Marketscope for Contact Cent 133155[1]

ResearchPublication Date: 31 January 2006 ID Number: G00133155

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MarketScope for Contact Center Quality Management, 2006 Jim Davies

The call recording market is evolving rapidly as aspects such as workforce optimization and speech analytics gain credence. Nice Systems, Verint and Witness Systems continue to lead in market share, but various emerging vendors are making promising progress.

Publication Date: 31 January 2006/ID Number: G00133155 Page 2 of 9

2006 Gartner, Inc. and/or its Affiliates. All Rights Reserved.

WHAT YOU NEED TO KNOW

You must invest in quality management (QM) software to improve the performance of customer contact centers. Most vendors offer features that extend beyond traditional QM into what Gartner defines as the broader workforce optimization (WFO) market, such as e-learning and performance management analytics. These complementary features are not evaluated as part of this MarketScope.

STRATEGIC PLANNING ASSUMPTION(S)

Through 2009, contact center call recording and QM solutions will continue to be an essential component of all contact centers with more than 50 seats (0.9 probability).

MARKETSCOPE

Vendor coverage has evolved since 2004 because of recent acquisitions and the emergence of new competition. Nice Systems, Verint and Witness Systems retain their Strong Positive ratings and continually appear on our clients' shortlists. Dictaphone has been acquired by Nice Systems and has consequently been retired from the MarketScope. etalk was acquired by Autonomy, but Mercom and Envision remain unchanged. ASC telecom AG, Cacti, DavaCord, Magnetic North and VoicePrint appear on the MarketScope for the first time.

Market/Market Segment Description The QM software market encompasses applications for on-demand, selective and full-time recording of customer audio interactions, as well as agent desktop activity (screen capture). It also provides call evaluation tools, online monitoring tools for joining live calls, and speech analytics for audio insight. These tools are traditionally used for compliance and quality.

Inclusion and Exclusion Criteria This document is an update of our 2004 MarketScope. It evaluates the current position of key vendors across five important evaluation criteria:

Product capabilities

Overall company viability

Customer experience

Geographic strategy

Product development strategy

Rating for Overall Market/Market Segment Overall Market Rating: Promising

Although it is a mature market, contact center QM is still growing, and many organizations need to invest in it for the first time or upgrade their antiquated systems. In addition, the role and scope of QM are evolving to become a more strategic enterprise investment. Consequently, Gartner defines this market as "promising."



Evaluation Criteria

Table 1. Evaluation Criteria

Evaluation Criteria Comment Weighting

Product/Service Core goods and services offered by the vendor that compete in or serve the defined market. This includes current product or service capabilities, quality, feature sets and skills, whether offered natively or through OEM agreements/partnerships as defined in the market definition and detailed in the subcriteria.

high

Overall Viability (Business Unit, Financial, Strategy, Organization)

Viability includes an assessment of the overall organization's financial health, the financial and practical success of the business unit, and the likelihood of the individual business unit to continue investing in the product, to continue offering the product and to advance the state of the art in the organization's portfolio of products.

high

Customer Experience Relationships, products and services/programs that enable clients to be successful with the products evaluated. Specifically, this includes the ways customers receive technical or account support. This can also include ancillary tools, customer support programs (and the quality thereof), availability of user groups and service-level agreements.

standard

Geographic Strategy The vendor's strategy to direct resources, skills and offerings to meet the specific needs of geographies outside the "home" or native geography, either directly or through partners, channels and subsidiaries as appropriate for that geography and market.

standard

Offering (Product) Strategy The vendor's approach to product development and delivery that emphasizes differentiation, functionality, methodology and feature set as they map to current and future requirements.

standard

Source: Gartner



Figure 1. MarketScope for Contact Center Quality Management, 2006

StrongNegative Caution Promising Positive

StrongPositive

ASC telecom AG xCacti xDavaCord xEnvision xetalk (an Autonomy Company) xMagnetic North xMercom xNice Systems xVerint xVoicePrint xWitness Systems x

As of January 2006

RATING

Source: Gartner (January 2006)

Vendor Product/Service Analysis ASC telecom AG ASC is an established $20 million European company with 20,000 customers worldwide. The vast majority of these customers are financial institutions and public safety sites, but ASC has more than 500 call center recording customers. However, fewer than 50 of these (half of which are in the U.S.) also use their complementary QM software because of its previously inferior capabilities compared with market leaders, and the fact that most use their own homegrown quality tool. Version 7.0 of ASC's QM offering was launched in September 2005, in an attempt to rekindle this aspect of the portfolio. In addition to performance enhancements, new features were added, such as coaching/e-learning, keyword audio analytics and interactive voice response surveying, in an attempt to achieve functional parity with the marketplace as a whole. Customer references, which were all from Europe, the Middle East and Africa (EMEA), were unable to comment on the new release; therefore, the viability of this enhanced offering remains unproven.

