquisition and restructure its debt. The support by this multinational conglomerate offers opportunities for country or industry-specific synergies across the shared assets. For example, in China, where the flagship retail brand Auchan has a $17bn business and will be a new target market for the Acticall Sitel Group.

At the same time, the most immediate opportunities for the group are to land and expand across its existing client base (e.g. in new markets such as North America for The Social Client and Learning Tribes, or Brazil for Premium Tech Support). In Europe, past company experience showed that every $1 generated by the ventures brings $5 to $7 in contact center business. The group objectives range from the short term (~30% of the U.S. clients having more than one service penetration) to the five year plan for a 20% share of global revenue delivered by non-Sitel ventures.

Main player in the customer experience revolution

The tactics for this approach vary between the different units, but common across all is to target digital opportunities. For example, addressing channel adoption with chatbots, where The Social Client has currently deployed ~25 in Europe; self-service communities, which Acticall runs for major French brands such as SFR; visual IVR, for which it has partnered with a leading provider in Europe; and mobile only methodology. The latter paradigm is the current solution to the challenge of the ‘end of traditional interfaces’, as described by the new Social Client GM for North America, Gordon White. In a world where messaging apps have 2.6bn users, surpassing those of social media, and becoming de facto new OS, vendors such as Sitel need to look for the new channels and formats where CX will be delivered.

Unsurprisingly, automation and NLP will play a big role in these digital transformation journeys. Sitel wants to position itself as the complementary provider for automation in a future where AI will become a commodity while remaining at the current ~70% accuracy. By the end of 2017, under the leadership of CMO Arnaud De Lacoste, Sitel plans to develop a bot engine working alongside third party NLP, leveraging access to large datasets of chat transcripts and employing its labor force to train the bot on process and client-specific lingo. The ‘bot supervisor’ will then offer real-time agent feedback and next-best-actions, improving quality and delivering an estimated 5% NPS boost on average. The project starts with English and moves to other major European languages next.

Digital transformation is slow but brings better margins

Across the different presentations at the event, a consistent topic was concentration on the digital roadmap, earning executive support, and empowering frontline staff instead of over-focus on technology. These different journeys may require:

  • Moving digital ownership from IT to marketing, as was the case with Wyndham Hotel Group, where CMO Barry Goldstein took on a digital enablement journey with its 8k hotels in 70 countries
  • Expanding to video despite initial opposition, as Don Deliz from Intuit described, where the ~600 seasonal work-at-home tax advisory began offering one-way video conferencing with co-browsing capabilities while maintaining a professional appearance and protecting personal data
  • Applying human intelligence at the core of the process, as Peter Francis from T-Mobile explained, to drive digital adoption and, in the case of T-Mobile, making the asynchronous in-app chat a primary contact channel with a newly formed team handling 100k messages weekly at 30-40 concurrency and 4.5/5 CSAT performance
  • Creating an engrained CX culture, like the example Doug Woodard shared about a Capital One agent going beyond her training and company procedure to deliver a highly personal and compassionate service to a war veteran.

Regulators vs augmented humans

The question on how to find, engage, and support agents in their increasingly complex and data-rich interactions was a running theme during the summit and covered exclusively by the Learning Tribe management, who mapped the trainee journey similar to the customer journey, with accents on requirements for mobility, interconnectivity, peer-to-peer support, and efficiency. On the flip side, Brandon Casteel from CareerBuilder painted an unflattering picture of poor applicant experience against an increasing skill shortage in the U.S. market. To add to the complexity, lobbyist Chris Putala explained the state of the Washington legislative environment, which reintroduced in 2017 the U.S. Call Center Worker and Consumer Protection Act, trying to curb U.S. call center offshoring.

As a global vendor, Sitel plans to hedge against these risks by further enhancing its multi-shore model, aiming to grow its U.S. domestic and nearshore footprint in Honduras, to enter new African locations in support of the French market, and expand its China presence from training and development to contact center services. Still, despite these new developments, the fundamental question for Sitel remains how to evolve from a contact center to a context center, able to bring emotion and value to the customer conversation at scale, with the support of new technology and augmented humans. 

<![CDATA[WNS Brandttitude: Serving Marketers with Advanced Brand Analytics]]>


While Facebook banks on the smartphone camera to digitalize offline relationships, and sales people use Snapchat to sell real estate, the main challenges for marketers to reach this level of interaction are structural – how to visualize huge amounts of disparate data to get actionable insights fast at a granular level. Here I take a look at how one CMS vendor, WNS, is tackling these challenges by providing an advanced business intelligence platform for brand performance and customer experience analytics to its clients.

Productizing marketing data visualization with Brandttitude

WNS’ Analytics practice has been offering data aggregation, reporting, and visualization of marketing information across multiple industries for more than ten years. Throughout this period the main client need has been to track the brand performance globally and locally, compare it historically, and benchmark against competitors. With its specific domain focus, WNS developed its knowledge of what marketing data to mine from where and which metrics to show and how to present them to marketers. For example, answering top of mind questions such as the fastest penetrating category or the most frequently purchased brand.

At the beginning of 2017, the provider decided to productize the offering through Brandttitude. Brandttitude is a BI analytics cloud platform which ingests data across sources, integrates, and presents them on a visualization layer accessible through mobile devices.

WNS launched the platform with a CPG client, a French food manufacturer. Brandttitude integrated and correlated the previously isolated customer survey reports from third parties such as GfK and TNS, household TV viewing stats from the likes of Kantar, point of sale resources such as Nielsen, and the client’s own shipment data on a quick stats section to uncover insights such brand lift and market reputation. The API pulls automatically from these syndicated databases and clusters and aggregates them according to market and time period. WNS is now planning to procure these data directly and do analysis independently.

With the French CPG client, WNS is rolling out the platform for multiple national markets in a region, where it has added another six data sources. One of these additional resources has been macroeconomic data from Euromonitor and Frost & Sullivan catalogs to identify correlations between volume and value changes with macroeconomic shifts.

How is my brand doing?

With all these different data sources, for marketers to assess product performance means translating the information into insights to create a single brand story. Brandttitude presents key metrics for a brand, such as value phase, affinity score, and repeat buyer percentage in one location. At the back end, it harmonizes and integrates data from 35-40 markets currently and four different data sources delivered in various formats and styles.

It also hosts a KPI library listing all metrics with an option for the user to plug and play KPIs, create customized views and, thanks to a separate API for each metric, visualize it on external tools. For the retail and CPG space, these are ~150 metrics. It further allows the user to correlate these trends and picture them on a single chart or table view (including mapping competitor performance and a drill-down by geography), and annotate and share them with other platform users within a collaborative space.

With a different set of data sources, clients have requested WNS to customize the platform to handle their specific set of needs. For example, for a U.K. insurance client, Brandttitude will have to manage complaints, claims, policy data, and contact center information to map the customer experience with a particular insurer at a personal level. For example, how many policies a customer has, what complaints they raised, how many times they contacted support, and how many days it took to settle a case and settle an amount. Also, the update frequency has to cater to the daily cycles of work. Similarly, customization will be required for a potential deployment for a convenience store chain in Switzerland by adding e-commerce data.

Domain knowledge enabled by technology

The social networks’ three-sided markets of users, content providers, and advertisers come with massive amounts of data at the individual level and understanding who to target with a Facebook dark post or how to publish effective Instagram Stories is a stepping stone. While marketers can use Tableau and QlikView to solve their technology needs for brand management, with Brandttitude WNS wants to position itself as an industry knowledge curator.

For the next versions of the product, WNS plans to accept information which is not in number formats, such as pdf and serve as a data repository for macroeconomic statistics. The key development, however, is the addition of a machine learning-powered analytics layer which will build upon the descriptive features to add diagnostic and predictive capabilities. For example, it will forecast revenue or create simple marketing mix outcome models. WNS targets these advanced analytics additions by the end of 2017.


