Pre-Covid: The Push to Innovate the CX
Increasingly intelligent systems are flickering to life across a host of customer environments. That process is lighting the way for more efficient, increasingly productive, and highly personalized customer and employee journeys. The process was well underway before the global pandemic hit, and it featured some of the top firms in the contact center industry.
Writing about Genesys in December, 2019, I wondered, “to what extent will the cloud and AI together help bring the warm rains of innovation to all the ‘hampering stuff’ of monolithic platforms, of the legacy call center as we’ve too long known it?” Thinking about Avaya in February, 2020, I suggested how the company, “…is pressing to become more relevant at a time of accelerating technological change, by, ‘breaking through the inertia’ to find that sweet-spot between the push and the pull, creating differentiation through a combination of new tech and strategic partnerships.” And in early, 2020, as Cisco was racing to build-up its cognitive resources, I wrote that the firm, “sees the Contact Center business as a key part of the… innovation story, particularly when it comes to a data-driven ‘Cognitive Collaboration’ that is benefiting the entire portfolio, from Webex Teams and Webex Calling to Webex Meetings and Webex Contact Center.”
Our Covid World: Private Equity & the Acceleration into Digital
Today, the demand for frictionless online experiences has intensified at a startling rate. That demand will push even more investments in our new cognitive revolution, with financial capital determined to accelerate the process. The customer experience (CX) has been a key piece of the value creation puzzle for some years now, but Covid19 has sent sparks flying across our digital landscape, flicking on lights of online opportunity like never before even as lockdowns shuttered many physical locations. Sure enough, a new April, 2021, McKinsey report, A Year of Disruption in the Private Markets, notes that:
Rapid changes in how the world lives, works, plays, and shops affected all real estate asset classes. Office and retail saw the most pronounced changes—some of which seem likely to endure—which are causing investors and owners to rethink valuation and value creation strategies alike…. A rapid shift to omnichannel shopping impaired retail real estate valuations, particularly for shopping malls…. In some respects, the PE industry in early 2021 strongly resembles the picture a year earlier: robust fundraising, rising deal volume, elevated multiples. But for the institutions that populate the industry, transformation has come faster than ever, accelerating old trends and spawning new ones.
The report focuses in on a considerable pickup in eCommerce penetration. According to credit card data from Earnest Research, the overall eCommerce penetration for leading retailers increased from 25% in the January to March 2020 timeframe, to approximately 35% in the April to May timeframe, “a significant shift that represents years of eCommerce acceleration in just a few months.” McKinsey’s recent Covid19 US Consumer Pulse Survey also posits the emergence of new shopping behaviors that blend the physical and digital.
More than 75% of Americans have tried a new shopping behavior during the crisis, and more than 70% overall intend to continue those behaviors. For example, in food purchasing, the survey shows the likelihood of consumers continuing new habits. “Buying online with pickup in store (BOPIS) and curb-side pickup are likely to become permanent fixtures of the shopping experience. New store formats that focus on experiences and enable omnichannel engagement will accelerate, which imply a different store network and a different box size for many retailers.”
In fact, this week The NY Times tells the story of Goldbelly, a platform hoping to lead a restaurant eCommerce revolution which has raised $100 million in new funding. Last year, investment firm Spectrum Equity reached out to the startup after glimpsing Goldbelly’s success in connecting local restaurants with a national audience. A managing director at Spectrum notes that, “The pandemic has really accelerated trends that were already happening,” and that Goldbelly’s growth has been, “extraordinary.”
Perhaps not unrelated, in March, 2021, Bain and Company also published an online report arguing that private equity companies are increasingly betting that broad economic forces are rapidly changing consumer behaviors and attitudes in subtle but impactful ways.
In the few short years since environmental, social, and governance (ESG) appeared on the scene, the industry has tended to view it as a sideshow — something good to do in addition to a fund’s normal business of buying and shepherding companies. Some firms have actually segregated these efforts into discrete funds wholly devoted to impact investing, where the goal is to generate social or environmental impact at market-rate returns. Now however, leading private equity firms, especially in Europe, are shifting away from discrete, segregated ESG initiatives and talking more about delighting customers, gaining market share, engaging employees and creating the best work environment.
Can you sense the landscape shifting? Societal trends can rush through markets like bolts of electricity, or they can spark new ways of shopping and working that spread slowly and quietly over time. Either way, digital practices kindled by the Covid fire should persist for customers and employees alike long after the crisis has passed.
