frost & sullivan's 2016 north american cloud contact center visionary innovation leadership...
TRANSCRIPT
BEST PRACTICES RESEARCH
© Frost & Sullivan 2016 2 “We Accelerate Growth”
Contents
Background and Company Performance ........................................................................ 3
Industry Challenges .............................................................................................. 3
Focus on the Future and Best Practices Implementation ............................................ 4
Conclusion........................................................................................................... 7
Significance of Visionary Innovation Leadership ............................................................. 8
Understanding Visionary Innovation Leadership ............................................................. 8
Key Benchmarking Criteria .................................................................................... 9
Best Practice Award Analysis for Interactive Intelligence ................................................. 9
Decision Support Scorecard ................................................................................... 9
Focus on the Future ............................................................................................ 10
Best Practices Implementation ............................................................................. 10
Decision Support Matrix ...................................................................................... 11
The Intersection between 360-Degree Research and Best Practices Awards ..................... 12
Research Methodology ........................................................................................ 12
Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices ................................................................................................................. 13
About Frost & Sullivan .............................................................................................. 14
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Background and Company Performance
Industry Challenges
The contact center market, like the global economy, has gone through rapid and
disruptive change in the past decade. Meanwhile, innovation has become central to help
satisfy a rapidly changing consumer. There is a demand for more feature-rich customer
contact solutions that help drive return-on-investment (ROI) for businesses.
Hosted and cloud contact center services have emerged as a way for businesses to rapidly
and flexibly support their continuously evolving customer service needs. The need for
seamless omnichannel engagement has become a key driver for businesses moving their
solutions to the cloud. In fact, deployments of hosted and cloud-based contact center
solutions surpassed premises-based systems in 2014, and the market for cloud contact
center services is forecast to grow 11% over the forecast period of 2014-2019.
Moreover, many of the early concerns surrounding the cloud, such as security and privacy,
have largely been addressed, increasing customer trust with cloud technologies.
Still, providers of contact center cloud solutions are faced with numerous challenges.
Despite a growing awareness of cloud benefits, IT stakeholders that work in concert with
contact center managers need to be convinced of cloud security, reliability, privacy, etc.
Both constituencies need proof that cloud offerings are as feature-rich as their contact
center systems counterparts and that they offer the flexibility and business agility those
businesses need to differentiate themselves in a complex and competitive market.
Further, despite the growth that is occurring in the cloud contact center market,
prospective customers need to be convinced of the long-term viability of their chosen
contact center solutions provider through solid financials, coupled with a growth plan and
compelling technology development roadmap.
A company that is a visionary innovation leader in this market needs to be in tune with
market trends and demands, be well grounded in what is possible, and be willing to take
risks. In the consumer-driven market for customer care, a company needs to offer a broad
set of customer interaction channels, adjunct solutions, have strong partnerships, and
strong analytics capabilities. And as a provider of customer service, it is imperative that it
also excels at customer support.
A company that can effectively differentiate itself from competitors with a compelling
value proposition will enable it to rapidly expand its base of customers, and in turn get on
the short list when prospects evaluate cloud-based customer contact solutions.
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Focus on the Future and Best Practices Implementation
With over 20 years in customer contact, Interactive Intelligence is one of the more
prominent providers of contact center solutions, and is one of the market leaders in
customer care. Interactive Intelligence has been recognized numerous times in the past
for customer value and market leadership, and continues to excel compared to its
competitors based on the following criteria: company culture, vision alignment, and
technological sophistication, a focus on unmet needs, growth performance, and growth
pipeline.
Criterion 1: Company Culture
Interactive Intelligence was founded on a vision of unified customer service
communications applications. The company was one of the first to offer a single-platform,
all-in-one software suite, at a time when the industry consisted primarily of ACD,
interactive voice response, call recording, outbound dialing systems, and best-of-breed
point solutions. The technical innovations that CEO Dr. Donald Brown has relentlessly
pursued since he founded the company in 1994 are impressive.