NelsonHall is currently working on a Digital Marketing Services project for publication later in Q2. For more information contact Guy Saunders (

<![CDATA[Consolidation & Growth of the German CMS Market: A Quick Look at Regiocom]]>

On 10th March, German energy BPS and ITO provider Regiocom completed the acquisition of customer management services (CMS) vendor SNT Deutschland to create a €230m provider focused on the German market. Here I take a closer look at the deal, and at the wider picture of consolidation and growth currently taking place in the German CMS market.

An Energy BPS Specialist

Regiocom GmbH is a private BPS firm created in 1996 as a 50% subsidiary of E.ON and fully owned by the management since the end of 2014. Its core speciality is the German energy market supporting energy suppliers, network operators, and metering companies with end-to-end business services from software development and data storage to billing, dunning, market data exchange, and customer care for end users. It has close to 2.3k employees of whom 1.7k people are in front office services based in delivery centers in Magdeburg (HQ), Berlin, Halle (Saale), Salzwedel, Dessau, Kaiserslautern, as well as in Vienna, Austria, and Sofia and Varna, Bulgaria. Its 2016 revenues were approximately €153m, of which ~a quarter are from E.ON.

Acquisition of SNT Deutschland to Expand into Telecoms & BFSI Sectors

The acquisition of SNT Deutschland from investment firm Livia Group will bring Regiocom client base and industry expertise in the telecoms sector (2/3 of the SNT business), as well as financial services and insurance, and leisure and travel sectors. SNT was part of KPN telecom and currently has ~3.3k employees and 2016 revenues of ~€80m. It has centers in Berlin, Essen, Chemnitz, Neubrandenburg (two centers), and Potsdam.

With the acquisition, Regiocom will venture outside the highly regulated German energy sector where it has achieved significant vertical integration with its clients and will create a more CMS focused provider. The combined company will boast a wide onshore delivery network and a small nearshore operation in Bulgaria, where it has recently expanded into a second location in Sofia.

German CMS Market Consolidation Continues

This latest deal comes on the back of a string of acquisitions by global CMS leaders in the German market in the last few years. Since the beginning of 2016, major M&A activity includes:

  • Webhelp buying Stuttgart-based 270 people contact center Ocon in February 2017
  • Convergys’ acquisition of a top five onshore vendor buw for €123m in the summer of 2016
  • Capita Europe buying 3C DIALOG with ~400 staff in April 2016, bringing its onshore centers to 13.

A market with nearshore delivery opportunities limited to certain Eastern European and Baltic locations, the German CMS industry relies on onshore presence challenged by relatively high labor costs and unionization. Until recently the market was distributed among multiple domestic players such as buw, walter services, Bosch services, SNT, 3C Dialog, as well as established global vendors such as Arvato, Teleperformance, Sitel, SYKES, and Transcom.

With the merger, Regiocom will be among the top seven German CMS players by revenue. That said, the expanded Regiocom will operate in the second largest European CMS market, which NelsonHall estimates at $3,765m (2017) growing at 4.4% CAAGR through 2020, which is above the growth rates of France, U.K., Italy, Benelux, and Nordic states.

<![CDATA[CMS in Bulgaria: TeleTech Explores Multilingual Skills & Aims to Move up the Value Chain]]>


Last month, NelsonHall visited TeleTech’s delivery center in Sofia, Bulgaria, to discuss the company’s main European operations and the advantages and challenges of Bulgaria as a customer management services (CMS) delivery destination.

From Sofica to TeleTech

TeleTech acquired a local provider, Sofica Group, in 2014 and rebranded it in 2016. Sofica was one of the first Bulgarian outsourcing providers, created in 2004 and offering customer care, technical support L1, helpdesk, and CMS back office in 26 languages, in addition to HRO, hosting, and Contact Center as a Service. The majority of the work is inbound, operating 24/7, but it also offers outbound sales services. It has ~1,100 people in three centers in Sofia and Plovdiv, and in Skopje, the capital of neighboring Macedonia. The main clients are European and U.S. telecoms, technology, financial services, and travel and transportation brands. TeleTech Eastern Europe also has ~15% domestic business servicing one of the biggest national mobile telecoms.

Advantages of the Bulgarian market

Bulgaria has experienced steady growth in its CMS industry, with major players present in the country since 2003-2004. The country has close to 45k people working in more than 360 outsourcing providers, and this is expected to reach 64k people by 2020 out of an active labor force of 2.4m. NelsonHall estimates that ~23k employees work in front office outsourcing services. In addition to TeleTech, CMS providers present in the country include:

  • Concentrix
  • Convergys
  • C3/CustomerContactChannels
  • Sitel
  • Sutherland
  • Telus International
  • Tek Experts.

In addition, there are several local providers, including 60K, Call Group, and Euro Connect.

The benefits of the country as a front office delivery location are in the deep multilingual skills of the agents, typically fluent in a major European language, but often speaking two or even three languages in addition to their native Bulgarian. For example, in TeleTech’s Sofica center, over 80% of the agents speak more than one language in addition to English and their native language.

Due to a language-focused national education system and a significant number of employees with direct study or work experience in European countries and the U.S., front-office providers are often able to handle multiple markets with the same resources and have a close cultural affinity. Other advantages of the country include:

  • Educated workforce able to provide front and back office services in technical and financial sectors
  • The lowest corporate tax in EU at flat 10%
  • Low office rental space. For Sofia, the average rent for A class business property is €12-€14 per m2
  • Good internet connectivity. Bulgaria often ranks among the top 20 countries globally for average internet speed
  • Physical and time zone proximity to Western Europe with direct flights to most European capitals
  • Stable currency pegged to the Euro.

Challenges of the Bulgarian market

The biggest limitation for the Bulgarian CMS industry is the market saturation. While the minimum wage in the country is one of lowest in Europe at €210 per month, the labor cost, particularly in Sofia, has steadily increased since 2010. For the relatively small agent pool, vendors compete with a sizable ITO sector and in-house support centers, as well as middle and back office outsourcing operations in HRO and FAO. Brands with front office operations in the country include AIG, Coca-Cola, C3i, EXL, Experian, IBM, Ingram Micro, Skrill, and William Hill.

Since 2008, this trend has caused vendors to open centers outside the capital Sofia in tier 2 cities such as Plovdiv, Varna, and Burgas. TeleTech was among the first to open its center in Plovdiv and uses it in support of domestic telecoms clients. Still, these locations cannot offer scale.

Other measures to address the labor shortages have been working with universities and offering free training for prospective agents. For example, in Q3 2016, TeleTech launched TeleTech Academy, a free training program for prospective agents for soft, technical, and language skills, particularly in German and French.

Also, TeleTech and other vendors have successfully expanded their recruitment network outside the country, targeting young people from Spain, Portugal, Italy, France, Netherlands, and Germany who are willing to relocate for the attractive low-cost lifestyle in Sofia.

Objective is to move up the CMS value chain

TeleTech is aiming to evolve its Eastern European operations to a more comprehensive BPO center offering the consulting, analytics, and technology capabilities of the wider company. For Logitech, TeleTech centralized customer care in Sofia, implemented a satisfaction monitoring process linking NPS across the various customer care touchpoints at the agent level, and developed a detractor reduction program. Within two years of the launch, Logitech experienced 70% improvement in NPS, while AHT reduced by 22%.

The vendor has a strong outbound revenue generation experience with several projects in Europe and U.S. for telecoms clients. In the summer of 2016, it started a service-to-sales program for a domestic telecoms firm with ~80 agents. For 2017, the provider is planning to build on this experience by launching a wider customer journey mapping and VOC assessment project for the client utilizing the resources of TeleTech’s Customer Strategy Service unit.

Continuous growth for the Bulgarian outsourcing industry

TeleTech’s objectives to expand into consulting and technology services from its Bulgarian operations is aligned with the development of the country as an outsourcing destination. As a growth strategy for a market relatively limited in scale, Bulgarian CMS vendors are adding more advanced technical support services and more digital channels to the already existing language base.

According to the Bulgarian Outsourcing Association, the national outsourcing industry is expected to reach €2.7bn (~6.0% of the country's GDP) by 2020.