In other words, the private equity industry seems to now fully recognize CX and the employee experience (EX) as essential differentiators in a world of increasingly commoditized products and services. Revenue growth in hyper-competitive environments will depend in no small part on the extent to which technologies can provision a seamless experience for customers and employees hot-wired with high service expectations.
The latest proof of this epiphany came last week, with the announcement that Boston private equity firm Abry Partners has led a merger of privately-held Aspect Software with privately-held Noble Systems to form Alvaria, “a new global company delivering optimized customer experience and workforce engagement software and cloud services technology solutions.” The total value of the combined transaction exceeds $1 billion. Abry is now the majority owner of Alvaria.
The recent Aspect story in particular has been one of twists and turns. Recall that the company emerged from bankruptcy back in 2016, and by February, 2019, Vector Capital had acquired Aspect and infused equity capital in the amount of $100 million as a means to transform the company and return it to profitability. Now Vector will continue as a minority equity holder of Alvaria. Aspect President and CEO Patrick Dennis will continue as President and CEO of the new entity. Aspect’s Michael Harris will stay on as Chief Product Officer and CMO.
So what, exactly, will Alvaria be comprised of?
Based in Atlanta, Georgia, Noble Systems was founded in 1989 by Jim Noble (going forward, he’ll serve as advisor to Alvaria and Abry Partners). Noble Systems was a pioneer in outbound dialing systems and has been profitable throughout most of its history. Its portfolio has been available on-premise, through the cloud, as a managed service, or in hybrid combinations with consistent patented technology features and functionalities across all options (it built a cloud offering years ago using the same code base as its on-premise offering). While on-premise solutions make up a large segment of its contact center deployments, particularly among larger organizations, those solutions also serve small companies across a range of industries.
The cloud contact center-as-a-service (CCaaS) solution is an omnichannel platform with the flexibility to deploy quickly and scale up or down on demand. Today, Noble Cloud has accounted for most of its new bookings and has transitioned enterprise-class deployments to a work-from-home environment within days. One client moved more than 2,000 agents to 100% work-from-home within one week while another client shifted its entire customer service and appointment setting operations in less than 24 hours. Noble’s hosted cloud solutions are single tenant.
Noble has long excelled in accounts receivable management (ARM) and its debt-collection business and the compliance requirements that characterize it. But the launch of Noble Inbound 100 back in 2016 signaled it was also a full-service provider. And indeed, since that time most of its customers have purchased inbound along with outbound capabilities both on-premise and in the cloud. It’s also spent years investing in solutions that deepen customer and employee engagement.
A couple of those solutions seem particularly noteworthy. Consider recent efforts at improving patient care in healthcare through an integrated contact center technology framework (a suite of omnichannel contact center, workforce engagement, analytics, and compliance tools that help manage the entire patient lifecycle, from revenue management to relationship management) that benefits patients, employees, and the larger enterprise.
Gamification appears to be another strength. Back in 2018, Noble Systems acquired gamification provider FidoTrack in order to apply gaming mechanics that help engage and motivate employees and ensure consistency of coaching and incentives across different teams. The solution can access data from any customer care database and then help improve KPIs. For instance, bringing gamification to collections has helped improve the agent experience and improve dialer adherence, total calls, and talk time percentage. And the flexible environment supports integration with existing contact center systems, so companies can easily “bolt on” gamification to any platform already in place.
By 2021, Noble’s solutions extended across contact center (Noble CC), workforce engagement management (Noble WEM), gamification (Noble Game), and analytics (Noble IQ) suites. Noble also happens to hold over 200 contact center related patents related to everything from outbound contact and compliance to workforce management (WFM) and AI. It should bring particular strengths in financial services, insurance, healthcare, telecom, retail, outsourcing, and inside sales to Alvaria.
For its part, Aspect has long been known as a prime mover in the industry. In 1973, it offered the first intelligent ACD. In 1980, it unveiled the first WFM solution. The following year it added outbound dialing capabilities with the first dialer. Its flagship on-premise enterprise solution, Unified IP 7.1, was introduced in 2012, and the platform continues to be refined (version 7.4 being the most recent).
Skip ahead to 2017, when it launched Aspect Via, its first best-of-breed contact management and workforce optimization enterprise cloud contact center platform that provided a complete CCaaS solution to the market. The company has been focused on investing in Via’s scalability, security, and accessibility ever since, offering its on-premise enterprise customers a manageable migration to the cloud. The most recent version, Aspect Via 20, was announced in August, 2020, amidst the Covid19 pandemic. As such, it features relevant upgrades to an array of contact management and workforce optimization (WFO) applications (the general availability of Aspect WFO Version 20, with a fully redesigned and simplified user interface and other enhancements aimed at the mobile workforce, was announced in July, 2020).