Rating: Caution

Cacti Cacti is a small (less than $15 million) but growing, privately owned company with a strong development background and a promising customer list. The company is now looking to divert more resources to marketing and expand beyond its pockets of regional activity in North America, potentially via a first round of venture capital funding. The single-server .NET-based solution supports all common QM requirements, from selective and full-time recording to voice over IP (VoIP) and speech analytics. However, ongoing development in areas such as the sophistication of its Web interface is needed, as well as the formation of relationships with complementary vendors and the improvement of its international standing. Reported product issues span aspects from selective screen capture to 100 percent of call capture and multisite management. Strengths include the low maintenance requirements of the solution and the direct "hands on" approach of the company to resolve issues. However, not all customers appear to receive the same level of support. This breakdown of relationships is symptomatic of a growing company and will need to



be addressed via enhanced processes and the ongoing recruitment of support and development staff.

Rating: Promising

DavaCord DavaCord changed its name from VoiceLogger in 1Q05 and was subsequently acquired by OnviSource in August 2005. OnviSource is a holding company that offers a complementary company portfolio that includes a call center solution provider (Cadcom) as well as an outsourcer and a host. The outsourcer and host use DavaCord's and Cadcom's software, providing customers with a variety of sourcing options. The U.S.-based company has 700 QM implementations of varying sizes, but most are small and midsize businesses or divisions of large companies and it has yet to establish itself internationally. The QM business generates less than $10 million per year, but under the new ownership and enhanced value proposition, DavaCord optimistically expects this figure to double year over year for the next three years. The QM offering provides standard features, such as screen capture, real-time monitoring and speech analytics via an original equipment manufacturer (OEM) relationship with Nexidia. Customer references were not verified by the vendor in the allotted time frame for this research.

Rating: Promising

etalk (an Autonomy Company) In 2Q05, etalk was acquired by Autonomy to penetrate the contact center market. Autonomy is a financially stable company that focuses on obtaining insight from unstructured data, such as audio, text and video. Integration with Autonomy's core platform was announced in September 2005. etalk added 24 new QM customers in 1H05. Although etalk will look to cross-sell Autonomy into its installed base through 2006, its primary objective is to add new customers and increase its business by up to 30 percent a figure much higher than the past three years. Autonomy's stronger EMEA and Asia/Pacific presence will help etalk's sales internationally (a previous challenge). The company is currently transferring Qfiiniti expertise to Autonomy's international offices. However, support will continue to be driven from the U.S. until EMEA support is added in 1Q06. etalk needs to increase revenue to maintain credibility and clearly define and market its value proposition under its new ownership.

Rating: Positive

Envision Envision is making renewed progress with its QM offering, and it is slowly gaining traction with its broader WFO proposition. Although it generated less than $15 million in 2004, the company is growing rapidly (more than 40 percent growth in the past four quarters) and expanding globally. It has 195 QM customers and it focuses on the midmarket and upward (that is, it will not compete for a 50-seat deal). The solution supports VoIP environments and speech analytics via an OEM relationship. In a consolidating Tier 2 landscape, Envision is a desirable acquisition target because of the breadth of the solution, the size of the company and its call center experience. Enhancement is required for the solution's analytics/reporting capability, but the company is highly respected for its tightly integrated e-learning solution.

Rating: Positive

Magnetic North Magnetic North is a small (less than $15 million), privately owned, U.K.-based company. Established in 1999 and funded by Mirage Holding Group, Magnetic North now has more than



400 customers across 700 sites, of which 70 percent are using its QM product, and 30 percent are using its complementary outbound dialer. Customers are primarily EMEA-based, but Magnetic North is just beginning to break into the U.S. and Canada via local partners. Although not as slick as the leading vendors, its role-based solution supports most common QM features. The company tries to differentiate itself through novel incentives, such as free lifetime upgrades and free switch migration (for example, you can move from Nortel Symposium to Cisco VoIP at no charge). The company is often praised for its responsive support.

Rating: Promising

Mercom Mercom is well suited for organizations that require between 50 and 500 seats. The company's midmarket focus was intended to differentiate it in the marketplace, but growth has been slower than expected. The company generated $19.8 million in 2004, of which approximately 60 percent came from call center implementations. Mercom saw significant growth in Asia/Pacific in 2005, but these were high-end recorder-only deals that do not align with its strategy. The company relies exclusively on its global reseller network for sales, and it currently has 90 resellers worldwide. The solution provides basic QM features and is competitively priced; however, it lacks sophistication compared with leading vendors. The company's claims of "ease of use" are well founded, but some enhancements to the management and administration of the solution are required. The release of version 3.3 of its Audiolog and Interaction Review (browser-based playback) products in September 2005 solved many of these issues, as will future planned releases. The modular browser-based solution is based on industry-standard Microsoft technologies. Mercom recently announced support for Windows XP.

