iQor began 2024 with a new CEO, Chris Crowley, and a funding boost by PE Mill Point Capital. iQor is now repositioning for growth, aiming to become a broad partner with existing clients and targeting new verticals. Earlier this month, I attended iQor’s Analyst Day 2024 in Trinidad, where the company is the largest BPS provider and has strong expansion plans.

Solid foundation as a springboard for growth

iQor is a ~$700m CX services provider with ~40k employees in ten countries, the majority in the Philippines (where it is a top 5 BPS employer), but also Colombia, India, and Trinidad and Tobago. The company supports ~200 North American clients, including several of the biggest U.S. telecoms, retailers, banks, financial services companies, utilities, consumer services, hotel chains, travel, and logistics brands. iQor also works with many of the national healthcare payers in the U.S. For example, one of its flagship telecom accounts has ~12k employees supporting 23 LOBs.

Its core mix of services includes customer care, revenue generation activities, including a sizable play in collections, loan servicing, and a range of CX back-office tasks.

With the hiring of Chris Crowley at the start of 2024, iQor has revamped its executive leadership by bringing a host of industry experts from competitors and reaffirming several long-term iQor managers, such as the Chief Digital Officer, PJ Singh and the Chief Operating Officer, Marty Lehtio, along with many technology leaders.

One of the executives’ goals is to put the iQor brand back on the map with the wider CX market and industry influencers. Its growth vision is for an expansion of nearshore and offshore delivery capacity, prioritizing promising sectors such as healthcare and travel, rethinking the tech stack and identifying new technology partnerships, and adding to the services portfolio with CX-adjacent work in KYC, fraud prevention, trust and safety, and more financial services back-office. This service diversification is building upon the in-house expertise in first- and third-party collections, dispute and chargeback management, and credit management that has already been provided to BFSI, telco, and utility companies.

Trinidad: a sustainable BPS delivery opportunity

Trinidad and Tobago is a key element of iQor’s nearshore delivery vision. It is the largest BPS player in the country with ~1.8k seats in three sites, burstable by ~1k employees during peak, including via WAH. iQor is currently reviewing the option for a fourth location to reach ~3k roles and sees a long-term capacity to employ ~5k Trinidadians.

iQor Trinidad supports 14 of the company’s core clients in energy and utilities, banking, retail, healthcare, travel, and P&C insurers. In addition to care programs, Trinidad has been shown as a promising destination for complex back-office tasks, retention, and sales. For example, iQor Trinidad runs a highly-sensitive and specialized sales and onboarding program for an elective medical procedures provider. For an insurer, it provides sales, advocacy, and large value collections (above $5k). iQor Trinidad launched a new energy client in Q3 2024 and is expanding into technical support for an insurer in Q4 2024.

Trinidad is also the market where iQor tests many of its learning and development initiatives and tools, such as the LevelUp career development program.

Trinidad and Tobago’s investment agency InvesTT eyes BPS as a promising sector for economic diversification from its traditional oil industry and emerging tourism sector. The country has nine international BPS players (the other major is Teleperformance) and two local companies for a total capacity of ~3k seats. The country has a workforce of ~590k (~350k aged under 30) and ~25k students enrolled at its top three universities. Other strengths of Trinidad CX delivery include:

• Native English with cultural affinity to the U.S. and U.K. (former Commonwealth country)
• Low labor cost of ~$600 in wages per month for a starting level CX agent. The country claims to have the lowest loaded cost in the Caribbean with competitive energy, water, and fiber optic prices
• Stable and favorable FX rate of $1 for TT$6
• -4 GMT time zone, suitable to support the U.S. market
• Direct flight connectivity to Miami, New York, Houston, London, and Toronto
• Developed international and domestic internet connectivity, allowing WAH agents.

The country has also enacted a SEZ Act in 2022 with tailored incentives such as a preferential corporate tax rate of 15%.

Considering the significant rise in environmental disruptions, Trinidad’s location below the hurricane belt is a critical BCP factor.

Likely challenges are the limited choice of Grade A office space and facilities suitable for contact center operations, an expected lack of experienced BPS middle management roles, and the need to promote the CX industry to the local workforce. CX services players are also not able to fully tap into its native Spanish-speaking workforce, although iQor has bi-lingual support programs. Another opportunity for BPS players in the country is using impact sourcing, including among the migrant community.

Being the best at putting AI to use

Part of iQor’s remaking is reviewing the company’s product catalog and assessing the business impact of technology investments. The company’s iQor Labs, headquartered in Poland, is now focused on delivering innovation runs in 60-90 days and prioritizing four or five large initiatives per year.

The current stack has solutions for proprietary interaction analytics VALDI integrated with an NPS PrediQtor, AI recruitment tool, and AI simulated role play using different third-party platforms. The objective is to plug the right solution for the specific use case, for example, in sales AI training. These platforms are now being rolled out to the entire agent population.

On the product map, the next investment areas are for: agent knowledge assist; decision-making insights generation, where a GenAI-powered virtual assistant will guide business analysts in a Q&A format; and accent neutralization. The organization is building teams of business analysts to serve as the insights hubs for both clients and for iQor internally.

AI voice enhancement is a particularly important development for iQor, as the company is already working with accent neutralization and noise reduction software providers and is running pilots from India. 

The expectation is that these and other developments, such as call summarization, automated QA, and emotion detection, will deliver a meaningful productivity optimization of no less than 5% each.

Growth plans supported by new capital structure

As AI takes over a greater share of simple interactions and replaces CX technology such as IVRs, the iQor investment roadmap aims to maintain a balance between performance and cost, human and machine CX. With its new capital structure, it is now able to invest in additional delivery capacity, agent augmentation tools, and AI applications for increased operational efficiency and insights.

iQor’s investments in employee onboarding, training, and development tools has a larger objective of selecting and uptraining CX agents to support digital-first brands by multitasking across multilayered processes and capable of handling shared services transactions. Target AI augmentation levers cover the employee lifecycle management, real time agent assist, voice enhancements and machine translation, self-service operational and business insights, predictive analytics, and eventually agentic AI.

In addition to its aggressive Trinidad plans, iQor is expanding in: Colombia, where it launched in February 2023 and has since experienced a strong pipeline; India, where a new ~1k people site is opening in November; and brand-new delivery countries in Asia and Africa for English-speaking support. The company is also looking at potential M&A activity, including strategic investments in AI-powered CX technology firms and vertical and domain opportunities, primarily in healthcare.

In 2024, WNS rebranded and relaunched its analytics practice to include data, analytics, AI services, and consulting in a unified offering to enable decision intelligence. I spoke with Gautam Singh, the head of WNS Analytics, covering the opportunities and pitfalls of GenAI solutions, the team’s vertical and domain focus, and the company’s vision for productized services. We also discussed the requirements for core use cases to achieve quick ROI with data engineering and analytics.

WNS Analytics’ AI + HI approach

The current WNS Analytics practice is a result of organic growth and acquisitions, the latest being the 2022 addition of intelligence and analytics services pureplay The Smart Cube. Today, the practice comprises analytics experts, statisticians, data engineers and scientists, data and solution architects, business analysts, and consultants supporting ~250 clients, including Fortune 100 and Fortune 500, many shared with WNS BPS. WNS Analytics is organized into ten industries, the same as WNS.

Its core offerings include:

• Data processing and integration, data modernization, data engineering, cloud engineering, data quality and governance, and MDM
• Analytics, where it delivers data analysis, descriptive analytics, exploratory data analysis, predictive and prescriptive analytics
• AI and GenAI capabilities including ML, DL, NLP / NLG, computer vision, prompt engineering, AIOps, MLOps, LLMOps, and Responsible and Ethical AI.

It runs an AI lab to accelerate innovation for client organizations and a co-creation lab to enable advisory services. They are currently co-creating GenAI solutions with hyperscalers such as Microsoft and AWS.

WNS Analytics aims to combine proprietary AI-enabled assets such as accelerators, frameworks, and best practices with human intelligence (HI) by adding subject matter expertise across domains, data engineering, data science, AI and GenAI, analytics, and technology.

Turbocharging WNS with productized services

WNS Analytics looks to integrate AI, analytics, technology, and processes with domain understanding. It focuses on services that are best supported through productizing elements of the business processes but still need humans in the loop, domain understanding (even at the data engineering level), and process excellence. This way, the company wants to position itself as a more credible co-innovator.

Its target buyers of direct analytics services are Chief Analytics Officers, Chief Data Officers, and Chief Digital Officers. Some of the engagements include data engineering to modernize clients’ data ecosystem, building recommendation engines for sharper marketing campaigns, AI-driven competitive intelligence, and managing organizational risk using AI-driven fraud analytics. The remaining part (approximately half) of the business offers business decision-makers analytics built into BPS. Integrating advanced analytics into BPS is a significant GTM development where WNS will not separate and price analytics as a standalone. For example, in CX services, this model applies to agent enhancements.

One such deployment is for an online travel agency, which struggled with low customer experience due to long TAT caused by agents accessing lengthy knowledge articles and policies across multiple recommended results and requiring manual effort to decipher, contextualize, and summarize the information. WNS Analytics redesigned the agency’s knowledge management approach and deployed its GenAI-led Knowledge Assist platform. It introduced a graph database for efficient knowledge management across ~1k airline policy documents and enabled responses through GenAI, which simulated human conversations. It also built a user-friendly UI for the agent to pass queries and receive responses and enabled language translation. As a result, WNS Analytics delivered an 18-20% AHT reduction, lower latency and processing time, and increased the CSAT score between 3-5%.

One-to-many utilities library to power productized services

WNS Analytics has a utility library of industry-aligned AI/ML and technology components, tools and platforms across its ten verticals and domains. It has ~45 AI-driven products, platforms and boosters powering ~50 productized services. The utility library is available on the Unified Analytics Platform (UAP) architecture which is cloud-agnostic and supports structured, semi-structured and unstructured data. It consists of an ingestion layer which is API-driven and contains connectors for email, message, and gateway connectors to support various business data ecosystems. Domain specific analytical engines are enabled with AI/ML layer and metadata layer. The user consumption layer of the Unified Analytics Platform (UAP) encompasses a user interface which enables various domain-specific AI and analytics use cases, business workflows and visualization.

These components across the layers are interconnected and interdependent. They are configured together to form platforms and products such as SKENSE, Responsible AI solution, GenAI-led Knowledge Assist, and Unified Analytics Platform (UAP) for the insurance sector, for horizontal and domain-specific use cases. WNS Analytics works on the library to continuously build reusable components to enable multiple comprehensive use cases.

ROI on core use cases

Most organizations are still investing to get their data silos stitched together. WNS Analytics helps them start with core use cases to identify what data and analysis are needed and to build a data pond instead of an entire data lake. This quicker data engineering solution allows it to connect the different data ponds and technologies later. For example, WNS Analytics works with the business units in retail and CPG to tackle revenue growth management, customer experience management, customer and loyalty analytics, supply chain analytics, and digital analytics. Of these, enhancing revenues is at the top of retail executives’ minds.

For a multinational retail company, WNS Analytics applied its loyalty management best practices and customer 360 frameworks to hyperpersonalize loyalty campaigns. It designed new data management for improved data quality and triangulation of customer data. It built a single source of truth through a customer 360 framework, segmented customers for the loyalty program, and deployed AI-led personalized customer recommendations by analyzing association, taste, and look-alike profiles. Finally, it enabled GenAI personalized recommendation content. WNS Analytics mapped ~22m transactions to achieve a 10% increase in customer loyalty and a 400% increase in email click-through rate with faster personalization of the email content and increased speed to market for the content generation, from 15 days down to just ten minutes.

Part of the evolved GTM for WNS Analytics is absorbing some of the client risks through outcome-based commercial models. An example area is WNS’ recovery-as-a-service offering, which assists insurance companies in collecting auto claims unpaid from counterpart insurers. It analyzes the information, processes through image recognition photo evidence, verifies the claim veracity, and allocates an agent to collect. WNS Analytics only charges on the generated value for the insurer.

Addressing future market needs

WNS is evolving to meet the market needs for BPS undivided from the underlying technology and analytics and delivering better, faster, and cheaper outsourcing. It is strengthening the consulting bench with domain specialists with management consulting backgrounds and analytics understanding. These resources can start with the business case and are able to identify what hyperautomation, data, analytics and AI, combined with the process, are required to enable the business.

Another target skill set within the advisory talent is the ability to utilize GenAI, which combines lots of data at an unprecedented rate today. Enterprises are prioritizing multimodal LLMs and SLMs, paying attention to responsible AI, and looking for MLOps and LLMOps to operationalize and govern current and future GenAI solutions. In this environment, WNS Analytics looks for experts who will not use GenAI as a shotgun solution to solve any problems but as a pointed answer to subprocess-level challenges. WNS Analytics recognizes that GenAI is not the only answer for all business challenges.

At the same time, WNS is investing in infusing GenAI-specific accelerators and boosters in its tech stack; for example, by adding GenAI-based computer-generated summaries of patients’ medical documents in SKENSE. It has already identified ~100 GenAI use cases.

Clients are also looking to bring GenAI and BI together. WNS Analytics invests in accelerating BI creation and consumption through NLP, including BI virtual assistants. It is working on automated dynamic reporting, advanced data analysis and interpretation beyond the capabilities of traditional BI tools, and personalized and contextual data visualization. WNS Analytics is building upon its capabilities for visual storytelling to create compelling data stories using GPT and NLP libraries to combine visuals with narratives to influence decision-making.

In August, NelsonHall spoke with the leadership of Movate AI to discuss the market expectations and challenges of AI integration, their in-house holistic framework, target applications, existing deployments, and how the company plans to build commercial relationships around this AI reinvention model.

From platform to framework to dedicated AI unit

Like most BPS players, Movate has been actively integrating AI and, over the last two years, GenAI into its existing technology stack; examples include the intelligent automation platform Movate Contelli, the CX transformation platform Movate Edison, and the business intelligence platform Movate Insights. The company developed Movate Athena, a modular plug-and-play AI + data framework that helps enterprises create an AI strategy, build advanced AI capabilities, and aims to transform them into a data-driven, AI-first business.

The Movate Athena framework aims to optimize enterprise functions such as sales, marketing, HR, IT, and customer service. It looks to support different internal and external stakeholders, such as customers, partners, and employees. Its ultimate goal is to purposefully enable experiences to improve CX and grow customer lifetime value. All these elements are supported by the company’s digital product engineering resources and its network of transformation partnerships (e.g., Salesforce Einstein, Databricks, Uniphore, Conversica, NICE, and others).

In August 2024, Movate launched a dedicated AI-first IT development and BPS technology integration subsidiary, Movate AI Inc. This is the last stage of the evolution for Movate AI. The subsidiary has its own P&L, separate branding, and new leadership, headed by the company CTO, Gourishanker Jha.

Bumps on the road to a promising AI future

While enterprises’ interest in GenAI capabilities has not subsided over the last 18 months, actual deployments at scale face many expected and new challenges. Fragmented corporate structures and functional silos, legacy technology, low data quality and data overload, change management and people upskilling, and even digital fatigue are all commonplace in technology-led enterprise transformation. Other common hurdles, such as cost, ROI, and innovation budgeting, have been exacerbated by the breakneck speed of GenAI iteration. The new potential roadblocks come from inherent risks within LLMs, with AI seed issues such as discrimination and bias, misinformation and disinformation, privacy and trust, and overall governance and accountability to deliver responsible AI. Adding on top security and regulatory risks, it is reasonable to suggest that enterprise adoption of GenAI is not replacing human-led processes – yet.

Movate AI looks to minimize and avoid these challenges through its North Star design thinking tenets. These guiding principles for delivering enterprise-wide use cases cover the end-to-end process:

• At the Discover stage, Movate AI consultants identify personas and journeys, processes and workflows data, platforms, technology, channels, and experiences
• During the Assimilate stage, the solution teams develop customer journeys and use cases, consider the AI and data perspectives and viewpoints, and design the data and AI acceleration levers
• The Define stage is where all the standards, best practices, governance models, roadmaps and prioritizations, tools, employee training, and target state operating models are developed
• Realize is the execution from licensing to prototyping and eventual development, testing, implementation, and ongoing maintenance
• Finally, the Train and Optimize step is for audits, data cleansing and enrichment, RAG, model tuning, and optimization.

Next, Movate AI will organize the use case by vertical and horizontal dimensions. For example, automated code review and optimization and AI-powered code generation and completion for technology AI-guided software engineering; or CX agent assist in telecom customer churn prediction and prevention.

The best AI enablement ecosystem

Movate AI will source from existing company capabilities in digital services, CX services, and insights. In CX, the company’s vision for AI-enablement has quite a few enablers:

• User-centric design and personalization
• Personalized omnichannel CX continuity
• Context, proactive engagement at speed
• Multi-brand governance
• Asset creation
• Translation – internationalization and localization
• Asynchronous messaging
• Universal search and self-service.

While all these levers can be treated as the end targets of the Movate AI framework in CX, the company already integrates its existing GenAI-based tools into live client projects. For example, it accelerated payment terminal business inquiries with a GenAI-based chatbot as part of the larger CX transformation for a payment client, where it consolidated global teams and standardized support processes; implemented Amazon Connect for global voice and chat, deploying five chatbots; launched GenAI for digital assets, automated customer interactions, and integrated Salesforce with Atlassian for improved data flow.

Movate also developed a smart case manager for intelligent routing, quality bots for feedback collection, and standardized CSAT tracking for all interactions. With this unified transformation approach, Movate delivered 20% deflection of issues and 50% automation of installation bookings, boosting back-office productivity by 30%. It enhanced self-service capabilities, unified portal access, and reached a 20% reduction in TCO.

In IT services, for a technology company with ~160k employees and ~140k vendor partners worldwide, Movate implemented a global service desk where it co-created AI solutions, provided operational insights, and recommended AI use cases. It also implemented proactive monitoring and self-healing, enhanced AI accuracy in ticket creation, routing, and knowledge recommendations for effective performance measurement, and tested and rated the developer copilot’s performance on multiple parameters. Among the achieved results were 98% accuracy in ticket routing, 95% in problem ticket creation, 85% success rate in recommending relevant knowledge articles, and improved engineers’ productivity by ~25%.

Success stories dependent on outcome-based flex pricing

While Movate AI looks to solve for current client uncertainties around GenAI with its two-week service assessment to craft an AI/GenAI adoption roadmap and boasts ~400 reusable
accelerator templates, the long-term question is about the sustainable commercial relationship between BPS vendors and clients. There are fundamental questions around what business goals organizations are willing to pay for AI implementations today. And who owns the outcome? In 2024, the common answer to the first is productivity improvements, while the second remains unanswered. For example, who gets paid for the future self-service content created by GenAI?

These convenient pricing models attuned to business needs can balance the client and vendor interests if they have a very well-defined outcome-based structure and executive buy-in. Movate has for several years worked on these flexible pricing models and has case studies such as a U.S. telecom for which it created a hybrid delivery model leveraging automation, FTEs, and on-demand experts to achieve a 25% TCO reduction with pay-per-resolution pricing. Taking into account the GenAI opportunities as well as uncertainties, the complexity of designing and selling to the client stakeholders increases exponentially. A positive development is a market maturing towards acceptance of the required ‘skin in the game’ for both sides.

Movate’s AI roadmaps

Movate has several immediate AI roadmaps, ranging from bringing to production the existing ~100 AI POCs and prototypes to injecting the framework into a prospect’s sales process. From an operational perspective, it plans to create ‘super’ agents and engineers with virtual assistants and copilots (e.g., autonomous quality engineering) and expand to other internal functions such as Finance and HR. Other medium-term AI plans include the CX enablers mentioned above, utilizing the full potential of the underlying client data for continuous insight services in the new economy landscape and reaching Gen 5 operations with predictive maintenance and support.

In July 2023, the U.K. Financial Conduct Authority (FCA) introduced Consumer Duty, a set of rules and guidelines to drive companies to deliver good outcomes for customers. By the end of July 2024, firms are required to ensure the application of Consumer Duty to closed products and services. ArvatoConnect shared its approach to enabling the adoption of Consumer Duty by its clients and its perspective on the wider impact it has on a results-driven CX culture.

Refocusing businesses around consumers

The core objective of Consumer Duty is a shift in firms’ culture to ensure the delivery of positive consumer outcomes. As part of its CX services offerings, ArvatoConnect supports U.K. organizations in translating and educating them on the ~160 pages of technical rules and guidances. ArvatoConnect also offers alignment of processes, CX technology, and people management practices to enable good consumer results.

Many of ArvatoConnect’s regulated clients have undergone a review of Consumer Duty’s purpose, derived new customer promises, and taken steps to align with their CX objective. ArvatoConnect now performs regulatory change management and compliance calibration exercises from a technical and cultural perspective with a broad range of impacts. Some of these impacts from Consumer Duty include:

• A rethink of product and service design and pricing, such as the suspension of the sale and subsequent overhaul of the U.K. Guaranteed Asset Protection (GAP) auto insurance
• Greater focus on post-sale CX
• Greater emphasis on identifying and supporting vulnerable customers (the way firms have implemented the FG21/1 guidance is currently under review by the FCA)
• Utilization of technology to monitor customer outcomes and share them with the regulator
• Greater collaboration between entities in the distribution chain, such as CX services providers.

As part of its Consumer Duty implementation project, ArvatoConnect also ran an internal culture review and made changes to its performance assessment, employee rewards and recognition, and reinforced the commitment to clients with a rebrand in February 2024.

Educating the market on the good customer experience

While the majority of the market, particularly from regulated industries, have a good understanding of the technical requirements of Consumer Duty, ArvatoConnect still finds opportunities to educate and benchmark “what good customer outcomes look like”. Some of the main challenges for companies are managing the shift from transactional to proactive customer care, dealing with product and process complexity, identifying vulnerable customers, and gathering and interpreting data to be shared with the FCA.

At the same time, for many companies, Consumer Duty is a trigger for reviewing their CX from a brand-new viewpoint. A key step here is involving senior management and educating them on the benefits of compliance on overall CX culture, such as improved NPS, increased loyalty, higher FCR, and greater CLV. An example of a broader benefit of compliance is when a financial services brand selects distribution and customer-facing service partners aligned to Consumer Duty’s requirements.

ArvatoConnect has a dedicated framework that helps brands redesign their customer journeys based on the customer type and from a customer support perspective. Some of the key criteria in the framework are giving customers choice of contact channel, time of contact, and self-service, making support easy, offering clear verbal and written communication, using a caring and considerate approach (especially when supporting vulnerable customers), and delivering effective complaint handling. An example of an outcome-based CX strategy-setting project is one with an auto-financing client.

Role of AI in agent augmentation

For many of the above-mentioned challenges, AI-based tools for agent assist are the main practical solution. For example, intent-based routing is essential for an effective match between the agent with the right skills and knowledge and the specific customer query, a need further accelerated by increasing product and service complexity, which in turn, is impacted by the embedding of automation and AI.

On the difficulty of identifying vulnerable customers,  conversation analytics can offer a solution by detecting customers in challenging financial circumstances. The analysis of all interactions can find triggers for vulnerability, such as customers stating they lost their job or are not good with computers. The analysis can then map and segment customers based on those characteristics. Automated QA can also drive agent upskilling and training to increase empathy and skills in vulnerability detection. Yet another aspect is developing inclusive service design, such as creating processes for digitally excluded customers.

Role of AI in compliance

Conversational analytics, AI and ML, and GenAI have a crucial role in enforcing regulatory compliance in CX. Under the new regulation, ArvatoConnect is reviewing the requirements and identifying AI intervention opportunities. Some of the immediate areas are QA automation, sentiment analysis during live interactions, and using GenAI to summarize contact reasons to generate evidence for the authorities.

An example deployment is a nine-week POC with an automotive financial services team on their complaints handling process. The client had low FCR, and challenges in compliance adherence were discovered during QA and data analysis. ArvatoConnect ran a root cause analysis to trace the issue to complaints management, where the client had lots of rework, consuming a significant amount of time. As a result, ArvatoConnect achieved 75% higher QA scores in the pilot team compared to the control group.

Separately, ArvatoConnect deployed its ADE discovery bot over four weeks to understand agent productivity against process and systems performance. ADE also maps performance variations, repetitive tasks, redundant steps (such as finding ~11k instances of copying and pasting), and bottlenecks for automation deployment. ArvatoConnect identified ~13% of non-productive time on a daily basis.

Next, ArvatoConnect implemented automated QA and recommended skill-based routing to the correct resources to improve CX. ArvatoConnect is routing complaints to skilled and experienced agents, which improves FCR and the customer journey. As a result, 51% of complaints were resolved by the pilot team at the first point of contact, compared to 12% in the control group, representing a 325% increase. More customers had their issues resolved on their initial call compared to the traditional process that can last up to eight weeks. By increasing FCR, ArvatoConnect reduced the historic 88% of complaints escalated to specialist complaint handlers. It achieved 49% in the pilot group, a 44% reduction.

Consumer Duty creating CX services opportunities

The introduction of Consumer Duty has turned CX services in the regulated space into a specialist area, creating new opportunities for CX services vendors. Beyond its CX consulting and regulatory advisory role, ArvatoConnect looks to capitalize with a service wrapper providing managed CX training, continuous improvement, and ongoing monitoring. Next, it is analyzing data to quantify the effects of compliance with Consumer Duty on CX performance outcomes. One area with clear initial results is claims and complaint handling, with initial direct impacts from the technology deployments. Here, the company is applying GenAI for macro queries on thousands of transcripts to verify compliance. A further development area is employing predictive analytics to forecast CSAT.

For its current CX transformation projects, ArvatoConnect is working on identifying options for enhanced knowledge management and self-service with GenAI-based dynamic FAQ, for example, for the above-mentioned auto financing client. Another area is GenAI deployments in auto summarization of interactions and auto record updates with the expected benefits of a 50% reduction in ACW and reduced errors. The ultimate goal is to allow specialist teams to deal with more complex work, which will allow for increased alignment with Consumer Duty’s objective for outcome-based CX.

While Consumer Duty primarily targets companies regulated by the FCA, its best practices are applicable to all sectors willing to put the customer first. It is increasingly likely that the principles around Consumer Duty will be adopted beyond financial services, which could have far-reaching consequences for other sectors. ArvatoConnect’s framework approach is easily transferrable across sectors and is capable of addressing the potential additional requirements and opportunities of Consumer Duty.

In May, Alorica announced the appointment of Mike Clifton and Max Schwendner as Co-Chief Executive Officers. Prior, Mike was the company’s Chief Growth and Transformation Officer, and Max was President Business Services and Chief Financial Officer. I spoke with them earlier this month to discuss their vision for the company and its position in the evolving CX services market.

Co-CEOs in times of significant industry change

The CX services market is undergoing a sizable transformation with the advent of GenAI, which is at the forefront of CX automation. For BPO players, pressures come from inside and outside the market. They have to deal with rising labor costs globally, persistently lower volumes in core sectors, consolidating competition, and clients potentially looking to leverage GenAI to eliminate a large proportion of live agent support.

With the appointment of co-CEOs, Alorica is adopting a more agile and encompassing model of corporate leadership to address these challenges. Traditionally, the co-CEO format has been more common in technology providers such as Oracle, SAP, and previously Salesforce, whose native ecosystems of technology and services are becoming more closely aligned to the CX services industry in 2024.

The change at the top of Alorica also comes as the leading CX services vendors have been restructuring their organizations over the last 18 months. CEO changes include Konecta, iQor, Firstsource, Transcom, IGT Solutions, an upcoming appointment at Yource expected in 2024, and the succession plan at Teleperformance with a deputy CEO.

Aggressive pivot to digital

Mike and Max have a remit from Alorica’s board for an aggressive pivot to equip the company with next-gen technology and capabilities to implement AI-first conversations. In support of this vision is that, as a private company, Alorica experiences fewer constraints when making such investments.

The new leadership sees the creation of an ecosystem of partnerships with a continuously refreshing platform stack as its key. Example platforms are Google CCAI, Genesys AI stack, OpenAI and Crescendo. The goal is to capture more CX technology implementation opportunities and deploy a fully managed model with built-in automation and LLMs.

Another crucial step for Alorica is retooling its marketing, sales, and accounts structures for GTM verticalization to achieve greater client intimacy, subprocess problem solving, and managed outcome commercial relationships. Alorica looks at outcome-based pricing as underpinning all ongoing CX services solutions. It is embedded in the managed service platform model, the license and the applications stack for voice and digital under a single price per transaction.

Part of the adoption curve for these changing pricing constructs is convincing clients to think differently about the individual interaction, particularly in high-growth product and service lines. Another tactic is helping clients see the final state of tech-enabled outcome-based delivery.

Everywhere, every language, every time

Alorica expects the natural end state of AI’s application in CX to still require human-centric support. One reason is that the CX interactions Alorica handles are highly complex, requiring industry and customer knowledge and multiple systems. As an example, at Alorica, agents run an average of six applications to respond to customer queries.

With that in mind, the company plans to maintain a nimble delivery footprint. Compared to its direct competitors, Alorica has a relatively concentrated delivery network in 19 countries, selected based on their longer-term market demand.

Max and Mike will continue the company’s strategy of limited capital investments in multilingual hubs and multinational footprints and instead apply the funding to a language portfolio delivery network integrated with realtime machine translation and AI voice enhancement via Alorica ReVoLT. This approach will allow Alorica to find pockets of talent where available and achieve the lowest costs for clients.

Alorica to be a tech-first company

The immediate roadmap for Alorica is to take the solutions developed by Alorica IQ labs in Bangalore and Mohali, India, and embed them in a federated services approach in all centers. Using federated services helps with faster client enablement. The co-CEOs challenged Alorica’s internal teams to think “tech-first”, driving increased collaboration and adopting the federated model. This tech-based vision permeates internal functions such as accounts receivable and HR. The company plans to substantially build up its development and process improvement teams, for example, expanding resources with expertise in AI collaboration and persona training. The objective is for Alorica IQ to become an expert in technology selection, particularly in AI wrappers.

Another part of Alorica’s vision is an investment in the VC ecosystem to gain early access to upcoming solutions, become early advisers, and test and try in Alorica’s labs. For this objective, Mike and Max will also rely on their contacts in investment circles to identify potential acquisition targets. One of the priority service line tracks is revenue generation and expanding Alorica’s existing cards and loans servicing practice.

All these investments highlight the vision of the CEO team for Alorica to evolve from a managed services provider into a digital-first company while maintaining the core of CX services delivery which, in Mike and Max’s view, will remain CX people.