<![CDATA[NelsonHall’s Blogging Year: A Selection From 2016]]> NelsonHall analysts are regular bloggers, and while you might be familiar with a number of them, you might not be aware of the full range of topics that NelsonHall analysts blog about. We thought it was an opportune time to look back and pick out just a few of the many blog articles produced last year from different corners of NelsonHall research to give readers a flavour of the scope of our coverage.



We continue to keep abreast of unfolding developments in RPA and cognitive intelligence. In October and November, John Willmott wrote a sequence of three handy blogs on RPA Operating Model Guidelines:

Turning to Andy Efstathiou and some of his musings on FinTech and RPA developments in the Banking sector:

Regarding developments in Customer Management Services:

Fiona Cox and Panos Filippides have been keeping an eye on BPS in the Insurance sector. Two of their blogs looked at imminent vendor M&A activity:

Blogs in the HR Outsourcing domain have included innovation in RPO, and in employee engagement, learning at the beginning of the employee life cycle, talent advisory and analytics services, employer branding, improving the candidate experience, benefits administration and global benefits coverage, cloud-based HR BPS, and more! Here’s a couple on payroll services, so often an overlooked topic, that you might have missed:

Dominique Raviart continues to keep a close eye on developments in Software Testing Services. For example:

Dominique also keeps abreast of unfolding developments in the IT Services vendor landscape. For example, in November he wrote about Dell Services: the Glue for "One NTT DATA" In North America.

Staying with IT Services, David McIntire:

Meanwhile, Mike Smart has been blogging about IoT. Here are two of his earlier ones:

And Rachael Stormonth continues to consider the significance of unfolding developments in the larger and more interesting IT Services and BPS vendors:

That’s just a small sample of the wide-ranging themes and hot topics covered by NelsonHall blog articles in our trademark fact-based, highly insightful style.

Keep up with the latest blogs from these and other NelsonHall analysts throughout 2017 here, and sign up to receive blog and other alerts by topic area, or update your preferences, here

<![CDATA[CMS in 2017: Delivery & Transformation and Industry-Specific Predictions for the Year Ahead]]> 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.

<![CDATA[Sykes’ Clearlink: Selling in the New Digital World]]>


Three watershed moments in online sales and support happened in November and went somewhat under the radar. At the beginning of the month, StatCounter reported that mobile surpassed desktop browsing for the first time at a global level. Then for the Singles Day in China, e-commerce retailers JD and Alibaba not only announced record sales, but the latter opened up the event internationally for the Taiwanese and Hong Kong markets. And after Black Friday, the National Retail Federation in the U.S. estimated more online than in-store shoppers for the first time.

While these events do not sound the death knell for physical stores or traditional websites, they confirm that when B2C brands identify their customers today, the thinking needs to be primarily in terms of digital customers. The challenges of such a shift become not just the ability to sell and support customers online, but discoverability and relevance.

Customer management outsourcers react: Sykes’ acquisition of Clearlink

2016 has been an active year for M&A in the customer experience outsourcing space, with several acquisitions driven by scale, market entry, analytics, and automation resources. Several have been pure additions of digital marketing and sales capabilities. The largest came from Sykes.

On 1st April, Sykes completed the acquisition of Clearlink for a cash consideration of $209.5m. The Salt Lake City, Utah-based Clearlink is a lead generation, inbound sales, and digital marketing company with ~1.5k employees (~1k inbound sales agents) in two centers in Utah and one in Arizona. Annual revenues are ~$123m (2015).

Clearlink supports B2C clients in the telecoms, satellite television, home security, and insurance sectors in the U.S. Its clients include AT&T, CenturyLink, Frontier, Verizon, DISH, Liberty Mutual, MetLife, Windstream, HughesNet, Safeco, The General, Progressive, and Dairyland.

Merging online and contact center sales

Clearlink generates inbound calls from the digital marketing campaigns it runs on behalf of its clients. It designs, hosts, and manages websites, creates social media marketing content, organizes paid and organic search over Google and Bing, and runs display, social media, video, and text message ads. Clearlink has integrated digital marketing with its contact center operations using algorithms to automatically adjust search engine campaigns in near real-time against the availability and performance of the sales floor. It also optimizes contact center staffing based on the requirements of the online campaigns. At a granular level, it can prioritize marketing campaigns based on their profitability over the phone.

Over the last eight years, Clearlink has developed a proprietary contact management platform which tracks individual users from the web to the contact center. The company collects the search data, browsing history, device information, and journey path on the website, and attaches it to the call record when it is initiated in the system.

End-to-end new acquisitions

Typically, marketing and sales departments are separate from the customer service operation which runs the in-house contact centers, and often manages outsourced partnerships, creating a disconnect between marketing efforts, sales skills, and contact center management. For Clearlink, the combination of digital marketing and contact center skills translates into the end-to-end management of new customer acquisitions. For example, for Frontier Communications, Clearlink serves as the digital agency of record and sales campaign outsourcer for the client’s West region. It manages traffic generation such as branded paid search, SEO, display and remarketing, email campaigns, and online buy-flow as well as website management of, retail store pages, blogs and PR content. Customers can reach the sales team via inbound call, chat, email, and SMS, but also complete the purchase online on the dedicated page. 

For the majority of its engagements, Clearlink operates on an outcome-based model, being paid only for the new customers it acquires. This model transfers the initial investment costs and risk from the client’s marketing department to the vendor.

Results in the satellite industry

For a satellite TV provider, Clearlink has been a top 3 sales partner for the last 12 years. The engagement began with the client looking to market and sell satellite TV and installations through online channels and improve the brand perception through targeted sales. Clearlink runs or enhances the organic and paid search, display, email, and phone search, print directory, and partnership marketing.

Since 2003, Clearlink has acquired over 500k customers for the satellite TV provider, with 65% of the customers in the highest quality tier of service, with a network high installation completion rate of 84%. It has consistently exceeded targets by 5-8% for high value channel package sales.

Opportunities from Sykes’ CX market & opportunities from growth verticals

Historically, Clearlink expanded through entry into adjacent industries such as telecoms, satellite TV, and home security, and uses this complementary environment to cross-sell to the end user. Currently, Sykes is assessing the possibilities to extend the Clearlink capability to markets outside the U.S., but its primary focus is on developing a comprehensive offering that includes marketing, sales, and support management over the full customer lifecycle. With a couple of shared clients in the telecoms space, the opportunity is there and the company has begun working on such projects.

Another significant growth opportunity is the connected home. With a marquee client in this space, Sykes is actively engaging during this peak retail season. But it is also looking to capture the telecoms providers and emerging players investing in IoT.

In the small and medium sized enterprises, Sykes also identifies another opportunity. In telecoms, this segment is underserved, and Sykes wants to expand its current mid-office and front-office support to new acquisitions by simplifying the selection, purchase, and provisioning of services.

<![CDATA[Alorica Aims for CMS No. 1 Spot in U.S. with Bets on LATAM & CX Transformation]]>  

NelsonHall recently attended Alorica’s analyst day in Guatemala City for an update on strategic developments. Here I take a look at how Alorica’s EGS integration is progressing, at the company’s U.S. nearshore strategy from LATAM, and at plans to drive CX transformation through consulting and analytics.

EGS acquisition: a path to the global CMS top 3

As we covered in June, the EGS acquisition propelled Alorica to a global top 3 CMS vendor by revenue, with 2016 estimates of $2.3bn.

Today, ~ 150 days into the integration, Alorica has achieved operational visibility, integration of the client accounts, implementation of a single pricing model, financial integration, a combined leadership team, and a regional structure. In the process, Alorica maintained a high level of communication for its joint workforce of over 92k employees in 147 locations by creating a dedicated portal on the acquisition and weekly personal letters from Alorica’s CEO, Andy Lee.

Alorica’s main integration team had an early start by beginning the process approximately two months before the deal signing, forming a team of internal experts and external consultants. Alorica organized integration teams across the two companies to identify best systems, processes, and cultural traits. For example, EGS workforce practices which had better agent retention rates have been extended to Alorica’s workforce, and Alorica’s corporate NPO supported by the employees has established chapters in EGS’ sites to foster a consistent culture.