Other innovations have contributed to the company’s culture of success. Interactive was
one of the first contact center vendors to introduce a hosted version of its premise-based
platform. It’s also one of the first vendors to enable customers to shift deployment from
on-premise to cloud. The company’s work in real-time speech analytics is also noteworthy.
Interactive also designs products that are simple to use. For example, its all-in-one
software architecture enables customers to add features by simply turning on a software
licensing key rather than installing new software or integrating a separate system. The
company also has invested in specific vertical markets such as insurance so customers can
further reduce integration requirements.
In short, Brown’s vision, embraced across the company, is that customer engagement is
changing, and employees across the entire organization are responsible for outcomes.
Flexible, digital workstreams that cross customer engagement, communications and
collaboration have long been emphasized. Brown also understands the importance of
underlying technologies such as machine learning and big data, and for a deep and broad
partner ecosystem that further adds value to the companies’ solutions.
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Criterion 2: Vision Alignment
While continuously building out this vision, one innovation at a time, Brown and his team
saw the limitation of current systems to embrace the changes that were occurring. As a
result, in 2012 he took a huge gamble and went to the company’s board of directors to
ask for money to build from scratch a completely new cloud platform. In keeping with the
company’s innovative heritage, the goal was to build a true next-gen cloud platform that
would be infinitely scalable, secure, reliable, flexible, and give customers immediate and
continuous new functionality.
The result was PureCloud, launched in mid-2015. PureCloud delivers rich customer
engagement features for contact centers, including omnichannel routing, interactive voice
response, real-time speech recognition, recording, quality monitoring, workforce
optimization, reporting and analytics, and outbound dialing. It also includes UC and
collaboration functionality such as IP PBX capabilities, voicemail, fax, audio and video
conferencing, corporate directory, Web chat, desktop sharing, and content management.
In effect, the company took the experiences it had amassed over more than two decades
of customer contact experience, and re-envisioned how to easily and inexpensively enable
companies to give their customers a superior service experience. Customer traction from
PureCloud proved so positive that the company said its new cloud service would be its
primary customer engagement offering beginning in 2016.
Criterion 3: Focus on Unmet Needs
Interactive Intelligence has developed numerous products and enhancements to existing
ones that demonstrate its ability to fulfill the unmet needs of its customers. For instance,
the company acquired Bay Bridge Technologies in 2012 to short circuit the development
time it would take to bring world class forecasting and scheduling capabilities to
customers. It since has improved upon the technology, creating the richly featured
application today that is known as Interaction Decisions.
With PureCloud the company has introduced a full-featured contact center and business
communications offering that is simple, scalable and affordable. In fact, the company
priced this offering to be disruptive to the market. It consists of three services for
customers. PureCloud Collaborate includes persistent chat, presence, five-person
audio/video conference, geolocations, and content management, and is offered as both a
free and paid service ($9.99/user/month). PureCloud Communicate (starting at
$19.99/user/month) is a full-fledged PBX and UC service that also includes the entire
Collaborate feature-set. Finally, PureCloud Engage (starting at $69.99) is a complete
contact center offering that also includes the Collaborate and Communicate capabilities.
PureCloud is modular, enabling customers to deploy full-fledged customer engagement
features, or just the Collaborate or Communicate pieces. The decision to provision telco
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resources directly from Interactive Intelligence – an option called PureCloud Voice -- was
also based on making it as fast and simple as possible for customers to deploy the service.
Finally, Interactive Intelligence offers customers month-to-month, pay what you use
terms, rather than annual contracts.
Criterion 4: Technological Sophistication
PureCloud brings significant technological advantages to the market. PureCloud was
architected as a set of stateless, independently load-balanced microservices running atop
the scalable Amazon Web Services Cloud. This architecture was designed to achieve new
levels of reliability, security and scalability. PureCloud also integrates easily with third-
party applications using REST APIs.