Conduent has partnered with Microsoft to use Microsoft Azure OpenAI to underpin its GenAI innovation initiatives with clients.

Its GenAI journey includes:

• Selecting use cases focused on improving quality, throughput, and cycle times
• Adoption of pilots in healthcare claims adjudication, fraud detection, and customer service enhancement
• Subsequently, moving to MVPs and industrializing use cases.

Use Case Selection Criteria Focused on Improving Quality, Throughput, and Cycle Times

Conduent recognizes that GenAI is an expensive technology and that its adoption will typically incur costs in changing existing processes and technology stacks. This makes it difficult to build GenAI business cases on already optimized operations based solely on cost reduction. Hence, Conduent is focusing on “innovative additive opportunities” to make the business case work.

The outcomes that Conduent is targeting from GenAI initiatives are:

• Improved quality, reducing error rates across standardized workflows
• Increased throughput of business process transactions
• Faster cycle times by consolidating value chain steps for faster processing.

At the same time, Conduent’s client relationships tend to involve relatively deep end-to-end service provision across a range of processes rather than single-process support. These combinations of services are tailored for specific clients rather than being standalone commoditized services.

Accordingly, Conduent’s document management services and CX services are generally supplied as part of a wider capability rather than as standalone services. Within this pattern, most of its solutions include elements of:

• Document management, including summarization & analysis, and extracting and contextualizing text within images
• User interaction/call center with multiple clients across various sectors, including enhancing agent assist, virtual agent, and call center agent assessment
• Search & analytics.

These three areas are regarded as core competencies by Conduent and all its GenAI use cases for the immediate future will fall into one of these areas and will be capable of delivering improved quality, throughput, and cycle times.

Initial GenAI PoCs Focus on Healthcare Claims Adjudication, Fraud Detection, and Customer Service Enhancement

Conduent has announced three GenAI pilot areas covering healthcare claims adjudication, state government program fraud detection, and customer service enhancement.

Conduent is a major provider of healthcare claims adjudication services. Here, it is working on a PoC with several healthcare clients to apply GenAI to reduce the error rate in data extraction and achieve faster cycle times in claims adjudication. GenAI is being used within document management to summarize highly unstructured documents, such as appeals documents and medical records, using its contextualization capabilities, including image-to-text. The technologies used are Azure AI Document Intelligence and Azure OpenAI Service.

Secondly, Conduent is working on a fraud detection PoC to support social programs in the U.S. state government sector. This PoC uses GenAI for search & analytics across multiple structured and unstructured data sets to increase the volume and speed of fraud detection. The technologies used here are Azure Data Factory and Azure OpenAI Service.

Finally, Conduent is using GenAI to enhance the use of agent assist and virtual agents by training virtual agents on existing data so that they can be deployed much faster.

Moving to MVPs and Industrializing GenAI Use Cases

Conduent initially undertook PoCs in the above areas to get both Conduent and the client comfortable with the results of applying GenAI and prove the use case. The PoC process is iterative and very granular, and Conduent perceives that organizations need to be extremely prescriptive to get the right results. This typically means defining the specific inputs and outputs of the use case very tightly, including defining what GenAI should do in the absence of individual inputs.

Conduent is now moving towards MVP and building client business cases in several of these pilots, including in some pilots in the document management space. Since Conduent has taken a horizontal approach to its use case selection, many of these have the potential to scale across multiple industry segments and clients.

In addition, Conduent provides BPaaS services to many of its clients, so it is looking to embed proven GenAI use cases in its proprietary technology platforms.

Existing use cases are business unit-sponsored but curated centrally, with the center providing enablement and cross-pollination across business units. However, the intention is to incubate future GenAI capability within individual business units.

Populii is Tech Mahindra’s enterprise gig marketplace for data collection, user studies, and microtasks. NelsonHall recently spoke with Populii executives about the platform’s current capabilities and growth plans in support of the exploding AI data training market.

Human annotation and specialized microtasks

Populii is a gig community platform offering data collection of language, utterance, and accent samples, speech and audio, images and video. Populii clients can also run end-user device testing of hardware and software prototypes, collect healthtech PII and non-PII data, and conduct user behavioral studies. Projects can last several months, but only a few hours with microtasks such as annotation, metadata tagging, cleaning, and categorization of texts and NLP, ML and AI, audio and automatic speech recognition, and translation. Content types include computer vision, maps, video, images, 3D models, and various types of user-generated content and ads.

Microtasks also range from simple search, transcription, content quality rating and checks, to feedback classification and content moderation, to specialized tasks such as medical writing and piano roll reading. Populii provides consultants with extensive domain knowledge and specialized skills for these custom tasks. For example, for an American multinational technology corporation, since 2023, the Populii community  have analyzed, solved, and provided comprehensive reviews of math problems. Experts apply mathematical principles and methodologies to solve advanced math problems in elementary mathematics, algebra, statistics, geometry, and calculus. The global community members process, on average, 300k problems and ~1m annotations per month in ~14 different projects, achieving above 90% accuracy across projects.

Human cloud management

Tech Mahindra launched Populii in 2023 to help internal employees handle internal data training needs. It has since opened it to external workers and clients. The community currently has ~200k active users. The freelance workers support ~80 languages from ~100 geographies. For example, for a search engine client, Populii workers annotate images with the relevant objects of interest. Activities include creating content and enhancing data for problem database flow, segmentation flow, and domain flow in ~100 projects. For this account, Populii involved ~25k crowd workers in ~25 languages from Noida and Hyderabad, India; Lisbon, Portugal; Budapest, Hungary; and Malaysia. It delivered a 100% on-time completion for the client, a 25% reduction in AHT, and an 80.4% agreement rate achieved with a consistent quality achievement score above 95%.

Tech Mahindra recruits gig workers with targeted outreach using ads for flexible, part-time, and WAH jobs. For the math-solving projects, it ran social media campaigns targeting domain-specific communities. To reach further scale and acquire specialized skillsets and contributor profiles, Populii also partners with other gig platforms.

Populii employs unmanaged and managed crowd-operating models for three levels of client needs:

• Unmanaged crowd, a low-cost model for collection, annotation, and curation requirements from the crowd pool with qualification criteria to perform tasks. It features metrics-driven performance monitoring, learning bites circulation, webinars, scorecards and stack ranks, and incentives. Here, the resources are completely scalable in a fully distributed crowd, and the client defines the price
• Crowd managed is a medium-cost model for clients with 70-80% quality needs where Populii runs daily random manual sampling, error pattern analysis and implements quality monitoring dashboards and ranking. The focus for these projects is on selecting qualified gig workers and meeting the agreed SLAs
• Fully managed crowd model is for quality needs above 90%, such as critical annotation or curation with SMEs on the platform and 100% commitment to timelines and quality. To ensure these targets, Populii employs quality monitoring dashboards, continuous monitoring, pop quizzes, spot checks, manual sampling, error pattern and gap analysis, regular training, knowledge assessments, and calibration sessions. Typically, Populii involves in-house SMEs for these projects to deliver above 95% quality and on-time completion. This model is closer to an FTE extension.

The platform allows pull and push of tasks to gig workers, including via auto-assign functionality. For the math-solving projects for the technology client, Populii applies a zero-disruption approach to transition where the freelance workers are taken on in a phased approach. The math problems are allocated based on past performance, with quality and eligibility status reviewed periodically. Populii deployed strong domain SMEs and an experienced crowdsourcing management team which performs validation and verification processes to onboard authorized experts. It also has a knowledge repository for continuous learning and upskilling.

Other features of Populii are freelancer qualification and certification, geography restrictions, user technical support, dynamic pricing, and automated payments to workers. For math-solving, the skills assessment includes eligibility criteria, proficiency tests, hands-on evaluation, and a final assessment, which takes up to a week. In the end, eligible workers are compensated for their assessment and training time.

AI dependent on humans

The current hypergrowth of GenAI is built with the large-scale data labeling work of platforms such as Populii, where gig workers enable datasets for efficient LLM training. Competitor examples include Wipro’s Topcoder, TELUS International AI Data Solutions, TaskUs’ TaskVerse, and Movate OnDemand. For many of these companies, the AI training work is the fastest growing service line.

Many of the leading high tech corporations have extensive experience with crowdsourcing, including with their own platforms. Tech Mahindra has set up Populii to couple the worker community acquisition, engagement, and recognition with the actual work execution tracks to easily direct gig workers to operate in the client environment. The company has several such implementations. As part of these engagements, Tech Mahindra still defines the minimum required skills, which guides the rate per task.

Populii leadership envisions the platform evolving to an end-to-end business process environment where complex processes such as claims management are broken down into microtasks for efficient handling by AI or humans. In the breakneck market for new product launches, Populii estimates it already delivers a 20-30% faster time to market at a lower cost. As a first step, Populii management aims to disrupt Tech Mahindra internal processes.

In February 2024, ResultsCX made its third European acquisition since 2022, adding U.K. specialist BPS and CX services provider Huntswood. This move complements ResultsCX’s roadmap to gain a presence in European markets, diversify offshore delivery, and target the high-growth financial services sectors. I recently spoke with ResultsCX MD & CEO Rajesh Subramaniam about the deal and the emerging opportunities.

Domain specialist in U.K.-regulated industries

Huntswood was founded in 1996 and is headquartered in Reading. It provides new customer onboarding, customer care, inbound and outbound sales, contact center back-office processing and admin work, RPO, consulting, operational resiliency, and continuity. It also offers specialized services for regulated industries, such as case management, remediation, support for vulnerable customers, regulated claims and complaints investigation and processing, paraplanning, credit management and collections, protection against financial crime, fraud resolution, alert management in KYC, and sanctions screening.

Other specialized capabilities come from SMEs providing risk assessment, regulatory health checks and due diligence, business QA, assisting companies to comply with regulations, staff training and certification, governance, and cyber advisory practice.

Huntswood has ~5k employees in Reading, Liverpool, and Glasgow, as well as WAH employees in England and Scotland, and in Durban (2 sites) and Cape Town, South Africa. It has ~60 clients, including most of the U.K.’s high street banks and multinational retail banks, financial services firms, consumer credit organizations, life and pension insurers, water utilities, energy providers, and retailers.

ResultsCX will manage Huntswood as a portfolio company retaining the strong national brand.

Addressing market needs in a tighter regulatory environment

In July 2023, the U.K.’s Financial Conduct Authority (FCA) rolled out a Consumer Duty Act, a set of rules and guidance for retail consumer sales and support, pricing, and products and services; for example, for the providers and advisors of financial and insurance products. For 2024, the regulator is increasing its enforcement activity.

With this latest acquisition, ResultsCX aims to capture this expanding market in the U.K. on the back of Huntswood’s client portfolio in regulated industries. A particular opportunity is integrating intelligent automation and AI, for example, in complaint control processes. Financial services and U.S. healthcare payer are two main target segments for ResultsCX, with potential for hypergrowth and room for disruption of CX services, adoption of new technology, and requirements for highly-specialized domain experience.

For the BFSI sectors, ResultsCX looks at higher value opportunities driving boardroom discussions, such as responding to changing regulatory frameworks and identifying white spaces for rapid customer acquisition and experience strategy. One such area is mortgages. U.K. lenders are facing a significant number of expiring fixed-rate mortgages in 2024, with sizable rises in payments and need for remortgaging.

EMEA focus and growth plans

ResultsCX has been active in internationalizing its markets, starting with the tuck-in acquisition of Bulgarian CX services provider 60K in 2022, which first established its European presence. It was followed by the Irish CX services player Zevas Communications in August 2023. 60K added nearshore U.K., multilingual European and North American capacity and client base, supported from Bulgaria with strengths in technical support and a flagship telecom and media clients. Zevas added customer care, technical support, B2B sales, and content moderation capability from Cork with a flagship payment processing account. With Huntswood, ResultsCX’s European business will expand to ~$225m annually.

ResultsCX’s M&A strategy aligns with the increased interest shown by North American CX services players in acquiring capabilities in the EMEA region in the last year. The most notable of these were Telepeformance’s acquisition of Majorel and Concentrix combining with Webhelp in 2023.

Ambitious plans within the existing portfolio

Since 2021, when PE ChrysCapital acquired ResultsCX and recruited Rajesh Subramaniam for the CEO role in 2022, the company has grown from ~$400m to ~$650m annual revenues, and it claims a 70-75% improvement in EBITDA over the period. The business scaled to ~23k employees in ~25 sites globally.

The company is utilizing India for CX technology development and analytics with shared services for global WFM and QA; for example, optimizing Huntswood’s WFM, learning and development, and attrition management.

It also plans to use the newly acquired South African capacity to expand offshore support for the U.K. and capture the need for U.S. delivery from the country, mainly for global brands and business models. South Africa already handles complex claims and fraud processes for U.K. non-banking clients in insurance and utilities. With Huntswood’s client portfolio, ResultsCX can also scale delivery to nearshore Bulgaria and the Republic of Ireland. For example, ResultsCX Ireland already has experience with fintech and regtech, particularly in B2B sales.

The main growth engines for ResultsCX will be existing clients, to land and expand by diversifying their delivery network and broadening the scope of LOBs. In the case of Huntswood, this will be from the higher consulting and premium services to scaled BPS with process excellence and automation. One of the most promising offerings will combine sales process expertise with analytics tfor he financial services sectors. With one of these accounts, the company aims to grow it from $7m per year to $30m over the next three years.

In the longer term, ResultsCX plans to achieve a fully-integrated CX services model with L0 support handled by GenAI and intelligent automation, while more complex customer interactions are supported by SMEs who can offer customer engagement and empathy in care scenarios and consultative selling and brand advocacy in revenue generation.

2023 was a very dynamic year in CX services with large-scale market consolidation, significant growth deceleration, and sizable investment in AI technology, especially GenAI.

In 2024, the role of agent augmentation technology will only increase, talent management will come to the forefront of vendor priorities, and clients will focus on delivery diversification, security, and revenue generation activities over digital channels.

The CX services market has slowed to its normal rate

At the end of 2022, the signs of slower market growth for 2023 were clearly visible, and the year proved quite challenging, with most vendors revising down their revenue forecasts to lower single digit growth. 2024 will follow similar growth rates, with NelsonHall forecasting the global CX services market to expand at ~5% CAGR year-over-year to $106bn (excluding collections).

The drivers for this softer market reflect the state of client industries, with weaker volumes in some of the largest sectors such as telecom, retail, and technology; while healthcare, pharmaceuticals, travel and hospitality, and financial services (except mortgages) are becoming the most resilient verticals. Healthcare, in particular, will continue to be a success story in 2024 (e.g., becoming the second largest vertical for TTEC at ~20% of the business).

Some of the more positive signs are the alleviation of clients' decision-making timelines, improved fundamentals in core industries (e.g., mobile phones resuming growth), and declining consumer inflation in the largest markets, boosting sales.

Among all the geographic and vertical variations, the most lasting positive trend is the uptick of first-time outsourcing brands from the mid-market, which, despite their smaller program sizes, are improving vendor client base diversification and risk exposure.

The CX services market reaches maturity

2023 was the year of large consolidations with the Concentrix-Webhelp consolidation, Teleperformance's acquisition of Majorel, the formation of Altius Link in Japan, and the Konecta-Comdata merger. These deals show a maturing CX services market with fewer larger players managing a more significant share of a multinational market. These vendors have the technology capabilities, design expertise, and financial strength to support more complex client needs.

In 2024, investment funds could drive synergies by consolidating their CX services portfolio, such as Warburg Pincus controlling Arise and now Everise or Capital Square Partners in Movate and Startek. Another possible development is intensified M&A activity in the Middle East and Africa to support the growing interest in the continent for delivery and domestic clients. In Europe, the U.K. is the subject of renewed M&A interest, with potential shifts amongst leading vendors being mooted.

From multishore to cloud delivery

Both 2022 and 2023 continued the trend of moving onshore work to nearshore and offshore. The last twelve months also saw the stabilization of WAH, which is now considered an integral part of CX delivery. Countries such as South Africa, Egypt, Kenya, Indonesia, and Turkey will continue to attract new sites in 2024, with Rwanda, Ghana, and Guyana also picking up new investments.

However, A bigger change is the establishment of cloud delivery models that combine multishore physical sites, hybrid work models, and pure WAH with gig and freelance elements. This 'borderless' delivery plus on-demand workforce is the main answer to persistent volume volatility and flex ramp-up market needs.

If there is one contributing factor to making borderless multilingual delivery a reality, it is machine translation and AI voice. Vendors have made significant progress in 2023, refining the technology and integrating it into their stack, and for 2024 are ready to roll out realtime AI translation and accent neutralization at scale.

Agent augmentation with GenAI

For 2024, unlike any time before, CX services vendors have extensive AI development roadmaps (e.g., Tech Mahindra, Movate) focused on utilizing LLM, conversational AI, sentiment analytics, speech-to-text and text-to-speech, and the above-mentioned machine translation. Most of these solutions are not new, but their scale and adoption are unprecedented. Optimizations in contact center operations, knowledge management, QA, WFM, security, compliance, training, and smart routing are now leapfrogging because of the integration of ML/AI algorithms. In 2024, vendors will differentiate by their ability to effectively and, at lower cost, incorporate IP and third-party AI technology from their partner ecosystem.

This year will likely see the first permanent implementations of agent assist and co-pilots across service lines, digital channels, and languages. By their very nature, these agent assist bots are not another point solution similar to the first wave of RPA/RDA. A real agent augmentation co-pilot, for example, using GenAI to feed next-best-action is only possible in an omnichannel and knowledge-based CX environment. While the next 12 months are too early to showcase this development, the evolution path of contact center agents to knowledge experts is evident.

Talent management is the best inoculation strategy for CX players (again)

Yet, before getting to this GenAI utopia, the priority for vendors remains enhancing their people management. CX services will continue to be a people business in the medium term, where live agents support live customers, not CX bots answering virtual assistants.

2023 was evidence that vendors' expertise in end-to-end talent sourcing, onboarding, training, coaching, mental health support, and well-being is a USP versus captive operations in the global search for digitally skilled resources. The growing importance of ESG for talent attraction and retention is also converting into a new logo acquisition approach, with impact sourcing a stronger factor for clients' selection criteria in 2024.

As brands shift their focus to revenue generation activities, the market will demand upskilling CX employees to become effective in sales through services, social selling, proactive retention, and brand advocacy. Vendors that have the vision to enable this CX employee evolution through talent management frameworks and digital tools will lead the market and be better prepared to fend off any AI takeover of support interactions.

To keep up to date with NelsonHall's CX services research and thought leadership in 2024, subscribe to our CX Services Insights newsletter on LinkedIn.

I spoke with Bharath Vasudevan, Chief Capability Officer, Tech Mahindra Business Process Services, on the company’s investments in GenAI, the business challenges it addresses, and the longer-term effects on CX services.

What are some of the immediate opportunities for using GenAI?

Bharath Vasudevan (BV): Like every other technology disruption, at Tech Mahindra we look at the business outcomes we are trying to solve and whether we are solving them for customer metrics, employee metrics, financial metrics, or a combination of the three. Conceptually, we want to be very clear on the business outcomes and these are the first levers in any GenAI initiative.

The second thing we look at is the GenAI strategy as part of the larger ecosystem. Some of the large enterprise hyperscalers have both the intellectual and financial bandwidth to model LLMs by themselves. Then, there are the platforms and products that are consuming these LLMs and creating products and services; the majority of the technology players today sit in this space. And then there are organizations leveraging GenAI to impact one or more of their business outcomes; these are the early adopters taking GenAI services and products and figuring out how they apply them. And others are waiting for evidence-based applications.

Our play is clearly in being part of the ecosystem that helps create these service offerings out of the LLMs and take them into the market. We have looked at six areas:

• Customer and agent conversation
• Content creation and curation
• Integration with enterprise data
• Assurance, governance, and risk compliance
• Enterprise business processes
• Process excellence.

For each of the six areas, every time we deploy use cases, we want to be very clear on what is the business outcome. For example, we are looking at content because we believe there is a huge play of LLM in how content gets created and curated across industries.

When it comes to process excellence, we are looking at not just our clients but our processes for employee utilization and efficiency maximization to improve how we run our BPO work today. The opportunity is to leverage AI to improve productive time and make our employees much more efficient.

How do you prioritize with the clients across these areas?

BV: We have formed within the organization what is called a generative AI council, a cross-functional team of about 15-20 leaders from across the organization. These people are, in turn, distributed into pods with each pod focusing on a particular business area and identifying GenAI applications.

Which use cases would you highlight having the fastest route to implementation with a strong ROI?

BV: Some of the initial use cases that we are starting to develop are in customer experience. For example, for a large U.S. telecom. It has a tedious process to update multiple platforms, knowledge bases, automated workflows, and deployed chatbots. These frequent process changes are time-consuming and dependent on IT with the knowledge coming from disparate systems.

We are creating a common source of information and using GenAI to extract key sources of information and use it in a common database, not just for our agent conversations. We are also looking at conversations from the website and other channels not owned or influenced by Tech Mahindra today.

This GenAI solution will track and synthesize information to automatically update in dynamic nature all these platforms, digital properties, and internal systems to improve volume management, efficiency, and customer experience.

I would expect it will impact employee experience as well?

BV: Significantly. I just looked at the end outcome, but you know, eventually it has a direct impact on employee experience as well.

The main benefit is taking information available in any format from any channel and bringing it into a template or a framework that is common and every agent can use. Being able to take information from disparate sources in disparate formats is really where GenAI plays a significant role.

Is there an element of human supervision on top of this?

BV: We must look at machine learning and GenAI as an active process where you are constantly feeding the technology with new data, new data sources, new data types, and new data exceptions. Without having the human in the loop to manage those interactions and provide the technology with all the training that it requires, I do not think you are influencing the ability of the technology to learn as significantly as you should. None of these technologies is taking away the human in the loop.

A classic example is with one of our largest telco accounts, a U.K. telecom. We have a significant amount of chat as a channel in the U.K., and the question is to standardize and personalize these responses using GenAI to serve as agent co-pilots during live interactions.

Given the maturity of this account, we have moved significantly beyond FTE-based pricing. This is an account where almost everything we do for the client today is tracked and measured by outcome. The use cases we are building for this client are also structured more towards customer experience rather than just efficiency.

Today, we will be using GenAI for support scenarios, but eventually, we will also use this to impact upsell and cross-sell.

What stage are you at with deployment?

BV: We are at a stage where we are creating smaller POCs from the floor and then starting to present them to the client. I think we should be in a position to start showcasing some of these tools by the end of 2023.

You mentioned GenAI use cases on the marketing and content side. Can you expand?

BV: One is to leverage unstructured data from external marketing sources to provide insights for sales enablement for better GTM and business development initiatives.

Another is using GenAI to generate personalized content based on mining CRM data to enable the sales function to improve customer insights and accelerate sales. It is largely focused on B2B and we will pilot this internally at Tech Mahindra, given the amount of sales and marketing activities the organization engages in.

One of the goals is to make the RFP process a lot more effective by extracting maximum knowledge from whatever we have in our database. We are also working on creating an RFX factory using GenAI to complete 80% of the straight-out-of-the-box information for the solution architects to solve the remaining 20%. Yet another is input gathering from large contract reading with GenAI.

Most of these are speed and quality enablers, which eventually also improve our outcome metric in terms of winnability and our ability to execute on client engagements.

These marketing and sales use cases are further drawn out into early 2024.

How are these new technology capabilities impacting clients' outsourcing decisions?

BV: When they look at the future and at strategic partnerships, they want to be working with vendors that can provide them with a richness of perspective and a vision for the future, including in their own industry from a CX viewpoint.

Whatever GenAI solution we propose should help create a multiplier effect to what they are doing themselves rather than compete with it. We partner with some of the largest LLM developers as a service provider and want to help them take these GenAI products and services out into the market and help evangelize and deploy.

What is the most exciting area emerging from the rise of GenAI in CX?

BV: The most fascinating part about GenAI is the human in the loop in the CX context. I am looking at the evolution of roles, responsibilities, and skills. I think that industries and companies that manage this evolution well and can clearly define the roles and responsibilities of the human in the loop, and can make that work for the business, are going to outshine the others.

It applies to executives like me. It applies to people managing projects. It applies to agents. It applies to everyone.

AI-generated text and voice have significant applications in CX services, with multilingual support now offering the most transformative use cases. Transcom has been actively building its capabilities in AI voice with its T:Translate platform and already has live implementations.

Integrating AI translation into the existing CX ecosystem

T:Translate is an automated real-time translation application using AI to answer customer queries over text channels: emails, tickets, live chat, and messaging. And now in 2023, Transcom has launched AI voice translation.

T:Translate combines in-house developments with GenAI third-party speech-to-text software. The company assessed new niche GenAI, LLM, and specialized voice AI vendors to derive specific UX and feature sets for building a real-time translation engine for voice and text. The goal is to achieve higher UX and quality than standalone translation engines. For example, Transcom is working with a Berlin developer, Parloa, for the speech-to-text and text-to-speech technology. For text specifically, T:Translate is customizable and embedded in existing contact center systems such as Salesforce, Genesys or Zendesk and other conversational AI solutions. For voice, it does not require direct integrations, making voice translation faster and more scalable to implement than text.

T:Translate also has a tailored translation glossary and features for contextual, industry, and brand-specific vocabulary and can also change the tonality, rate, pronunciation, and speaking style. Transcom provides the LLM training upfront using existing knowledge bases, interaction recordings, and sentiment analysis. It also builds the glossary using other resources, such as the brand website and training materials.

The tool allows the agent to handle multiple languages with an average translation accuracy equivalent to a B2 or C1 language level agent or +90%. T:Translate supports ~100 languages and gives a choice of ~400 voices across genders and ages. The company can typically deploy it in six to seven weeks.

Augmented agent

Transcom sees AI translation as one of the transformation tools with the greatest impact, driving improvement in the customer experience, lowering costs while maintaining quality for clients, and increasing the agent experience. T:Translate is part of the overall company approach in offering advisory, technology, and transformation of the client setup through its T:Labs innovation unit. T:Labs is responsible for T:Translate implementation and subsequent training and maintenance of the LLM, focusing strongly on the algorithm’s self-learning from the agents’ selection.

The AI can be trained in different languages, but usually, Transcom trains it in English as the middle language and monitors for translation quality post-implementation. Another service monitors the quality of the AI outputs and optimizes the translations.

T:Translate addresses increasing market expectation to improve operational performance through automation and co-pilots on different process parts, such as call wrap-ups in languages the agent is not fluent in. Transcom positions AI voice as the next-generation solution for these more complex transactions that cannot be redirected to text effectively. Transcom’s experience using T:Translate in combination with these RPA/RDA, intelligent automation, and agent augmentations such as next-best-action achieves TCO reduction, faster issue resolution, and increase in FCR and NPS. In TCO, the company expects to deliver between 25% and 65% reduction when deployed on voice automation to augment live agents. Another benefit is accuracy and compliance adherence; for example, the tool always uses the right wording per the processes. T:Translate is GDPR compliant and does not demand storage of the transcriptions.

AI alternative to traditional multilingual support

Traditional multilingual delivery faces challenges in sourcing fluent language talent that requires higher compensation. When this talent is available, operations have difficulty maintaining effective utilization, with uneven volume patterns between language queues. With T:Translate, one agent can handle multiple languages without any language skills, achieving productivity of ~80-85%, allowing Transcom to run lower-cost locations with a lower headcount. An average hourly saving for a Nordic support role is ~50%, taking the rate to under €18/h.

In 2023, Transcom established an AI translation hub in Cairo, where it has a multilingual capability, including for Nordic languages. It is gradually routing more of its multilingual volumes there.

An example implementation is for a U.S. CPG company that wanted to enter European markets covering multiple languages with small volumes by using automated translation. In Q1 2023, Transcom deployed real-time voice translation for European languages in English and Swedish with fluent speakers from Malaga, Spain, and 100% automated translation in Polish, German, Italian, and Czech within one month and without system integration. The program has a 0% CSAT deviation.

Expansion of T:Translate to the client base

On the development roadmap, Transcom is adding functionality for agents to flag translations for checking and retraining of the AI. It also develops language skills and selects agents with language aptitude in Cairo to become translation experts and AI trainers. It also plans to recruit a linguist to develop the glossaries and technology further. Another area is testing to identify the right voice characteristics for the different support scenarios. With the rapid evolution of the quality of synthetic voice, Transcom looks at significant opportunities for creating custom brand voices and new brand identities. At the same time, certain brands want more robotic-sounding voices to distinguish them clearly from human voices.

The company is now proactively offering the full hybrid model (with bots, AI translation, and interaction shift to text) to its existing clients. It has three projects in development with go-live dates in Q3 2023, and for the U.S. consumer brand, it is adding six more European languages. Target processes are technical support, urgent queries, and handling peak volumes.

Regardless of the technical leap forward, the AI translation will not completely eliminate the need for onshore and nearshore CX support. Regulated processes, higher value interactions, and highly unstructured conversations require cultural and language proximity. An example of this market direction is Transcom’s investment in July 2023 with the acquisition of a German CX services provider, timeframe, adding employees in Germany, Portugal, and Greece.

The opportunities and applications of generative AI are the most pressing topics for IT and CX managers alike. Movate is moving aggressively in the space by developing a set of offerings and platform accelerators and then piloting with enterprise brands to gain first-mover advantage. I spoke with Movate last week to discuss their generative AI journey and the first business outcomes from the pilots.

ChatGPT services: from product to management

Movate’s generative AI services cover the consulting, design, and deployment of solutions and their management, maintenance, and evaluation. Movate offers the following services:

• Development and deployment with ChatGPT design and prototyping, testing, and integration into websites and mobile apps
• Integration, customization, and hosting
• Training and validation with knowledge curation, data collection and preparation, model training, and relevancy evaluation
• Technical support and maintenance of users of the ChatGPT solutions and engineers running the tool with software updates, bug fixing, and performance optimization
• Monitoring and evaluation in areas such as performance, uptime monitoring, and security enforcement.

Movate is also developing accelerators to assist the deployments. For example, it has ready-to-pilot governance models to explore, search, identify, and recommend resolutions to different issues. It has a summarization feature able to classify key themes and clusters in CSAT, NPS, and customer feedback surveys. Other accelerators include a topic modeler for grouping similar clusters and classes and providing the impact of business KPIs, an automated KPI trend analysis, and an automated test case generator. It is also working on automated customer support tasks, automated parsing and transformation of data, content creation, automated behavioral analysis, and root cause analysis.

The goal is to apply these models, libraries, and tools across industries and service lines as clients look to understand the realm of possibilities with generative AI for customer-facing processes and employee augmentation.