The target for next year is to launch the new corporate website by January 11th, complete the physical locations rebranding, and implement a uniform recruitment process utilizing advanced analytics and demand planning tools. Alorica’s 2017 focus will be on execution as it aims to reach $3.1bn revenues based on organic growth by 2020. It has already adopted a dynamic strategy approach, where 55 of the company managers and senior leaders gather to select 12 strategic initiatives for the company, assign a champion for each, and execute milestones toward those initiatives every 90 days. 

The key objective for the company is to become the CMS BPO leader in North America, targeting the largest global consumer market. In healthcare, in particular, the EGS acquisition brought a sizable portfolio and capabilities, and the combined company has the potential to benefit from the sector’s high organic growth and high barriers to entry. 

Alorica bets heavily on LATAM countries as nearshore destination

With a combined workforce of 13k people at 17 locations in 9 countries, both EGS and Alorica have actively grown their footprint in the LATAM region in support of the U.S. Present in Mexico, Central America, the Caribbean, Brazil, and Uruguay, the company aims to sell the region on a multi-country delivery model to achieve cost advantages and risk mitigation while benefiting from the cultural alignment, physical and time zone proximity, and a large agent pool of over 5m. Providers in the region also benefit from sizable bilingual skills fueled by a strong population movement to and from the U.S. The language potential of the region also lies in the increasing Spanish speaking population in the U.S. which is currently over 41m native and over 11m bilingual speakers.

For Alorica, its LATAM expansion strategy is a mix of the addition of tier 2 cities (Guatemala, Mexico, Jamaica), expansion in existing cities (Honduras), and new market entry (Colombia). The company still lacks sizable presence in South America, particularly in high-growth delivery destinations such as Colombia, and has not developed the LATAM domestic markets, currently standing at single digit percentage revenue. 

The challenges for BPO providers in the region are country-specific, and Alorica relies on its local leadership with multi-country experience to work with government authorities, universities, and trade organizations in areas such as tax incentives, infrastructure, and education. For example, in Guatemala, a high potential delivery country with over 68% of the population under 30, 6.2m workforce, and ~ 80k people returning from the U.S. per year, Alorica has 4k staff and is looking to expand substantially, opening its latest contact center with 1k seat capacity in March 2016. To increase its talent access, the company has partnered with educational institutions to open a finishing school to teach BPO required skills under Alorica developed curriculum and materials.

Employing WAHA to further diversify delivery mix

Another opportunity which the company is exploring to further diversify its delivery mix is the Work-At-Home model in selected LATAM locations. It is trialing WAHA with a new economy brand out of Mexico, and an online retailer out of Uruguay. The challenges of the model in these countries are the labor laws and cumbersome regulations. Still, with close to 6k employees in 26 U.S. states, Alorica’s WAHA capacity is a strategic element of the company’s delivery infrastructure. It has been used not only to meet seasonality but also to increase talent access, for example hiring at-home pharmacists for the healthcare provider sector.

Analytics and consulting skills to drive CX transformation

With a strong delivery mix for the U.S. market, Alorica is looking next to its analytics and consulting capabilities to lead transformational initiatives for its clients. The two key pieces are the customer experience transformation team and its center of analytical excellence. For example, EGS analytics teams worked on 54 client programs in 2015, and for 2016 will have 150 program engagements. For a ride sharing company, the company reviewed the driver application experience and passenger sentiments both from an internal perspective such as document processing, and from the customer perspective, traveling with the brand and its competitors and serving as drivers over a 90-day period. This holistic approach, together with the data analysis feed, provided a set of recommendations resulting in an estimated $1.5m of annual savings from document processing optimization.

At the beginning of next year, the company is planning to double its CX consulting team with operational, sales, and consulting experts aligned by domain expertise, in order to increase the breadth of its engagements. The company sees this embedded consulting as a key part of their growth creation and retention. As next steps, it is preparing to expand its text and speech analytics toolbox, and to partner with machine learning and AI companies focusing on customer-facing processes. For 2017, Alorica is targeting at least 5% revenue growth, anticipating 12 new logos generating roughly 25% of that growth, with 75% of the new revenue coming from organic growth in its existing client base. 

<![CDATA[RPA Operating Model Guidelines, Part 3: From Pilot to Production & Beyond – The Keys to Successful RPA Deployment]]>

As well as conducting extensive research into RPA and AI, NelsonHall is also chairing international conferences on the subject. In July, we chaired SSON’s second RPA in Shared Services Summit in Chicago, and we will also be chairing SSON’s third RPA in Shared Services Summit in Braselton, Georgia on 1st to 2nd December. In the build-up to the December event we thought we would share some of our insights into rolling out RPA. These topics were the subject of much discussion in Chicago earlier this year and are likely to be the subject of further in-depth discussion in Atlanta (Braselton).

This is the third and final blog in a series presenting key guidelines for organizations embarking on an RPA project, covering project preparation, implementation, support, and management. Here I take a look at the stages of deployment, from pilot development, through design & build, to production, maintenance, and support.

Piloting & deployment – it’s all about the business

When developing pilots, it’s important to recognize that the organization is addressing a business problem and not just applying a technology. Accordingly, organizations should consider how they can make a process better and achieve service delivery innovation, and not just service delivery automation, before they proceed. One framework that can be used in analyzing business processes is the ‘eliminate/simplify/standardize/automate’ approach.

While organizations will probably want to start with some simple and relatively modest RPA pilots to gain quick wins and acceptance of RPA within the organization (and we would recommend that they do so), it is important as the use of RPA matures to consider redesigning and standardizing processes to achieve maximum benefit. So begin with simple manual processes for quick wins, followed by more extensive mapping and reengineering of processes. Indeed, one approach often taken by organizations is to insert robotics and then use the metrics available from robotics to better understand how to reengineer processes downstream.

For early pilots, pick processes where the business unit is willing to take a ‘test & learn’ approach, and live with any need to refine the initial application of RPA. Some level of experimentation and calculated risk taking is OK – it helps the developers to improve their understanding of what can and cannot be achieved from the application of RPA. Also, quality increases over time, so in the medium term, organizations should increasingly consider batch automation rather than in-line automation, and think about tool suites and not just RPA.

Communication remains important throughout, and the organization should be extremely transparent about any pilots taking place. RPA does require a strong emphasis on, and appetite for, management of change. In terms of effectiveness of communication and clarifying the nature of RPA pilots and deployments, proof-of-concept videos generally work a lot better than the written or spoken word.

Bot testing is also important, and organizations have found that bot testing is different from waterfall UAT. Ideally, bots should be tested using a copy of the production environment.

Access to applications is potentially a major hurdle, with organizations needing to establish virtual employees as a new category of employee and give the appropriate virtual user ID access to all applications that require a user ID. The IT function must be extensively involved at this stage to agree access to applications and data. In particular, they may be concerned about the manner of storage of passwords. What’s more, IT personnel are likely to know about the vagaries of the IT landscape that are unknown to operations personnel!

Reporting, contingency & change management key to RPA production

At the production stage, it is important to implement a RPA reporting tool to:

  • Monitor how the bots are performing
  • Provide an executive dashboard with one version of the truth
  • Ensure high license utilization.

There is also a need for contingency planning to cover situations where something goes wrong and work is not allocated to bots. Contingency plans may include co-locating a bot support person or team with operations personnel.

The organization also needs to decide which part of the organization will be responsible for bot scheduling. This can either be overseen by the IT department or, more likely, the operations team can take responsibility for scheduling both personnel and bots. Overall bot monitoring, on the other hand, will probably be carried out centrally.

It remains common practice, though not universal, for RPA software vendors to charge on the basis of the number of bot licenses. Accordingly, since an individual bot license can be used in support of any of the processes automated by the organization, organizations may wish to centralize an element of their bot scheduling to optimize bot license utilization.

At the production stage, liaison with application owners is very important to proactively identify changes in functionality that may impact bot operation, so that these can be addressed in advance. Maintenance is often centralized as part of the automation CoE.

Find out more at the SSON RPA in Shared Services Summit, 1st to 2nd December

NelsonHall will be chairing the third SSON RPA in Shared Services Summit in Braselton, Georgia on 1st to 2nd December, and will share further insights into RPA, including hand-outs of our RPA Operating Model Guidelines. You can register for the summit here.

