The release this week of Gartner’s Magic Quadrant for CRM Customer Service Contact Centers, which ties in with this month's theme at CMSWire of mobile CRM. In this report, though, Gartner finds a market that is conflicted and fragmented, developing slowly and where business applications for the customer service and support (CSS) function are largely obsolete.
It sounds pretty damning, and certainly what Gartner says in relation to the market context and how technologies are developing seems to indicate a set of technologies that have a long way to go.
Before looking at the leaders in the Magic Quadrant for CRM Customer Service Contact Centers -- notably Oracle Siebel, Oracle Right Now technologies, Microsoft, Pegasystems and Salesforce -- let's see where the problems lie, and how Gartner sees solutions to those problems developing.
The first thing to be said -- and important to note -- is that this is not customer relationship management technologies (CRM), nor customer experience management (CXM) technologies; this Magic Quadrant is built around Customer Service and Support (CSS) problem management.
Gartner points out that customer service contact centers refer to a logical set of technologies and process engineered to support the customer, regardless of the channel.
Within this, there are CRM business applications that will analyze customer interactions, but there is generally more than that too; other functions include advisory services, problem diagnostics and resolution, account management and returns management.
So how do you get into this quadrant in the first place? Like all the other quadrants, if you’re not really a player you won’t get in there. According to Gartner, vendors must have:
- 15 customer references for CSS functionality, of which at least five are new customers in the past four quarters in at least two geographic regions
- Generated at least US$ 7 million in software revenue for core CSS in the contact center
- Appeared regularly on client shortlists; it should also have enough third-party consulting and integration firms to grow at a double-digit pace for five years
- Enough financial resources to make it viable -- that is, it must have sufficient cash to continue operating at the current burn rate for 12 months
And once you get through that, vendors are then judged on a number of criteria including ability to execute and completeness of vision.
Execution Ability of CSS Vendors
In the second part of this piece, we will look at the completeness of vision as it relates to the vendors in the Leaders Quadrant, but for the sake of market analysis, let’s look at criteria under the Ability to Execute heading. In this list, vendors need to demonstrate:
- Advances in software architecture
- Continued future vitality of product
- Ability to provide global sales as well as distribution abilities
- Ability to generate market demand and awareness of its CSS solution
- At least five quality clients and references
- Consistent and clear pricing models and structures
CSS Market Context
So with all this, what is Gartner saying about the CSS market? Taking all these elements into account, Gartner puts the market in context, and that context isn’t flattering for those operating in the market.
In the report -- and we will cite it here verbatim, just so it’s clear that Gartner is the one saying it and not us:
The established business applications for the CSS function are largely obsolete. They are simplistic and restricted by inflexible configuration rules and procedures that govern the input, retrieval, and flow of data and information. They support collaborative interactions poorly.”
Pretty damning. Gartner adds that the systems have not evolved to take into account new ideas like social experience design concepts and incorporate them into customer interaction applications for customer service.
The result is that the whole concept of collaboration becomes problematic. Without them, employee interaction and interaction between employees and customers is limited.
What seems even worse is that vendors see no economic point in rearchitecting their software for social experience, believing that social software will have no adverse impact on core systems.
Struggling With Social CRM
However, this is not just a lack of will to do so. Gartner suggests that the market context at the moment is characterized by acquisition and integration as an interim strategy until they work out the importance of social CRM.
In this respect, Microsoft, Oracle and salesforce.com are making progress whereas the other vendors covered in the quadrant are lagging behind.
The philosophy among the largest software vendors serving the large and midsize enterprise could be described as follows: No major competitor will disrupt the sale of its enterprise business applications, because none has developed a social-centric system,” Gartner adds.
The result is that none of the major software platform providers has a commanding presence in social CRM software.
Organizations, Gartner says, are not migrating to new systems. They are integrating social tools into the CSS environment with workflow rules, for example, written in CRM environments and exported into CSS.
In light of this, and because of the complexity of information required to support customers, the market for CSS applications is fragmented.
By 2013, many industries will include in their definitions of a "CRM customer service contact center" access to mobile users and community participation in knowledge creation.
Over the next 18 months, agent real-time access to customers’ activity, including Facebook activity, will be actively pursued by 15% of customer service centers.
SaaS as a method of delivery is being accepted by many organizations -- hardly surprising given the complexity -- although there is resistance in many areas, including:
- Fears in some locations over privacy, data privacy and latency
- National and federal organizations where regulations restrict access to data
- Complex environment with high volume calls and transactions
- The result is that the move to SaaS through to the second half of 2013 will be restricted mainly to B2B low-volume call and contact centers
By 2014, as more applications are built in a cloud-based model, SaaS will be critical selection criteria for customer service contact centers. This will be a relatively rapid evolution with at least 75% of centers using SaaS applications as part of the contact center solution.
This could be for knowledge management, desktop CRM functionality, feedback management or chat. On Thursday, we will take a look at the Leaders in this Magic Quadrant and how they got there.