Rating: Promising

Nice Systems Nice generated $254 million in 2004, with an estimated $155 million coming from its call center business. The company acquired Dictaphone's recording business in 2Q05, and will welcome the maintenance and migration revenue this will bring during the next few years, as well as the additional support staff to bolster Nice's established infrastructure. Nice is gaining traction with its feature-rich, analytically driven "insight from interactions" solution, recently enhanced via a partnership with SAS, but some early stability issues have been reported. As of YE05, only 100 organizations were fully utilizing the capabilities of Nice Perform some cases reported high upgrade costs of moving from early 8.x versions. As support contracts on older versions come to an end, customers will begin to explore the vendor landscape. The next release of Nice Perform, due in 1H06, will include an improved form designer and deeper integration with the company's customer survey solution and screen content capture tool. Variable support and training quality both direct and via the company's partner network is an ongoing issue that Nice is looking to rectify.

Rating: Strong Positive

Verint Verint continues to execute well in the QM market. It generated $250 million in 2004, of which Gartner estimates $83 million came from call center recorder and QM implementations. The company expected to grow by 30 percent in 2005. Customers are happy with the solution's flexibility and core QM features, as well as the speech analytics capability for call categorization. However, Verint needs to enhance its post-implementation support and training. The addition of a data-mining capability to suggest weighted probable causes for performance shifts (such as quality scoring dropping) is an interesting and unique capability. However, improvements to how



evaluation forms are constructed and the addition of partitioning to enable multidepartmental recording need to be addressed. Verint views QM as just one, albeit important, element of its vision that focuses on providing "actionable" intelligence across the enterprise. The recent acquisition of the operational performance management vendor, The Opus Group, will fuel its move in this direction.


VoicePrint VoicePrint is a small (less than $15 million) company with more than 50 employees. It focuses primarily on midmarket call center deployments. One-third of its 1,200 implementations are in call centers. The company is privately held and profitable. Rather than streaming screen recordings, the solution reduces the effect on network resources by buffering true video files at the agent desktop and archiving across the LAN/WAN at scheduled intervals. VoicePrint recently launched a new portal application a browser-based addition to the company's suite of enterprise reporting, speech analytics, real-time performance analytics and automated e-learning tools. It is primarily a North American organization, although it does have a technical-support office in the U.K. and a small global partner network. The company has relatively limited resources compared to its larger competitors. It is suffering "growing pains," which are manifested through its basic support infrastructure and long product development cycle. However, VoicePrint is addressing these issues and expects a strong recovery in 2006.

Rating: Promising

Witness Systems Witness continues to execute well in the QM market despite its many distractions. The acquisition and integration of Blue Pumpkin's workforce management (WFM) solution are ongoing in the pursuit of a unified WFO solution. In 2004, the company generated $141 million, and expected this figure to reach $200 million by the end of 2005 because of organic growth and revenue resulting from Blue Pumpkin. The company added 277 new customers, including 162 for its VoIP solution, as of September 2005. The release in September 2005 of the first "Impact 360" offering brought various enhancements to its QM offering, such as improved, centralized, multisite management, as well as some early integration benefits between WFM and QM. The release also signified the migration to a "software only" QM proposition, thus eliminating the need for proprietary hardware and enabling customers to source their own servers. Established WFM implementation partners that are now cross-selling QM without the appropriate support expertise are an issue that needs to be addressed.


RECOMMENDED READING

"Extending Quality Management Beyond the Contact Center Benefits Companies and Customers"

"Agent Esteem and Self-Actualization Are Key to Customer Satisfaction"

"A New Market Emerges for Workforce Optimization Tools"

"The Six Building Blocks of Contact Center Workforce Optimization"

"Magic Quadrants and MarketScopes: How Gartner Evaluates Vendors Within a Market"



Acronym Key and Glossary Terms

EMEA Europe, the Middle East and Africa

OEM original equipment manufacturer

QM quality management

VoIP voice over IP

WFM workforce management

WFO workforce optimization

Gartner MarketScope Defined

Gartner's MarketScope provides specific guidance for users who are deploying, or have deployed, products or services. A Gartner MarketScope rating does not imply that the vendor meets all, few or none of the evaluation criteria. The Gartner MarketScope evaluation is based on a weighted evaluation of a vendor's products in comparison with the evaluation criteria. Consider Gartner's criteria as they apply to your specific requirements. Contact Gartner to discuss how this evaluation may affect your specific needs.

In the below table, the various ratings are defined:

MarketScope Rating Framework

Strong Positive Is a solid provider of strategic products, services or solutions.

Customers: Continue investments.

Potential customers: Consider this vendor a strong strategic choice.

Positive Demonstrates strength in specific areas, but is largely opportunistic.

Customers: Continue incremental investments.

Potential customers: Put this vendor on a shortlist of tactical alternatives.

Promising Shows potential in specific areas; however, initiative or vendor has not fully evolved or matured.

Customers: Watch for a change in status and consider scenarios for short- and long-term impact.

Potential customers: Plan for and be aware of issues and opportunities related to the evolution and maturity of this initiative or vendor.

Caution Faces challenges in one or more areas.

Customers: Understand challenges in relevant areas; assess short- and long-term benefit/risk to determine if contingency plans are needed.

Potential customers: Note the vendor's challenges as part of due diligence.



Strong Negative Has difficulty responding to problems in multiple areas.

Customers: Exit immediately.

Potential customers: Consider this vendor only if there are no alternatives.

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Documents

Marketscope for Contact Cent 133155[1]