Also, if you would like to find out more about NelsonHall’s expensive program of RPA & AI research, and get involved, please contact Guy Saunders.

Plus, buy-side organizations can get involved with NelsonHall’s Buyer Intelligence Group (BIG), a buy-side only community which runs regular webinars on RPA, with your buy-side peers sharing their RPA experiences. To find out more, contact Matthaus Davies.  

This is the final blog in a three-part series. See also:

Part 1: How to Lay the Foundations for a Successful RPA Project

Part 2: How to Identify High-Impact RPA Opportunities

<![CDATA[RPA Operating Model Guidelines, Part 2: How to Identify High-Impact RPA Opportunities]]>


As well as conducting extensive research into RPA and AI, NelsonHall is also chairing international conferences on the subject. In July, we chaired SSON’s second RPA in Shared Services Summit in Chicago, and we will also be chairing SSON’s third RPA in Shared Services Summit in Braselton, Georgia on 1st to 2nd December. In the build-up to the December event we thought we would share some of our insights into rolling out RPA. These topics were the subject of much discussion in Chicago earlier this year and are likely to be the subject of further in-depth discussion in Atlanta (Braselton).

This is the second in a series of blogs presenting key guidelines for organizations embarking on an RPA project, covering project preparation, implementation, support, and management. Here I take a look at how to assess and prioritize RPA opportunities prior to project deployment.

Prioritize opportunities for quick wins

An enterprise level governance committee should be involved in the assessment and prioritization of RPA opportunities, and this committee needs to establish a formal framework for project/opportunity selection. For example, a simple but effective framework is to evaluate opportunities based on their:

  • Potential business impact, including RoI and FTE savings
  • Level of difficulty (preferably low)
  • Sponsorship level (preferably high).

The business units should be involved in the generation of ideas for the application of RPA, and these ideas can be compiled in a collaboration system such as SharePoint prior to their review by global process owners and subsequent evaluation by the assessment committee. The aim is to select projects that have a high business impact and high sponsorship level but are relatively easy to implement. As is usual when undertaking new initiatives or using new technologies, aim to get some quick wins and start at the easy end of the project spectrum.

However, organizations also recognize that even those ideas and suggestions that have been rejected for RPA are useful in identifying process pain points, and one suggestion is to pass these ideas to the wider business improvement or reengineering group to investigate alternative approaches to process improvement.

Target stable processes

Other considerations that need to be taken into account include the level of stability of processes and their underlying applications. Clearly, basic RPA does not readily adapt to significant process change, and so, to avoid excessive levels of maintenance, organizations should only choose relatively stable processes based on a stable application infrastructure. Processes that are subject to high levels of change are not appropriate candidates for the application of RPA.

Equally, it is important that the RPA implementers have permission to access the required applications from the application owners, who can initially have major concerns about security, and that the RPA implementers understand any peculiarities of the applications and know about any upgrades or modifications planned.

The importance of IT involvement

It is important that the IT organization is involved, as their knowledge of the application operating infrastructure and any forthcoming changes to applications and infrastructure need to be taken into account at this stage. In particular, it is important to involve identity and access management teams in assessments.

Also, the IT department may well take the lead in establishing RPA security and infrastructure operations. Other key decisions that require strong involvement of the IT organization include:

  • Identity security
  • Ownership of bots
  • Ticketing & support
  • Selection of RPA reporting tool.

Find out more at the SSON RPA in Shared Services Summit, 1st to 2nd December

NelsonHall will be chairing the third SSON RPA in Shared Services Summit in Braselton, Georgia on 1st to 2nd December, and will share further insights into RPA, including hand-outs of our RPA Operating Model Guidelines. You can register for the summit here.

Also, if you would like to find out more about NelsonHall’s expensive program of RPA & AI research, and get involved, please contact Guy Saunders.

Plus, buy-side organizations can get involved with NelsonHall’s Buyer Intelligence Group (BIG), a buy-side only community which runs regular webinars on sourcing topics, including the impact of RPA. The next RPA webinar will be held later this month: to find out more, contact Guy Saunders.  

In the third blog in the series, I will look at deploying an RPA project, from developing pilots, through design & build, to production, maintenance, and support.

<![CDATA[RPA Operating Model Guidelines, Part 1: Laying the Foundations for Successful RPA]]>


As well as conducting extensive research into RPA and AI, NelsonHall is also chairing international conferences on the subject. In July, we chaired SSON’s second RPA in Shared Services Summit in Chicago, and we will also be chairing SSON’s third RPA in Shared Services Summit in Braselton, Georgia on 1st to 2nd December. In the build-up to the December event we thought we would share some of our insights into rolling out RPA. These topics were the subject of much discussion in Chicago earlier this year and are likely to be the subject of further in-depth discussion in Atlanta (Braselton).

This is the first in a series of blogs presenting key guidelines for organizations embarking on RPA, covering establishing the RPA framework, RPA implementation, support, and management. First up, I take a look at how to prepare for an RPA initiative, including establishing the plans and frameworks needed to lay the foundations for a successful project.

Getting started – communication is key

Essential action items for organizations prior to embarking on their first RPA project are:

  • Preparing a communication plan
  • Establishing a governance framework
  • Establishing a RPA center-of-excellence
  • Establishing a framework for allocation of IDs to bots.

Communication is key to ensuring that use of RPA is accepted by both executives and staff alike, with stakeholder management critical. At the enterprise level, the RPA/automation steering committee may involve:

  • COOs of the businesses
  • Enterprise CIO.

Start with awareness training to get support from departments and C-level executives. Senior leader support is key to adoption. Videos demonstrating RPA are potentially much more effective than written papers at this stage. Important considerations to address with executives include:

  • How much control am I going to lose?
  • How will use of RPA impact my staff?
  • How/how much will my department be charged?

When communicating to staff, remember to:

  • Differentiate between value-added and non value-added activity
  • Communicate the intention to use RPA as a development opportunity for personnel. Stress that RPA will be used to facilitate growth, to do more with the same number of people, and give people developmental opportunities
  • Use the same group of people to prepare all communications, to ensure consistency of messaging.

Establish a central governance process

It is important to establish a strong central governance process to ensure standardization across the enterprise, and to ensure that the enterprise is prioritizing the right opportunities. It is also important that IT is informed of, and represented within, the governance process.

An example of a robotics and automation governance framework established by one organization was to form:

  • An enterprise robotics council, responsible for the scope and direction of the program, together with setting targets for efficiency and outcomes
  • A business unit governance council, responsible for prioritizing RPA projects across departments and business units
  • A RPA technical council, responsible for RPA design standards, best practice guidelines, and principles.

Avoid RPA silos – create a centre of excellence

RPA is a key strategic enabler, so use of RPA needs to be embedded in the organization rather than siloed. Accordingly, the organization should consider establishing a RPA center of excellence, encompassing:

  • A centralized RPA & tool technology evaluation group. It is important not to assume that a single RPA tool will be suitable for all purposes and also to recognize that ultimately a wider toolset will be required, encompassing not only RPA technology but also technologies in areas such as OCR, NLP, machine learning, etc.
  • A best practice for establishing standards such as naming standards to be applied in RPA across processes and business units
  • An automation lead for each tower, to manage the RPA project pipeline and priorities for that tower
  • IT liaison personnel.

Establish a bot ID framework

While establishing a framework for allocation of IDs to bots may seem trivial, it has proven not to be so for many organizations where, for example, including ‘virtual workers’ in the HR system has proved insurmountable. In some instances, organizations have resorted to basing bot IDs on the IDs of the bot developer as a short-term fix, but this approach is far from ideal in the long-term.

Organizations should also make centralized decisions about bot license procurement, and here the IT department which has experience in software selection and purchasing should be involved. In particular, the IT department may be able to play a substantial role in RPA software procurement/negotiation.

Find out more at the SSON RPA in Shared Services Summit, 1st to 2nd December

NelsonHall will be chairing the third SSON RPA in Shared Services Summit in Braselton, Georgia on 1st to 2nd December, and will share further insights into RPA, including hand-outs of our RPA Operating Model Guidelines. You can register for the summit here.