Not another platform: integration with internal and external platforms

Movate is actively positioning its generative AI offerings as integrated parts rather than another standalone platform. The company is integrating ChatGPT within its Movate Edison CX transformation platform which includes WFM, knowledge management, QA, training and performance management, and CCaaS.

The application within Edison includes a ChatGPT-based bot that can detect when a customer requires assistance and provides a relevant help article, a ChatGPT assistant and case generators. Other use cases are the summarization of long discussions, troubleshooting issues, and personalized recommendations using various resources such as chat history, customer feedback, and previous CSAT scores. For the agent-facing process, ChatGPT can perform CSAT and NPS analysis, sentiment analysis, and categorize and prioritize issues.

Movate also targets custom deployments and point solutions when companies invest in enterprise platforms such as Azure Open AI, Freshworks Freddy AI, and Salesforce Einstein GPT across the service, sales, marketing, and commerce cloud. There are dozens of opportunities here, including self-service assistants, intelligent lead qualification, personalized campaigns and sales enablement, and personalized product recommendations that can be tailored to the customer persona.

Productionization: pilots, kickstarter packages, and a dedicated CoE

Movate has nine pilots underway with brands from the cybersecurity space, data storage, cloud, communications, and hardware. For example, for a multinational storage OEM, Movate has a pilot in the returns management process. It integrated Azure Open AI model with SF Service Cloud, trained the algorithm on ~1k customer service knowledge articles, converted them to ~5k articles, and launched a ChatGPT bot that retrieves the relevant article for users, triggers the RMA, and credit issuing, offers progress and shipping information, but also auto-creates the case in Salesforce and integrates with Edison to propose next-best-action steps to the agent when the issue requires human intervention. The bot has machine translation to French, allowing support without French-speaking resources.

Across its nine examples, the company evaluates the potential business benefits at:

• 10-15% improvements in CSAT
• 35-40% engineer productivity improvement
• 15-25% improvement in time to resolve
• Extension of customer support to 24x7 format.

The company is partnering with some of these enterprises for joint GTM for their clients. It created two fixed-price bundles for generative AI for the top use cases with assessments, roadmaps, and technical architecture. Clients can add on a Movate developed ChatGPT chatbot to integrate with their CRM (e.g., Zendesk or ServiceNow) or purchase a service such as knowledge curation or testing for the existing LLM bot. The add-ons are offered on time and materials pricing.

To support these services, Movate created a CoE for generative AI with ~50 industry and technical SMEs such as knowledge management and data training experts, LLM engineers, language designers, and prompt engineers. Some of the required skillsets extend to human behavioral science and anthropology and Movate is assembling the team to complement and diversify competencies.

In the GPT model and data protection, Movate relies on the enterprise security frameworks built into Azure Open AI and Salesforce Einstein GPT. The company is applying its security know-how in customer security to user management, authentication, single sign-on, endpoint protection, and best practices in code and data security such as vulnerability assessment and penetration testing (VAPT), data loss prevention, storage and transfer encryption. It is also offering generative AI security assessment as a service.

Leveraging flexibility and speed

A repeated challenge for new CX technology deployment has been optimizing the ROI and leveraging the full capabilities of platforms. Generative AI requires a higher level of business evaluation, customization, and managed services for CX-specific processes or enterprise-specific intelligence. Movate is looking to capture this broader range of opportunities by offering flexibility and nimbleness for its target use cases, such as categorization and prioritization of issues for engineers in technical support scenarios. It already has expertise in identifying issues across a sample of technical tickets and training the engine and employees on the findings. In its current generative AI experience, this fast deployment works for both narrow, highly technical issues requiring effective summarization, and simpler queries in vast product ecosystems needing quicker knowledge retrieval.

In parallel, Movate is evaluating the biggest market needs. For example, data training and validation seem like a frequent current ask from organizations. Knowledge curation is also the area with the heaviest resource augmentation requirements; for example, Movate deployed ten to twelve experts for a large-scale security client project. Strong demand will also likely come from the regular technology updates such as ChatGPT 5.0, where clients need support before and during the transition.

In the last week of March, Teleperformance made two significant announcements. The first was the planned acquisition of 100% of Majorel shares for a total consideration of €3bn, including €1bn of Teleperformance shares in exchange. The transaction will create a company with $12bn in annual revenue (end of 2023 estimate). The second statement came during the Q1 results, where the company assessed that "there is a potential to automate 20-30% of its volumes over [the next] 3 years."

The two events might not have a direct connection, but they both highlight the way in which the CX services market is evolving. In this blog, I summarize the benefits that Majorel brings and look at the broader impacts of automation and generative AI technology on the CX services market.

Majorel brings major injection of EMEA talent

The initial reaction to the planned deal is that it goes against Teleperformance’s previously declared M&A strategy, that it is a defensive reaction to Concentrix's plans to combine with Webhelp, and that adding CX services employee scale is illogical because ChatGPT exists. However, such observations are inconsistent with the market trend for CX services consolidation over the last few years.

Many of the latest CXS deals have had a sizable growth effect on delivery scale:

• Sitel’s (now Foundever) acquisition of SYKES in 2021, added ~61k employees
• TELUS International acquired crowdsource data annotation business Lionbridge AI in 2021, which currently claims ~1m gig workers
• The Konecta-Comdata merger, finalized in 2023, combined to reach ~130k employees
• The above-mentioned planned acquisition of Webhelp will add to Concentrix ~120k employees.

When the Majorel deal finalizes in Q4 2023 or Q1 2024, Teleperformance will exceed ~500k employees but still below TCS (~615k) and Accenture (~738k).

Majorel's talent is particularly valuable in Europe, with its highly sought-after German-speaking scale, French offshore capacity, and 25 multilingual hubs in cities such as Berlin, Dublin, Maastricht, Lisbon, Barcelona, and Tbilisi. The demand for nearshore German-speaking support has driven much of the recent new site launches and M&A activity in Southeast Europe and also Turkey, which is a focus for Majorel.

Majorel's sizable European onshore and nearshore delivery is further boosted by its African market presence and delivery network. The company operates in established outsourcing centers such as Casablanca and Cairo but also Togo, Senegal, Côte d'Ivoire, and has recently grown its delivery from Ghana and Kenya. Multiple countries in Africa have the potential to become the next big delivery centers for CX and BPS. Teleperformance's investments follow this logic, with the company expecting to have ~40k people on the continent after the deal.

This active diversification of the global delivery network is backed by increasing cost pressures on clients, the persistent talent shortage, and the fundamental need for de-risking and hedging against growing external factors such as environmental and political disruptions. All major CX services players have adopted this approach, including Majorel, which added capacity in locations such as Suriname and Colombia.

Majorel's domain expertise

Majorel brings several specialized services and domain capabilities that target high-growth segments in CX services:

• Bank account portability offerings, platform, and clients in German-speaking markets, France, and, most recently, Ireland. This capability is high on the list of European banks as they face higher interest rates, customer migration for higher yield deposits, and challenges from neobanks
• MajUP, a dedicated startup accelerator, offers a custom support model, pricing structure, and delivery format for new brands in Europe
• A developed trust and safety and content moderation practice with localized delivery, marquee client base, and moderation IP
• Consulting and CX technology delivery unified under the Majorel X brand with ~650 resources in 15 countries. Majorel X provides CX consulting and design, customer journey mapping and strategy, CX application and platform development, and content creation services
• Automation and AI development in Majorel's RPA factory in Dublin. An example of development is the cognitive virtual assistant MAIA with self-learning functionalities, an NLU engine, interactions memory, service, and technical panels
• Experience in selected verticals, such as luxury goods and automotive. A further benefit Majorel brings is that among its ~500 clients are those operating in China, where the company supports multinational brands, including in automotive.

For Teleperformance, these digital capabilities can be integrated into its own portfolio of CX platforms, tools, and transformation practice TAP and cross-sold to enterprise clients. For example, Teleperformance's offerings can target Majorel's flagship travel clients for agent training in GDS and real-time interaction augmentation. Integrating front and back-end tools and operating models with subprocess vertical-level expertise is becoming a key enabler for organizations to achieve cost take-out and revenue increase.

And as expected, the combined company will bring cost optimization opportunities in systems, licenses, property, managerial, and administrative. Teleperformance estimates the run rate cost synergy potential at €100-150m.

What about ChatGPT?

When AI first emerged as a viable CX technology a few years ago, a common industry concern was its disruptive effect. Since then, CX services providers and clients have adopted AI, while the overall market has expanded. Generative AI is not new for CX services players, but its recent emergence in the public spotlight brings renewed focus on the role of human-delivered CX support. The reality is that a lot is unknown in the long term (three to five years).

In the last few years, the adoption of conversational AI and large language models in CX operations has shown:

• Better intent recognition and language pattern categorization
• Significant improvement in automated conversation building
• Enhanced agent productivity, for example, by autocompleting certain tasks
• Application of agent learning with benefits in speed-to-proficiency and accuracy.

Another clear development is that more and more users, especially new customer demographics, are more receptive to interacting with bots. ChatGPT had ~100m uses in January 2023.

However, these technology advancements do not point to a drop in support volumes but rather their replacement. The rationale is:

• Voice will remain, for a while, the preferred channel for certain types of customer interactions in conversations related to money, health, or highly sensitive and urgent issues. NLU and generative AI apply to text only. The likelihood is that for this status quo to change, it will require massive technological progress (e.g., in quantum computing)
• Feeding the LLM algorithm with up-to-date and accurate data to answer highly dynamic CX processes requires a lot of human supervision and checks. Given the potential risks, brands are likely to apply it to a narrow range of more repetitive customer-facing processes, leaving the bulk of interactions to humans or hybrid human-machine support
• Human engagement and contextual empathy are key in different CX processes and irreplaceable in sales, retention, win-backs, and collections. These revenue generation processes are among the fastest-growing outsourcing needs
• Data ownership barriers and the regulatory environment can potentially limit the application of unsupervised AI in CX.

Other factors that favor outsourcing providers are: their role in the ecosystem as administrators of mass customer interactions and CX data across clients and industries; the scale of the contact center agent population who can work alongside the algorithms; and providers' experience in CX automation design and implementation.

Other macro trends are also driving CX services demand, including the closure of physical stores and debranching, shifts to subscription models, and the rise of experiential shopping, to name a few.

When will AI disrupt CX?

From the perspective of the current state of generative AI, the Teleperformance acquisition of Majorel and the previous examples of CX consolidation are more strategic enhancements of domain capabilities and less a reaction to expected volume automation. After the transaction completes, the company will reveal its new four-year growth plan.

Still, AI has a very tangible potential to disrupt CX services in many unexpected ways. Accent neutralization software (e.g., Sanas) and synthetic voice (e.g., ElevenLabs) could make delivery borderless; conversational bots could evolve into personalized brand representatives with social functions (in the vein of Replika); AI-generated video content can revolutionize self-service (e.g., RunwayML); and leaps in agent efficiency through AI augmentation could reduce the operations required to handle existing volumes. When these evolutions materialize, CX services vendors and contact center agents will have to adopt new roles; for example, AI whisperers and trainers, language interface designers, or online brand ambassadors and concierges.

Travel and hospitality are among the fastest-growing CX services sectors in 2023, with the market recovering to pre-pandemic levels. However, while vendors and clients are trying to adapt to the increased demand, they face higher costs, changing customer requirements, and more IROPs.

In February, Conduent was awarded a CX services contract by Virgin Atlantic to manage rebookings and provide customer support, including flight changes and cancellations. I spoke with Conduent to discuss the recent win, their sector-specific services, and the market evolution.

Pedigree in travel

Conduent’s longest-tenured CX services client is a U.S. multinational full-service airline it has supported since 2005. During the pandemic, Conduent reorganized and scaled down the operation for the client to accommodate the demand drop, but since 2022 has been ramping up the support structure again to handle the increased volumes. Conduent also supports a vehicle rental company, cruise lines, and hotel chains. Outside of pure CXS, it has transportation business worth $750m annually (FY 2022 revenues), which includes managed services and technology for road tolls and charging, curbside management, passenger payment, ticketing, boarding, and travel safety solutions.

Conduent’s CX services include different types of passenger support and customer care, technical support, sales, retention, collections, and specialized LOBs such as lost luggage management and upselling and cross-selling of ancillary services. For example, Conduent launched a white glove service for a cruise line for the premium customer segment with delivery from Guatemala.

Strategic domain offerings

Conduent’s travel and hospitality CX services are built on three foundations: standardization of operations, employee development, and addressing seasonal fluctuations.

The first foundation is standardization of operations, CX technology, and operational models across the multishore delivery network. With many travel clients expanding through M&A, the requirement to standardize disparate processes such as WFM, technology environments, and results is a high priority.

For example, for a cruise company in 2013, Conduent consolidated its nine locations into three in the U.S., LATAM, and Europe. It then unified the multilingual CX for 12 markets in nine languages. It regionalized the support structure to facilitate client communications and enable full visibility of newly outsourced guest services. Conduent also leveraged CX analytics to track agent productivity and customer activity across channels. The vendor also took additional LOBs, including sales and loyalty, to improve bookings, upselling, and cross-selling. Since the program started, Conduent has achieved 34% savings with $1m annual efficiency gains and has increased CSAT by 3%.

The second foundation is employee training, development, and engagement. Conduent’s Customer Experience Management practice has ~37k employees, including ~20k in WAH; the company’s talent recruitment, onboarding, learning, engagement, and retention best practices are key to attracting travel brands. For example, Conduent cross-shares its talent management know-how with a hospitality chain for its captive and third-party suppliers. This model of a collaborative outsourcing partnership is becoming standard.

During the pandemic, travel clients wanted to maximize WAH and looked to Conduent to offer rollout experience and tools such as gamification and especially security. For example, for an international brand of full-service hotels and resorts, Conduent built a CX services team of ~700 agents within two months. It streamlined the training curriculum to enable agent ramp-up and augmented the timelines with flex trainers. It also implemented WAH capability management and scheduling to complement the client’s four locations. As a result, Conduent reduced agent onboarding time from one week to two days, the customer curriculum reduced training from three weeks to 11 days, hiring SLA improved from 45 to 30 days, while quality scores in learning exceeded the target. Conduent teams also surpassed the client’s sales conversion performance for agents with the same tenure.

The third foundation is the ability to address seasonal fluctuations, with travel and hospitality clients struggling to maintain their CX resources throughout the year. Conduent uses its contracyclical clients in insurance, tax, healthcare, and the public sector to allocate travel support agents to other programs during the low season. When demand returns, it can ramp up 3x or 4x times. This flexibility eliminates the reduction following volume fluctuations, shortens the lead time for new agents, and reduces recruitment costs. It also improves eSAT through better work variability, with Conduent measuring 90% positive agent feedback across travel projects. An example of scaling for the current demand surge is for its longstanding airline client: Conduent grew from 50 voice agents to ~800,  and in 2021 it recruited and trained ~1k chat agents.

Bringing full BPS capability to the travel sector

Conduent accepts operational optimizations and knowledge sharing with travel accounts as part of the larger client relationship. Sharing training expertise for improved proficiency in the client’s delivery ecosystem and customer insights leading to reduced customer pain points in the overall travel product can be the basis for winning additional business in other areas such as F&A, procurement, HR services, and automated document management. For its flagship airline client, Conduent delivers HR services such as workforce admin, payroll, health & welfare admin, and other back-office services, with the deployment of employee self-service and full automation of HR processes.

Next on the CX services development roadmap, Conduent sees new requirements from U.S. travel clients for regional and multilingual support overseas. The company plans expansions in Europe and APAC, for example, in Conduent’s center in Kuala Lumpur, which offers multilingual support in Mandarin, Japanese, Korean, and Thai. The company is also exploring using a gig work model with a partnership platform to address the peripheral demand in the travel sector.

The company expects travel brands to take advantage of CX transformation levers more broadly, such as conversational AI for call avoidance. These investments are the sector’s response to growing cost pressures and higher cost of capital. Analytics is another investment area in travel, to gather insights into opportunities for operational improvements. An example is Conduent’s work for the cruise line mentioned above, for which the deployment of speech and sentiment analytics during the COVID-19 outbreak protected revenue and customer loyalty. Conduent reduced call refund volumes with IVR tuning and decreased the call backlog by 75%. As a result, Conduent became the sole analytics services provider for the cruise line.

Further, travel clients look for consumer insights to identify patterns and drive sales and marketing campaigns as well as product development, such as new destinations. To provide these insights, Conduent is now spending more effort on call transcriptions and after-call work to map upstream and downstream optimization opportunities; for example, around payments.

ESG and eco-travel next on the CX agenda

The topics of ESG and employee experience (EX) are becoming more prominent in Conduent’s discussions with travel brands. Sector clients add more KPIs for employee retention and satisfaction by benchmarking the performance of outsourced versus captive operations. This hyperfocus on quality follows the logic of better EX driving sales measures of success.

Sustainable travel is another emerging topic, but so far has little material impact on CX services. Consumers are cautious about spending more on eco-travel, with West European markets likely leading in this niche. Conduent executives see this space as highly correlated to macroeconomic trends but consider it capable of driving the creation of new CX models and white glove services.

This week, Concentrix announced the planned acquisition of Webhelp in the largest CX services deal yet. The total transaction value for Concentrix is $4.8bn in the form of cash, stock, and a seller note for 100% of Webhelp. Upon closing the deal by the end of the year, Concentrix shareholders will own ~78% of the combined company, with Webhelp shareholders ~22%.

Number 1 CX services player

At the end of 2023, the combined company will have ~$9.8bn estimated pro forma revenues, making it the largest CX services provider, followed by Teleperformance and Foundever. At that time, Concentrix will have:

• ~$1.6bn estimated Adjusted EBITDA for 2023
• ~2k clients, including ~155 Fortune 500 brands
• ~420k employees in ~500 delivery locations in ~70 countries, with 52% in Asia
• A client base almost equally diversified across the Americas, EMEA, and APAC
• A client vertical mix led by technology & consumer electronics with 28%, retail, travel & ecommerce 22%, and media & communications 18%
• A diversified delivery mix with 43% onshore, 27% nearshore, and 30% offshore
• Expected run-rate cost synergies of $120m by year 3 of the transaction.

Concentrix CEO Chris Caldwell will lead the combined organization, while Webhelp CEO Olivier Duha and Groupe Bruxelles Lambert (the majority stakeholder in Webhelp) director Nicolas Gheysens will join the Concentrix Board of Directors.

Webhelp’s specialized units – cherries on the cake

In addition to the CX services operations and client scale, particularly the complementary delivery and client presence in Europe, Africa, and LATAM, Webhelp also adds a range of specialized BPS units and CX services augmentation capabilities:

• Dedicated KYC and legal claims management practice
• Payment processing unit providing credit management, online payments, and collections with ~2k resources covering ~35 countries
• Webhelp Medica for healthcare BPO, sector sales and promotion, and patient support, with a client footprint in France
• Software, web application, and RPA development company PitechPlus, headquartered in Romania
• Content management, content moderation, community management, trust and safety, and data annotation, with proprietary platforms (Netino), and strong client base in the French-speaking world, and ~3.3k dedicated resources
• Telecats, a Dutch software company developing platforms for intelligent routing, speech recognition, recording and transcription algorithms
• Mature B2B lead generation and sales practice with an enterprise client base, for example, in high-tech
• The NEST, startup and scaleup program with a bespoke operational model offering new CX program launch, expansion, internationalization, flexible commercial and delivery model, and startup advisory. See this NelsonHall profile for more details
• Experience design and CX consulting firm Gobeyond Partners, headquartered in London, U.K. Gobeyond Partners offers strategy design, UX/UI development, management consulting, innovation services, data and analytics, model office with a lab in Oxford, organizational excellence, and change management. It also recently folded in the in-house digital agency Gobeyond Studio for creative services.

The new company will expand the reach of IT services and consulting, part of Concentrix Catalyst, entering new locations such as France, Germany, Hungary, Romania, Brazil, Colombia, and El Salvador. The LATAM locations come on the heels of several Webhelp acquisitions in the region between 2021 and 2022.

Getting the most of diversified BPS

For Concentrix, the deal presents an opportunity to achieve traditional cost savings through rationalizing the real estate, removing redundant corporate costs, harmonizing IT systems, consolidating data servers, and standardizing client contracts. Concentrix already has significant experience with large-scale acquisitions with Convergys in the past, and most recently PK and ServiceSource (check out the NelsonHall blog on this latest capability). However, Webhelp is the larger firm in terms of size and diversity of services, delivery locations, and markets.

The biggest promise for growth comes from the unification under a single outsourcing organization of a broad range of BPS and ITS capabilities to help the different functions within multinational brands achieve digital transformation. As enterprises face significant challenges from external systemic factors (e.g., environmental disruption), accelerating technology iteration (e.g., conversational AI), and new generations of employees and customers (e.g., Gen Z), point solutions or single department transformations are not effective. Instead, clients look for a multi-tower approach.

This pattern is seen throughout the CX services market, with ITS vendors looking to build front-office capabilities, including for marketing and brand services, while pureplay BPOs actively boost their IT and consulting practices to enable automation, cloud, and AI.

The CX market (finally) reaches a mature stage 

The Concentrix-Webhelp acquisition will be the largest market deal for CX services, but it also aligns with the growing consolidation of the top 10 vendors. Separating the leading 15-20 players from the hundreds of small, regional, or industry-specific CXS providers is an expected pattern, creating a more natural two-tier market. The biggest risk here is for the mid-sized ($500m to $1bn annual revenue) BPOs, which face sizable requirements to invest in platforms, expensive consulting and technology talent, and a truly global delivery network.

On the positive side, the sheer scale of the addressable CX services market (Concentrix estimates it at $550bn) and its underutilization by vendors at ~$119bn (NelsonHall estimate for 2023) offers unabridged growth opportunities for the next several years for providers willing to be innovative and aggressive.

Revenue generation services are the fastest growing LOBs within CX outsourcing at over 9% CAAGR through 2026 globally (NelsonHall forecast). While the focus of most new revenue generation programs is on the consumer space, enterprise and mid-market client onboarding, sales, and retention are also becoming highly promising areas and the next growth engine for the leading CX services players.

In July 2022, Concentrix completed the acquisition of specialist provider ServiceSource International for ~$131m to enhance its B2B sales capabilities and bring complementary technology domain expertise. Here is how the deal complements Concentrix's existing portfolio and presents growth opportunities.

Full life-cycle revenue generation services for B2B brands

ServiceSource offers specialized B2B inside sales, customer success, renewals, and channel management. It adds ~3k employees in San Francisco, Nashville, Dublin, Liverpool, Bulgaria, Singapore, Manila, Japan, and Kuala Lumpur. Its client base has grown from multinational technology brands where demand for their services has evolved into other verticals including financial Services, manufacturing, and healthcare.

Following the acquisition, Concentrix integrated the new capability within its B2B sales services and now offers a full spectrum of revenue generation services across:

• Purchasing with digital lead generation and management, sales performance analysis, ad sales, inside sales, deal desks, and quote generation
• Implementing and executing for customer or partner onboarding, welcome calls, shipping and logistics, and various types of dealer, seller, partner, and channel management and support
• Growth, where Concentrix offers renewal management, churn analytics, win backs, retention and recapture, and customer success strategy.

Account management with proprietary talent enhancement

ServiceSource started in 2001 as a B2B sales specialist, developing its proprietary framework, High Performance Selling (HPS), with multiple components to boost the performance of sales reps. The company employs a multilayered approach for the different levels of the team, including customer success executive coaching, team and leader level strategy with tactics such as forecasts and deal stacks, team huddles, and territory and strategy reviews supported by BI. Key success factors include driving pipeline hygiene, discipline, customer relationship governance, and enforcing accountability to optimize returns.

For example, for a cloud technology provider who wanted to build more efficient partner onboarding and management and increase revenue, Concentrix prioritized business development for converting warm and cold leads into prospects and then handing them off to internal sales teams. It helped the client grow its pipeline sales volume, accelerate time-to-close, and increase revenue by upselling and cross-selling new products to existing accounts. For renewals, Concentrix utilized account health checks to increase recurring revenue, accelerate service ticket resolution, and more improve the efficiency of channel partner management (with improved partner onboarding and overall quality of the partner population). As a result, Concentrix has achieved over 190% increase in SMB revenue since 2019, while consistently exceeding all revenue targets. In that time, Concentrix onboarded ~9k new partners to the SaaS platform with a 98% satisfaction score from the partners.

Matching sales expertise to customer needs at scale

Integrating the new B2B sales capability within the over 300k-employee Concentrix presents a sizable opportunity to scale operations and enter new markets. An example program is for a software developer looking to improve the retention and renewal rates of its customer base. Concentrix led the client's commercial renewal cycle in APAC, EMEA, and the Americas, supporting 57 countries in 23 languages. Concentrix doubled the deal size and increased the deal volumes five-fold with a 15% improvement in the renewal rate and a 10% improvement in retention rate over four years. In 2022, Concentrix took ownership of most commercial renewals for the client.

In parallel to scaling, one of the best practices within the company has been to identify resources from within the organization who have skills and interests in enterprise account management and offer a career path in business development. An example is the work Concentrix delivered for a SaaS migration for a software company that struggled with low channel migration levels. Concentrix set up a 10-member team to resolve a ~6k support ticket backlog, another 20-member team to clean up the CRM data, and 20 global business development representatives to expedite the migration to the client's subscription. It dedicated two specialists to process design and working with the largest channel clients.

Massive potential in IT sales and beyond

Various analyst reports indicate a massive potential in the IT and software license and support markets. Concentrix estimates its TAM for B2B sales at $65bn. The current cooling off of startup investments and scaling down of some of the most prominent technology brands cannot divert from several fundamental factors which boost the massive potential of IT sales.

First among these factors is the evolution to SaaS and subscription models from legacy licensing formats. This change creates a need for a renewals advisor who can combine the roles and skillsets of initial support, sales, and account management with tasks such as onboarding and health checks. Here, Concentrix can bring its expertise in developing outbound sales representatives into customer success executives.

Another driver is the client's requirement for cost saving through offshoring and access to new markets. In the current economic environment, tech clients in particular are actively searching for cost-effective solutions for sales and partner management operations. For Concentrix, the next steps include utilizing its existing nearshore and offshore delivery network and expanding into new geographies with support presence; for example, a program going live in South Korea.

The highly volatile technology market also demands a greater focus on analytics and customer insights. Concentrix has a methodology for a continuous feedback loop with the client’s various functions. One of the direct benefits has been sharing findings and issues that the client's internal team can be reluctant to share. This ongoing feedback is now becoming critical for brands to be quicker and better tuned to their market, improve processes and reduce customer friction. For example, Concentrix helped a robotics automation enterprise define its customized GTM based on customer behavior instead of value segmentation, resulting in higher renewal rates for a greater share of wallet from existing customers.

Augmented talent and opportunities beyond the technology segment

Some of the next steps for Concentrix are employing its tech stack in agent augmentation and domain process optimization, such as loyalty management platforms developed by Concentrix Catalyst and AI and smart data applications for propensity modeling. Sentiment analytics is another promising area with an impact on the revenue generation process. The company is already working on employing it for real-time coaching on live interactions with customer success executives to drive next best actions. Other benefits include an overall cohort analysis based on conversations between the Concentrix team and the customer base to optimize the client's strategy and team coaching. 

Next, the company is building up its sales capability in new delivery locations such as Egypt, Georgia, China, India and Costa Rica to add capacity for markets such as Germany, APAC, and South America.

Outside further optimizations for the significant technology sectors, the Concentrix B2B sales unit is looking at the financial services and manufacturing verticals, focusing on large accounts which face similar challenges of an underserved mid-market.

Concentrix expects the acquired unit to deliver $230m in additional revenues and $38m of adjusted EBITDA in the first twelve months following the ServiceSource acquisition.

As we end a relatively successful and dynamic 2022 for CX services, here’s a look at some developments we expect in the new year.

CX services market is slowing down

The CX services market had a strong CY 2022, with most top 10 players registering high single-digit organic growth in Q3. The macroeconomic headwinds already started to impact the second half of 2022, with increased client caution lowering demand in the largest CX services verticals of telecom, banking, and retail. Some previously high-growth sub-segments, such as crypto, are being impacted particularly severely. However, certain client industries are bucking the trend, notably in travel, mobility, gaming and  entertainment, often driven by a return to pre-pandemic levels, changing consumer habits, and new support LOBs. Vendors prioritizing these segments could offset some of the decline in other client sectors.

Nearshore and offshore capacity to accelerate growth

The second half of 2022 showed some signs of rapidly rising labor costs beginning to stabilize. However, in 2023, authorities from the U.S. to Indonesia and Eastern Europe are planning minimum wage hikes. As other expenses rise (e.g., energy), costs and their predictability are a key priority for outsourcing clients. These costs are coupled with limited talent availability and digital skill shortages, resulting in brands looking for more CX capacity nearshore and offshore.

In 2023, new center openings and acquisition activity in nearshore/offshore countries will be even greater than in 2021 and 2022, with geographies such as South Africa, Egypt, Turkey, and Colombia continuing as direct beneficiaries of this demand. East and West African countries are already experiencing meaningful CX outsourcing interest for the first time, with companies such as Majorel and CCI building capacity in these regions.

All this demand is topped by the prevailing market need for truly global support, which requires CXS players to offer resources for at least North America, Western Europe, and core APAC countries. In 2022, some of these moves included:

• U.S.-headquartered vendors acquiring in Europe (e.g., TaskUs in Croatia, ResultCX in Bulgaria)
• European-headquartered vendors building nearshore U.S. capacity in LATAM (e.g., Webhelp in Mexico, Intelcia in Jamaica)
• APAC-headquartered vendors building capacity in Europe (e.g., TDCX in Turkey).

As vendors and clients embrace this multishore delivery model, the more advanced market players are incorporating a strong gig/freelance element for added flexibility and cost controls. Gig work strategies include:

• Partnerships and in-house platforms (e.g., Alorica, Concentrix, TaskUs, WNS)
• Outright acquisitions (e.g., Movate, Tech Mahindra, TELUS International).

Talent management is the best inoculation strategy for CX players

CX players are among the leaders in talent sourcing, learning and development, and agent augmentation. To retain these capabilities in 2023, their investments in the space need to continue across a broad range of capabilities: virtual employee recruitment, onboarding, training, employee health and well-being, upskilling, gamification, immersive learning in the Metaverse, machine translation, and real-time sentiment analytics. The growing importance of ESG for talent attraction (for example, impact sourcing and green policies) will receive more boardroom attention.