To provision PureCloud, the company deploys a virtual or physical Edge device for the
customer that encapsulates all the media server capabilities of the company’s other
solutions, such as speech analytics, voice transcoding, PBX, ACD, and IVR for example.
One particularly innovative feature is that with PureCloud the local Edge provides local
survivability. If an Internet connection goes down, the Edge continues to take calls,
record, provide ACD and IVR functionality, and when the connection goes back up,
everything that occurred gets synced back up with Amazon, so nothing is lost. The
company also gives businesses that don’t want any device on-premises the option to use
the Edge installed within the Interactive Intelligence data centers.
Criterion 5: Growth Performance
PureCloud was initially introduced to the market aimed at the small-sized contact center
with a target of <100 agents. The goal was to test it with a couple dozen customers, then
in early 2016 to rapidly expand to accounts up to 1,000 agents. By 2017 it planned to
expand into accounts of 10K or more. That didn’t happen. Instead, sales took off and
scalability proof points happened more quickly. The company reported in its 2015 year-
end earnings call that PureCloud deployments were happening across all market size
segments, and in many cases it was up and running within weeks of signing.
Criterion 6: Growth Pipeline
Interactive Intelligence has a strong cloud story. Even before PureCloud the company had
been rapidly ramping up cloud sales starting with 5% of orders attributed to the cloud in
2009 to 50% in 2013. And it’s not just replacements of existing systems, but new
customers as well. As of 2014, 95% of cloud customers were new to Interactive
Intelligence, showing that its cloud story is clearly resonating with prospects. With
PureCloud this story can only get stronger.
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Although PureCloud addresses the entire market range, there is a large untapped potential
in the under-served SMB market, which Interactive Intelligence can capitalize on. SMB
customers are seeking the same functionality as their larger counterparts through vendors
that can help them deliver expert customer service without the costs associated with
premises-based deployments.
Finally, the company took a number of steps to make it easy and affordable to adopt
PureCloud. It created a subscription plan that enables customers to pay monthly for what
they use, with no commitment and no hidden fees at competitive prices. It also
implemented an online ordering process that enables organizations to purchase directly
from the company’s website, and lets customers change their subscription at any time.
Conclusion
Interactive Intelligence has produced a winner with the strategy behind the design of
PureCloud. Its rapid scalability, flexibility, ease of use, and affordability address key needs
in the market. With its strong overall performance and potential to increase its market
presence with PureCloud, Interactive Intelligence has earned Frost & Sullivan’s 2016
Visionary Innovation Leadership Award for Cloud Contact Centers
What Customers are Saying?
―Given our small IT staff, we needed a cloud contact center service that would be really
simple to deploy and manage. And we needed it to easily and cost-effectively scale to
accommodate intervals of high call volumes. We selected PureCloud Engage℠ because it
met all these requirements, and its architecture was more streamlined compared to
competitors. This meant we would reap the benefits faster. And with continuous delivery
of the most innovative functionality, we’re confident that PureCloud Engage℠ will keep us
one step ahead of the competition.‖
- Quicken Care
―We can’t say enough about the value PureCloud Engage℠ has brought us – from
improved service to increased efficiencies. It will certainly be a selling point in the future
as we potentially expand the properties we service.‖
- Universal Protection Service
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Significance of Visionary Innovation Leadership
A visionary innovation leadership position enables a market participant to deliver highly
competitive products and solutions that transform the way individuals and businesses
perform their daily activities. Such products and solutions set new, long-lasting trends in
how technologies are deployed and consumed by businesses and end users. Most
important, they deliver unique and differentiated benefits that can greatly improve
business performance as well as individuals’ work and personal lives. These
improvements are measured by customer demand, brand strength, and competitive
positioning.