Also, if you would like to find out more about NelsonHall’s extensive program of RPA & AI research, and get involved, please contact Guy Saunders.

Plus, buy-side organizations can get involved with NelsonHall’s Buyer Intelligence Group (BIG), a buy-side only community which runs regular webinars on sourcing topics, including the impact of RPA. The next RPA webinar will be held in November: to find out more, contact Matthaus Davies.  


In the second blog in this series, I will look at RPA need assessment and opportunity identification prior to project deployment.


<![CDATA[South Africa and CMS BPO Services: The Importance of Conversational Skills]]>


Last week, NelsonHall attended the latest BPM Summit in Cape Town organized by BPeSA (Business Process enabling South Africa), the official trade body for the outsourcing and contact center industry in the Western Cape. The event provides an opportunity for potential investors, analysts, providers, and government officials to interact. Here I take a look at the appeal of South Africa as a location for business process services (BPS), at successes to date, and at the drivers and inhibitors shaping the future development of outsourcing in the country.


The expanding automation of low-level front-office interactions and the increasing use of self-service as a channel are driving voice support in contact centers to more complex and potentially higher value interactions. These types of interactions require agents who are confident and skilled in non-scripted conversations. For customer management services (CMS) providers, finding such talent, while keeping wages manageable, continues to be a challenge. Hence, vendors have been expanding their operations in tier 2 and 3 cities in their existing delivery countries, particularly onshore and in the Philippines, as well as looking for other locations (e.g. Guyana in support of the U.S. market, Mauritius to service French speaking customers, and the Baltics to service the Nordics). However, South Africa, while being a well-known outsourcing location for CMS, is still largely underused.

Government ready to help

This year’s conference was opened by the Premier of Gauteng, David Makhura, who emphasized the importance attached by government authorities to the BPS industry for its role in job creation. Representing one of the largest economies in Africa, he champions an aggressive two-year plan to attract 25 new Fortune 1000 BPS providers to his region, while at the same time working with the Western Cape and KZN provinces to promote the country of South Africa as a business destination.

The national government’s commitment includes a BPS incentive program, offered since 2011, which provides tiered financial compensation based on the number and types of opened outsourcing jobs.

Progress so far

Supported by the work of BPeSA and the regional governments, the BPS industry has increased from R1.3bn (~$177m) in 2010 to R3.6bn (~$242m) in 2016. In the CMS space, global vendors with operations in the country include:

  • WNS, with over 4k employees and 20+ clients, serviced from five cities offering CMS, F&A, analytics, procurement and legal services, and HRO. WNS has almost doubled its workforce in the country over the last two years, primarily in support of the U.K.,
  • Webhelp, with over 1.2k employees in Cape Town and Johannesburg
  • Capita, with 2.5k staff and two sites in Cape Town
  • Teleperformance, with one site in Cape Town
  • Xerox Services, with one center in Johannesburg
  • Aegis, present in Johannesburg and Durban
  • EXL, a newer entrant.

South Africa also has local players such as Merchants, servicing both domestic and offshore clients, and a number of captive centers, notable ones including Amazon and Barclays.

Need for a focus on target markets

The majority of the work conducted in the centers is serving clients in the U.K. and Australia, but with growing concern of the impact of Brexit, South Africa is also looking to the U.S. as a potential source of growth. We believe this presents a substantial challenge, as the time zones, plus cultural and language differences make the country less competitive compared to traditional offshore and nearshore locations for North America.

In contrast, the U.K still presents a big opportunity as the primary target market. While Brexit may have a negative effect on the available work in certain areas such as banking, some of the largest U.K. accounts serviced from South Africa are in telecoms and utilities, which typically remain stable even in times of economic disruption. One opportunity in the utilities sector is the deregulation of the water market for business clients in England and Wales from April 2017. Overall, the U.K. CMS market estimated by NelsonHall at $4.7bn (2016) has a stable growth potential of 4.2% CAAGR through 2020. With its conversational skills advantages, South Africa has the potential to increase its share in voice work from this market.

Education as a BPS driver

The changing requirements for the BPS workforce, coupled with South Africa’s >25% unemployment rate, especially youth unemployment (>50%), places big demands on education and training. David Blyth from marketing consultancy Yellowwood shared that his surveys among young people show that millennials are forced into vertical work structures, but want horizontal environments. As Lisa Roos from Merchants described, the increasing freelance and self-selection character of today’s agents require school education to incorporate digital learning and gamification.

Both BPeSA and the regional governments recognize this need. BPeSA has developed a mobile game to help young people learn about the BPS career path, while next year Gauteng plans to open schools of specialization offering skills training for the outsourcing industry.

From front office work to advanced BPS

While relatively mature, the BPS industry in South Africa has yet to make substantial gains in middle- or back-office BPS, despite a strong talent pool in financial and legal services. Part of the challenge can be addressed by creating an eco-system of local players who can provide the analytics, digital, and automation services required for advanced BPS. Examples of such capabilities from local companies include:

  • Software developer Zailab with its multi-channel platform and custom agent desks supporting 3D gestures
  • CLEVVA, which has developed a software platform for non-coders to build virtual agents
  • Genii Analytics and its customer experience interaction and predictive analytics platform.

The advantages of South Africa

The decline in the value of the Rand has made South Africa more cost attractive compared to the Philippines and India, and clearly, BPS is getting government support. But these factors on their own would not be sufficient to attract more organizations to look at South Africa for BPS. Its key advantage is talent-related: South Africa has a large population of fluent English speakers with a ‘neutral’ accent, with the ability to communicate with customers effortlessly in a friendly, persuasive manner, making the country the preferred English piece in a global multi-lingual delivery set-up. For environments where conversational skills are important, South Africa offers agents with 'call intelligence'.

NelsonHall published a repprt on‘Analysis of South Africa as a BPO Delivery Location’ in 2015. To find out more, contact Guy Saunders.

<![CDATA[CSS Corp Chennai: Focused on Premium Technical Support & Agent Advancement]]>


NelsonHall recently visited CSS Corp’s contact center in Chennai, India to learn more about its operations and its current focus on developing its premium technical support services. The center opened in July 2010, supports 28 clients (primarily in the high tech and telecoms sectors), and has ~2,200 employees providing customer care, technical support, premium technical support, and analytics offerings.

Agent recruitment & advancement

In terms of agent recruitment, CSS Corp hires from colleges, and has a summer training program that sees approx. 65% of program participants go on to become CSS Corp employees. The hiring profile includes engineers and non-high tech customer care agents.

CSS Corp is working to address customer channel shifts from voice to chat, and this is reflected in its recruitment priorities. In recruiting customer care agents for chat work, CSS Corp is initially more focused on typing accuracy than speed, and requires candidates with typing speeds of just 20 words per minute minimum. Ideally, agents progress to 35 wpm, but speed is not a deal breaker.

Hired agents typically spend 12 months with the company before advancing to premium technical support, and currently there are ~380 CMS agents at this level. CMS agents can move up to engineering, enterprise, and applications positions, and these advancement opportunities are used as an incentive at recruitment time. CSS Corp has ~400 engineers trained in IoT and ‘smart home’.

Technical support initiatives

CSS Corp’s technical support initiatives include:

  • Increased focus on automation, omnichannel, and analytics
  • Increased focus on inbound sales, especially for a high tech electronics client
  • Using social media (Facebook) to update customers of high tech clients in an effort to reduce calls to contact centers
  • Encouraging collaboration with other providers to deliver strong premium level customer care – e.g. when other service providers are closely involved in providing support services to the customer, CSS Corp premium support agents will call the other provider(s) and conduct a joint call until the customer’s issue is resolved
  • Focus on revenue generation for clients – e.g. in providing white labeled premium technical support for a global networking company, CSS Corp is working with the client to move from FTE-based pricing to outcome based-pricing.