CXS vendors’ 2022 acquisition activity shows an emerging appetite to boost their HR tech and talent management capabilities; examples include:

• Teleperformance buying recruitment services provider PSG for $300m
• HGS planning to acquire Human Resources Management System company uKnowva.

External factors to disrupt CX players

Multiple external threats and disruptions impacted the CX services market in 2022. The war in Ukraine, cybersecurity breaches, supply chain breakdowns, health risks, political instability, and environmental emergencies all affected the industry, highlighting the role of risk diversification.

Next year, many of these risks will remain, with China as a domestic and offshore destination likely to be the most immediate worry for CXS executives.

Somewhat under the radar, however, are the inching regulatory changes such as the EU’s Digital Services Act (DAS) and Digital Markets Act, the U.K. Online Safety bill, and similar regulations in Australia and the U.S.

The issue of digital sovereignty will potentially place new rules on social media, digital delivery, and server locations, with the EU likely to set the standard for many other countries to follow. For the multinational CX services providers with an onshore presence in key geographies, the new digital regulatory environment could be a boost.

Long-term challenge: breaking the linear relationship between business growth and workforce increase

CX services will remain a “people business” in 2023 and 2024, but with changing CX technology, enterprise industries, and end-user preferences evolving, CXS players cannot rely on process optimizations and operational excellence. Most of the CX challenges are organizational and ecosystem-related, requiring advanced consulting and technology solutions to break the linear dependence between revenue and employee number increases.

On the consulting, experience design, and brand support side, the CXS vendors already making massive moves, among others, are:

• Concentrix Catalyst unifying the PK and Tigerspike divisions
• TELUS International planning to acquire WillowTree
• Majorel merging its consulting, technology, and content services in Majorel X.

In parallel, the leading vendors are creating a network of technology partners to offer domain-specific digital assets in automation and analytics.

Probably the biggest uncertainty for the CXS market in the next several years is on the technology front, where accent neutralization, synthetic voice, and self-service via generative AI such as the massively popular ChatGPT have the potential to overshadow the above-mentioned industry paradigms.

In January 2022, Tech Mahindra acquired BPS provider Allyis. Allyis offers digital experience, cloud, AI, & engineering, data & analytics, and technical support services and has actively built trust and safety, content moderation, and content enhancement services. The deal complements Tech Mahindra's strategy over the last seven years to acquire and expand into experience, digital consulting, and design capabilities. Allyis also brings capabilities and a client base in the highly promising space of content services.

Allyis - a multiplay provider

Allyis was founded in the 1990s and is headquartered in Seattle. It has ~2k employees in the U.S., India, Romania, and Costa Rica, generating ~90% of its revenues from managed services, primarily from consumer and enterprise software clients. It also supports consumer electronics, retail, food, and healthcare.

It provides learning and development, instructional design, and marketing services, including sales and campaign management, test engineering and app development, BI, analytics, and low-code AI solutions. In CX services, it specializes in L1 & L2 technical support such as customer onboarding and integration, device management, and augmentation. Allyis has gradually developed its data services, such as AI and ML data training, metadata tagging, digital asset management, analytics, and social media command center.

Since 2016, it has rapidly built its trust and safety practice, initially with a custom project for an existing enterprise client. Today, it provides a host of content moderation services:

• Content review and moderation, including community management and moderation of extreme content
• Compliance, where it verifies ad relevance, app compliance, user-generated content (UGC) compliance, and brand compliance
• Fraud monitoring and AML checks
• Online reputation management and online brand consulting and protection.

Content moderation growth

Since its launch, Allyis' content moderation services have scaled significantly. Today they range from the moderation of objectionable and illegal content to privacy violation reviews, forum moderation, and specialized use cases. For example, in video games, it moderates text, audio, image, and video content over chat between players or virtual events. An example implementation is for a game developer and publisher. Allyis reviews, tags, and processes UGC, investigates and escalates reported content, and reviews and communicates on user appeals. It deals with images such as custom skins, monitors in-game chats, videos, audio, and 3D experiences (e.g., creative islands). The company also set up a dedicated team to manage egregious content. Allyis processes ~15m interactions per year, covering 12 languages from four delivery markets. It significantly reduced user reports around bullying and harassment, reduced false-positive rate to below 1%, reduced TAT by 20% on technical support, and AHT by 12% on UGC review.

Another area for specialized moderation is advertising quality checks, verification, and compliance. For example, for an international online advertising platform, Allyis performs ad reviews, checks for adult content, intellectual property violations, and restricted and disallowed content such as gambling. It supports advertisers with labeling, appeals, and policy questions. Allyis handles ~15m ads, appeals, and tickets per year and runs ~300k audits annually, maintaining 97% quality across policy groups. For the client, it operates in English, German, French, and other major European languages, as well as Mandarin and Japanese.

Specialized talent management

Allyis has a dedicated framework of processes and work models to support content moderators. It has onsite wellness and resilience resources, procedures for setting mental distance from the work, and a closed office with restricted access. It employs automated pre-moderation to limit the agent's exposure to harmful content. For example, for a U.S. technology corporation, Allyis reviews automatically flagged and shut down accounts due to CSAM images and videos. The specialized onshore team investigates, gathers the necessary information to report, and identifies subjects' ages, ensuring corrective action is taken on the images in question. After the investigation, moderators mark the images, videos, and URLs and report them to the NCMEC (National Center for Missing & Exploited Children). Allyis maintains 99% quality on the workflows.

Integrating Allyis' services in Tech Mahindra's BPS

Tech Mahindra is integrating Allyis into the Digital Business Operations (DBO) practice, which will reach ~$80m in annual revenues and ~12k FTEs. Allyis adds delivery proximity in the U.S. with onshore and nearshore sites, which has been an active market priority by Tech Mahindra (e.g., the 2021 Activus Connect acquisition, which boosted the U.S. WAH capacity). 

For technical support the focus is on software products, especially L1 support for cloud products, strengthening the relationship that both Allyis and Tech Mahindra have with a U.S. multinational technology corporation.

Tech Mahindra looks to benefit from Allyis’ services in learning and development to develop knowledge bases, advise on learning curriculums, integrate and customize training platforms, and design learning programs. Within these services, the company promotes an additional spectrum of learning content services such as translation, localization, training materials creation and publishing, potentially in immersive environments. Many of Allyis’ existing learning accounts use its services for partner, customer, and supplier learning, and Tech Mahindra aims to utilize these capabilities with its enterprise BPS and ITS clients. For a U.S. technology client, Tech Mahindra is creating a content development team in Romania to write and localize materials for the brand partner ecosystem. Another high-potential vertical is life sciences, with discussions underway with a pharmaceutical manufacturer.

Tech Mahindra also looks to take Allyis’ trust and safety offerings, including adjacent services such as data annotation and training to its broader client base. Allyis already brought a new ~$40m client win in the games vertical for metaverse moderation. It plans to open up Allyis trust and safety operations in new regions, for example, Malaysia and Japan.

Another significant opportunity for the DBO practice is leveraging the design and experience consulting units such as BORN and Mad*Pow with Allyis’ learning and trust and safety clients.

As brands increasingly invest in more effective digital sales and support, the breadth of Tech Mahindra DBO’s capabilities can enable them to successfully target the various needs of marketing and customer service in an integrated way.

NelsonHall CX Services is launching a new Content Transformation research project. For participation, please reach out to Ivan Kotzev.

In September 2022, CSS Corp announced a new name and brand identity: Movate. "Movate" promotes the company's commitment to achieving outcomes for its clients and co-innovating with them. The brand signifies Momentum and Innovation, the two core themes for the company. A key part of Movate's innovation framework is flexible gig work and work-from-anywhere delivery. In 2022, Movate surpassed 11,700 employees in 20 locations, including newly added sites in Colombia and Romania. The gig work model allows the company to accelerate and internationalize delivery outside physical centers and complement the service portfolio with specialized services.

Movate's gig work acquisition

In March 2022, Movate acquired Directly's OnDemand business, adding an on-demand CX work platform and flexible work resources for customer care and technical support. OnDemand has a network of thousands of freelancers in 60 countries and is based in San Francisco. Its clients include Microsoft, LinkedIn, Airbnb, and Autodesk.

Movate's acquisition of OnDemand follows a clear trend in BPS for vendors to build (e.g., Concentrix), acquire (e.g., Tech Mahindra, TELUS International), or partner with gig work platforms and resources. These deals arise from client requirements across verticals as they struggle to predict and manage the highly volatile work volumes and customer interactions and address challenges with skilled talent sourcing. Clients also look to expand the scope of outsourced activities, such as data annotation, ML training, and content enrichment (e.g., Alorica, HGS). As a result, the gig and contract work model has become an essential part of the delivery mix for CX services, following the footsteps of ITS processes such as crowdtesting. In addition, human cloud players such as Arise are experiencing significant growth.

For Movate, the deal added scale, resources in new delivery markets, multilingual capabilities, a client base in high tech and enterprise services, and IP to manage the gig experts. The OnDemand acquisition enables Movate to offer an integrated hybrid blended model with the scalability of the gig platform with its core workforce and the company’s proprietary CX transformation platform (Edison).

Movate OnDemand’s gig peer experts

The Movate OnDemand platform has between 6k and 10k active users supporting ~100 languages over email, in-app, in-game and web chat, and messaging. Clients are in the travel, shared economy, consumer and enterprise technology, gaming, telecom, and B2B services sectors. The freelancers have a typical profile of product/services or technology experts with several years of firsthand experience. OnDemand has processed ~5m tickets.

The proprietary platform connects the brands' experts to provide peer-to-peer support. For example, for a travel client, the gig agents are current property owners who are specialists in the marketplace. Movate and the client proactively recruit the talent with internal communication, presenting the opportunity to provide peer-to-peer help and showing the earning potential. Movate then runs an assessment, checks the applicants' backgrounds, qualifies them, and then onboards them. Another channel for onboarding members on Movate OnDemand is through targeted ads and communication on spaces such as forums and online communities. An example client is a game console. Again, Movate performs the authentication and evaluation of the expertise credentials.

OnDemand can scale up to 4x its workforce, sending notifications to the gig community to join during volume surges. With its game console client, Movate onboarded several hundred peer experts within weeks.

As active users, the applicants need zero or short training time, usually for process-specific policies, using OnDemand's integrated learning module. Another benefit of hiring existing experts is the quality achieved as soon as a new expert starts.

Example implementations include:

• A software company for which OnDemand resolved 1.8m tickets with ~1.5k experts and achieved 87% CSAT
• Professional social network with ~190k resolved tickets supporting nine European and Asian languages with 84% CSAT
• Consumer electronics manufacturer processing ~864k tickets via OnDemand with AHT of 22 seconds and 82% CSAT
• Enterprise product tech company using OnDemand in 17 languages, achieving 67% cost reduction and 94% CSAT.

Cloud work ecosystem

Movate OnDemand does not schedule the contract experts and they can choose the time, duration, volume, and type of individual tickets they want to handle. For the game client, some of the gig experts chose technical support tickets for the console, others to help gamers with account management issues. Peer experts can also work on several accounts. Movate also implemented a peer review QA process which covers 95% of the responses and provides feedback on each interaction.

The company achieves this flexibility by integrating OnDemand with its on-site and WAH full-time delivery workforce. Upon interaction entry, it deployed an intent engine to route tickets to gig experts. The engine parses between 20% and 70% to OnDemand, excluding selected tickets as billing questions for the telecom client. For some clients, the end-user has the option to choose peer-to-peer assistance. The platform has an option if the gig expert cannot answer a ticket instead of redirecting it to the traditional contact center. The company monitors and controls the ticket rerouting to improve the engine.

Because of scale of the talent pool, the response rates are shorter, with an average of 90 seconds. Movate analyzes the performance of the ecosystem to expand the peer expert community as the ticket volume grows. The analysis also drives real-time compensation, driving price during peak demand. Also, based on the volumes for different intent types, Movate proposes and creates automated responses to reduce manual contact handling.

OnDemand incorporates the peer QA results, the response speed, availability, and a reputation engine that uses customer CSAT evaluations to form an overall contributor score. It uses the score to allocate volumes which in turn drive agents' earnings. The gig experts receive payment once the customer confirms their issue is resolved.

The model works well for established brands with a sizable customer base and sufficient volumes to feed the expert cloud. Movate estimates a 30%-50% lower cost per handled interaction but requires around 10% of the volumes to be handled via the gig model to achieve the ROI.

Cohesive element in the delivery mix

Movate positions OnDemand as an element of its end-to-end managed services. It continues to invest in the gig platform; for example, piloting voice workflow for a technology client in a click-to-call model. When a customer asks for a callback, the platform converts it to a gig ticket. It uses outbound calls to follow compliance and PII requirements. It has eight patents related to contact routing and peer-to-peer evaluation.

The company is in discussions with existing BPS clients (e.g., in the networking space) and prospects (e.g., in mobility) to adopt OnDemand for part of their volumes. It offers to handle certain volumes with a mixture of traditional BPO, gig experts, and automated responses with a shifting ratio between the three types with the ultimate goal of training conversational AI and virtual assistants for self-service. The company commits per resolved contact to create an ROI accretive model. An example win is with a computer OEM for their premium consumer segment.

Lastly, Movate is exploring the use of OnDemand for additional services such as data annotation and ML training, complementing its geospatial analytics offerings.

Machine translation has been one of the fastest developing areas of AI in the last five years and has quickly become a target investment for CX services players. As the technology evolves from statistical analysis to the use of neural networks, CX services companies start to benefit at scale. Webhelp has been active in the space for several years, initially through partnerships with machine translation tech vendors.

In 2018, Webhelp started to study the potential benefit of machine translation for CX, and in 2019 it launched Polyglot, an in-house translation capability combining AI and human translators with an exclusive focus on CX processes and service lines.

Polyglot’s machine-human platform

Under Polyglot, Webhelp builds client-specific service to translate text from one language to another in real-time and then uses humans to verify and improve the quality. Polyglot has ~110 language pairs and is powered by a combination of third-party technologies from DeepL, Google Translate, SYSTRAN and proprietary algorithm. The platform has features for monitoring and reporting, comes with built-in taxonomies, adaptation to the individual program, and has APIs and connectors to major client systems such as Salesforce and case management systems for integrations with chat, email, webforms, instant messaging, and social media.

Webhelp also brings human language experts into the loop. Machine translation still cannot fully account for the context and nuances of language, especially at the beginning of a new program. Humans come in to assist with complicated terms, industry-specific vocabulary, and, most importantly, conversation content. The AI then learns from the human conversations and corrections and improve accuracy.

The typical profile for a bilingual language expert is B2 levels in English and native proficiency another language. The requirements for the talent are accuracy, speed, and flexibility. The typical manual text review lasts 30 to 90 seconds, where the expert prioritizes grammar and vocabulary. These universal language experts are process agnostic and do not require client or program-specific knowledge. This flexibility allows for shared services verification across clients and offers borderless support, for example, from multilingual hubs such as Webhelp's Barcelona site.

Webhelp has deployed Polyglot on 26 language pairs, including major European languages, Chinese, Japanese, Arabic, and Brazilian Portuguese. For 17 languages, it employs human language experts. 

Direct benefits of machine translation

The traditional multilingual support format uses dedicated language resources serving one or several markets with restrictions on availability for long-tail and difficult to source languages. The model often requires exclusively onshore delivery, higher costs, and advanced WFM to account for different hours of operations, peak volume management, and absenteeism and attrition. With machine translation, all these challenges are alleviated, if not fully removed.

From its Polyglot implementations, Webhelp also experienced improved business resilience during lockdowns, a greater concurrency, faster speed to proficiency, and higher ESAT, as agents can operate during regular business hours and with more flexible work models such as work-at-home.

For CX clients, the lower cost and ability to serve minority languages increase the outsourcing model's attractiveness. Webhelp is actively employing Polyglot as a differentiator in RFPs and to hunt for new opportunities. It already has couple of dozen clients in the travel, fashion, consumer goods, high tech,  and media sectors. A highlight is the zero client churn for all Polyglot client engagements.

Not just traditional customer service

The Webhelp Polyglot-supported programs are not limited to just customer care. The company has implementations for technical support in high tech and consumer goods and for B2B sales. The size of the programs varies significantly.

Example implementations include:

• A multinational fashion brand for which Webhelp introduced Polyglot to simplify the multilingual operating model and generate 40% cost savings. Webhelp provides email customer care and support over WhatsApp and Facebook using automated translation in 15 languages, including French, Spanish, German, and Dutch. It reduced the delivery sites from six to one and now has ~250 agents in India and language experts in Greece and Estonia. The program handles ~2k cases per day, achieving a 35-point higher NPS than the native language teams
• A consumer electronics OEM where Webhelp engages with customers on Facebook and Amazon reviews in 14 languages using 3.5 FTEs from a location in the Netherlands and language experts in Spain and Turkey while maintaining 5 points higher NPS than the native resources
• Another consumer electronics brand needed to lower TCO on chat and WhatsApp customer service. Webhelp has a 14-member team in India covering French, Dutch, Italian, and Nordic languages, with CSAT 9% higher than the native language team, delivering 95% translation quality, improving average first response time by 76%, and a 45% decrease in annual costs.

Translation technology vs. BPS

The main differentiations between pure technology vendors and BPS players are the partnerships with different translation engines, expertise in CX use cases, and end-to-end sourcing. In the case of Webhelp, it owns the process, the CX setup, and resources. It offers Polyglot, closing the loop for model training, talent augmentation, quality improvement, security, and ongoing feedback capture. Webhelp also eliminates the complexity of separate technology licensing by rolling in Polyglot in the overall BPS contract.

For example, at the end of 2021, Webhelp integrated Power BI into Polyglot with dynamic dashboards for operational data such as tickets handled by each agent and the AHT of both agents and language experts. It also monitors rejected translations and shows the quality of translations over time.

A factor not to overlook, of course, is the high cost of the leading machine translation engines.

Machine translation technology leaders continue to improve with their neural language engines incorporating human inputs to a lesser and lesser extent. Still, this solution is only applicable for text communication, and human voice support at the quality required by CX programs is still some distance away.

The limitation to text only strengthens the positioning of CX outsourcing companies as customers migrate to multichannel interactions and vendors increasingly support voice and text with universal agents.

Opportunities ahead for Polyglot

Machine translation is becoming a core enterprise need within the larger CX digital transformation. Webhelp readily adopts these needs within its solutions ecosystem, where Polyglot sits within the BOOST family of voice transformation, RPA, and email automation.

The company is working on version 3.3 of Polyglot in the autumn of 2022. On the roadmap is adding language resources for Asian languages. It will also integrate with new case management systems to target mid-market opportunities and a new machine translation engine.

Webhelp also plans to expand into machine content translation for customer-facing FAQs, self-service articles, and VOC analysis to assist with client needs around compliance and management of minority languages. Automated CX content translation is likely among the next priority areas for clients and vendors. Brands are looking for international growth with custom sales, marketing, and support content while customer expectations for personalization quickly catch up across markets.

Turkey has been a success story for nearshore European CX services for several years. At the start of 2022, Majorel officially acquired Mayen Telekomünikasyon Hizmetleri A.Ş. (Mayen), an independent Turkish BPO. In this blog, I review the growth of Turkey's CX services and its challenges, Majorel’s expansion in the region, and the opportunities arising from the deal.

Majorel's entry into Turkey

in Q4 2021, after a period of partnership, Majorel acquired Mayen, a Turkish CX services provider with ~3.5k employees in seven locations, including Istanbul, supporting domestic and international clients in 12 languages. Since the pandemic, approximately 80% of its staff has been WAH.

Mayen was founded in 2004 and offers customer care, technical support, sales, collections, social media care and monitoring, CX analytics, and RPA. The company also has an in-house team of a dozen customer journey and CX process design consultants and business analysts.

Effective from the start of 2022, the company rebranded as Majorel Turkey.

Majorel Turkey has ~40 clients in the country and in Germany, across energy, telecom and media, aviation and tourism, BFSI, ecommerce, technology, and healthcare providers and medical devices. It is seeing increasing demand from onshore clients to implement automation to improve performance and quality and address the fluctuation of workloads. For example, for a Turkish payment processing fintech with significant volume peaks at the end of each month for card renewals, Majorel Turkey ran a UiPath implementation of back-office process robots to eliminate manual steps and automate data entry, checks, and processing. The hybrid human-bot environment handles ~50k customer card transactions monthly with 95% success and a 50% increase in efficiency.

For another Turkish fintech client-facing challenge with 24/7 continuity and increasing volumes, Majorel Turkey achieved 100% automated financial audits with a UiPath on-premise deployment. The automation handles ~400k unique transactions out of ~1m total transactions per day with a 99% success rate and 4x efficiency improvement. Other examples include an energy client for which the provider developed a custom robot implementation to reduce human errors on customer accounts and service change requests. The resulting benefits for the client are ~79% AHT reduction and ~80% FTE saving.

Majorel's expansion in Southeast Europe

Majorel’s Turkish acquisition is part of a broader push by the company in the region. In 2021, it entered Zagreb, Croatia; in Q1 2022, it entered Skopje, North Macedonia and expanded with a site in Thessaloniki, North Greece. Coupled with existing operations in Romania and expanding presence in Georgia and Armenia, Majorel is targeting geographic diversity and the increase of nearshore and offshore to enlarge its talent pool in support of West European markets. In 2021, Majorel increased the share of nearshore/offshore to 39% from 35% a year prior.

The ability to offer multilingual support, especially with German-speaking employees, is significant. Nearshoring German language operations will further gain attractiveness with the domestic market experiencing low unemployment rates and a minimum wage rising to €12 per hour in October 2022.

Turkey has quite favorable exchange rates with the Turkish Lira down 44% y/y in 2021, with Majorel responding by increasing employee compensation. In addition, the country offers a sizable pool of remigrants, native European language speakers with lived-in experience abroad. According to the national Call Centers Association, there were over 168k customer service employees in the country in 2021, a 5% increase y/y, with ~63% in outsourced operations. The country boasts ~11k employees supporting a foreign language, mainly German and English, but also Dutch, French, Arabic, and Russian. The association estimates the local market to be worth €1.5bn in 2021.

Another proximity factor for European market support is Turkey's GDPR alignment and improved transport connectivity, with the new Istanbul airport becoming a global traffic hub two years after its launch.

Turkey is pulling in CX players

The Turkish market is established with several multinational players and large domestic competitors. Most recently, it has also attracted smaller BPOs. Examples include:

• U.K. Ascensos opening a site in Istanbul
• German Kikxxl also enter Istanbul in 2022
• Croatian M Plus merging with Turkish CMC.

For Majorel, the Turkish acquisition offers interesting opportunities to target the domestic Turkish market. Majorel's play in the banking sector with IP and experience in digital transformation, such as account portability, can be a strong capability for the sizable Turkish BFSI and fintech sector. In 2021, BFSI became the largest segment of the Turkish market at ~25%. Majorel Turkey has existing domestic clients in full-service traditional banks, neobanks, credit cards, and payment processing apps, money transfer brands, shopping and prepaid voucher providers, and insurance companies.

Majorel plans further expansion in 2022, adding a new site in Diyarbakir in the country's Southeast and two others for nearshore services.

The main challenges in the domestic market are macroeconomic turbulence and hyperinflation, which complicate further business continuity and planning. For Majorel Turkey, this translates into more robust client contracts and greater resource flexibility via WAH. The company expects WAH to continue to positively impact employee attrition and hopes that broader career prospects in the larger organization will also strengthen its positioning in the local labor market. It also looks into utilizing the in-house digital learning and internal employee communication tools in other geographies.

Opportunity with digital natives

Another promising sector is startups and digital natives. Turkey's startup scene rapidly scales with several unicorns such as Getir and Trendyol. The company looks at Turkey as a center to support international and domestic new economy brands in line with the overall company approach. Already, over half of Majorel Turkey's revenues are in digitally native brands. It is also establishing the MajUp startup unit in Istanbul, intending to target the local startup ecosystem.

After several months of speculation, Konecta and Comdata announced their planned merger, creating a $2bn CX services provider that positions it in the global top 10. The deal is a strategic move to respond to the growing market demand for CX transformation capabilities, greater technology investments, and a multinational scale.

Konecta-Comdata combined

The merger, subject to approval by authorities, is expected in Q3 2022. It will create a combined company with ~130k employees in 24 countries, supporting ~30 languages. It will be headquartered in Madrid and will be chaired by the president of Konecta and led by the CEOs of both companies.

The new unit would have had over $2bn in revenues for 2021 and will become the market leader in Spain and Italy with a strong presence in LATAM domestic markets such as Mexico, Colombia, Brazil, Peru, Guatemala, Argentina and Chile. Through Comdata, it will also have a sizable presence in the French market. It will have over 500 large corporate clients in Europe and LATAM. In these markets, the joint company will have a significant role in telecom, BFSI, utilities and energy, the consumer goods sector, and several big tech and new economy global brands.

Particularly interesting is the Spanish domestic market, where Konecta has been aggressively expanding in the last few years, especially by acquiring four different Spanish companies, part of the Rockethall Group, in 2020.

Another dimension is the financial stability and required funding for growth expansion. In the case of Konecta and Comdata, the two private companies received investment from PE ICG.

Merging of tech, digital marketing, and CX consulting

The merger will allow the sharing and cross-sell of specific CX transformation capabilities. Some of these transformation assets include:

• Konecta’s software development factory in Medellín, Colombia, building CX automation, analytics, knowledge management, and collection tools
• Comdata’s CX consulting and operational redesign services unit and teams of development engineers. A strength is Comdata Digital’s established positioning in Italy and France
• Comdata’s innovation center in Milan and Konecta’s innovation hub in Madrid
• Comdata’s expertise in VOC and customer feedback management
• Konecta’s content and performance marketing and conversational commerce offerings via a dedicated digital agency, B12 in Spain.

Both companies also bring proprietary tool stacks such as Comdata’s C.Suite with a range of tools for intelligent back-office automation, predictive analytics engines, and remote visual assistance. Konecta adds its Uranet subsidiary in Brazil, which has its own platforms for customer journey orchestration, knowledge management, and contact center infrastructure.

Within the larger industry trend for CX clients prioritizing value-add across multiple transformation dimensions of outsourcing, these digital assets and resources are the key levers to deliver the next stage of contact center operations optimization, omnichannel maturity, and effective integration of machines for self-service and agent augmentation.

LATAM attracts attention

The growth of the regional CX services markets of Brazil, Chile, Peru, Colombia, and Mexico has attracted attention for the last several years. The three most recent sizable deals include:

• Intelcia’s acquisition of Spanish Unisono for an estimated €200m in 2021, adding operations in Chile and Colombia
• Webhelp’s deals for OneLinkBPO, adding ~14k employees in 17 contact centers in LATAM, and Dynamicall with ~4.5k employees, both in 2021.

Historically, LATAM was dominated by small local players and few multinational BPS providers, the latter often accepting low margins and sometimes loss-making contracts. The current appeal of the domestic markets in the region is more in line with the global shift to higher value, transformational deals.  

The other not-so-secret appeal of Mexico, Colombia, Central American countries, and the Caribbean states is that they are nearshore delivery locations for U.S. and Canada. It is fueled by, among other things, labor-cost pressures and talent shortage in onshore North America and the desire to relocate some offshore operations closer after the pandemic. Some of the latest examples include Transcom’s re-entry in Colombia, new sites opening in Trinidad and Tobago by Teleperformance, iQor, and Valenta BPO, and Itel’s acquisition of Emerge BPO with employees in Guyana and Honduras.

Along with this trend, the Konecta-Comdata merger offers a strong launching pad to target U.S. clients, offering a multi-country delivery model across the entire LATAM region at scale. For example, the new company will have 20 sites in Colombia and seven in Mexico. Colombia, in particular, has been a success story for the CX market as a whole, but also for Konecta and Comdata, where both companies place some of their most innovative programs.

The consolidation enables the new company to work with large clients across multiple delivery countries and end markets, a capability that is of rising importance for CX clients. The drivers behind this need are the desire to achieve consistency and quality of CX at a global level and the acceleration of borderless commerce such as Mercado Libre or hyperscalers such as Brazilian Nubank or Uruguayan dLocal.

New top 10 player

While the new entity branding is still unknown, some of the next steps are clearer. Konecta-Comdata will:

• Reinforce its presence in core markets
• Make a concerted push to utilize and cross-sell CX transformation products and services
• Target U.S. clients, including by establishing onshore delivery
• Likely pursue further M&A activity in 2023-2024.

In 2022, CX market M&A activity continues to accelerate, reaching a maturity stage similar to other BPS sectors and improving the overall quality, ideally placing it higher on the client’s partnership wishlist.

2021 was a good year for CX services

After the disruptive first nine months of 2020, the CX services market began a rapid recovery, which lasted throughout 2021. In fact, the global market rebounded strongly, with many vendors achieving record organic growth beyond their pre-pandemic levels.

The table below shows the annual revenues for publicly listed companies, their respective year-over-year expansion, and comparative growth percentage with caveats.

CX services revenues for FY 2021, ending 31^st December 2021

The trend is industry-wide, with both private vendors reporting strong growth (e.g., Alorica, Sitel) and public vendors not included in this table expanding revenues in the quarter ending in December 2021:

• Tech Mahinda with 34% y/y
• HGS with 20% y/y
• Ibex with 12.8% y/y
• Firstsource with 7.2% y/y.

Much of this growth stemmed from the improved economic environment with greater activity across verticals, including the heavily impacted travel and hospitality sector. An example contract in the space is Majorel taking over ~2.7k employees and centers from Booking.com across several markets.

Some of the headwinds behind the growth were temporary. For example, the end of 2021 saw a gradual ramp down of some projects such as COVID hotlines and track and trace activities. However, the growth direction is clear.

An example is the public sector, where part of the healthcare-related work converted into permanent business, such as HGS being awarded a two-year critical care contract by the U.K. Health Security Agency with a maximum value of £211m. Another indication of faster than expected CX growth in the historically sluggish public sector has been vendors' active merger and acquisition activity. Major deals include:

• Teleperformance acquisition of U.S. government BPS provider Senture for $400m
• TTEC's upcoming acquisition of part of Faneuil U.S. public sector business
• Tech Mahindra paying $62m for Activus Connect which has a strong presence in U.S. federal and state services support.

Across industries, the most significant growth engine continues to be the increased adoption of outsourced CX by clients to lower costs, address talent shortages, and meet the business and customer needs for digital transformation.