Understanding Visionary Innovation Leadership
Visionary Innovation is the ability to innovate today in the light of perceived changes and
opportunities that will arise from Mega Trends in the future. It is the ability to scout and
detect unmet (and as yet undefined) needs and proactively address them with disruptive
solutions that cater to new and unique customers, lifestyles, technologies, and markets.
At the heart of visionary innovation is a deep understanding of the implications and global
ramifications of Mega Trends, leading to correct identification and ultimate capture of
niche and white-space market opportunities in the future.
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Key Benchmarking Criteria
For the Visionary Innovation Leadership Award, Frost & Sullivan analysts independently
evaluated two key factors—Focus on the Future and Best Practices Implementation—
according to the criteria identified below.
Focus on the Future
Criterion 1: Focus on Unmet Needs
Criterion 2: Visionary Scenarios through Mega Trends
Criterion 3: Growth Pipeline
Criterion 4: Blue Ocean Strategy
Criterion 5: Growth Performance
Best Practices Implementation
Criterion 1: Vision Alignment
Criterion 2: Process Design
Criterion 3: Operational Efficiency
Criterion 4: Technological Sophistication
Criterion 5: Company Culture
Best Practice Award Analysis for Interactive Intelligence
Decision Support Scorecard
To support its evaluation of best practices across multiple business performance
categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool
allows our research and consulting teams to objectively analyze performance, according to
the key benchmarking criteria listed in the previous section, and to assign ratings on that
basis. The tool follows a 10-point scale that allows for nuances in performance evaluation;
ratings guidelines are illustrated below.
RATINGS GUIDELINES
The Decision Support Scorecard is organized by Focus on the Future and Best Practices
Implementation (i.e., the overarching categories for all 10 benchmarking criteria; the
definitions for each criteria are provided beneath the scorecard). The research team
confirms the veracity of this weighted scorecard through sensitivity analysis, which
confirms that small changes to the ratings for a specific criterion do not lead to a
significant change in the overall relative rankings of the companies.
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The results of this analysis are shown below. To remain unbiased and to protect the
interests of all organizations reviewed, we have chosen to refer to the other key players
as Competitor 2 and Competitor 3.
DECISION SUPPORT SCORECARD FOR VISIONARY INNOVATION LEADERSHIP AWARD
Measurement of 1–10 (1 = poor; 10 = excellent)
Visionary Innovation Leadership
Focus on the
Future
Best Practices
Implementation Average Rating
Interactive Intelligence 10 8 9.0
Competitor 2 8 7 7.5
Competitor 3 7 6 6.5
Focus on the Future
Criterion 1: Focus on Unmet Needs
Requirement: Implementing a robust process to continuously unearth customers’ unmet
or under-served needs, and creating the products or solutions to address them effectively
Criterion 2: Visionary Scenarios through Mega Trends
Requirement: Incorporating long-range, macro-level scenarios into the innovation
strategy, thereby enabling ―first to market‖ growth opportunities solutions
Criterion 4: Growth Pipeline
Requirement: Best-in-class process to continuously identify and prioritize future growth
opportunities leveraging both internal and external sources
Criterion 3: Blue Ocean Strategy
Requirement: Strategic focus in creating a leadership position in a potentially
―uncontested‖ market space, manifested by stiff barriers to entry for competitors
Criterion 5: Growth Performance
Requirement: Growth success linked tangibly to new growth opportunities identified
though visionary innovation
Best Practices Implementation
Criterion 1: Vision Alignment
Requirement: The executive team is aligned on the organization’s mission, vision, strategy
and execution
Criterion 2: Process Design
Requirement: Processes support the efficient and consistent implementation of tactics
designed to implement the strategy
Criterion 3: Operational Efficiency
Requirement: Staff performs assigned tactics seamlessly, quickly, and to a high quality
standard
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Criterion 4: Technological Sophistication
Requirements: Systems enable companywide transparency, communication, and efficiency
Criterion 5: Company Culture
Requirement: The executive team sets the standard for commitment to customers,
quality, and staff, which translates directly into front-line performance excellence
Decision Support Matrix
Once all companies have been evaluated according to the Decision Support Scorecard,
analysts can then position the candidates on the matrix shown below, enabling them to
visualize which companies are truly breakthrough and which ones are not yet operating at
best-in-class levels.
