Even a brief look at Gartner’s Magic Quadrant for the CRM Customer Engagement Centers (CEC) shows that this is a technology space that is in trouble. Led by Oracle RightNow Cloud Services, Pegasystems and Salesforce, Gartner says that the established business applications for CEC are obsolete and restricted by inflexible configuration rules.
Customer Engagement Centers
CEC's have also failed to evolve with other developing technologies, as many have a weak native cloud architecture and poor social media engagement abilities, combined with poor collaboration abilities that restrict the ability of users to carry out their jobs.
Of all the MQs in recent months, this is the most damning market perspective we've seen and points to a future that is uncertain for these kinds of systems. The evolution of cloud computing, and in particular the emergence of SaaS however, is giving new life to a technology space that is being held back by the sheer complexity of all its needs.
The potential for these technology sets -- and it is important that we keep in mind that these are technology sets -- is enormous and if deployed efficiently, have huge business potential for enterprises. That said, there are 13 vendors in this Magic Quadrant with Kana, Lithium Technologies, Parature and Zendesk all added this year, offering hope that new blood will keep this area moving.
The Leaders’ quadrant has only the three vendors we've already seen, while the Challengers’ quadrant also has three: Microsoft, Oracle (Siebel) and SAP. We will take a closer look at these tomorrow, but in the meantime we need to understand what this market consists of and what exactly is happening.
The CRM CEC market does not refer to a single technology, but a set of technologies working together to provide enterprises with customer support. However, this is not just about customer support, it is also about providing enhanced customer experiences by developing business rules to determine the next, best action, information or process needed to manage customers.
For the past 12 years, Gartner says, it has been referring to CEC's as customer service contact centers, but with the evolution of new technologies like social media as well as the emergence of customer relationship management (CRM) technologies and customer experiences technologies (CXM), it now refers to them as "customer engagement centers."
At the very basic level, they carry out a wide range of tasks related to the customer. Those tasks include engaging customers and potential customers across a wide range of channels, as well as order management, case management, account management, problem diagnostics and many others.
The result is that they have a wide range of functional elements that may or may not come from a single vendor. A complete CEC solution should contain:
- Customer service and support (CSS) problem management, trouble ticketing and case management
- Knowledge solutions, content management, advanced desktop search
- Decision support based on real-time analytics
- Engagement possibilities through social media
- Support for mobile customers
- CRM databases containing all customer information including offer and account information
- Real-time feedback surveys.
There are other abilities that are desirable too, but these are the main ones. Vendors must also be able to provide these functionalities no matter what channel the enterprise is operating in, be it a website, mobile device, in a community, or on a social media site like Facebook and Twitter.
This, as a result, provides the enterprise with a view of what the customer sees, insight into the path the customer used to arrive where they are, as well as the tools to ensure that the enterprise can solve customer problems no matter where the customer is.
If this wasn't complicated enough, then it gets even more so when business rules for complex processes are also needed.
MQ Inclusion Criteria
As a result, to get into the Quadrant in the first place is difficult, let alone the Leaders’ Quadrant. General criteria include:
- A minimum of 15 customers using the software for Customer Service and Support (CSS).
- Having at least 5 new customers for CSS in the past year in at least 2 geographic regions
- At least US$ 7 million in software revenue for core CSS
- Demonstrate that the company will equal or exceed those figures in the coming quarters
- Sufficient third-party consulting and integration firms to ensure double-digit growth for 5 years
- Technology to support and extension to cross-channel customer services, including mobile and social media.
CES Market Context
Taking the complexity of these technologies and requirements that have to be met to make it into the Magic Quadrant, it is not really surprising that there are only 13 vendors in it. It is also a market that has had difficulty keeping up with changes in technologies, so much so that Gartner says that the established business applications for CEC are largely obsolete.
Surprisingly, for a technology area that works in the customer experience space, Gartner also says that the systems currently available have poor abilities in social media engagement and are restricted by configuration rules and poor collaborative support.
Broadly speaking, they have also failed to take-up new ideas like social experience design and apply them to customer interaction applications, while the lack of collaboration capabilities as a core ingredient make interaction between employees and between employees and customers very difficult.
The major vendors at the moment don’t however, see the economic benefit of re-achitecturing their social experience software, but are actively pursuing acquisition strategies to fill in the gaps created by their failure to keep up with the evolution of social software.
Oracle, SAP and Salesforce appear to have understood this and their acquisition strategy, in this respect, is providing “good progress” in the space. Other companies in the MQ however, are lagging behind here. All this is complicated by the fact that it is difficult, if not impossible to migrate from an old system to a new system although many companies have overcome this by integrating CRM tools and social tools into the CEC environment.
As more CEC suites with real-time analytics reach the market in 2014, the case for migration will be easier to make, Gartner says, while industry- and geography-specific considerations will see businesses accelerating investments in innovation and social-centric interfaces. The US is at least one year ahead of other geographies in this respect.
CEC Market Evolution
The result of all this is a market that is fragmented. The complexity of the information required to support customer interactions, and the complexity of the business rules required to form the steps in interaction have made development in the market difficult.
The development of SaaS has made this easier, but Gartner says there is resistance to these kinds of deployments in certain classes, including:
- Locations where data privacy, latency and availability are major concerns including Asia, South America and Central, Eastern Europe.
- Where national or federal government regulations, or regulations associated with the healthcare market, prevent their use
- Complex environments with high call volumes, high transaction volumes and real-time integration with legacy systems.
However, this is changing and by the second half of next year, complete customer service solutions will start emerging delivered as a SaaS model, particularly in the B2B space and in the non-process intensive B2C centers.
SaaS, a result, will emerge as a critical fact for all kinds of CEC, with some 75% of all CECs using some form of SaaS by the end of this year. Even still, by the end of 2014 less than 20% of organizations will select SaaS for complex business process support. The Leaders and Challengers tomorrow.