CSS Corp’s premium support offerings are built on its Active Delivery Framework, which is supported by a suite of proprietary tools including:

  • Active Edge – a social CRM and knowledge management tool providing agents with a full omnichannel CRM view of interactions in voice, email, webchat, and social media formats. This offering is not licensed as a stand-alone, but this could change in future based on customer demand
  • Active-I – a support augmenting tool with proactive fault detection and resolution, asset intelligence, and call scheduler support
  • Active Insights – a platform solution providing analytics and business intelligence support. It provides a unified view of the customer, and an analytical engine for insights and recommended actions, in an effort to drive cost reduction and revenue growth.
<![CDATA[CMS Takes Center Stage for Conduent, the New Face of Xerox Services]]>


From January 1st 2017, Xerox will separate its business process services (BPS) business into a public company called Conduent (trading under the ticker CNDT on NYSE). Conduent will have approximately ~$7bn revenue and over 96k employees. I recently spoke with Chuck Koskovich, Executive Vice President Customer Care Services at Xerox Services, about the implications of the split on their customer management services (CMS) business, and the strategy to develop it.

Offshore expansion & new automated operating model to drive growth

Conduent is looking to grow its CMS business with a focus on offshore markets and delivery centers, expanding its contact centers (currently over 160 in 26 countries, supporting over 30 languages). It recently launched new sites in Johannesburg for the European markets, also a new customer care center in Indore, in west-central India. The drivers for this geographic expansion are not only costs and access to labor, but also clients’ need for multi-country support.

The company is also looking to revamp its operating model, leveraging its capabilities in advanced analytics, machine learning, and automation to move upstream in the clients’ business. Conduent comes with a significant breadth of CMS clients, and the task at hand is to evolve their support beyond basic account management or billing interactions, aiming at broader and more complex services. The push for increased efficiency is twofold: towards cost optimization via automation and robotics, and improved customer satisfaction through empowering front office agents via analytics.

Enhanced leadership team preparing for a future workforce

In July, Xerox appointed Ashok Vemuri, the former president of iGATE, as CEO of the new company. In the last quarter, the company has also expanded its customer service leadership team by appointing leaders who not only have direct contact center outsourcing expertise but, very importantly, understand the changing nature of the industry, where new hires, particularly millennials, look for shorter working hours and a more flexible career path. An example is an expansion of the Work-At-Home (WAHA) program for a U.S. client, an upgrade of the WFM platform, and an increase in agents working less than 40 hours per week. Conduent recognizes that this shift towards a part-time or freelance workforce may well be the future industry standard. 

Another part of this change is the adoption of methods such as gamification in contact centers, and new training processes with the support of digital technologies and new learning techniques. For Conduent, this approach enables the hiring of operational management staff with background in education and psychology.

Greater focus and more demanding client base

The overarching objective of the senior management team is not just to run efficient operations, but to assist clients in identifying opportunities for transforming their sales and support, something that clients are demanding. To support this, Conduent is looking to recruit a Chief Innovation Officer.

The scale of its CMS client base (over 400 clients) allows Conduent to be more selective when approaching new opportunities, targeting companies that will more readily allow them to move higher up the value chain. Conduent’s core verticals remain technology (two new clients in 2016), telecoms (a new mobile telephone client this year), media, and healthcare (two new clients) in the U.S.

Healthcare represents a third of the portfolio, and is the sector in which Conduent has had the most success with adoption of automation, despite the regulations in the industry. However, this sector poses its challenges; for example, when a North American healthcare client lost business, this forced discounting of the contract.

Strong message for contact center services from a big new brand

A number of official announcements have yet to be made, e.g. the location of the new headquarters. However, as the close of the year approaches, Conduent is launching its branding and marketing initiatives, with plans for the executive staff to be present in the contact center sites.

For certain, CMS is at the forefront of Conduent’s new brand messaging.

NelsonHall has published three profiles on various aspects of Xerox Services’ CMS business this year: an overall CMS profile, plus profiles of their CMS analytics capabilities and their CMS business in the Retail & CPG sector.

Xerox Services is also covered in the NelsonHall Vendor Intelligence Program, in both Key Vendor Assessments and Quarterly Vendor Updates. For details, contact

<![CDATA[CSS Corp’s Enterprise Product Lifecycle Support: Integrating CX with Product Development]]>

The explosion of connected devices and IoT products promises a greater volume of technical support interactions and increased customer demand for proactive and always-on assistance through the lifecycle of a product. In turn, these requirements force customer experience (CX) providers to be involved with the product manufacturers at new levels, participating in development and testing, sales generation and supply, and finally in the technical support and out-of-warranty support of a product. And while in the consumer electronics world, such end-to-end solutions are still rare, in the enterprise product support world they are a norm.

Here I take a close look at how CSS Corp is developing its Enterprise Product Lifecycle support offering.

Developing a comprehensive offering

CSS Corp started its Enterprise Product Life-cycle services in 2003, offering technical support levels 1, 2, and 3 to networking OEMs making servers, switches, routers, and other telecommunication products. It has 24/7 multilingual support centers in India, Poland, Philippines, Costa Rica, Utah, and Mauritius.

The company realized that in a typical model, clients don’t get a unified view of what is happening with their product and have limited visibility of the business outcomes, apart from KPI tracking. To tackle this challenge, CSS Corp developed a complete product support process. The process begins with sales, for which CSS Corp generates leads, integrates and customizes Salesforce and reports, and offers real-time help to the sales engineers to answer technical questions while in front of the customer. Next come the welcome centers – a starting point for all initial customer interactions, identifying contract eligibility, scheduling product training, delivery status and other onboarding issues. These centers require 40-50 staff to handle a 10k monthly interaction volume.

After the initial helpdesk, CSS Corp offers technical support from L1 through L3 and out-of-warranty support. It also provides 24/7 white labelled NOC services for which equipment monitoring is required to maintain 99.999% uptime: for example, network connectivity for hospitals. The company also contacts customers for renewals, upgrades, and warranty extensions. CSS Corp currently supports 16 Enterprise Product Lifecycle clients, including an enterprise wireless OEM, a networking product manufacturer, and a global provider of voice communication platforms.

Support across channels is a must

Both sales and technical support are provided over multiple channels (chat, email, voice and online user communities and social media), and across functions. For example, the social media team collects sales leads from forums and blogs, but also accepts tickets and escalations. Phone calls dominate the U.S. market, generating ~65% of the traffic, while in Europe email is almost at par with phone calls at ~45%, with 15-20% of the global traffic via chat, including in-app messaging and co-browsing. Regardless of the channel, cases are logged via the client’s ticketing system: Siebel, Qlikview, Remedy, Cares, or Salesforce (which is growing in terms of the number of implementations).

Technical issues are complex and require next level of product integration

95% of reported problems are L2 and above, reaching even L4, which requires issue simulations or product testing in CSS Corp’s labs and eventually with the manufacturer. This complexity keeps the resolution time to an average of 4-5 days. A big part of CSS Corp’s holistic approach is their involvement with the manufacturer’s product and feature testing, particularly interoperability. The networking OEMs have tens of thousands of certified application and product partners, and CSS Corp conducts this testing and certification: for example, to ensure the proper functioning of a conference phone with the client’s PBX.

Enhancing the CX and cost optimization for a global telecom equipment manufacturer

For one of its oldest clients, with over 13 years of engagement, CSS Corp has reached just such a level of product and process integration. With this telecom equipment OEM, CSS Corp supports over 20 products lines in multiple languages at a global scale. Starting with a 15- member team, today the vendor has over 180 technical and engineering staff delivering product validation, testing, development, knowledge base, technical documentation, onsite, and remote support. Despite the increase in staff, CSS Corp achieved 50% reduction in TCO over the course of the engagement and reached 1.26 NPS against a 1.4 point target (the client uses reverse NPS 1 to 5 scoring, with 1 being the highest).

Getting ready for the consumer world

Enterprise product lifecycle support is not a volume business, with customers often working with a preferred engineer for years. So, preparing to take on mass consumer markets is a big challenge for vendors.

In order to handle the scale of a mass IoT consumer electronics market (where complexity and interoperability issues remain), vendors will have to employ predictive analytics, automation, and machine learning to prevent product faults, while using different channels such as self-service and user communities to keep costs down and deliver customer satisfaction.