DECISION SUPPORT MATRIX FOR VISIONARY INNOVATION LEADERSHIP AWARD
High
Low
Low High
Best
Practi
ces I
mp
lem
en
tati
on
Focus on the Future
Interactive Intelligence
Competitor 2
Competitor 3
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The Intersection between
360-Degree Research and
Best Practices Awards
Research Methodology
Frost & Sullivan’s 360-degree research
methodology represents the analytical
rigor of our research process. It offers a
360-degree-view of industry challenges,
trends, and issues by integrating all 7 of
Frost & Sullivan's research methodologies.
Too often, companies make important
growth decisions based on a narrow
understanding of their environment,
leading to errors of both omission and
commission. Successful growth strategies
are founded on a thorough understanding
of market, technical, economic, financial, customer, best practices, and demographic
analyses. The integration of these research disciplines into the 360-degree research
methodology provides an evaluation platform for benchmarking industry players and for
identifying those performing at best-in-class levels.
360-DEGREE RESEARCH: SEEING ORDER IN
THE CHAOS
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Best Practices Recognition: 10 Steps to Researching,
Identifying, and Recognizing Best Practices
Frost & Sullivan awards follow a 10-step process to evaluate award candidates and assess
their fit with select best practice criteria. The reputation and integrity of the Awards are
based on close adherence to this process.
STEP OBJECTIVE KEY ACTIVITIES OUTPUT
1 Monitor, target, and screen
Identify award recipient candidates from around the globe
Conduct in-depth industry research
Identify emerging sectors Scan multiple geographies
Pipeline of candidates who potentially meet all best-practice criteria
2 Perform 360-degree research
Perform comprehensive, 360-degree research on all candidates in the pipeline
Interview thought leaders and industry practitioners
Assess candidates’ fit with best-practice criteria
Rank all candidates
Matrix positioning all candidates’ performance relative to one another
3
Invite thought leadership in best practices
Perform in-depth examination of all candidates
Confirm best-practice criteria Examine eligibility of all
candidates Identify any information gaps
Detailed profiles of all ranked candidates
4
Initiate research director review
Conduct an unbiased evaluation of all candidate profiles
Brainstorm ranking options Invite multiple perspectives
on candidates’ performance Update candidate profiles
Final prioritization of all eligible candidates and companion best-practice positioning paper
5
Assemble panel of industry experts
Present findings to an expert panel of industry thought leaders
Share findings Strengthen cases for
candidate eligibility Prioritize candidates
Refined list of prioritized award candidates
6
Conduct global industry review
Build consensus on award candidates’ eligibility
Hold global team meeting to review all candidates
Pressure-test fit with criteria Confirm inclusion of all
eligible candidates
Final list of eligible award candidates, representing success stories worldwide
7 Perform quality check
Develop official award consideration materials
Perform final performance benchmarking activities
Write nominations Perform quality review
High-quality, accurate, and creative presentation of nominees’ successes
8
Reconnect with panel of industry experts
Finalize the selection of the best-practice award recipient
Review analysis with panel Build consensus Select winner
Decision on which company performs best against all best-practice criteria
9 Communicate recognition
Inform award recipient of award recognition
Present award to the CEO Inspire the organization for
continued success Celebrate the recipient’s
performance
Announcement of award and plan for how recipient can use the award to enhance the brand
10 Take strategic action
Upon licensing, company may share award news with stakeholders and customers
Coordinate media outreach Design a marketing plan Assess award’s role in future
strategic planning
Widespread awareness of recipient’s award status among investors, media personnel, and employees
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About Frost & Sullivan
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