New economy players demand new CX outsourcing

Ecommerce, fintech, including crypto, media, entertainment, and gaming sectors, posted sizable growth in 2021. An example is Teleperformance, where the media, entertainment, and gaming sectors reached 9% of the business, up from 6% in 2020.

Vendors' responses have evolved from sector diversification (from their legacy telecom accounts) to their current aim of capturing the new client types with targeted sales efforts, custom offerings, and flexible commercial terms. Providers also increasingly complement their portfolio with specialized front-office services (e.g., CSS Corp's services for the mobility sector), analytics (e.g., WNS' Triange), and data training services (e.g., TELUS International).

The major investment focus is in CX consulting resources and capabilities, with the most notable dealbeing Concentrix’s acquisition of PK to form its Catalyst consulting and technology arm.

Another strategic investment is geographic expansion, such as Webhelp's sizable deals in LATAM or Majorel's in Turkey, which allows labor-arbitrage, but more importantly gives additional capacity in the narrowing onshore labor market. This globalization of delivery also supports the borderless nature of new economy clients, who, even at the early stage of development, look to internationalize their business.

These activities will continue with announced plans for acquisitions, additional consulting bench strength, new strategic partnerships, new multilingual sites, and the opening of CoEs and innovation studios.   

Impact of the war in Ukraine

In the first days of the human tragedy in Ukraine, the impact on CX services was limited to the few CX operations in the country. The unprecedented sanctions on Russia will likely make in-country delivery untenable, at least in the short term, with one multinational vendor having a meaningful local presence and mostly Russian national CXS providers affected. Some speculative effects through 2022 include:

• Ramp-up of programs in support of travel disruptions, with a slowdown or reverse of the travel and hospitality CX services recovery
• Ramp-up of KYC and regulatory compliance services in BFSI, including in front-office activities
• Increased security and fraud protection work
• Significant ramp-up of social media crisis management and online reputation management services
• Further inflation and labor cost increases
• Expansion of support for ecommerce and online shopping as consumers offset rising gas prices.

Positive signs during instability

Multiple vendors revised up their 2022 expectations to correspond with their improved performance, such as TaskUs looking to reach $1bn. This bullish vision relies on sustainable organic revenue increase and targeted acquisition deals. For example, TTEC aims to double its business in five years, and Teleperformance is planning to become a €10bn company by 2025. Within the constraints of the highly unpredictable global macro-economic situation, the CX services market will likely accelerate above the initial forecast of 5% CAAGR by 2025 (NelsonHall estimate).

Over the last several years, TTEC has been actively investing in EMEA and looking to bring its technology development and CX transformation services to the region. I spoke with Alistair Niederer, Senior VP, Head of Europe, Middle East & Africa, about the company's growth plans, what's happening in the CX services industry, and best practices for CX leaders.

What are the new core elements of CX transformation in 2022 and the next two years?

Alistair Niederer (AN): "The industry backdrop shows that customer satisfaction is going down. The offering and use of technology are going up, but we are not really solving the problem, and customers are not getting the promised customer experience. This trend has been going on for some time.

The first thing for service providers, client companies, and end-user customers is to find a way to remove business silos to achieve customer service targets. A lot of company decisions stand in the way of better customer satisfaction, for example, between IT and the Customer Service group and Finance. To succeed in achieving greater results in customer satisfaction, you need to be dealing with the CEO and senior leadership to ensure it gets into the boardroom.

The second task is to convince buyers they don't just need technology but also need to apply the right talent and follow the path of proper transformation. At TTEC, we provide people and technology that transform the customer experience.

The third area that I think is critical is that we need to show companies how to get the real voice of the customer. This is about making sure to use technology to listen to customers, then use analytics and insights to get the true voice of the customer. We've seen this not only improves customer loyalty but reduces costs too by easing frustrations around customers getting resolution.

But post-call survey response rates are dropping?

AN: Call disposition codes entered by agents and post-call surveys are not representative of customer sentiment. There is no reason why we shouldn't be listening to 100% of interactions in the digital age. The technology is available, and then it needs to be analyzed and interpreted. You must ask the customers, not in the moment of the transaction but when they have had time to reflect, "How do you feel this company is delivering?"

There is an element of process and customer expertise to generate these insights, right?

AN: It is always about the difference between analytics and insights. Insights are the key element that interprets what you find in real business situations. This is a difficult and expensive job, and two years of COVID-19 mean that companies could not invest in that when firefighting due to the huge demand caused by the pandemic was paramount - but going forward, hopefully, we will see that change. It is important that you get a true view of the customer's voice in combination with deploying the right channels. Otherwise, you are likely to see customer satisfaction going down.

Is this changing?

AN: Yes, companies understand they must get to TCO, understand their objective for customer service, then look at the channel shifts, the financial impact, and CSAT impact, and then deploy. The companies we are talking to understand the need for experts, who have done this before, who work in their vertical, and who can show results and show how they can blend the technology with people and processes.

What are the characteristics of these future-looking companies? Any specific sectors ahead of the others?

AN: We are seeing a lot of mid-market companies invest more in technology and self-service but they are not yet at the maturity point to understand all other tools they can use. Mid-tier companies across various industries are looking to interpret data to reduce their TCO and increase their CSAT. It is more about the people in the organization's leadership and not driven by any particular sector.

How is TTEC targeting these decision-makers?

AN: We target different personas. We are vertically focused and know the industry pain points or opportunity points, and different people in that organization have different aims. In retail, it could be fraud prevention, counterfeit management, issues in their supply chain, or issues with transitioning people from web to webchat. We target all personas in the business with propositions that answer typical problems such as cost decrease, revenue increase, and CSAT. It is about really understanding the sector and the challenges brands are facing and being able to show them a solution.

We recently undertook a fraud prevention project for an online retail client, which, during the COVID-19 pandemic, needed to shift to work-from-home and quickly expand its customer support, including monitoring transactions for fraudulent activities. TTEC identified the training, operations, and quality assurance candidates and engaged our global training network in the Philippines, which included certified trainers who would spearhead the WFH training initiative. We ran four parallel virtual batches to expedite training. As a result, all training batches went live as scheduled, and we succeeded in ramping up to 170 team members in 40 days during the lockdown. The remote training throughput came in at 91% compared to 88% in bricks-and-mortar.

What are your target verticals in EMEA?

AN: In EMEA, target companies are in the automotive, retail, public sector and local government, banking, financial services, and insurance sectors (where we focus on insurtech and fintech). Typically, it's the first time these companies have outsourced and we show them the TTEC Digital side of the business and how experience can be applied. We treat hypergrowth almost like a separate vertical.

Because we expanded so much in the digital sense, working with major technology players, who need systems integration and managed services, once they deploy the tool, they need people. TTEC can help identify who will serve the customer, where they will be, how they can help, whether voice or non-voice.

We also expand through referrals from our clients to build strategic account plans, helping our existing clients in the U.S. with their EMEA operations, such as multi-lingual services.

What is the opportunity to expand Avtex capabilities to EMEA?

AN: We expanded our work dramatically with technology partners who need CX transformation capabilities and systems integration. The Avtex acquisition means we now have strong relationships with Genesys and Microsoft. We already have a strong Cisco relationship, also with Pega and Salesforce. We are the largest global systems integrator for Genesys. Through our VoiceFoundry business, we invest heavily in EMEA in the AWS Connect. All these vendors are moving very strongly in the CX direction, and we are focused on moving to the cloud, where there is a huge, huge forward runway.

As an example, we have an embedded Genesys on-prem solution for a telecom in Ireland and we are working on migrating it to the cloud. Then there are the Cisco clients looking for us to manage their services and start giving them a pathway to the future. In another example, for a multinational automotive client based in the U.K., we provided a full CX digital transformation strategy by moving them to a multichannel self-service automation environment. This includes taking over their frontline staff and the technology, both customer and agent tools.

What is the fastest-growing service line in EMEA?

AN:  We are seeing demand for customer growth services rise exponentially and anything related to detecting and managing fraudulent situations. Governance and fraud are big, as brands are being forced to reassure customers on how secure their service is.

In automotive, TTEC is doing a lot of work in connected vehicles through our Percepta business, which has 200+ people in EMEA supporting auto retailers and manufacturers.

How is the agent profile changing to respond to these client needs and the new technology environment?

AN: As we look at the employment models for millennials and Gen Z's, we need to be sure that the ways we operate are comfortable to a digital native and that we use tools that they reasonably expect. They would expect there will be agent assistants, knowledge bases, and online solutions to the question that the customer has just asked. It is a big web of tools that allows the agent to do their job well, and customers to communicate easily through their channel of choice.

We have a tool called Humanify Neighborhood, a visual representation of the service floor to help your team find information and message. We are also working with ChatLingual and Google on machine language translation to enable language-agnostic communication in Neighborhood.

Neighborhood is an immersive, fully-virtualized engagement and collaboration workspace that gives agents access to all TTEC and client applications and connectivity in one hub. It’s the virtual world that most millennials are comfortable with for onboarding, training, retaining them, and helping them feel part of the community even if they are working from home.

What are the main industry challenges going forward?

AN: I would wrap this up by saying that by far, the biggest challenge going forward is making it easier for customers to contact them. We have seen digital transformation strategies accelerated across industries such as financial and retail. Any organisation today should be able to respond efficiently to queries digitally. The future is for people to self-serve comfortably and agents to engage at a higher level for complicated or distressing situations. For example, most of our two thousand TTEC EMEA employees are handling high-value transactions to deliver CX transformation that really delights customers.

This week, Concentrix announced its agreement to acquire PK, a U.S. CX design engineering firm, for ~$1.6bn from PE Carlyle Group. PK will add significant scale and IT capabilities in CX transformation and will enhance Concentrix’s play in the fast-growing intersection of cloud technology, automation and analytics assets, and digital customer journeys.

Digital and human assets at scale

PK has ~5k software engineers, mobile developers, data engineers and modelers, solution architects, functionality consultants, business analysts, product managers and industry specialists, UX/UI designers, and change managers. It is headquartered in Beaverton, Oregon, with a presence on the West Coast and the Midwest, and offshore delivery centers in India, Mexico, and Argentina.

The scale of technical and consulting resources considerably increases Concentrix’s existing Tigerspike consulting practice and diversifies its development hubs. A strong benefit is PK’s onshore U.S. presence, which is ~40% of the total workforce, boosting development capacity in a challenging labor market.

PK also brings a significant proprietary tech stack with ~200 IP assets, including in digital marketing, experience platforms, omnichannel, big data, cloud, analytics, and intelligent automation. It has partnerships with ~20 technology brands, including Adobe, Google, Salesforce, Microsoft, AWS, and Sitecore. 

This broad range of digital assets can address essential CX services clients’ needs for function-specific technology across all customer journey stages. For organizations, outsourced CX services are increasingly part of a broader digital transformation with accelerators in intelligent automation, cloud migration, digital channel enablement, employee experience, and enterprise modernization. For PK, the major business areas are strategy, design, and cloud engineering services at 21% of revenues, followed by marketing and CRM platforms at 18%, and data analytics and automation at ~15% each. The acquisition thus enables Concentrix to evolve from a consulting to a developer role in their CX transformation engagements; for example, as the CEO Chris Caldwell pointed out, to build data lakes for big data services and create back-end system integrations in automation.

Added revenue, higher margin

The deal is accretive to Concentrix, adding an expected $530m in revenues for the first 12 months of the transaction and ~$85m of adjusted EBITDA. The expected year-over-year growth for PK is above 20% for 2022, consistent with its pre-pandemic expansion rate. The double-digit growth of PK is boosted by the company’s focus on digital customer experience in areas such as new customer acquisition, speed to market, engagement, and retention. These are focus areas for enterprise clients as they navigate changing customer profiles and behaviors while facing unprecedented competition.

Concentrix looks to utilize the newly added technology and consulting capabilities both for further margin expansion and cross-sell opportunities to PK’s Fortune 250 client base. Two target verticals are technology and healthcare.

Concentrix’s plans to internationalize PK’s capabilities outside North America are likely to be mid-term and will require investments in new locations and synergies with existing CoE and innovation centers, especially Tigerspike’s.

Digital services – new growth engine for CXS players

Gradually, CX technology, design, and consulting levers become the foundation for all outsourced CX services programs. The overall CX services market is responding similarly to Concentrix by building and acquiring these capabilities more often. Prominent recent examples include:

• TTEC acquisition of Genesys and Microsoft integrator and technology developer Avtex
• TELUS International acquisitions of Lionbridge AI and later Playment for data training services
• Teleperformance acquisition of U.S. BPS provider Health Advocate
• Tech Mahindra acquisition of CX consulting firm Eventus Solutions.

This trend also drives consolidation at the top of the industry, exemplified by the Sitel>SYKES deal and the search for additional funding from the financial markets and investors (e.g., Majorel and TDCX IPOs). All these moves steadily stratify the leaders from the rest of the CX services providers.

Concentrix in 2022

PK is the first major expansion for Concentrix since its split from SYNNEX and highlights a clear drive towards value-add services beyond pure-play CX. The transaction is expected to close in Q1 2022 (ending Feb 28^th), bringing the company over $6bn in annual revenues. It will also put Concentrix in competition with technology providers such as Globant, EPAM, Endava, Thoughtworks and IT and BPS providers such as TCS, Wipro, Cognizant, Genpact, and Accenture. In these groups, however, market positioning and a consultative sales approach become even more important. A more structural challenge is when enterprises separate their technology and BPS suppliers to limit overexposure.

Among the significant opportunities for Concentrix from the deal is to cross-sell its existing transformation capabilities, for example, in VOC and customer feedback management and marketing support services. At this stage, Concentrix’s plans for 2022 include investments in boosting its sales operations.

Humble beginnings

Tech Mahindra and Vodafone New Zealand began their partnership in 2017 with a proof of concept for leveraging RPA in billing for one customer segment. Following its success, it evolved to a complete revamp of the telecom’s CX operating model using automation.

The two companies created a shared team to discover, perform RPA feasibility checks, justify, and implement automation interventions targeting repetitive manual tasks. Within Vodafone, the dedicated technical delivery unit sits outside the technology practice with the goal to build business cases and prioritize bots. It has specialized team members consisting of process and product experts with different domain knowledge such as billing and payments, provisioning, and collections. The Vodafone experts are paired with a Tech Mahindra business transformation team of engineers and RPA consultants.

The joint team has deployed ~100 bots, currently processing ~1.5m transactions annually for Vodafone NZ. Typically, these implementations take between two and three weeks and sit on top of existing systems without a need for platform modifications. The decision process involves the impacted business owner who advocates for the resulting cost savings to the organization. The team runs ongoing assessments of the automation outcomes with a dedicated automation framework to measure uptime, utilization, and resolution time; for example, on bots with a restricted time of operation. The team also evaluates the resulting new opportunities.

At the beginning of 2019, the team expanded in size and scope to address new back-office processes, handling additional transactions, and moving into more customer-facing processes such as technical support. It broadened its remit to other departments such as Wholesale and Infrastructure, Experience and Commercial, Enterprise, Finance, HR, and Legal.

Tackling the biggest customer pain points

One of Vodafone’s biggest call drivers is unplanned network outages for broadband consumer customers. Historically, the telecom relied on the customers to notify it about disruptions in their area, and it then coordinated with local internet provider Chorus, amending its IVR messages and communication. The Vodafone Automation team invented and implemented a solution (named UNO – Unplanned Network Outage) Notification Automation to direct monitoring of the supplier’s event server with automated checks to measure the impact on Vodafone customers, triggers to the CRM to identify them, and then connections to the network for automated SMS notifications during and after the outage. It also noted on the billing system to issue compensations. As a result, after three weeks at the end of 2019, Vodafone saw an 80-85% call reduction during broadband outages (there were typically 10k of these calls per month).

In another example, the team is looking at migrating customer accounts between its four CRM systems. This highly manual process involves multiple parent and children accounts which the agent must move for every customer request manually. The team is now deploying RPA to capture and transfer account data between the systems. The company’s objective is to move all customers by Q1 2022.

For enterprise billing, Vodafone and Tech Mahindra built a bot to pull information across a hierarchy of dozens, and sometimes hundreds, of billing accounts across three billing systems and present a summary. Before the automation, an employee could take up to five days to create the summary using various formats. The automation shortened the period to one hour and enforced standardization of the output with a more user-friendly design. The summary is now used by both the customers and Vodafone employees such as account managers, enterprise helpdesk, and collections.

Automation roadmap

Today, Tech Mahindra has CX service employees for Vodafone NZ onshore in Christchurch and in India, as well as a separate business service center migrating ~200k clients of the telecom from a legacy system stack.

It also has an offshore RPA management team responsible for the design, deployment, and 24x7 maintenance of the existing automation. A big part of the maintenance is adjusting to the upcoming platform and system changes. For example, in the billing account migration, the IT department is making upgrades and changes in parallel. Vodafone is also on the path to implementing Amazon Connect, which will benefit from automation to make task requests easily visible and usable by the frontline staff.

Next, Tech Mahindra and Vodafone RPA teams are focusing on database and API solutions; for example, integrating customer requests captured over different channels such as the mobile app or the web self-service portal in an omnichannel environment, including the contact center and the IVR.

Also planned is enhancing self-service; for example, for requesting refunds, changes to direct payments, other planned outages, and providing access to this information in the retail stores.

RPA as a standard solution

Tech Mahindra is looking to position its RPA practice in a proactive approach accepting the potential cannibalization of managed CX operations and committing to an overall cost reduction of 30% for Vodafone over the next three years. It aims to evolve from a UI to API approach with RPA deployments having a longer uptake and wider applications. For example, it is creating an RPA prioritization forum with Vodafone to establish the financial benefit for selected workstreams from a backlog of opportunities.

Earlier this summer, I spoke with Birendra Sen, Business Leader, Tech Mahindra Business Process Services, on the building blocks of customer experience transformation and lessons from the pandemic.

What are the main customer experience objectives for companies in 2021 and 2022?

Birendra Sen: The pandemic caused almost a reset of customer experience objectives for brands. It accelerated the need for digital to be pervasive: customer expectations have become digital and I don’t think they are going back.

All our clients are prioritizing scaling their operations as sales and support have rapidly moved online. The key is how to grow the operations without growing costs at the same pace while balancing experience objectives. The other objective is for businesses to adopt digital solutions for customers to be satisfied. Enterprises look for partners to assist them in this entire journey. Going forward, the goal is to ensure customer retention, satisfaction, and delight.

What are the main elements of this digital transformation, given that these changes are irreversible?

Birendra Sen: COVID-19 has been the Chief Digital Officer of sorts. The two facilitating factors have been the pervasive adoption of cloud infrastructure and the acceptance of work from anywhere. We quickly moved to work from anywhere as an integral building block of CX transformation.

Supporting all these shifts is crucial for brands to have the right aspirational purpose and enable it with customer journey design and CX consulting. All these elements have to come together for a brand to be relevant in post-pandemic times.

Where is this new CX vision typically residing in the organization?

Birendra Sen: We have started seeing in our enterprise clients the role of Chief Digital Officer becoming more common and at the same time new roles such as Chief Customer Experience Officer. The hope is that these new roles will unify the existing functions, break down traditional data silos, identify and prioritize opportunities to improve the CX, generate actionable insights quickly, and deliver hyper-personalization at scale. Most of these challenges will be the remit of whoever is the custodian of CX.

What proportion of organizations is going down this route?

Birendra Sen: Definitely more than half and more than a year ago. We are going to see a steady increase because our clients don’t have a choice. It is a game of relevance in a fast-moving current.

How is Tech Mahindra responding to these changes?

Birendra Sen: At Tech Mahindra, we try to bring together all the different parts of CX; for instance, we created an experience design services capability through acquisitions. Two years ago, we acquired BORN Group, Mad*Pow, and The BIO agency in the U.K. All these units form the fulcrum of our experience design services. Most recently we acquired a boutique CX consulting firm, Eventus Solutions out of Denver, with ~130 consultants with deep experience in providing CX transformation. Coupled with a technology-enabled BPS capability is an end-to-end CX playbook that allows us to execute the transformation. We apply continuous insights, automation, bots, conversational AI, and cloud migration, creating the right customer and agent experience with tools to manage the entire lifecycle.

I think this is the future of a provider like Tech Mahindra, to offer the full array of capabilities. Providers are at different stages of the maturity lifecycle, with some BPOs still operating with the same linear models. However, clients are ready to embrace the range of capabilities that Tech Mahindra offers.

BPS providers will play a pivotal role in offering these kinds of platforms and applications to enable data-driven insights using predictive analytics in operations and will run on a managed service model delivering outcomes. This model will be more common in the next 18 to 36 months, with an opportunity for providers to take a leading position.

This ability to bring together these capabilities is one of the reasons for Tech Mahindra to be a beneficiary, growing at 6 to 7 times compared to the industry average.

What are the limitations for enterprises to accelerate CX transformation?

Birendra Sen: There are several:

• Some are generic such as disaggregated customer journey, caused by internal or external setup such as operating in multiple service provider environments, with vendors offering point solutions without looking at the end state
• There is a need to innovate at a lower cost. The question is how to innovate in an agile and swift fashion with limited budgets
• Many organizations have grown off legacy infrastructure and need to modernize it
• Data maturity with the ability to generate insights quickly and leverage data
• Getting the ROI and identifying the high-impact CX opportunities in a fast-moving technology environment.

But most important is for organizations to have the right talent and skillset to drive this transformation itself.

What is the impact of a truly transformed CX on service delivery?

Birendra Sen: Work from anywhere is the new normal, with cloud computing being center stage and pay-as-you-go pricing. The pandemic accelerated the gig economy with greater flexibility and an expanded talent pool.

At Tech Mahindra, unless the client has specific requirements for office delivery, all our workforce is work from anywhere. The model offers convenience and flexibility, which is a critical factor in the war for talent. Along with that is the proliferation of different technology to amplify the agents in their work; for example, presenting information to the agent during the call, sentiment analysis for active intervention, and automating the aftercall work.  

Also, the ability to leverage multiple delivery locations will be critical. We are very active in APAC, including Australia, New Zealand, China, the Philippines, Malaysia, and we are also exploring Japan. In India, we are looking at tier 2 and 3 cities to broaden our footprint. In EMEA, we are also looking at the Saudi market to address the requirement for “Saudization” of services. We are continuing to expand in Eastern Europe and planning for South Africa.

In North America, we are growing in the U.S. with a new site in the greater Atlanta area. And in LATAM, we are investigating new delivery markets such as Colombia and Costa Rica.

What CX technology do you see gaining momentum?

Birendra Sen: We see traction around real-time analytics throughout the agent experience, automation for agent assists, unified agent desktop with RPA, and the use of AI for specific elements of the customer lifecycle; for example, our m.ai.a bot. We have an AI-based search called SEER which provides real-time insights, and it has been hugely popular – we embed it in every solution we have. Another area is the option to move to asynchronous messaging at scale. These technologies are leveraged already and are part of our tech stack. The key is to make them a constant component for every client with a view that CCaaS will be the majority of the market.

We develop this technology internally or in partnerships. We want Tech Mahindra to be the orchestrator of superior business outcomes – to bring together the different components of this tech stack to meet enterprises’ CX expectations.

What lessons do we want to keep from the last 18 months?

Birendra Sen: Virtual work from anywhere will stay; the requirement to create improved employee experience to effectively manage the talent, such as health and wellness; a renewed focus on data security and privacy, and Business Continuity Planning will be extremely important.

I would also add an increased willingness by enterprises to do business, to deliver CX in a different way.

2020 triggered multiple large-scale engagements between public sector bodies and CX services providers, with contract activity growing 12.5% year-over-year to reach $4.7bn globally this year (NelsonHall estimate). Outsourcing companies provided healthcare information lines, patient track and trace, unemployment and social benefits hotlines, and loan administration for national, regional, and municipal governments.

I spoke with Fabien Adnet, Head of Webhelp France Public Sector practice, on the company's response to the CX services opportunities in the government sector and the long-term trends for public CX services outsourcing.

Webhelp France public sector

Historically, Webhelp France combined the public and utilities sector practice, starting with support for state-owned energy clients around 2005. In March 2021, Webhelp created a new division dedicated to the public sector in the country. Today, it has ~500 FTEs in 11 delivery centers in nine cities across France, supporting a dozen public sector clients.

The decision to create a dedicated business unit came as an outcome from a shared think tank process with an external consulting agency, Altermind. Webhelp and the agency benchmarked the European CX public sector best practices and met with several national and local government representatives to listen to their needs and challenges.  

The new practice combines all offerings of the service portfolio with experience of different group divisions. For the sector, Webhelp provides general inquiries, information hotlines, customer care, technical support and remote troubleshooting, payment processing, collection management, retention, and back-office processing. It also develops and implements digital tools such as digital payments.

For example, for a transport body, Webhelp has provided support across the customer journey since 2013. It processes L1 and L2 queries about online subscriptions, commercial information, management of contracts and after-sales support (including handling claims and complaints), processes back-office activities such as management of customer data, and interaction with transport firms and external agencies. It also conducts outbound calls, collections, and runs marketing campaigns. Webhelp ramps up the program during two-month peak times, from 30 to 280 FTEs. It manages 24/7 with 90% SLA adherence, 48-hour TAT for back-office tasks, and 24-hour set-up for outbound campaigns.

The company's social media unit, Netino by Webhelp, also has a strong footprint in the French public sector and supports various entities such as ministries, museums, and public campaigns with content management and moderation. An example client is the public information service Service d'information du Gouvernement (SIG). Netino also publishes reports on trends in online hate speech to help authorities identify and categorize online threat messages.

French government's drive towards transformation

In 2017, the French government launched Action Publique 2022, a program aimed at digitizing citizen services to achieve higher quality CX, modernize working environments for the staff, and lower costs. It aims to measure citizen satisfaction with the services; for example, follow-ups over the phone for tax return submissions.

Webhelp and Altermind created a white paper to assess the BPS outsourcing opportunities in support of this transformation. The paper estimated the potential savings of public spending at around €25bn.

Webhelp also published Baromèter, a quarterly report measuring progress at the department level, based on a survey of national and local authorities. The 2020 edition covered 315 elected officials, 172 agents by Webhelp and another provider, and 1k users. The results highlighted three majors challenges to invest in:

• Quality of the services delivered to citizens
• Improvement of customer agents' work environment
• Management of public spending.

In this context of transformation needs, Webhelp defined three strategic tracks based on:

• Dematerialization and digital transformation
• Performance satisfaction
• Placing citizens at the heart of the service experience.

Challenges in purchasing

As with other countries, the French government closely regulates public services outsourcing with multiple restrictive policies and constraints, such as delivery locations in the respective region or municipality. For example, Webhelp has only one French public client with some of the work delivered from offshore. Often, state organizations lack the procurement expertise to purchase CX services specifically. Also, price is usually the main selection decision criterion, leading to contracts with small and local contact centers.

At a higher level, French public agencies have different parts of the customer journeys sitting with different units or departments, resulting in separate contact centers. In addition, in most French public entities, chatbots and customer-facing automation are deployed disparately; for example, in the early stages of email automation.

The pandemic as a catalyst for transformation in government outsourcing

Following multiple lockdowns and disruptions of face-to-face services, public organizations want to enable multichannel experience with mobile apps and social media. A further driver is the level of unpredicted volumes and seasonal traffic. Webhelp is employing its consulting unit Gobeyond Partners to redesign the experience to unify and centralize the CX, starting with phone and face-to-face delivery (the latter remaining the main channel for most citizens). It also assists with the development of organizational training and staff upskilling; for example, government offices where representatives help citizens complete the administrative procedure on a device. Webhelp also uses its digital agency MyStudioFactory to develop interfaces and apps.

An example implementation is for a French agency looking to support the digitization of service registration of citizens. The agency has to deal with strong seasonality trends exacerbated by the pandemic and wanted to enable technical support for online services. Webhelp established three onshore sites and ~150 employees, beginning with simple customer care calls. It trained the agents in incoming and outgoing workflows such as online registration assistance. It redesigned the WFM using part-time and pooling models. It also developed ticketing tools for technical escalations. It handles ~10k calls per month and ~20k callbacks from web interactions. Webhelp achieved ~90% service quality, ~93% control adherence, and ~95% CSAT.

Other factors in public sector outsourcing

Increasingly, the French authorities focus their attention on impact sourcing and green policies to develop ESG (Environmental, Social, and Governance) specific actions. These include people focus such as recruitment of unemployed workers and benefits recipients, and diversity and minority hiring. For environmental protection, a new French law is currently in discussion to require factoring of the environmental impact in outsourcing. Here, one of the benefits for CX services providers is the shift to work-at-home, with Webhelp currently maintaining 50-60% of its French workforce on remote working. It plans to incorporate 20-25% WAH in all its public sector programs. Webhelp is responding by incorporating environmental, social, and corporate governance KPIs into RFPs, including carbon footprint and effects on the local community.

Another trend in France is greater decentralization of services to the regions and cities. Webhelp's Public Sector practice is devising a commercial approach focused on proximity, and is evangelizing solutions by sub-segment.

Webhelp's French Public Sector practice is planning to share its best practices with other public sector units across target Webhelp markets to benefit from great experiences and establish benchmarks in public sector CX.

From wine to pharmacy sales, gamification is quickly becoming a tool for marketers to attract and retain customers in a subscription economy. Yet at its core, gamification is a leading method to teach, retrain, and engage employees. We recently spoke with Teleperformance about their gamification practice and the benefits of implementing comprehensive game-based learning.

Game-based learning methodology

Teleperformance began its active investments in gamification in 2018 under its High Touch, High Tech strategy, starting with research on intrinsic motivation. It launched TP Training Lab in Colombia to build a learning methodology targeted towards the younger employee demographic. At the core of the approach are the techniques of learning by doing, learner autonomy, and interaction with others. It used participatory teaching methods and contextualized the information using video games. Teleperformance estimates that more than 90% of its agents play video games and are users of digital content.

It builds the training program, beginning with new hire training needs assessment, followed by an analysis of customer contact drivers, KPIs, and performance data for the client in order to analyze the curriculum and training content across time and themes. Then it designs the agenda with specific tools for each scenario such as simulations, immersive experience, and micro-learning, as follows:

• Experience learning using Constructor, digital showrooms, and app emulators
• Data learning using Pareto analysis, contribution graphs, and playbooks
• Reference learning using proprietary tools and platforms: TP Book, TP Simulation, and TP Arcade.

Once agents learn the material, Teleperformance measures the knowledge acquisition, retention rates and training effectiveness for each part of the curriculum. The company also has a proprietary platform for agents to locate information independently.