With its Enterprise Product Lifecycle support offering, CSS Corp has taken the first key step in addressing that challenge.

<![CDATA[Analytics are the Key to Disruptive Customer Experience]]>

Over the last few months, I have held discussions with a number of leading customer management services (CMS) vendors and their clients regarding the increasing need for advanced analytics to drive step changes in customer experience (CX). Here, I reflect on the changing role of analytics as they take centre stage as the key to disruptive CX.

How times have changed

When I first participated in the greenfield launch of a contact center in 2005, the main focus was on systems, making sure the network connectivity, CTI, and IVR work, and that our multi-million dollar CRM could be customized sufficiently to support the business.

Roll forward eight years to 2013, the last time I was involved in a new contact center set-up, and the priority had shifted to finding, recruiting, training and retaining the right talent to meet the client’s requirements.

If I were to set up a new contact center today, I would start with analytics as the core, building operations around the questions of how to collect and manage customer data, what resources and tools are required to generate real-time insights, and which processes are needed to prescribe next-best-actions to the agent (human or otherwise).

While the market is predominantly at the descriptive stage of this journey, the capability to deliver effective BI (i.e. to collect, visualize and interpret the significant amounts of data collected in the contact center) is a basic standard. If a business is still struggling with such operational analytics in their contact centers, they need to outsource their operations immediately, because it is most likely causing bottom line losses. Analytics houses such as the South African Pivotal Analytics are able to quickly bridge the gap from reports to insights.

The task of service personalization

The current task for many CMS outsourcing clients is to link data from contact centers with information residing in other departments and the outside world. Vendors such as Sutherland are working on delivering fast and low-cost solutions to unstructured data challenges, covering the customer journey across touch points and beyond single brand interactions. The objective is to finally provide service personalization to users who are sharing enormous amounts of information with companies and not receiving the benefits from it.

In practical terms, this personalization translates to empowering the agent to identify customers and customize their offers (as Intelenet is doing in the hospitality and retail sectors), but also predicting customer behavior per interaction, and contextual needs to match brands (as WNS delivers for a travel client).

Analytics underpinning self-service & revenue generation

The two main trends in contact centers, for increasing self-service and enhancing revenue generation, are heavily reliant on analytics capabilities. Examples include:

  • HGS driving digital channels adoption and scalability through self-service, which is dependent on accurate analysis and forecasting of channel usage and customer behavior trends
  • Firstsource’s sales practice actively employing speech analytics insights to guide the cross-sell and upsell process and performance for agents
  • Xerox Services’ work in retention and collections (where predictive analytics are a true proxy and differentiator). Here, Xerox is developing a churn prediction model that combines statistical and mathematical methods with hypergraph-semantics to discover hidden connections and churn drivers.

The road to predictive analytics

In the growing convergence of marketing, sales and customer service, domain expertise and benchmarking capabilities are combined with customized frameworks, tools and resources for text, social media and VOC analytics to deliver quick benefits to the clients. Vendors such as Concentrix, with significant experience in incorporating traditional channel analytics with sentiment and web analysis, and Minacs with decades of marketing analytics practice in a specific vertical, are best positioned to meet this demand. These capabilities are also a driver for M&A, as shown by Concentrix’ recent acquisition of Minacs.

While predictive analytics is the deliverable sought by CMS vendors for their clients now, the prescriptive analytics and proactive services delivered by cognitive analytics and AI are still aspirational goals. Vendors such as CSS Corp are already providing proactive diagnostics in tech support for the IoT and enterprise space, but effective machine-led CX has yet to materialize.

With greater demand for advanced analytics driving increasing investments in new analytics technologies and models, vendors and clients who are lagging may soon find the competition unreachable, as leaders start to utilize the latest in deep learning, NLP or geo-spatial analytics to deliver market disruption. Examples such as Amazon, Netlflix, and Lyft have proven that a solid analytics backbone makes possible such leaps in the customer experience.

As part of its CMS research program, NelsonHall will soon publish a comprehensive market analysis report on the application of analytics in CMS, together with vendor profiles, and a NEAT vendor evaluation. To find out more, contact Guy Saunders.

<![CDATA[Teleperformance Forays into Interpretation Business with $1.5bn Acquisition]]>

On 22nd August, Teleperformance announced the acquisition of interpretation services provider LanguageLine Solutions (LLS) for $1.52bn.

LanguageLine was founded in 1982 and is headquartered in Monterey, California. In 2015 it had revenues of $388m and adjusted EBITDA of $147m, and the company is expected have revenues of between $400m and $450m in 2016. It has ~8k interpreters, 92% of whom work from home, and supports 240+ languages with over 25k clients.

The majority of LanguageLine’s revenues come from the U.S. and Canada (94%) and the rest from the U.K. Its revenue by vertical for 2015 was:

  • Healthcare (payer and provider): 46%
  • BFSI: 21%
  • Public sector: 16%, particularly police departments
  • Others: 17%.

Over-the-phone channel brings the largest share of revenues (2015 numbers):

  • Over-the-phone: 86%
  • Video remote interpreting: 3%
  • On-site interpreting: 5%
  • Other: 7%.

The company has developed its own ERP system called Olympus and in February 2016 launched a mobile app for video interpreting.

The acquisition from the minority shareholders and private equity ABRY Partners, who purchased the company in 2004 for an estimated $720m, is expected to close by the end of the year.

What is the pull of the interpretation market?

The $35bn global market is divided between translation of written texts and interpretation of voice (in person or remotely), the latter making up well below 10% of the market. According to Teleperformance, the U.S. over-the-phone market is expected to grow by 9% per annum, driven by increased outsourcing in the space, more regulations requiring multi-language support, and increased non-English speaking communities.

LanguageLine is the largest interpretation provider in the U.S. market, and claims to be four times larger in terms of revenue than its nearest interpretation services competitor, and that it exceeds the combined revenues of the next eight direct competitors. Its own growth estimate is between 8% and 10% CAAGR, with an EBITDA margin of ~30% for 2016-2020.

The global interpretation, translation and localization market is highly fragmented, with several vendors with hundred million dollar revenues, including:

  • U.S. public company Lionbridge Technologies with revenues of $560m in 2015
  • U.S. private company TransPerfect with estimated 2015 revenues of $505m
  • Public U.K. company SDL with 2015 revenues of £267m
  • Private U.S. company CyraCom International with estimated 2014 revenues of $91m
  • Hewlett Packard’s Application and Content Globalization group in France.

Other outsourcing vendors who have their own interpretation or translation business include Capita, Transcom, and transcosmos. Japanese vendor transcosmos launched its own interpretation contact center last year in order to capitalize on the Tokyo 2020 Olympic Games.

LanguageLine itself grew through acquisition, buying Pacific Interpreters in January 2013, one of the top 10 American providers with nearly $50m revenues.

Benefits from global market presence

While there is some client overlap, LanguageLine’s exclusively North American focus allows Teleperformance to expand its services to what it considers both an underserved and underdeveloped European market. It also looks to the Chinese market to provide local interpretation services from the main European languages to Mandarin and Cantonese. Still, Teleperformance plans to keep LanguageLine separate from its main business, similar to the operating model of its Face-to-Face visa processing business – the company acquired TLScontact in 2010, growing its revenues from ~€10m to an expected €130m in 2016.

The challenge and opportunity of automation

As with other customer facing services, automation has begun to take over some of the lower end interactions. Services such as Google, Twitter and Skype have given all users free auto-translate and interpretation services, but automation has been primarily used by translators to build dictionaries and full sentence databases to speed up and improve the quality of their work. Most of the current developments in AI and NLP are focused on English, with the expectation that the technological improvements in the field can be relatively easily propagated to other languages eventually. As Teleperformance points out, machine-translation is not an immediate threat, with 76% of the current total business volumes at LanguageLine generated by complex calls lasting over 10 minutes.

€5bn company by 2020

The acquisition is accretive to Teleperformance’s earnings per share of around 10% on a pro forma basis for 2016, but more importantly it adds more weight to the company’s growth plans to reach revenues of €5bn by 2020, from its 2015 level of €3.4bn.