Consider that the new workforce optimization suite of applications delivers advanced forecasting and agent engagement capabilities for an increasingly mobile and homeshored workforce, which makes managing, scheduling, and motivating such agents easier. It also supports intelligent inbound routing strategies and advanced outbound campaign and list management with regulatory compliance tools that help organizations comply with national, regional, and local regulations at a time of increased regulatory fervor. Companies can quickly deploy a full omnichannel contact center from scratch.
The Aspect platform’s API layer has allowed for easy integration with existing CRM, CEM, CFM, CSS, ERP, BPM, and WFM solutions. Enterprises with up to 15,000 agents can modularly deploy the apps on the common cloud platform, overcoming the “complicated mash-up of inflexible technologies” Aspect has seen all too often across the customer engagement landscape.
Aspect’s experience, platform-agnostic approach, and comprehensive offerings mean that many top enterprises utilize its contact center solutions, particularly in multi-PBX environments. AI capabilities include enhanced self-service (across voice, visual IVR, social, SMS, and mobile), agent support (using machine learning [ML] to bring intelligence to workforce schedules), and analytics. And AI-related initiatives such as Aspect’s work with Earley Information Science to integrate all required components to deliver a future-ready Conversational AI architecture for the development, deployment, and management of employee and customer-facing conversational experiences is also worth noting.
In effect, the combined technology stack of Noble Systems and Aspect Software should make for a strong competitor in the space. Large enterprise customers will be in financial services, online retail, healthcare, travel, and transportation. And as Michael Harris notes, “Customers of Aspect Software and Noble Systems will continue to use the existing products and services they depend on now for delivering mission critical services, without interruption, followed by a seamless transition to the next generation of Alvaria systems and services.”
Contact Center Systems: Embedded in a Dynamic Future
That next generation of systems and services is almost sure to continue the kind of innovation the entire industry is motivated to continue pushing. While both Aspect and Noble are known for their predictive dialer history, changes are coursing through the economy, and they know it. Alvaria is a company that will continue to reinvent, positioning for innovation and growth at-scale. Its leadership sees a world where the number of digital and voice interactions alike are increasing, and it’s focused on nothing less than participating fully in our surging cognitive revolution, pitching forward into a future that is less predictive than dynamic.
Extrapolating beyond the contact center systems industry and thinking about the economy as a whole, the post-Covid future we’re all graduating into this May of 2021 seems particularly abundant with possibilities. And AI in particular will be at the center of that story. Or as Chief Data Scientist in the AI Group at Genesys, Maciej Dabrowski, put it at the analyst summit in Ireland at the end of 2019, “We have gone through AI winter and now it is AI spring.” AI researcher Lex Fridman agrees. Just last week he tweeted that back in May, 1973, the Internet had just 42 computers and 36 nodes. Today, it's billions.
Just imagine today’s technology being at the stage where the Internet was in 1973, and then think about where it will be in fifty more years. The pace of transformation is astonishing. Or in the words of Nobel-winning psychologist Daniel Kahneman this week, “…clearly AI is going to win (against human intelligence). It’s not even close. How people are going to adjust to this is a fascinating problem.”
Like electricity itself, the speed and impacts of exponential technological advances – from AI to the IoT – won’t be fully appreciated until they’ve been embedded in the future of massive interconnection that awaits us.
Perhaps Yuval Noah Harari puts it best in his best-selling 2015 book, Sapiens:
Two centuries ago electricity played no role in the economy, and was used at most for arcane scientific experiments and cheap magic tricks. A series of inventions turned it into our universal genie in a lamp. We flick our fingers and it prints books and sews clothes, keeps our vegetables fresh and our ice cream frozen, cooks our dinners and executes our criminals, registers our thoughts and records our smiles, lights up our nights and entertains us with countless television shows. Few of us understand how electricity does all these things, but even fewer can imagine life without it.
Now consider the words of Google CEO Sundar Pichai back in January, 2018, when he said that AI’s impact on humanity will be more profound than electricity, and ultimately, just as profound as that of fire.
Next stop, a world of immersive techno-consumerism.
Which contact center systems companies will be thriving at the center of tomorrow’s changed world?
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