Experience learning with custom tools

Constructor is a Minecraft environment created by the lab with the client and customized by delivery region, where the trainee can practice specific tasks in a process. An example is to maintain battery charging in a renewable energy-powered house to teach the concept of solar energy. The learning targets can be independent decision-making or teamwork for multiplayer setups.

For example, Teleperformance had two groups of trainees with and without Minecraft-based training for a retention program. While both groups met their dollar retention value and support percentage targets in the first 30 days of operation, the one using the gamified training achieved a 15% higher retention rate with a larger trainee group.

Over six to eight weeks, TP Training Lab builds a custom digital showroom with personalized experiences on Unreal Engine for video games. The trainee explores a virtual environment and interacts with products and devices; for example, in a technical support scenario for network connectivity. Within the digital showroom, the gamer can also interact with rich media such as animation and video. Teleperformance has Digital Showroom implementations in home automation, connected homes, manufacturing, and the restaurant business.

Performance gamification with TP Gamification

TP Gamification is a SaaS platform that uses game, social, and reputation mechanics to motivate and engage employees. It turns the daily KPI targets to game achievements for the agents to earn points, move between levels, and win rewards. It has real-time dashboards tracking individual performance and different levels of access for agents, team leaders, and business managers. It bucketizes employees by performance quartiles to segment the targets. The company decides on targets such as schedule adherence, FCR, and quality score for each game. The platform can link with knowledge bases and e-learning databases. The leaderboards are broadcast on the operation floors. Teleperformance has ~10k daily active users, with typical implementations at LOB level.

An example deployment in 2020 is for a U.K. multinational investment bank with ~114 FTEs working from home and delivering customer support over the phone and back-office activities. Teleperformance identified employee behavior gaps by mining data across unified communications, WFM, quality and survey tools. Then it designed games focused on improved productivity and knowledge by awarding points, badges, and quests. It also introduced a reward system to recognize top performers. The game setup has custom features such as the ability for team leaders to challenge agents, run competitions, assign and publish custom quizzes. As a result, over an eight-week period, the program reduced “not ready” and on-hold time, decreased AHT by 11%, increased critical accuracy score in the back-office to 100% from low 90%s, and improved productivity by 22%.

In another TP Gamification roll out in a sales program for an Indian banking client, the program achieved 70% improvement in talk time and 54% improvement in the number of sales.

Gamification at scale

With ~380k employees globally, Teleperformance looked to develop quick mass scale gamification for general skill development and knowledge checks. Partnering with an external provider, it launched Training Arcade, a gaming portal and game authoring tool with eight games such as Jump, Scramble, or Jeopardy! Games can be played individually or as a team. It democratizes game creation, publishing, and sharing of a new game in five minutes. Teleperformance has 150 arcade game creators and between January and May 2021 made over 2.5k games with 647k game sessions played by 118k employees.

Example deployments include:

• A CPG brand in Spain looking to stimulate participation, make knowledge checks more interesting, and improve, revise and recall knowledge outside training hours. TP created questions based on the most difficult topics and ones with the lowest quality scores. TP Arcade improved the average quality score by 12% between January and February 2021
• A U.K. travel client aiming to engage and leverage several learning concepts, reinforce critical topics, and improve speed to competency. The TP Arcade games with questions based on analysis of errors and common queries on the floor improved accuracy by ~4% in 2021.

An essential element in the learning approach

With the increased complexity of customer interactions, expansion into products and services ecosystems, and the addition of new generation employees with new learning expectations, Teleperformance is pinning gamification as an essential element in its learning approach.

It has already started deploying its gamified learning environments on VDI and running the TP Gamification leaderboards on individual screens to cater to work-at-home and remote workers. It continues to collect data from the tools and feedback from creators to optimize game choice and add new functionality such as challenges to Training Arcade. It will also integrate more learning items such as video. It plans to create journeys with different skillsets and levels as part of the learning path in Training Arcade. Next, it will add experience points for employees to purchase in-game and real-world prizes.

Sitel’s announcement on 18 June to enter an agreement to acquire all outstanding shares of SYKES stock further consolidates the global CX services leaders. It also highlights the market shift to large-scale, multinational, and financially strong players able to make the needed investments in consulting, CX technology, and automation. Here is a short analysis of the deal.

The largest in a series of CX M&A deals

The all-cash transaction valued at approximately $2.2bn is the largest CX services deal since Concentrix acquired Convergys in 2018, but it follows several major deals in the last 18 months:

• TELUS International purchase of Lionbridge AI for $935m
• TELUS International earlier expansion with Competence Call Center for $1bn
• Teleperformance acquisition of Health Advocate for $690m
• TTEC acquisition of Avtex for $490m
• Private equity investment in Everise BPO for $450m.

It also follows several public listings by CX services companies, such as the spin-offs of Concentrix and TELUS International and the IPOs of IBEX and TaskUs.

In addition, several smaller acquisitions in CX consulting, design, marketing, automation, and new geo and consolidations in Australia, Benelux, and Russia point to increased centralization with fewer strategic players – a trend that has been long overdue in CX services where the top 10 brands form less than 30% of the market. The combined Sitel-SYKES company will have ~$4bn revenues in 2021.

As the market moves to more complex and more value-add CX, the requirements for providers increase exponentially. This change limits the pool of eligible CXS experts with robust analytics and an automation tech ecosystem, cloud infrastructure partnerships and experience, and end-to-end talent models and platforms.      

Sitel gains delivery expansion and WAH IP

An established player with a strong footprint in the U.S., Europe, and the Philippines, SYKES offers several capabilities to Sitel.

First is its mature work-at-home (WAH) offering with IP and sizable presence even before 2020, not only in the U.S. but also in selected European markets. In Q1 2021, it had 77% of its European workforce at WAH. SYKES has an established footprint in Germany and the Nordics, adding capacity in these highly sought-after languages. The delivery networks of both companies are mostly complementary, reaching a combined ~155k employees in 39 countries and ~50 languages. Sitel will likely modify some of the newly acquired assets to its hybrid on-site and WAH MAXhub model (for example, in Romania). It has already opened MAXhub in Barranquilla, Colombia, for ~1k people, converted its site in Romainville, France, and is launching one in Athens, Greece.

Foray into healthcare

While Sitel does not comment on client and industry overlap, an industry where SYKES directly brings benefits is U.S. healthcare payer. The healthcare sector is one of the fastest-growing segments for SYKES, for example, expanding 51% organically y/y in Q1 2021. It formed ~6% of SYKES’ $1.7bn revenues in 2020.

Another sizable industry for SYKES is financial services, approximately a third of the business, growing throughout 2020 and 18% y/y in Q1 2021.

Post-transaction, Sitel will have over 600 clients.

Buying specialized capabilities

Similar to the historic acquisition of its WAH expertise, SYKES has been an active acquisitor of specialized capabilities. The last purchase was at the end of 2020, when it added U.S. personal finance digital media company The Penny Hoarder (TPH) for $102.5m.

Other significant additions have been RPA integrator and managed automation firm Symphony Ventures, tuck-in marketing and design agency deals, self-service content developer, and lead generation, inbound sales, and digital marketing company Clearlink. Over the years, SYKES had varying degrees of success in cross-selling and internationalizing these capabilities. With its pedigree in replicating its digital transformation offerings from the French market to the U.S., the opportunity now is for Sitel to unify SYKES solutions with the Sitel EXP+ platform. 

The main standout is Clearlink, with its ML-based model and tools for integrated online and contact center sales and marketing. Another is social media services in content moderation and online brand protection, insights, and proactive customer engagement, a cornerstone of SYKES’ digital transformation approach.

Next for Sitel

At this stage, Sitel cannot disclose specifics around future branding of the acquired logos, leadership changes, or the next steps in the consolidation roadmap. The deal is expected to close in the second half of 2021.

Expect some delivery network rationalization, accelerated integration of SYKES WAH platforms and expertise, and concerted efforts in utilizing its RPA resources.

For the broader CX market, all indications are for other sizable deals in 2021.

While the CX services industry is anxiously following the situation in India and its surge of COVID-19 cases, the start of 2021 mainly brought positive news. In this blog, I look at the strong performance across the industry and the extent to which the current growth is sustainable.

2021’s record start

The three months ending 31^st March 2021 was a record quarter for many CX services players. Multiple vendors had double-digit revenue growth, double-digit organic revenue growth, and improved margins.

Much of the growth came from pandemic-related business in the public sector, where vendors provided unemployment support, COVID-19 loan processing, test and trace services, health information helplines, vaccination appointment scheduling and booking. But rapid growth came across sectors, from digitally native and ecommerce companies to healthcare, technology, entertainment, and gaming. Of particular note is the BFSI segment which expanded for all providers.   

Across service lines, customer care, new customer onboarding, and content moderation services all saw significant growth. To take one industry-specific example, volume increases in the banking sector have reflected pent-up demand for mortgage processing.

Better margins in Q1 2021, following the big hit last year, came as a result of lower attrition and improved productivity in WAH and during lockdowns.

Tailwind factors

Part of the story is the economic recovery in the U.S., Western Europe, AN&Z, and China, but some drivers are exclusively industry-specific. In a January blog, I discussed the positive trends for 2021 in CX services. Tailwind factors include greater client demand to transform their CX operations, growth of digital-native companies, and the changing relationship between customers and brands...

Vendor goals for the year are to capture a greater number of first-time outsourcers and expand share with existing clients who realized the benefits of risk diversification and the challenges of running a hybrid on-site and at-home customer service delivery structure.

... Five months later, the experience economy is top of mind for companies, and digital-first CX creates interaction volumes across many and new channels simultaneously. It also drives a need to redesign CX across all services and products. This switch brings challenges around technology, internal processes, and the overall customer journey. The convenience of everything being done from home forced clients to transform their business model, leaving little bandwidth to deliver high-quality support and digital sales, creating opportunities for CX services outsourcing and driving enterprises to partner with vendors with disruptive capabilities.

Keeping the momentum

An immediate question for the rest of the year is how successful CX vendors will convert this temporary business surge into permanent deals. The signs are promising because of the above-mentioned digital shift and external factors impacting talent sourcing and management.

First, the labor markets are becoming more challenging, either because of temporary changes such as the unemployment benefits in the U.S. or permanent ones such as the minimum wage increase in Brazil. As attrition returns to normal levels, clients struggle to acquire talent, relying more on their vendors.

Second, employee expectations for more flexible and convenient work models such as WAH benefit large organizations such as CX services providers with experience in recruiting, onboarding, training, and engaging talent virtually. 

Multidimensional rebalancing act

The CX services industry is undergoing several rebalancing trends at the same time. On one side is vendor diversification of the client base, leaving fewer accounts, especially telecom, with more than 10% business share. The second focuses on promising sectors with hypergrowth paths such as online entertainment, fintech, and healthcare. From another angle is the aim to offer a broader spectrum of BPS to tackle organization-wide transformation challenges. A prime example is an aggressive push for cloud migration of contact center operations and the partnership of all large players with Amazon Connect.

Vendors are reacting with active M&A strategies such as:

• Teleperformance’s acquisition of Health Advocate to expand U.S. healthcare offerings and capabilities
• TELUS International’s purchase of Lionbridge AI for data annotation
• Tech Mahindra’s deal for Eventus Solutions to strengthen CX consulting capabilities
• TTEC’s acquisition of Genesys and Microsoft integrator and contact center technology developer Avtex.

In parallel, companies from Europe and LATAM such as Atento, Webhelp, Transcom, and Majorel are targeting the U.S. market more actively, looking to benefit from the internationalization of businesses.  

Finally, the rationalizing of onshore facility portfolios is beginning to pick up as vendors want to rebalance on-site with WAH delivery.

Sustaining top-line growth

I will conclude the same way as in January: external factors continue to be the most significant unknown in the CX services industry and can reverse the strong market impetus. These factors can be negative, such as the uneven pace of recovery and vaccine access around the world such as India and continued headwinds in travel and hospitality; or they can be positive, such as the potential tax reduction in the Philippines and faster than expected economy bounce-back in core markets.

The market indications are for a strong second quarter and upwardly revised annual results. In the medium term, CX modernization will continue to drive market demand while good execution will differentiate between temporary and sustainable success.  

2020 further accelerated transformative trends in the mobility space. Changes include electric vehicle adoption and the shift to mobility as a service and mobility on demand. Auto manufacturers, car rental firms, ridesharing providers, and public transport operations are all responding to this new market and, in support, the underlying model is changing from product to service to customer experience.

In this blog I look at CSS Corp’s new focus on the mobility industry with a dedicated practice.

CSS Corp SMART Mobility to capture sector opportunities

In 2020, CSS Corp created a dedicated mobility practice, SMART (Secure Micromobility Autonomous Ridesharing Telematics) Mobility. It comprises the company’s customer care, technical support, and inbound and outbound premium support services with digital engineering offerings in analytics and insights, automation with cognitive bots and virtual assistants, agent dashboards, and custom app development.

CSS Corp also brought its geospatial services into the SMART Mobility practice. Here, it delivers spatial analytics and insights, data services such as collation and modeling in support of autonomous driving, as well as mapping and content development, enrichment, and maintenance for navigation and 3D maps.

CSS Corp won a key contract in 2020 with a multinational auto OEM and a luxury vehicle brand. The majority of the current work for sector clients is in L2 and L3 support, where it handles complex cases and white-glove support for the premium customer base. It also takes over special projects around vehicle buybacks and recalls. Typically, these customer interactions are longer calls at around 10-15 minutes, or even complex cases over several days involving contacts with owners, dealers, and service technicians. It also has sector clients in auto and truck parts manufacturing, logistics and transport software, roadside assistance, and ridesharing.

Subsegment variations with differences in recovery paths

The multiple verticals within mobility had different impacts during the pandemic and they are recovering at different speeds. For example, the slow pick-up of business travel negatively affects the car rental space, while ridesharing shifted to food and essentials delivery. In new vehicle sales, the differentiation is between markets and vehicle types; for example, the growth in China auto sales, the increase in power, sports, and recreational vehicles in the U.S., and the 54% share of electric in new car sales in Norway.

For traditional OEMs, the strategic focus on margin expansion drives the need for premium CX, with one-to-one customer care, personalized and contextual presales, sale, and post-sale interactions; and, in some cases, offering luxury experience across the customer journey.

Automotive resembling the high-tech vertical

Over the last few years, IoT and changing customer preferences propelled high-tech brands to support the entire connected home ecosystem and add direct-to-consumer sales. Similarly, automotive companies need more advanced technical support infotainment systems and are exploring sales without franchise dealers, following the Tesla model.

In this environment, CSS Corp developed the Agent 360 dashboard, a single analytics dashboard to help agents navigate customer interactions. Agent 360 includes agent analytics, API integration to automate the information for recalled vehicles, service appointment scheduling, connected vehicle data for self-diagnostics, knowledge base, and SOPs and agent manuals and guides. It has the functionality to segment the owner and vehicle.

Creating enhanced CX for an auto brand with Agent 360

For the multinational OEM with sales in over 190 countries and several thousand dealerships, CSS Corp led a consultative approach with a CX transformation roadmap and process optimization design. The client wanted support to handle complex interactions in the buyback, Lemon Law action, and VIP customers while facing volume spikes and data challenges.

CSS Corp trained its team in the specific brand and automotive standards and activated intelligent routing based on skillsets. It deployed pre-built automotive workflows in the Agent 360 dashboard with customer context, omnichannel engagement, recall integration, connected vehicle data, single integrated KB with articles pulled from multiple sources such as parts manufacturers, dealers, and insurance providers. It also implemented intelligent virtual assistants to assist agents.

It also enabled a mobile assistant with visual IVR, the customer support app and integrated sales offers and performance analytics within the app. It delivers analytics and insights on customers, customer journeys, and operational information based on VIN and vehicle usage details. Further, it provides geospatial engineering services in data management and LIDAR mapping for autonomous driving.

As a result, over 18 months, CSS Corp is on course to deliver ~80% reduction in basic inquiries through automation, reducing call abandon rate by 25%, improving AHT by 30%, and automating 100% of the case allocation.

Challenging established BPO players

As a newcomer in the automotive space, CSS Corp is building up its sector client footprint on the back of recent wins, particularly the luxury segment with nearshore delivery. It targets high-level support opportunities with concierge services, where the live agent is enhanced by the unified desktop and virtual assistants and bots for quicker and accurate resolution. It also looks to take over industry-specific processes such as automation of back-office admin processes. A challenge here is that automotive players often operate under strict regional legal frameworks such as recall rules and expect CX services providers to have an extensive industry background and strong security capability. For the latter, CSS Corp plans to utilize its security experience in B2B network support.

CSS Corp is also looking to address needs for CX infrastructure modernization, such as assisting OEMs in moving from their legacy and homegrown CRM systems to cloud-enabled platforms and its Agent 360 unified desktop. One such opportunity is with a tier 1 auto parts manufacturer. Another area is building the virtual assistant and self-service with live agent triage in an OEM client’s mobile app.

2020 was a very disruptive year for CX services, marked by supply problems in the first half and a massive shift to WAH. It also proved to clients the key role of their CX services suppliers and the major benefits of outsourcing. The year started several trends and accelerate multiple others which will shape a dynamic 2021 for the industry. Here are five CX services trends for 2021.

1. Growth Returns

The Q3 results of CX services providers showed a mixed picture of record year-over-year growth (e.g., SYKES) and continued contraction (e.g., Atento) with the unifying impact of depressed margins due to the significant costs of WAH transition. Many of the variations stem from the ongoing restructuring of the individual players or their target markets' economic performance. Companies are moderately bullish in their guidance for 2021, with more aggressive targets rare, such as TTEC's ~15% y/y increase.

Overall expectations are positive, with NelsonHall predicting ~5% y/y expansion for 2021. Vendor goals for the year are to capture a greater number of first-time outsourcers and expand share with existing clients who realized the benefits of risk diversification and the challenges of running a hybrid on-site and at-home customer service delivery structure.

Further evidence of a strong future is the increased investment in the industry by private equity (for example, Everise and several smaller ones) and the public offerings such as the public spin-off of Concentrix from 1^st December and IBEX's IPO in August. 2021 will see more of this activity, starting with the listing of TELUS International.

2. Multilayer Delivery Networks Become Standard

The long-predicted scaling of work-at-home underwent a quantum leap last year, with vendors shifting 50%-75%-100% of their workforce to WAH. With the health and safety situation hopefully improved, 2021 will see less of a reverse than a recalibration of the delivery format. Certain destinations such as India and the Philippines will see greater diversifications to tier 2 and 3 cities; others such as China will see almost full return to the office, while still others in Eastern Europe, North Africa, and LATAM will maintain a smaller proportion of employees at home.

Both clients and CX services suppliers understand the need for a combination of on-site and remote workers from a BCP perspective and gain from a whole set of advantages, including greater flexibility in addressing demand uncertainty, access to new talent and higher employee satisfaction, and better productivity. This model is not a straightforward split of employee numbers between workplace types, but a more complex network combining hub and spoke delivery and gig and flexible work platforms such as the strongly performing Concentrix Solv. This network's success is underpinned by an ecosystem of tools and frameworks for effective remote employee recruitment, training, and engagement.

3. Relationship Balance Between Consumers and Brands Shifts

Two of the engines for CX services providers in 2020 have been content moderation work and asynchronous messaging interactions. Both are products of a changing relationship between consumers and brands. Factors such as the shift of consumer habits, including the rise of ethical and environmentally conscious buying, cross-sector benchmarks in personalization and convenience, and the megaphone of social media, push towards a more agile CX where these elements are actively incorporated. CX services leaders in the space have a range of offerings to support the need for one-to-many communication, proactive intervention, brand protection, automation, and self-service; for example, Concentrix's play in messaging or HGS' capabilities in social media crisis management.

The question for the next two to three years is how early consumer interactions will migrate to direct messaging and social channels and how quickly businesses can build these pipelines for marketing, sales, and support. In turn, these digital-only customer journeys require CX services providers to offer integrated services to a broader range of buyers within client organizations. 

4. CX Services Providers Go Beyond CX Services

The turbocharged move to remote work and online marketing, sales, and support in 2020 forces organizations to realign their CX services, marketing, and IT services suppliers. A mature ‘work from anywhere' model and a true digital CX require cloud-enabled contact center infrastructure, a world-class security practice, automation and ML development capabilities (and partnerships), analytics expertise for continuous insights, and deep domain and sub-process knowledge.

CX services vendors reacted in their 2020 M&A moves by vertically integrating, adding technical capability, or building vertical expertise. Some of the examples include:

• Teleperformance's acquisition of U.S. Health Advocate
• TELUS International purchase of data training and annotation services company Lionbridge AI
• Majorel's acquisition in the French banking sector for account switching
• Konecta's deals in marketing
• TTEC's additions in Amazon Connect integration and RPA.

2021 will see more of the same targeted deals and a few consolidations as in the Australian example between Probe Group and Stellar. As BPS providers create expertise to meet the more complex CX needs of businesses, smaller and local players will be squeezed out of the advanced market.

5. Key External Factors Demand Attention

2021 will continue to put a premium on external factors affecting CX services. Some of the obvious ones are disruptions in client industries, recession in core markets, and high unemployment. In parallel, CX services providers and clients will need to factor in potential issues with regional and global repercussions:

• Policy changes such as the new U.S. administration's position on offshoring and corporate taxation
• Data barriers and freedom of movement restrictions from the U.K. & EU Brexit trade deal
• Regulatory changes such as EU's PSD2 or social media user-content moderation
• Uncertainty around major events such as the Tokyo Olympics
• Data breaches and security threats
• Natural disasters and environmental issues.

In 2021, these risk multipliers will favor providers with scale and financial backing, delivery presence across continents, and client sector diversification.

How Should CX Services Leaders Prepare?

Vendors should focus on digitally integrated BPS with vertical expertise, an ecosystem of own and third-party technology accelerators, and new GTM targeting a broader array of stakeholders. They also need to reinvent their talent end-to-end lifecycle management for the workforce of tomorrow.  

How Should CX Services Clients Prepare?

Clients should prioritize CX services vendors that are ready to operate in highly fluid client markets and support a dynamic, demanding, and empowered customer.  

In a year when the U.S. stock market pushed to a record high, the U.K. had its worst recession in 300 years, and entire sectors shut down for weeks, business planning has become less reliable while demand fluctuates unexpectedly and inconsistently. The supporting industry of CX services is directly impacted on two fronts:

• Challenges with supply, where the traditional multi-hundred seat production floor cannot operate as usual
• Highly fluid client needs to ramp up and down in shorter time spans while cutting budgets and limiting capital investments.

Gig workers and flexible contractors are steadily becoming an alternative to managing this variability. Starting in early 2020, WNS developed a detailed gig approach, part of its EXPIRIUS CX delivery framework, including IP for digitally-enabled agent life cycle management. EXPIRIUS is WNS’ CX model integrating human-assisted design and domain expertise with AI-driven conversational insights and consulting-led CX strategies. Its gig operating approach includes workforce optimization to predict volumes for flexible hiring.

Workforce Engagement for Gig Work

The gig model offers workers the ability to work when they can or want, operate as independent contractors for part-time or short-term projects, and work remotely from home for most programs. The three biggest challenges are security and data protection, performance management on remote workstations, and distributed employee engagement. WNS tackles each of these issues with a set of proprietary and third-party instruments:

• Security, with two factor authentication, biometric verification with facial confirmation, system and desktop monitoring, video observation, analytics for violation detection, and other tracking features. The company uses a third-party employee monitoring tool, customizing the system to match the BPS requirements. For example, it trained the image recognition facility to distinguish electronic devices from other objects in the webcam’s viewing angle and enabled features such as imposter detection
• Performance management, with a proprietary real-time back-office floor management tool which tracks agent activity on productive and non-productive applications. It has already deployed the tool across ~3k employees. Another WNS tool is a team collaboration platform. Further, the company has changed its performance management practice to include quicker and more frequent reviews, and uses NICE for QA
• Engagement, where WNS enabled digital agent recruitment with an enterprise recruitment system (SmartRecruiters), remote onboarding (ClickBoarding), and virtual training classrooms. The company has its own AI-based digital learning and knowledge platform, GLINT, with micro-learning modules, analytics, and gamification.

To enhance its distributed workforce engagement, WNS created a mobile app, hYve, with an engagement bot. The bot answers employees’ HR and training questions, allows escalation of concerns anonymously, and runs ESAT surveys. It proactively asks the employee about motivation, health, support from team leaders, and knowledge resources.

Benefits of Gig Work

Its scalability is particularly useful for highly seasonal demand in sectors such as retail and travel. The WAH element and flexibility also expand the addressable talent pool in terms of geographies such as tier 3 cities in India, demographics such as pensioners, and niche skillsets across domains. For example, for a North American full-service airline with a typical volume peak in the last three months of the year, WNS designed a workforce model for IRROPS and baggage queries. It recruited part-time and temporary staff with a minimum daily login of 4.5 hours, onboarded and trained them in two weeks, and scaled the existing ~70 FTEs to a ~130 member team during the short peak season.

Before the gig model, one of the difficulties of effectively substituting full-time experienced agents was the complexity of interactions and required skillsets. WNS deals with this challenge by decoupling processes to individual tasks or by separating  workflows at the customer end to streamline the overall handling. An example is a U.K. catalog retailer for which COVID-19 impacts increased inbound sales call volumes dramatically, resulting in ~20k calls lost per day. It needed skilled resources to handle sales orders. WNS redesigned the client IVR tree to create a separate route for new order calls and staffed it with an hourly workforce who handled the surge volumes and improved the order management and dispatch.

Finally, from WNS’ experience with gig work, the typical reduction in cost-to-serve is between 10-20% compared to permanent, full-time workers. An example is a U.K. utility company which has a quarter of its weekly calls on Monday alone, with intraday peaks over four hours.  WNS supports the account from South Africa. During the COVID-19 pandemic, limited employees are allowed in the office, so WNS developed WAH operations with onboarding, training, and nesting for ~300 full-time and gig agents. The significant savings come from both balancing demand with capacity and the reduction of infrastructure costs.

Being Relevant to the Emerging Workforce

Blighted by perennial problems with attrition, and low desirability as a career, the CX services industry faces a new workforce of Gen-Zers who increasingly perceive full-time, 9 to 5 jobs as outdated. The flexible gig model offers one solution, and future-looking providers are actively adopting it.

WNS incorporates the gig model as an essential lever in its EXPIRIUS framework, expecting to reach a quarter of the agent population in the long term. It is already exploring opportunities in Europe to service multilingual programs and plans expansion in India, where the government has recently eased guidelines regarding compliances around WAH for the IT/BPM sector. The company is particularly bullish on the back of its current implementations and scalable digital infrastructure, its pipeline of client demand for BCP, responding to clients’ business variability, and the advantages of its domain focus in a few key verticals. It is now investing in consistent agent experience and knowledge by building an SME bot to integrate with its learning platform.

In July 2020, Majorel acquired French platform developer ISILIS, specialists in bank account switching. In this blog, I look at the new capability, the company’s focus on the banking and financial services sector, and the evolving CX services needs of EU banks.

Specialist in bank account portability

ISILIS was founded in 2004 initially to support non-regulated account switching processes between French banks and later developed a banking mobility platform. The ISILIS platform facilitates bank connections and information exchanges with issuers. Banks subscribe to the mobility service and when end users want to switch, they visit their new bank branch or register online for digital banks. Then a bank employee enters data on the white-labeled platform and the customer signs an agreement.

Using the French open protocol SEPAmail Aigue-Marine (SEPA = Single Euro Payments Area), the platform collects the last 13 months’ of historical transaction records from the initial bank based on the BIC and a unique IBAN identifier. It processes the information through a transaction database and transfers it to the recipient bank. ISILIS ensures the agreed file formats and specifications, follows the mandated timelines, and handles exceptions and non-responding banks. Finally, it informs the issuers’ bank, which notifies its issuers to update their database, move deposit amounts between the institutions, set up new standing orders, and update the customer’s payment partners such as energy, insurance, telecom, media, and public entities. The company also has a legacy portability process for unregulated accounts where it directly contacts the issuers. This legacy process is applicable for self-employed, sole traders, and in cases of divorce, a person switches from a joint to an individual account.

Today, ~80% of French banks are connected to ISILIS, including traditional and digital ones. The company supports its ~130 clients with ~30 employees in Paris and Laval, France.

Majorel’s BFSI expertise in German speaking markets

For Majorel, the acquisition adds a new, growing banking market in Europe and allows it to utilize its expertise in account portability from the German speaking markets. Majorel has a dedicated subsidiary for the service, called Kontowechsel24, which offers similar services with a proprietary digital banking platform with the following added functionalities:

• Single sign-on
• Integration with online and mobile banking
• eSignature
• Automatic recognition of payment partners
• Option for e-vouchers to incentivize switches
• Video chat module.

It also performs OCR/ICR recognition for the identification of payment partners from paper documents. Kontowechsel has ~20 clients with ~10k daily users. An example implementation is for the Austrian digital bank99, a subsidiary of Austrian Post. Majorel integrated the digital account-switching platform with bank99’s online system and mobile app and provides technical support, order processing, and other back-office tasks. Between April and June 2020, bank99 accepted more than 30k new customers with the majority using the switching service, and expects to maintain an average of ~150 migrations per day.

Expanding EU regulations

EU Directive 2014/92/EU for access to payment accounts and payment account switching for consumers is gradually being adopted in the member states: in Germany in 2016 with the ZKG act, in Austria the same year with Verbraucherzahlungskontogesetz, and in France with a Macron law from 2017. Some of the potential developments under review at the moment include cross-border account switching and the EU-wide portability of IBAN numbers.

Under a separate directive PSD2 for electronic payment services, EU banks need to improve the level of transparency for fees; for example, through independent comparability websites.

BFSI focus

Majorel is actively focusing on the BFSI sectors, which form ~17% of the business. It currently has over 45 clients in the sector, including traditional banks, direct banks, B2B banks, credit card issuers and credit institutions, as well as fintech, insurance companies and mobile banks. The ISILIS acquisition expands the portfolio of services. The company supports banks for inheritance beneficiaries to stop recurring transfers and direct debits. Since 2018, it developed an IBAN validation and fraud prevention service.

With growing population mobility in the EU and the rise of digital banks, Majorel targets the CX needs of banks from account onboarding and KYC to loan processing, upsell and cross-sell, payment support, and collections. For the French market with an estimated 6% customer adoption of banking portability, in 2021, ISILIS plans to automate its process for self-employed account holders using the know-how from Majorel Germany where the unregulated segment represents 80% of the market. It aims to reach double-digit adoption in France. In addition to activating its full Kontowechsel24 offers in France, the company is looking at Spain and Italy, which have less mature account-switching markets and have opportunities for multi-account management.

Majorel also wants to utilize the PSD2 capability for account mobility and centralized management in insurance coverage, and is currently piloting the insurance portfolio evaluation tool in Germany.

Ages ago, in the pre-COVID-19, pre-U.S. election, pre-BLM protest times of 2019, the challenges of online reputation management (ORM) seemed to be brand-specific. For example, how Boeing could restore customer confidence in the 737 MAX aircraft. Today, in the second half of 2020, navigating social media during a crisis is top of mind for most brand managers and PR departments across industries and markets. The onslaught of economic, political, and social changes is pushing corporations to build real-time crisis management capability proactively, often starting with online, as users are firmly embedded in the digital world.

HGS crisis command center

In Q2 2020, HGS created a 24x7 social media crisis command center in Mumbai, India, with 200 social media analysts, of which ~90% are working from home. The team consists of four types of roles: customer care, joy and revenue generation, issues and escalations, and reporting and insights. The center addressed an exponential client demand for online crisis moderation during the pandemic. The team monitors in real-time owned and earned media for its social media clients, covering mentions of the brand, key executives, employee related conversations, and competitor posts. The last one helps identify and create alerts for emerging market-wide issues or industry problems before they affect the client.

It has algorithms monitoring thresholds for topics reaching viral status or beginning to trend in a viral pattern. The team follows the topic through its full course, captures the context, and alerts the brand. It also trains the ML algorithms with new keywords to listen to and calibrate the required thresholds; for example, 1k interactions in the first 15 minutes.

In March 2020, HGS reached out proactively to its clients to jointly plan investments in social media resources and licenses. It defined the required analytics and insights to drive decision making by brand managers and marketers. Further, it prepared workflows to distribute content such as ethical and HR questions. For example, HGS is working with a cosmetics company to enable additional features on Sprinklr to assign content more quickly. It also developed region-specific approaches, modifying the communication strategy by state according to regional policies and regulations. For example, for the local pages of a multinational restaurant chain, HGS customized and localized the message for ~15k outlets.

COVID-19 crisis management

For COVID-19 crisis management and other massive crises, HGS established a set of alternative processes to monitor and prioritize the most important conversations for the client. For example, for its retail clients in the U.S., HGS tracked delayed or missing orders in the peak of the lockdowns and hot topics such as toilet paper shortage. HGS retail clients have witnessed volumes double since March and remain high due to COVID-19 -related issues, ongoing social unrest, and mask policies. By having the right playbook and technologies in place, HGS was able to maintain KPIs throughout these crises.

It can also deprioritize less important content, such as positive sentiment, to ensure that the brand is not celebrating in times of suffering. It can silence these conversations in the agent feed and relocate resources between customer care and reputation management. As a result, the command center can focus on niche but crucial areas such as shared online employee concerns or questions around job security or health and safety. For example, for a multinational big box retail chain, HGS harnessed the social media data and pinpointed issues by location. It then escalated supply chain disruptions or customer dissatisfaction with policy changes such as the number of people inside the store and restrictions on purchased items. The social agent will jump on a negative post and offer alternatives such as online orders and store pickups. In terms of KPIs, HGS measured standard ones such as volume, sentiment shared, and speed of response; but during the critical times, it increased the frequency of reporting from one to four times per day.

Another element is scaling up the team. For a national retail warehouse chain which had its offshore centers in the Philippines under lockdown, HGS tripled the size of the social team in the U.S. and India to respond to the excess volumes deflected from the phone channel. It also extended the hours of operations of social media care to 24x7.

Key success factors

From its experience, HGS defines several key success factors in social media crisis management:

• Quickly shifting the conversation focus
• Agility in rerouting conversation threads and scaling resources
• Remaining responsive in the face of the additional volumes
• Utilizing technology such as self-service bots and autoreplies
• Increasing the review frequency of the conversation drivers.

Expanding role of social

In the long run, HGS expects the additional social volume to remain as customers shift to digital channels. For its clients, the company continues to support primarily Facebook and Twitter for customer care. However, for the listening and monitoring functions, it is adding new channels such as YouTube, TikTok, and review sites.

HGS is also witnessing a pent-up demand by companies to understand customer behavior and digital conversation better when relating to their brand. Clients are increasingly approaching HGS to help design and implement a social media crisis management process coming out of the pandemic status quo. In the second half of 2020, HGS is launching new ORM programs in the U.S., U.K., and India for financial services, automotive, healthcare, and retail.

It is working with its platform partners such as Sprinklr to enable ML-based smarter workflows. It is also looking into opportunities to promote sales through earned media and reactive social customer care; for example, for beauty clients.

In Q4, NelsonHall is publishing a major Social Media CX Services market analysis report covering support, sales, ORM, content moderation, and trust and safety services.

The impacts of the pandemic and lockdowns are creating winners and losers in terms of BPS delivery geos. Determining factors include a geo’s ability to manage the health and safety of workers, its success in minimizing economic disruption, and the flexibility of its labor regulators.

For Egypt, the unfolding effects of COVID-19 on front-office BPS may be too early to judge, but so far the country has been praised by both vendors and clients. This strong performance comes at a time of revival for Egypt BPS, and this makes it an attractive multilingual hub offering lower costs and scale of talent for nearshore delivery to Europe and the Gulf countries.

Potential for significant market growth

Egypt’s Information Technology Industry Development Agency (ITIDA) estimates the country’s BPS market at $3.5bn for 2020, growing at 17% y/y, with ~186k employees in the industry. Egypt offers HRO, F&A, procurement, and other mid-office activities, but ~70% of the market is CX services. The majority of the CX services are for international markets in Europe, the Middle East, Africa, North America, and Asia, and approximately a third of the delivery centers serve three or more regions.  

The country is now established as a multilingual destination offering bilingual Arabic and English, and also French, German, Spanish, Italian, Turkish, Russian, Hebrew, Greek, and other languages. For example, there is a Greek speaking minority, a German university in Cairo, and a Russian university in Badr City. Annually, ~90k university students graduate with English language alone. For Arabic, the Egyptian spoken dialect is considered neutral and the most widely understood in the region, with a significant Egyptian diaspora in the Middle East.

With a fully-loaded cost of $10-12 per hour, CX services in Egypt come in at 20-25% lower than Eastern Europe, 15% lower than Morocco, and 15-20% lower than South Africa, but ~10% higher than India. The average contact center agent monthly salary is in the range of 4k to 8k Egyptian Pounds ($250-$500) and increases to $500-$1000 for highly sought languages such as German. The Egyptian Pound is slowly appreciating against the U.S. dollar but remains below 2017 levels and is comparatively stable as an emerging market currency.

Lastly, Cairo is two hours ahead of the U.K. (one in the summer), the same time zone as Athens and Bucharest.

Increased interest by BPS firms

Interest in the Egyptian BPS and ITS delivery market is not new, with major captive and outsourced centers starting as early as 2001. The country hosts development and shared services centers from Microsoft, IBM, Vodafone, Orange, Dell, HSBC, Uber, Oracle, and Nestlé, among others. In 2019, Amazon, Etisalat, and PepsiCo also entered the market with their own BPS centers.

Currently, major CX services players include Majorel, Teleperformance, Concentrix, Sutherland, SYKES, and most recently Transcom and TTEC, both entering in 2020. Egypt also has a number of domestic and pan-African players such as Xceed, Raya Contact Center, iSON Xperiences, and Etisal International; and smaller centers such as Centro Global Solutions, icall Outsourcing, and FGS. The largest footprints exceed 7k employees and spread across the cities of Cairo, Alexandria, Asyut, and Beni Suef.

Domestic and international opportunities: the example of Xceed

Xceed is a fully-owned subsidiary of Telecom Egypt and started operating in 2001. It offers back-office CX services, inbound and outbound customer care, technical support, sales, and collections over voice, chat, and email. In 2018, it started offering F&A, RPO, and payroll outsourcing. It currently has ~10k seats, including sites in Morocco and Mauritius, and ~18k employees supporting European markets, UAE, Saudi Arabia, Qatar, Bahrain, Kuwait, U.S., and Canada. Its clients are in the following sectors: telecom and ISP, high-tech, real estate, food delivery, restaurant chains, travel, energy and utilities, and the domestic public sector. In Egypt, Xceed supports the ambulance services, a government complaint line, the tourist visa website, Egypt’s National Services, and the customer service for utilities in the New Urban Authority.

Overall, the company manages nine languages, including Russian and Portuguese, from seven sites in Cairo and upper Egypt. These centers are typically in dedicated technology parks such as the Smart Village on the outskirts of the capital and Maadi Contact Center Park in Cairo.

COVID-19 challenges and overcoming security reputation

In response to COVID-19, the Egyptian CX services industry, which had experience in BCP from the 2011 political disruption in the country, reverted to WAH, operating under lockdowns and night curfew. In April, ITIDA sampled 19 companies, 11 of which migrated 100% of their staff to WAH, with the remaining eight migrating 50-90%. For example, Xceed used its in-house remote applications and VPN to transfer 75-80% of the employees to home work. For those clients whose infrastructure did not allow distributed workplaces, Xceed rented small locations such as hotels, where the agents could live and work in social bubbles. The company also began supporting the national virus hotline.

The slowdown of the travel industry in the country also freed multilingual resources and opened up new demographic segments such as middle-aged agents speaking French. Xceed tapped into these resources and enabled digital recruitment, starting in March. For the company, WAH created other benefits such as lower attrition and higher adoption of split shifts to handle higher volumes with the same employees.

At the national level, the pandemic triggered the acceleration of the government service digitization plan for 2020, which targets automation of registries and public services for real estate, supply, and traffic documentation services such as driving license renewals.

Positive outlook

The Egyptian government is expanding the national infrastructure, opening four technology parks outside the capital in cities such as Sadat, and is currently developing the purpose-built new administrative capital where Xceed plans to open a new site. It is increasing the average internet speed of the country, investing $1.6bn, and trying to reach 20 Mbps by the end of 2020.

In parallel, the government passed a new data protection law, aligned closely with the regulatory framework of GDPR, improving the support position for EU.

To expand the talent pool, the Egyptian Ministry of Communications and Information Technology is running programs to train students in digital skills as well as campaigns with information on career development in BPS. ITIDA is organizing other talent development initiatives such as a software engineering competence center for engineer certification, and is implementing a national program, Next Technology Leaders, to train 10k people in ML, DL, and AI, with around 5.3k trainees already graduated.

The agency is also fine-tuning its incentive scheme, and from June is allowing companies to benefit from financial support for telecom operating costs as well as training costs for their existing employees (as opposed to new hires only).

For Xceed, by the end of 2020, the company expects to return more employees to the centers and keep ~20-30% in WAH. In terms of growth opportunities, the company is seeing continued interest from the Middle East, returning demand from the U.K., and new interest from Continental Europe and the U.S.

If there is a silver lining to the pandemic with respect to CX services, it is the changing perception of clients and providers on the pace of digital transformation and the role of frontline staff. In a conversation with Ritesh Idnani, President of Tech Mahindra, we discuss the company’s vision for what the Future of Work looks like and some of the latest trends and technologies in the CX world.

Ivan Kotzev (IK): COVID-19 accelerated the adoption of advanced operational models, most notably Work-At-Home (WAH). From your perspective, what is the role of WAH in the long term?

Ritesh Idnani (RI): We think ‘Work from Anywhere’ is going to be the operating model in the long term and that means, as an organization, we have to prepare ourselves for that kind of fungibility where an employee can work in any setting, whether in an office, at home, or in a virtual setup. We are starting to ready ourselves with the new operating model and ensuring that 100% of our employee base works in that direction.

We can classify our workforce going forward into 3 categories:

• Work that, due to regulatory compliance, customer privacy, data and information security, might need to be executed in an office environment
• Work packets that will usually be executed outside the office
• A hybrid model where people may work some days in a physical setting and somedays in a virtual setting.

We have put together a post-COVID-19 playbook that sets the roadmap towards ‘Work from Anywhere’ and joins the dots for the work categories with the delivery formats.

IK: In this ‘Work from Anywhere’ model, is the main benefit BCP or are there additional benefits?

RI: The initial results go far beyond BCP and risk mitigation. For example, in some of our low-cost locations such as India and the Philippines, the average employee commute is 1.5 to 2 hours each way, and that creates stress and causes people to be less than fully productive. The ‘Work from Anywhere’ model offers not only increased productivity but also allows expanding the talent pool to tap into a new workforce; for example, women in India who pull out from the workforce after marriage. We have this demographic which is highly educated and highly qualified and can now continue to be part of the workforce.

As a consequence of ‘Work from Anywhere’ you could also start thinking of a crowdsourced economy. We are making efforts and initiatives to break our work even further into smaller tasks that some people can take on easily. We have acquired a company, Zen3, that does a lot on the crowdsourcing front (in IT services), and we are taking advantage of the skillsets of the workers in the gig economy to extend it to the business process side.

IK: Are you seeing an environment where we completely recruit, train, coach, and manage a workforce without ever meeting them face-to-face?

RI: We already had a few examples pre-COVID-19, but this only accelerated in the last 12 weeks. We have added new logos and expanded our existing client relationships, and a lot of these transitions have happened virtually. These range from virtual recruitment to virtual onboarding, training, to running a virtual operation. It encompasses the entire lifecycle. We have an entire suite of technology tools in support of virtual operations with no physical interaction at all. For example, with a current security services client for whom we are running a technical assisted support center, we have ramped up the transition from an incumbent vendor who was not able to deliver WAH to four global locations in the Bay Area, Fargo, ND, Philippines and India, in the past eight weeks. All this was done virtually.

IK: How are we going to address the challenge of security and what is Tech Mahindra doing here?

RI: There are solutions we have put in place to enable ‘Work from Anywhere.’ This allows us to check what the employee is working on, to see that they are logged on for a consistent period, and what kind of access they have. We do record the agent screens and review them as a part of the audit. But the business controls, access to data, etc., are done at the  Virtual Desktop Infrastructure (VDI) level so the opportunity for fraud is minimal from the outset.

In addition, we have fully redundant global VDI, multi-factor authentication, a dedicated agent operating system with encrypted connection to all work-related data, and client networks. Data always resides within the VDI environment. Further, we ensure that there is a lock-down of workstations; users cannot toggle from the VDI. We also disable printing, faxing, connectivity to any peripheral device, and also there is no ability to copy data inside the VDI and paste outside. These are just some of the measures that we have ensured to address the challenge of security.

We will have to look very closely at the local norms and regulations around this space and it is another variable in the balance as we are implementing ‘Work from Anywhere.’

IK: Will this impact Tech Mahindra’s location strategy?

RI: The current environment will create opportunities for employees, making location secondary. But at the same time, with the advent of ‘Work from Anywhere’ technology, clients will look at combinations of onshore, nearshore, offshore versus only offshore delivery. It will also result in work being done closer to the customer. I do expect from our standpoint that it will accelerate our delivery in primary geographies such as the U.S., Canada, U.K., Australia, and Continental Europe.

The typical large campus of 5k-10k-15k people in a single location will make way for a distributed nodal system across the globe, which allows you to expand the talent pool and have a critical mass of 300-400 people in a single place. Also, reaching out to tier 2 and tier 3 cities will be a lot easier, particularly for pieces of work that can be done remotely.

IK: Do you see these changes as a push for clients to proactively drive their adoption of digital?

RI: Those companies that were already ahead on the digital maturity curve are able to withstand the impact of COVID-19 a lot better. Organizations that were slower tripped over themselves. I have seen a few examples of organizations that could not enable WAH and have lost a competitive advantage in the last quarter.

At the same time, in the last eight to 12 weeks we have accomplished two to three years of digital transformation. Clients have moved faster than they ever have, because they did not have a choice. The current environment is about market share and mind share driving the pace and urgency of clients.

IK: What are the unifying characteristics of the early adopters?

RI: Even before COVID-19, for the last three to five years the early adopters have been thinking about their customer journeys. They had a view on a frictionless experience and seamless interaction across channels. They have put in place a lot of the elements from a foundation standpoint, so that they could take advantage of newer technologies. They have been able to mature their business and engagement models a lot faster than most.

The other thing that helped the leaders is the culture and open mindset to succeed in the digital ecosystem. They recognized going digital requires an agile workforce, bias towards testing and learning, and decentralized business decision-making.

IK: What is the role of CX services providers in this digital transformation path?

RI: In multiple ways. For example, we are using resources from the recently acquired BORN agency to help increase the pace of creative commerce and content adoption. We are working with a lot of brands to deliver a direct-to-consumer play, enable brand experience from a service design standpoint, ensure a frictionless journey across channels, implement e-commerce platforms to shift their business online, and potentially create marketplaces to enable them to reach their end customers directly.

These are some of the areas where we are working closely with brands at the front-end of the cycle to improve their overall CX. Tech Mahindra’s BPS group can help them implement digital channels, revamp their process, and launch ‘Work from Anywhere.’

The COVID-19 crisis is forcing a rethink of the CX delivery model with large contact centers. The fundamental question is how to maintain people’s health and safety in an open floor space with hundreds of seats, continuous face-to-face interactions, shared equipment, and 24x7 operations. For many outsourcing clients, the pandemic was the trigger to adopt work-at-home (WAH) for the first time. Two months later, these forced WAH pilots have their first results, and the emerging picture of a future CX work environment marks several changes.

In this post, I look at how Teleperformance is addressing the challenges of the pandemic and the next stages of their CX delivery plan in EMEA.

The pandemic is also a crisis of communication

The magnitude and speed of the pandemic and the resulting lockdowns at national, regional, and city level prompted Teleperformance to migrate 75% of its ~70k frontline workforce in EMEA to WAH in four weeks. It also reorganized the remaining contact centers under new health and safety policies. For each EMEA country, Teleperformance worked with clients to adapt the schedule to the local regulations such as curfews in Albania, Egypt, Lebanon, Madagascar, and lockdowns in Tunisia.

One of the less discussed challenges of the crisis is a general lack of reliable information and direction. Based on the experience of its Chinese operations, in March, Teleperformance issued global guidelines and a health and safety dashboard and began measuring regularly. It also organized bulletin boards, weekly newsletters, and daily CEO chats in every country. The health and safety guidelines included detailed cleaning protocols, sanitization of workstations and equipment before each work shift, temperature checks, where legally allowed, physical distance markers in offices and recreational spaces, availability of disinfectants and gels, closure of some common areas such as training and breakrooms, and opening of isolation rooms at every site. In some locations, the company also has an onsite physician to check symptoms and prescribe quarantining of individuals and teams. The company also procured six million face masks for its employees.

For the migration to WAH, Teleperformance prepared e-learning modules for the agents on working from home with recommendations on setting up the workspace, time management, and the importance of taking breaks. It also included tips on separating work and personal environments. For the managers, the modules focused on remote management, with team and one-on-one communication and some additional skills such as technical support.

(Un)expected effects of the WAH transition

For Teleperformance, the transitioning of processes to the WAH environment brought some expected and unexpected benefits. Not surprisingly, it had a massive drop in employee attrition rates, but it also experienced a 50% lower absenteeism even compared to before the pandemic. While the AHT increased, productivity improved and NPS and CSAT scores remained stable. The company is now running an employee survey to evaluate sentiment and satisfaction with the transition, and gauge interest in continuing to work from home. The initial feedback points to a large proportion of agents willing to go back to the call centers.

One of the biggest challenges of WAH delivery is engaging employees and alignment with the supported brand. Teleperformance EMEA benefited from moving experienced agents with classroom training and already immersed in the brand culture and values.

The company HR is addressing this distancing with several initiatives. It started virtual Zumba, yoga, and cooking classes, weekly happy hours, and lunch breaks with the CEO. New hire recruitment moved completely online and over video, bringing a higher attendance rate. It is also piloting fully virtual classroom training in Germany using Blackboard.

In May, it unified these capabilities under Teleperformance cloud campus with virtual talent acquisition, training, development, coaching, team building, learning, client interaction, quality control, and data security management, as well as social interaction for employees.

The future of CX is a mix of brick-and-mortar and WAH

Clients reacted with different speeds and agility to the crisis, with proactive organizations partnering with Teleperformance to quickly activate BCP and move agents and equipment to the home in the early days of March. Other clients, for example in BFSI, delayed decisions until mid-April, often awaiting inputs from their internal IT functions.

With the easing of movement and lockdown restrictions in certain European countries, CX services clients are opening discussions with Teleperformance to return to brick-and-mortar operations. However, this return faces far more questions than the initial WAH shift. For example, how to organize the contact center under social distancing rules, plus the question of whether the additional costs make it sustainable. Teleperformance EMEA calculated that a full return to physical centers with social distancing requires 2.5x its existing office space. The other big risk is the medical uncertainty and potential new wave of infections later in the year.

Regardless of any medical developments, the future of CX delivery will be a combination of on-site and remote working. Teleperformance is now planning for the partial return to brick-and-mortar operations with logistics steps, infrastructure changes, and floor changes such as workstation separators to comply with social distancing guidelines. 

The new hybrid model is a must-have for risk mitigation, but it also opens opportunities for multilingual delivery in EMEA with cross-border access to talent. Teleperformance’s experience shows certain markets such as Egypt and Romania have a strong appetite and capability for WAH. The crisis also shifts other aspects of the industry, such as sales, where Teleperformance EMEA adopted virtual pitches and site visits.   

Managing a distributed workforce entails a redesign of many CX operational processes, from different ways of organizing training content and teaching, to the recruitment of candidates specially selected to work remotely. The main objective now is negotiating with clients to reach a healthy balance of brick-and-mortar and WAH.

In a new social distancing world, most traditional face-to-face customer service tasks have had to digitize quickly. This trend is not new, but for some processes, it required the adoption of emerging technology and different operational models. A prime example is customer premise visits by engineers for equipment installations, parts replacement, and technical support. For several years, CX services vendors have worked on visual support and remote diagnostics, and are now looking to Augmented Reality (AR) to lift technical support to the next level. CSS Corp has already developed its proprietary technology in the space and is now working on AR deployments.

KYRA: AR-enabled CX & enterprise support

CSS Corp sees AR-enabled CX and support across three use cases:

• Visual self-service, where the AR provides visual guidance to users on product features and interactive how-to user manuals
• AR integrated virtual assistant, which automates the user engagement with intelligent bots using AR projections and overlay
• Remote agent assistance to resolve user issues from a distance with AR markers and overlays.

The company has a pilot of AR visual self-service for a U.S. multinational telecom equipment manufacturer with products in the fixed, wireless, and IP technology space. The AR has step-by-step visual user guides and in-depth installation manuals, component descriptions, component usage instructions, and remote visual troubleshooting. The implementation has an integrated virtual assistant.

The user or field engineer scans a QR code on the packaging leading to the AR support web page downloading an app on their smartphone. She or he then asks the bot for a virtual user guide. The customer focuses their mobile camera on the equipment or error message, and the AR support interface identifies the product model and downloads the correct user guides and knowledge articles. It displays the components and narrates within the AR environment. The virtual assistant explains how to set up and use the components using animations and AR markers. In addition to the spoken and written instructions, it allows image scrolling and freezing and control with voice. The bot then reads the device screen to determine if the installation is successful and guides the user to enter configuration commands.

If the initial installation fails, the computer vision identifies the error message, and the bot starts interacting with the user via chat or messenger to troubleshoot the issue and guide the self-service steps within the AR. If the issue still cannot be resolved, the bot escalates to a live agent who initiates a secure AR session on the support app by sending a link. The transfer displays to the agent the transcript and completed steps and auto-creates a ticket and case history in the client CRM.

For the client, the initial results of the pilot in 2020 show 23% faster issue resolutions for AR supported interactions and 38% AHT reduction with the automation. For 20% of the volumes, the realized end-to-end automation efficiencies reached 94%.

Challenges to the spread of AR

Historically, AR adoption for remote collaboration stumbled due to a lack of high network bandwidth and speed. The proliferation of fiber optic broadband and the rollout of 5G will eventually resolve this challenge. In the meantime, CSS Corp’s KYRA uses cloud-based lightweight AR technology.

Another common concern for all two-way video chat remains security and privacy protection. CSS Corp addresses this issue by masking to the live agent all sensitive user information such as passwords and blurring outside objects. It also ensures that the tools are PCI DSS compliant.

Lastly, customers are often reluctant to download another app, and its usage sharply decreases after the initial setup. Here, CSS Corp works with clients to offer additional incentives and features in the app to drive regular user engagement.  It also provides the SMS/email links to user, to start the remote assistance with the agent.

KYRA: AR-optimized field operations

Other opportunities for KYRA, which CSS Corp actively explores, are enabling field engineers with virtual technical assistance in a live environment for remote installations, deployments, repair, and maintenance. An example POC is for a telecom and media brand which struggles with high-volume dispatches for no-fault cases and low fix rate, requiring additional visits in close to a quarter of cases. CSS Corp’s AR proposal includes remote issue resolution, improved due diligence before the dispatch, and remote consultation for the field engineers. It estimates to eliminate 90% of the no-fault dispatches and reduced unscheduled truck rolls by ~25%, resulting in cost savings, improved customer satisfaction, and freeing up technicians’ time.

In addition to managed services, the AR and app technology, the company trains the ML algorithms with real-life drawings and component libraries, and the algorithm annotates issues for self-learning. The company builds process logic and rules and expands the knowledge base articles with rich media content.

AR Future

The future options before AR and VR use in CX are significant, not only because of the growth of AR-capable smartphones, but also the increase of use cases such as testing designs and trying products virtually. The current lockdown has triggered companies to move from innovating to adopting AR. For example, IKEA, a pioneer with its 2013 AR catalog, acquired AR startup Geomagical Labs in April, and British online retailer ASOS launched its own AR tool in May.

CSS Corp believes the technology is an excellent enhancement for remote expert collaboration to guide local technicians by projecting problem resolution for quicker handoff. For communication and information system clients, it integrated the AR with its managed services platform Contelli, mapping clients’ infrastructure and applications.

AR is also applicable for engineer education, with CSS Corp already training its distributed workforce operating in WAH mode with AR simulated environment; for example, for out-of-scope devices.

CSS Corp is now identifying client segments in consumer electronics, networking, and connected environments suitable for AR-boosted technical support.

One of the memes during the COVID-19 crisis asks ‘who led the digital transformation of your company?’ with the options of ‘the CEO’, ‘the CTO’, or ‘the virus’. The global emergency has severely impacted CX, forcing many organizations to shut down or limit their contact center operations when they are most needed. A side effect is that, where available, self-service, customer-facing bots, and asynchronous messaging prove their efficiency in handling large volumes, 24/7. As a result, for many CX services clients, the pandemic will trigger a call to action and jumpstart CX innovation programs.

Concentrix messaging

Private messaging use has exploded in recent years, and for younger generations it surpasses traditional social media. Its benefits are numerous – it runs voice and text; it is mobile, asynchronous, private, timesaving, low effort, and retains the conversation thread. It is also a richer channel, allowing hyperlinks, documents, pictures, videos, stickers and emojis, and interactive widgets such as carousels. All three of Apple, Facebook, and Google (with RBM) are pursuing opportunities in the space, opening the API for development and business use.

Concentrix has been working on its messaging offerings since 2016, when it started with WeChat in China. In early 2020, it launched a comprehensive offering called Concentrix XP Messaging. Concentrix XP Messaging includes support resources along with the messaging and automation platform. The company identifies the CX opportunity for messaging deployment and designs, implements, manages, and optimizes the bots coupled with live agent support. It offers the pre-built APIs and integration accelerators for the messaging apps and also provides and maintains the third-party software. Finally, it establishes and delivers the reports and insights on metrics, interactions, volumes, and utilization levels.

The ideal path is when customers initiate the message, a bot responds with selected answers, and if live agent support is required, it automatically transfers with contextual information. Agents can invite bots back to the conversation; for example, to handle payments. Bots can also proactively initiate conversations. The messaging platform handles the queuing, routing, delivery of messages, and live transfers. For the customer service agents, the messaging platform integrates directly with the CRM and it is presented as a unified queue regardless of the customer channel – web or in-app chat, messenger, SMS, or social media DM. Contact center managers have a real-time and historical view of performance and traffic.

On average, Concentrix sees at least a 26% productivity gain from increased concurrency and efficiency compared to chat, and up to 50% compared to voice. The deflection rate from voice, email, and chat to messaging can reach ~30%. In addition, ~85% of customers return to the channel with typically higher CSAT scores of between 7% and 11% compared to traditional channels.

Before the global impact of the pandemic, Concentrix had several thousand messaging agents supporting clients in financial services, technology, telecom, and retail. It provides B2B and B2B status checks, appointment setting, customer care, L1 technical support, upfront marketing and sales over WhatsApp, Messenger, Apple Business Chat, and SMS.

Interactions suitable for messengers & bots

Increasingly, Concentrix is identifying new use cases for messaging with its clients. The discussions often evolve from a substitute for traditional chat or email to customer journeys suitable for self-service and automation with bots and messaging. For example, for a U.K. retail brand, it added a messaging option on the IVR to prompt SMS use with ~90% adoption rate. Usually clients are surprised by the potential scope of up to 50% of voice interactions suitable for messaging and up to 100% from text channels. Concentrix models show potential cost savings of 20%, 30%, 70%, depending on the level of automaton, the original channel, and delivery location. For example, for a retail provider in the U.S., it provided a messaging application allowing customers to engage over web, SMS, Apple Business Chat, in-app messaging, FB Messenger, Twitter, and WeChat. It also deployed proactive outbound messaging via SMS from agents or systems based on business rules. Concentrix integrated an APIs to client systems to present offers and achieve in-channel purchase completion.

The company developed a digital operating model to recruit, train, and performance manage messenger agents and set up different quality standards and KPIs. The agent profile is a digital native with advanced typing speed and understanding of the conversation styles and tone using emojis, shorter phrases, and more direct language. The agents have to be confident in multitasking as the environment is fast-paced with higher concurrency than chat (as high as five to seven sessions) and smaller after-call work. Across its messenger population, Concentrix sees an 8% greater training graduation rate and a 16% higher retention rate.

Messaging bots in time of crisis 

While phone hotlines have been the go-to response during the pandemic emergency, private companies and government bodies have also taken up Q&A bots on messengers to help the public. For example, WHO launched a COVID-19 bot on Viber and the Pakistani government started a virus hotline over WhatsApp.

Concentrix developed several use cases to address the pandemic, with Q&A bots offering general COVID-19 information for a company, brand, or product-specific statements, safety recommendations, and retailer updates about openings and closures. These types of bots require no client IT involvement and have rapid 24 to 48 hour deployment cycles. With massive volume demand on the contact center in certain verticals in the current situation, it proactively offers self-service bots to existing chat clients. These bots apply effectively in basic triage scenarios such as status updates, warranty and replacement, and new product order and pricing info.

For example, for a multinational printer company, Concentrix provides technical support outside the product warranty and sells support subscriptions over the phone, email, and chat. Due to the COVID-19 emergency and higher than normal volumes, the client needed an alternative channel. Within two days, Concentrix developed, tested, and configured an SMS bot, created the content and bot flows and set up an IVR prompt to drive customers. The bot answers the most common call types such as wireless connectivity and Windows updates. It also links customers to ‘how to’ instructions and troubleshooting videos for printer and PC issues. The messaging bot deflected 10% of all traffic to self-service and the client plans to expand to other programs.

Future interface

Messaging is one of the most promising future customer interfaces, with a far greater pool of transactions applicable to its use. Its current and potential benefits are expanding, such as the integration of Apple Business Chat, eliminating the need for user authentication and the deployment of messaging in Google search. The pressure on brands to patch their CX brought about by COVID-19 creates the need to add a more productive and user-friendly channel. Over time, it can also fire up the opportunity for conversational commerce.

High employee attrition rates are the norm in contact centers, with companies maintaining a constant recruitment, training, and onboarding pipeline. As generations X, Y, and Z come to represent the majority of the workforce, these new workers have different career aspirations, work values, and learning styles. For CX services providers with global delivery networks and demand for specialized agent skills, workforce engagement becomes a priority. The most effective ways of finding, hiring, training, and preserving talent combine people analytics, bots, mobile apps, and other tech solutions with new HR models.

Here, I look at Alorica’s investments and practices in engaging new generation employees by harnessing technology.

Bot recruiters

Since 2018, starting in the Philippines, Alorica has had a dedicated recruitment chatbot to field applicant questions, perform initial screening, and organize interviews with one-click applications. The bot is on the company Facebook page for each country. In 2019 it expanded the tool to certain LATAM and India delivery markets.

For general company inquiries and available positions, it has a FAQ bot called AVA (Alorica Virtual Assistant) on the official Alorica webpage. AVA is an in-house company development using Microsoft NLP layer. The bot also answers question through Google Home and Alexa. Alorica is now customizing AVA for internal use to enable employee HR self-service for its 100k people in 14 countries. It will answer general questions related to HR, policy, payroll, and PTO and has basic service desk functionality, e.g. password reset.

Alorica also developed a physical robot on wheels which is in pilot at select contact centers. It greets applicants, answers questions, and provides information on the company and the recruitment process.

Evolving trainee engagement with digital tools

In 2019, Alorica launched Connect, its own employee engagement and training progressive web application using IP. It has sections with new hire content, quizzes, and surveys, prompting trainees to increase their competencies. Through team and leader boards, new hires can see their progress and individual standing.

On Connect, employees can also submit their mood and confidence levels anonymously on a daily basis. Trainers and managers then view a dashboard with the overall team mood and performance in real-time and break it down by time slot and competency. The company analyzes the overall data to identify pain points during the onboarding journey at macro, country, site, and team level. Alorica is now establishing ‘hypercare committees’ in each contact center to respond to employee feedback on various topics from management to IT and facilities.

It also has gamification elements for agents to win points for different interactions with the app. Agents can use the accumulated credits to acquire badges and build customized avatars.

Connect is available on both Android and Apple devices, with an initial roll-out in three regions with selected clients in the Philippines, Guatemala and Panama, India, and the U.S. For data protection and to meet employee work hour restrictions, the app is geofencing certain sections, so users can only access on work premises. Over the first three months of the pilot, Connect had ~10k active users. In six months, Alorica achieved eNPS scores improvement of 10% of the global average.

Virtual microlearning for new generation workers

The Connect app is at the core of Alorica’s approach to training next-generation employees, for many of whom this is their first full-time job. Connect has a digital backpack with microlearnings to help trainees organize their knowledge and access it. The app offers bitesize information with instant responses and gratification, while ensuring the agent has minimum viable proficiency. The company’s design team is tasked with converting many of the materials into visuals.

Within the app, it is now building Alorica Academy for learning content, including topics outside the immediate work environment such as negotiation skills and business software. Alorica Academy piloted in the Philippines in February 2020.

Alorica is also testing the use of VR with a virtual classroom and an avatar trainer to guide employees through the learning material.  

Automation of the -30 to +90-day employee cycle

Alorica’s objective is to automate and enable self-service for the complete new hire onboarding process. It plans to move AVA to a cognitive conversational level to assist applicants and collect process feedback. For employees, on the development roadmap are seven POCs for self-service features. The bot will link with backend systems such as Oracle, payroll, and WFM. Alorica also wants to enable AVA on the physical robot and deploy it on the contact center floors to engage with agents, answer their questions, and play training videos.

The company plans to integrate the bot with Connect and transform the app into the main HR source for employees, including for schedule management. Next, it is localizing and expanding the app to new delivery geographies and languages and incorporating the ESAT surveys for additional feedback.

As businesses brace for the effects of the Covid-19 virus, one direct impact is already happening: the mandatory shift to work-at-home (WAH) in China created the world’s biggest remote working experiment. In CX services, this health hazard is putting the WAH model top of mind for both providers and clients. While virtual work has been gaining traction in the last few years, this external factor can now trigger its global expansion. 

WAH shows significant recent growth

The first WAH agents in CX services started in the late 1990s in the U.S. but this has remained a relatively small proportion of the workforce – just 5-10% for the major CX services providers. Since around 2016, in U.S. and Canada, it has attracted interest from new clients such as utility and energy companies and greater focus by CX services suppliers. These two markets represent between 80% and 85% of the global WAH population. For CX services vendors, the acceleration of WAH has come as a response to saturated urban markets, low national unemployment rates, minimum wage increases in certain states and Canadian provinces, and the demand for specialized talent.

Since 2018, Transcom saw the trend in the market and decided to change all its North American operations to virtual working, also hiring a practice leader in early 2019. Currently, it has ~1k full-time employees in 33 U.S. states and six Canadian provinces supporting e-commerce & retail, consumer electronics, telecom, travel, and SME clients with customer care and technical support services, primarily over voice as well as email and chat.

Lessons from Transcom

Transcom has approximately 14 years of experience in work-at-home delivery, starting initially in Europe. It has developed a dedicated WAH recruitment approach with skill-based testing, technical skills and digital literacy exams, scenario and voice analysis, behavioral and competency-based interviews, and background I9 checks, where permitted. It hires only 5-10% of applicants, with the highest throughput results from its referral program. For training, it uses virtual training to replicate different aspects of classroom training with instructor-led and self-paced content. The company has COPC certification for all its WAH employees, covering coaching, monitoring, outlier management, and adopting various incentives such as pay-for-performance, schedule flexibility, and career advancement.

Transcom’s distributed agent infrastructure enables a locked-down virtual desktop environment. The company tests the VPN connectivity between Transcom, the agent machine, and the client’s data centers to ensure the quality of the connectivity from point-to-point. For security, it employs two-factor authentication, no agent administrative rights, limited USB devices, user and computer Group Policy Object, and PCoIP session management and tuning. For its flagship consumer electronics client, it supplies the agent computer.

Clear benefits and new challenges

The WAH model offers labor cost arbitrage opportunities, better talent retention, and adds resources with different skillsets, typically higher educational attainment, and increasingly younger agents from the millennial generation who prioritize flexibility. The model also provides business continuity and disaster recovery (as with the current virus threat).  

For clients, the virtual workforce gives significant scalability during peak seasons. For example, for a multinational e-commerce and retail brand which had a peak Christmas 2019 period with ~37K emails and hundreds of social media posts accumulated in a few days, the backlog challenged the 50-strong support team. Transcom recruited and trained 50 additional employees (200% flex up) on a temporary basis in three business days, delivering the staffing before the Christmas holiday and sustaining it for ~30 days until volumes returned to normal. The company delivered 12% CSAT improvement and mitigation of negative publicity for the brand.

In addition to the traditional challenges with security and data protection, the increasing complexity of work drives the need for another level of onsite employee engagement. Transcom is evolving WAH to a ‘community approach’ where it hires people virtually around a hub such as a coworking space or college campus to conduct ongoing monthly skills training.

Global reach

More and more companies now understand that virtual work offers a dynamic and flexible way of working with access to their target talent. Virtual working in CX services is expanding in new countries such as U.A.E. (Sutherland), Scotland (SYKES), Germany (Webhelp), Colombia (Teleperformance), India (Tech Mahindra and Teleperformance), and Japan (Teleperformance).

In 2020, Transcom is expanding its WAH agents to Germany for onshore, and Poland, Croatia, and Serbia for nearshore German. It is integrating its operational best practices and technology while relying on the local market presence and HR expertise. The company is attracting interest from new economy brands, for example in travel, usually influenced by young leadership familiar with the model in their operations.

For the U.S. market, Transcom is offering its ‘community approach’ targeting premium segment white-glove support that can be dynamically localized around retail stores or high-value customer concentrations. With the service, it targets automotive brands, retail, software and consumer electronics manufacturers.

At the end of January 2020, NelsonHall attended Teleperformance’s global analyst meeting in Mumbai. Here are some insights into the company’s progress since the Intelenet acquisition in October 2018 and the formation of Teleperformance Digital Integrated Business Services (D.I.B.S.).

Repositioning as a knowledge partner

Teleperformance’s reorganization in 2019 to form Teleperformance D.I.B.S. was a step towards unifying the company’s offerings, placing the ~100 proprietary platforms under one umbrella, and optimizing the go-to-market approach. D.I.B.S. includes the company’s vertical specific business process management services, analytics, intelligent automation, and digital transformation capabilities, which also covers the recently launched Innovation and Experience Center in Santa Clara. 

D.I.B.S. has a dedicated technology, analytics, and process excellence practice (T.A.P.) with its own P&L. It serves as an internal catalyst (and educator) for the entire organization regarding transformation. The knowledge practice currently has ~600 experts including data scientists, developers, Lean Six Sigma Black Belts, COPC practitioners, and CX consultants. While Teleperformance aims to scale the team to ~1k people by the end of 2020, the ultimate goal is to democratize and embed the ‘transformational DNA’ across the company. As a first step, T.A.P. is identifying projects in key markets; for example, partnering with sales staff in Colombia and France. It also organizes internal webinars and training sessions on topics such as RPA and analytics. The objective is to upskill employees across the organization to identify value addition opportunities and to know the basics of which processes to target for automation and analytics deployment. Further, T.A.P. looks to find potential synergies in integrated business services, starting with the operations in India.

An example opportunity is in integrated business services with the company’s Finance & Accounting practice. Teleperformance has ~90 F&A clients supported by ~10k employees in 12 countries. Over the last two years, the work has gradually shifted towards more complex work and contextual tasks such as financial planning and analysis (FP&A), tax, treasury and other niche areas under record to report (R2R). As a result, it offers aggregated packages of products, including intelligent automation with their micro tools strategy, analytics, and F&A talent who bring global and local accounting standard experience and knowledge.

India’s booming CX services market

For Teleperformance, India is both a high-potential delivery location and a target domestic market. For example, a large proportion of the T.A.P. resources are in India. At the moment, the company has ~80k people in the country, with approximately half supporting the domestic market. It continues to scale, with capacity expansions in 2019 focused on Tier 2 and 3 Indian cities. Teleperformance plans to further add new locations mainly in Tier 2 cities for international email and chat work. High-growth verticals include BFSI, healthcare, and travel.

In a recent interview, Teleperformance CEO Daniel Julien placed a big bet on India, predicting that the workforce in the country will increase to ~150k people in the next few years.

Engaging a new generation workforce

Teleperformance’s market vision for ‘High Tech, High Touch’ relies on remaining a people-centered business where the company recruits, trains, coaches, and manages a global workforce. With more generation Y and Z cohorts dominating the labor pool, Teleperformance is reinventing its recruitment and talent engagement practices. The company employs psychometric assessment-based hiring to identify dark personality traits, particularly with a view to preventing intentional security breaches. In recruitment, it also evaluates the emotional intelligence of applicants and actively involves social media as a channel, a practice widely adopted in India.

In training, the focus is on self-learning games, comics, video learning, and delineation of career paths. While the traditional agent learning curve is disappearing because of self-service and bots, the company is shifting to bite-size learning and gamification using video, leaderboards, props-based learning, VR/AR, e-learning platforms, simulations, and exploration games.

Another approach to attract and retain talent is work-at-home-agent (WAHA) to complement on-site delivery. Teleperformance is increasing its WAHA population and has ~10k FTEs globally, with only 60% in the U.S. In India, it plans pilots in 2020 out of two major cities for chat and email customer care for international and domestic clients; for example, in retail. These plans are dependent on regulatory approval. As a next phase, it will include voice services as well.

The Fourth Industrial Revolution already impacting CX services

Most of Teleperformance’s ~850 clients are facing significant disruption from digitally native competitors, new technology such as cloud and IoT, and shifting customer profiles and preferences. The new economy clients have a different set of requirements, prioritizing scalability and multinational delivery to meet high growth patterns; for example, social media and e-commerce platforms looking for content moderation services. In this environment, Teleperformance looks to offer an in-depth understanding of the client industry and provide horizontal technology, processes, and people across the customer journey. Part of these investments include setting up the CEO office of ‘Transformation’ headed by Bhupender Singh, partnerships with process mining firms, doubling down on its internal cybersecurity expertise, expanding the T.A.P. practice, and a potential M&A to add more digital and/or consulting capabilities.

Telus International announced last week the acquisition of Competence Call Center (CCC) for ~€915m. The deal marks the biggest M&A in front-office BPO (CX Services) for 2019. It is also one of several investments in the DACH region and part of a global trend for market share acquisitions.

CCC gives Telus International scale for DACH markets

CCC is a private CX services provider founded in 1998 in Austria. It has ~8.5k employees in 22 locations in Austria, Bosnia and Herzegovina, France, Germany, Latvia, Poland, Romania, Slovakia, Spain, Switzerland, and Turkey. In Germany, the company has eight sites including two in Berlin (the company’s HQ), as well as one each in Vienna and Biel, Switzerland. Its nearshore footprint for German-speaking markets spreads across a number of established locations such as Poland, Turkey, and Romania, and more recently Sarajevo in Bosnia and Herzegovina.

This addition significantly boosts Telus International’s delivery for DACH markets, complementing its centers in Bulgaria, Romania, and Ireland, and expanding its ~5.5k employees in Europe. Once finalized in Q1 2020, the deal will bring Telus International’s total revenues to ~$1.3bn.

The supply problem of German-speaking markets

Germany, Austria, and Switzerland are high-value CX services markets facing a challenge to source native speakers cost-effectively. At a full employment rate, around 3-4% in these countries, the onshore options for outsourcing companies are limited. Over recent years, site openings increased in the north and northeast Germany (e.g. Rostock, Stralsund) or closer to the country’s borders to capture a wider employee pool (e.g. Aachen). Pilots with work-at-home delivery are also underway, for example, by Webhelp.

Another solution has been to increasingly relocate native speakers to Mediterranean countries, offering one or two year contracts and the benefits of a lower cost of living, warmer weather, and better work-life balance. This model contributes to the multilingual capability in Barcelona, Lisbon, and increasingly Athens.

Lastly, vendors are entering new destinations such as BiH, Kosovo, Montenegro, North Macedonia, and Georgia, which can offer German language competency but at a smaller scale.    

Acquisitions to expand delivery scale in core geographies

In 2019, CX services vendors picked up opportunities for inorganic growth in core markets, often adding capacity with tuck-in deals or buying shares in new verticals. For example:

• In the U.S., TTEC bought FCR bringing in ~80 clients and new centers in Oregon and Montana
• In Ireland, Infosys BPM bought Eishtec
• In Germany, Transcom acquired TMS Connected! to grow in the energy sector and ASA Informationsdienste in the media space
• In France, Tessi added French CX services provider ADM Value for €110m
• In LATAM, Covisian acquired Avanza’s CX services business in Iberia and LATAM after the earlier acquisition of Grupo GSS in  the same regions
• In Spain, Konecta grew with retail sector specialist Sum Talk
• In Italy, Comdata Group invested in the addition of PayCare financial services provider.

All these acquisitions come on top of growing client demand for multinational scale and the need for solid multishore delivery while guaranteeing operational standards and consistent CX across geographies.

Acquisitions of diversified and value-added services

This year also continued the trend of service extension M&As in higher-value offerings. Major areas again were CX consulting, digital marketing, and UX design capabilities, including:

• transcosmos’ November addition of Tokyo social media marketing agency Interest Design
• Tech Mahindra’s BORN Group, which offers strategy consulting, content creation, and marketing production
• AlmavivA’s new UX/UI and digital services agency Wedoo.

Part of this vertical integration is also vendors bringing in-house CX automation technology and resources, most notably Webhelp’s purchase of Romanian RPA developer PitechPlus and Konecta’s purchase of the Brazilian Uranet.

For Telus International, CCC brings a different capability – experience and clients in content moderation and trust and safety services. The German Network Enforcement Act of 2017 and similar regulatory plans in Austria, France, and across Europe created a significant market for human moderators, trust and safety specialists, and community managers. Both Telus International and CCC support Facebook for the German market with several hundred German speakers onshore and nearshore. Now, the merged capacity will create scale and strengthen the company’s domain experience.

Consolidation and M&A opportunities in 2020

This deal will drive Telus International to the cusp of the largest global top 10 CX services providers by revenue. With last year’s Concentrix–Convergys, Teleperformance–Intelenet, Arvato–Saham Group, and Startek–Aegis M&As, the market consolidated sizably but still keeps its very long tail of regional and local players. This fragmentation does not benefit the industry. At the moment, it captures less than a third of the addressable market.

As a private company, Telus International benefited from the backing of Baring Private Equity Asia. With a number of PE ownership changes in 2019 for the likes of Webhelp, Konecta, and IGT, and the availability of investment funds, 2020 will see more similar-sized deals.

In the midterm, the increasing client requirements for integrated full-service offerings supported with strong consulting and design expertise, IP, multishore centers, and technology partnership networks will further differentiate the market leaders and will push out smaller and commodity type vendors outside the clients’ supply chain.

One of the main challenges facing front-office automation projects is the adoption of commercial terms protecting the interests of both clients and CX services providers. In an industry dominated by traditional per FTE and per hour/minute pricing, to be successful, end-to-end digital transformation requires significant initial investments, new KPIs, a stake from the vendor, and a longer project horizon.

The cannibalization dilemma   

Cost saving is a direct benefit of front-office automation, generated by deflecting traffic from live agents to self-service and improving productivity to enable reduction in required FTEs. Effective cognitive bots deployed in key customer journey stages or back-office workflow can eliminate the need for human intervention and decrease the volume handled, thus reducing vendors’ revenues.

So far, CX services providers have responded by absorbing the financial impact, hoping to protect their position from competitors, gain additional share of the client’s business down the road, or use it as a lever in the next renewal negotiation. However, this approach cannot be sustainable because cognitive CX is not an end solution but a continuous journey addressing customers’ increasing service expectations and growing acceptance of bots. Even in narrow-scope deployments, traditional performance metrics such as AHT lose their relevance when more complex and challenging interactions end up with human support.

Footing the robot bill

Clients commonly do not want to invest heavily upfront, especially when they do not know what outcomes to expect from CX automation. CSS Corp addresses this pain point with an upfront contract commitment to achieve cost out while backloading most of the investment and blending it in the rate. The company’s commitment stems from its significant experience with the specific client and vertical and from its cognitive IP. For example, its first large-scale CX automation project was with an existing home networking client, which CSS Corp has supported since 2005 and is now the sole supplier. The digital transformation with the client evolved from several joint RPA implementations and simplifications such as screen scraping in the past to 22% TCO reduction through automation. The vendor’s domain experience in home networking with multiple clients, accumulated customer data, and digital assets integration practice gives it confidence to accept the risk.

In another example, for a U.S. VoIP service provider, CSS Corp manages sales, customer care, technical support, and retention. It is responsible for increasing sales, reaching retention numbers, maintaining credit per line, and achieving customer satisfaction levels. CSS Corp charges on a ‘cents per active line per month’ basis. The provider owns the automation and tools but has agreed on a penalty matrix for FCR, CSAT, retention rates, etc.

Contracting with ‘unknowns’

In cases where the domain is less mature for the provider, or the client RFP does not give access to internal data, cases, or existing infrastructure, CSS Corp utilizes reference information and demands a clear view of the internal development roadmap. An example is a hardware storage manufacturer which CSS Corp supports in APAC, U.S., India, and Europe with 200 employees. The contract is based on flat per hour pricing with targets to reduce the headcount by year, 1, 2, and 3 with an increasing rate per hour.

A vital element here is the realistic assessment of meaningful results to justify the cost to the client. When these results do not bring savings, the company contracts against customer satisfaction improvements delivered through the CX automation. CSS Corp’s best practice is to employ a conservative calculation in generic cases. For example, it underwrites only 14-16% TCO over three years when the level of automation is limited by the product, languages, or degree of customer base exposure to chatbots.

Workforce model for bot-human support

With both established and prospective clients, CSS Corp applies a workforce model based on the number of eliminated contacts, volume of self-service, percentage handled by a chatbot or voice bot, and efficiency improvement for technology augmented live agents. It also includes the usual quality and SLA terms. If the automation benefits do not materialize, the provider accepts the need to overstaff. If the benefits exceed targets, CSS Corp gains from the additional savings. For ROI calculation to come through, the contract duration typically needs to be three or more years. Also, to win the buy-in from the organization, CSS Corp shares its calculations and research data, conducts onsite consultations, and organizes workshops.

The proper due diligence from CSS Corp requires sign-off on the client product release and IT update schedule. For these requirements it works with marketing, product development, IT, and operations in addition to customer service departments. The client’s IT approval is crucial to ensure an alignment of deployment dependencies and timelines. For example, in one instance, the client’s delayed telephony upgrade pushed the introduction of parts of the automation components back by six months. Here, the outcome-based pricing kicked in only after the infrastructure upgrade was complete.

Co-innovation with pricing

CX automation programs require investments from the client and vendor, and advanced pricing models are a must to ensure ‘skin in the game’ from both sides. True co-innovation entails a more flexible commercial approach which translates into a next-level CX services partnership.   

NelsonHall will publish a Cognitive Customer Experience Market Analysis reports before the end of 2019.

Voice bots are a tiny part of the customer service and outsourced CX services market today. However, they are significant both in terms of investment and the attention they are receiving from organizations. In both smart home devices (voice assistants) and traditional telephony, voice bots are growing (*see a sample of news items from October 2019 at the end of the text).

With diverse markets, from automotive to healthcare, with multiplying uses cases from food ordering to job applications, growing adoption in the U.S. and U.K., the addition of new markets (e.g. Ireland) and higher frequency of use, the question for BPS and CX services providers is not when but how to get involved in the digital voice ecosystem. Here I look at how Tech Mahindra has entered the field.

Converting from human-human to human-bot interaction

Tech Mahindra BPS began developing its voice bot m.ai.a in early 2019, utilizing in-house ML and AI capabilities. It started with a simple Q&A bot able to support FAQ type queries. In the second phase, they introduced NLP and NLU into the bot to allow users to paraphrase their questions and receive responses. In the third phase, Tech Mahindra BPS introduced conversational features for the bot to respond to unstructured dialogue outside the Q&A format. Here the conversation can be multi-dimensional, and the bot will comprehend it.

The voice assistant processes data in real-time from systems such as CRM, ERP, billing, and knowledge management, and the algorithm builds a voice response back to the customer. For example, in a current pilot for a telecom client, the bot handles the first steps of a sales interaction and automatically schedules an outbound sales call in the dialer for a human agent to complete the sale. Tech Mahindra achieves this access through an API where available, and in the case of legacy applications it employs its own RPA script in the background to read/write the information.

Partnering in a complex ecosystem

There are different ways to build a bot solution currently: build a bot engine from scratch on Python or another language, customize one of the existing platforms, or create your own bot on existing frameworks from Google, IBM, Amazon, or Microsoft. The last option involves using a ready tool such as Avaamo, Conversocial, or one of many others.

Tech Mahindra combines several approaches. It uses Google Cloud Platform to create chat and voice bots, works with Amazon Lex and Amazon Lambda gateway API to integrate with back-end systems, and Amazon Connect for telephony integration. It also partners with Avaamo for the bot building.

Amazon in particular has an advantage, as it offers both the platform and connectivity and is able to effectively manage the integration of voice bots on a telephony platform. Tech Mahindra is working to deploy the bot over IVR and route it to a live agent if the bot does not understand or cannot respond to the query (a feature not available for smart speakers for now).

Uses cases in telecom

The initial POCs for m.ai.a are with telecom use cases such as price check or billing status update, activating roaming or bolt-on, and in service desk password resets. These processes have high enough volumes and sufficiently straightforward customer journeys to deploy the voice bot. Beyond these first target processes, Tech Mahindra is now looking (with telecom clients) to reduce truck rolls and engineer visits, with the bot guiding the user through technical support queries in scenarios related to faults with fixed line or broadband. The company is also working on similar use cases in the high-tech sector; for example, to help a home appliances manufacturer to schedule appointments and request replacement parts.

These processes are particularly malleable to voice automation as they deliver sizable cost savings with limited opportunities for self-service, especially when the user has no access to the internet. The bot also helps with addressing spikes in support calls during outages and disruptions.

Another key factor is customer propensity for adoption. Unlike a back-office RPA deployment with linear calculations, Tech Mahindra evaluates the ROI by demographic group, geography, and use case; for example, targeting 35-40% deflection in the U.S. in an active age group for technical support interactions.

From POCs to implementations of voice bots leveraging intelligent automation

To address the market potential and demand for CX automation, Tech Mahindra plans to grow its voice bot development team in the next few months. Part of these resources are curators and conversationalists with a degree in linguistics and communications who can develop an effective and natural dialogue. The curators also localize and culturally align the taxonomy and conversation style.

Tech Mahindra will continue to target the communications and high-tech sectors, the enterprise segment, and service desk functions. From a broader perspective, its objective is to implement voice bots in a broader offering, leveraging process orchestration and intelligent automation across the CX journey.

NelsonHall is currently developing a Cognitive Customer Experience market analysis report, analyzing the use of cognitive models and technology in customer experience by Fortune 2000 organizations.

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A common theme in NelsonHall’s Advances in Analytics BPS market analysis is that organizations’ need to operationalize data has matured beyond BI and simple visualization. Companies do not want to wait days to build a report and weeks, or even months, to generate insights. They need to fill the AI-analytics continuum, democratize data discovery and data manipulations, and obtain (near) real-time insights.

Tech Mahindra’s Virtual Analyst offering aims to address all three of these tasks by employing the power of cognitive technology.

Virtual Analyst architecture

Virtual Analyst incorporates Tech Mahindra’s visualization IP across tools and third-party NLP engines such as ThoughtSpot and PowerBI. The business model is for Tech Mahindra to serve as a reseller, solution provider, and analytics co-developer for BPS clients, where it offers its domain expertise.

Under Virtual Analyst, Tech Mahindra deploys the NLP and AI engines, and in-memory computation algorithms. It also implements a data visualization layer and distribution cluster manager. The unified platform is supported by an enterprise security and governance layer and includes data connectors and APIs to link various data sources. Virtual Analyst pulls data across sources into a single window, and business users can employ different visualizations to build customized dashboards and perform data analysis through multiple levels of drilldowns. Finally, it has the option for a private or public cloud deployment.

Conversational search to speed up analytics

To simplify analytics consumption, Tech Mahindra’s Virtual Analyst gives users the option to type a business contextual query, even parts of a sentence or key words, in the NLP engine and retrieve an analytics insight without technical assistance. The questions can be both known and unknown. At the same time, it offers clients who want to continue with the current structured visualization approach the option of predefined reports and prepopulated queries. The difference between the two ways of visualization is often in the balance between speed and independent decision making.

Automated insights to kickstart analytics

Virtual Analyst is integrated with a predictive engine to give result-oriented outputs using what-if scenarios and other advanced analytics algorithms and AI/ML models. Even if the user does not know where to start or what information to look for, the software defines some trends and patterns.

Self-service to open analytics to non-data scientists

Virtual Analyst targets data democratization where senior executives and operational staff access the same information and can use visuals created with R scripts to perform advanced data analytics such as forecasting. It also allows the creation of persona-based insights to manage authorizations. Users can create their own customized dashboards with only the relevant insights made available at the visualization layer.

Market opportunities

Sales , marketing and field operations functions are the first adopters of Virtual Analyst looking for easy access and queries. Particularly in the telecom, manufacturing, and retail sectors, Tech Mahindra has several implementations. For a  European telecom, it gives the  executives information on field operations, predictability, and viewing information based on data from multiple-source systems.
The client leveraged it to save charges raised by various contractors.  Additionally, Tech Mahindra provided a probability study to identify contractors to do the work cost-effectively.  Similar clients have achieved additional savings by not upgrading their existing analytics platforms.

In another example for a U.K. telecom, the CMO and every brand manager have real-time insights into campaign performance and week-on-week churn. The company marketers analyze customer details, phone usage, and campaign data from 200 concurrent campaigns and 75m monthly communications to improve targeting and reduce customer churn. The company forecasts a churn decrease by 17% year-on-year.

Tech Mahindra sees increased interest from supply chain and procurement and customer service departments. It has ~12 new implementations of Virtual Analyst.

Next for Tech Mahindra’s smart analytics and visualization

As Tech Mahindra presents Virtual Analyst to clients, a common question is around legacy analytics investments. The provider is addressing it by running Virtual Analyst as a business layer, priced not by the traditional license model but by the amount of processed data. For example, for a U.K. local council, Tech Mahindra uses the existing PowerBI deployment in F&A for the CFO and her team and is now implementing ThoughtSpot for other council processes such as security.

Another target is to cross-sell with technology partners, going to joint pitches with clients. A recent example is a Swiss multinational food manufacturing client where the Virtual Analyst improved the back-office business processes beyond traditional ERP systems and started to provide predictive insights as well.

Tech Mahindra is looking next to leverage its design thinking and assets of its subsidiaries Pininfarina and the BIO Agency to further the possibilities of self-service analytics. On the technology roadmap, Tech Mahindra plans to integrate multiple home grown third-party tools into its BPS Recommendation Engine framework. It also plans to adopt voice command interactions to provide additional value and provide better user experience.

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.

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.