mardi 22 octobre 2013

Magic Quadrant for the CRM Customer Engagement Center

A lire sur:  http://www.gartner.com/technology/reprints.do

13 May 2013 ID:G00251937
Analyst(s): Michael Maoz

VIEW SUMMARY

The blend of social media engagement with CRM software is evolving the contact center into the customer engagement center. Gartner's 2013 CRM customer engagement center Magic Quadrant looks at vendors that respond to the challenge of "any channel" customer service engagement.

Market Definition/Description

This document was revised on 16 May 2013. The document you are viewing is the corrected version. For more information, see the Corrections page on gartner.com.
The CRM customer engagement center (CEC) refers to a logical set of technologies and business applications that are engineered to provide customer service and support, regardless of the interaction (or engagement) channel. The goal of the CEC is not only to provide service to customers as they move among communications channels — including social media — while retaining the customers' context, but also to deliver the appropriate business rule to determine the next best action, information or process with which to engage the customers.
For the past 12 years, Gartner referred to CECs as customer service contact centers. As the need to engage customers and prospects on new channels such as social media has expanded, we have evolved the term "contact center" to "customer engagement center," and thus, we have renamed our Magic Quadrant (see "Magic Quadrant for CRM Customer Service Contact Centers," published in April 2012).
At their most basic level, CRM CEC applications handle a wide range of tasks, including engaging customers and prospects across multiple channels, and handling trouble ticketing, order management, case management, advisory services, problem diagnostics and resolution, account management, and returns management. The focus of the engagement might also be for government, nonprofits and higher education, in which the target not always is customers, but could also be students or citizens. This may also involve knowledge-enabled resolution (such as advanced search tools), process-centric/enabled service resolution, community management, and management and service analytics dashboards.
CRM Business Applications for Customer Service Engagement
A complete CEC solution, although not available from a single vendor, will contain all of the following functional components:
  • Customer service and support (CSS) problem management, trouble ticketing and case management
  • Knowledgebase solutions, content management and advanced desktop search
  • Real-time analytics/decision support
  • Social media engagement for customer service
  • In-line support of mobile consumers
  • Peer-to-peer (community/blog/forum) support and/or integration
  • CRM databases for account/contact/offer information
  • Desktop integration with telephony, co-browsing, mobile and Web extension of the solution to online communities interested in peer-to-peer (P2P) collaboration management
  • Social service process analysis
  • Real-time feedback and surveys
  • The ability to connect to remote sensors embedded in equipment such as consumer electronics
(For a breakdown on the weightings applied for the evaluation, see "Social Media for CRM Will Force a Shift From Contact Centers to Customer Engagement Centers.")
The agent must be able to support the customer, whether the customer is on a website or a mobile device, at a kiosk or in a vehicle, on Facebook or on Twitter, or in a community or a blogosphere. This means:
  • The agent sees what the customer sees.
  • The agent knows the path the customer has taken before the voice conversation takes place (that is, he or she knows the communication context of the interaction).
  • The agent has the tools to solve the customer's problem or address the customer's issue from a remote location.
The CEC needs to send out proactive, automated alerts. For example, when the status in a back-end system changes to one of which the customer needs to be aware (such as a bank balance, credit card fraud, flight delays, available upgrades, price range reached, a special offer on cars or insurance policy exceptions), an alert is sent to one or several devices until the customer responds that he or she has received the notification.
The application must contain business rules for complex entities, such as contact, enterprise, subsidiary or partner, and the workflow processes to route a case, opportunity or order based on the rule set for the specific relationship. Optionally, the application should be available as a subscription service in a cloud-architected model for all relevant industries. (Some industries, such as telecommunications and federal government agencies, may not be ready for this model, and on-premises software or private cloud may be preferred.)
A case may be routed from one department to another, depending on type. The case can link to all interactions across channels, whether email, online, SMS or a phone call. An application supports multiple languages simultaneously. In some situations, real-time decision support is important. Multiple back-end systems synchronize using their own rules — for example, credit card fraud; telecommunications-specific functions, such as telecommunications billing, service and resource management; product life cycle management; digital content; and advertising bundling — and integrated order management.

Magic Quadrant

Figure 1. Magic Quadrant for the CRM Customer Engagement Center
Figure 1.Magic Quadrant for the CRM Customer Engagement Center
Source: Gartner (May 2013)

Vendor Strengths and Cautions

Amdocs

Amdocs is a profitable company with more than $3.25 billion in sales in 2012. It has a comprehensive set of software and services to communications service providers (CSPs), in terms of telecommunications, media and satellite. In the CEC market, Amdocs is a niche provider, with a business and vision directed at customer service contact centers and the customer experience to its target industry.
Strengths
  • In the telecommunications industry, Amdocs has the advantage of a comprehensive set of products as part of the Customer Management Version 8.x and new CM9, ranging from an order management and billing platform, customer service functionality for the agent desktop, device management, a catalog and retail interaction manager, together with libraries of interaction flows.
  • Amdocs is a strong and profitable company, with customers and professional services resources in every major geographic location.
  • For prospects with deployed Amdocs assets, the company offers strong insight on the future of the telecommunications customer. It understands retail operations and the contact center in telecommunications and mobile, and it has good integrated billing capabilities.
  • Amdocs' consulting has strong experience in project management, best practices and key performance indicator mapping, and the support organization receives high marks.
Cautions
  • References have pointed to gaps in the agent desktop product, including knowledge management, reporting/analytics and industry-specific capabilities outside of CSPs (telecommunications). Look to partners to close functional gaps.
  • Amdocs has not kept pace with the needs of clients in the areas of cloud-based systems (although it does offer a managed service option), sentiment analysis, online communities or social media engagement. Some recent partnership strategies have improved its abilities. A new capability for real-time decision making is emerging.
  • Amdocs is not recommended for customer service contact center shortlists across industries other than telecommunications, although it may be appropriate for consideration on longlists.
  • Despite Amdocs articulating leading ideas for customer experience, Amdocs references have not expressed the view that it is best of breed in areas such as chat, knowledge management, co-browsing and virtual assistants.
  • Amdocs has limited traction in growing third-party external service providers (ESPs) for consulting and implementation services.

Astute Solutions

Astute Solutions is a small (estimated revenue of less than $20 million in 2012) niche provider of cloud-based (software as a service [SaaS]) and on-premises customer service functionality, primarily to the consumer affairs market and primarily in the U.S. and the U.K.
Strengths
  • Astute has continued to develop its products to meet changing customer demand, most recently with more-advanced cloud capabilities and improved knowledge management. It also has a clean and useful social product for CRM — Social Relationship Management (SRM). It has a good natural-language processing tool that is useful for customer sentiment analysis.
  • Astute's ePowerCenter version 8.x is available either on-premises or in a cloud subscription model, primarily in small and midsize customer service centers (15 to 100 agents). Through an acquisition, it can now offer a cloud-based computer telephony integration (CTI) component in addition to extending the application to mobile devices.
  • The vendor has strong knowledge of and functionality for customer service processes in industries such as restaurants, hospitality, consumer goods and retail (nonbanking or other financial services), as well as best-of-breed capabilities, such as Facebook-based chat.
Cautions
  • Astute is a small company (fewer than 100 employees), and it has a limited software partner ecosystem and a small integrator/consultancy partner practice. In 2012, there was no small degree of reorganization in sales and marketing.
  • References point out customer support issues outside of the United States, although Astute has moved to 24/7 global support.
  • The product requires improvement to the configuration module and other components in multicountry/multiclient operations environments that require large data volumes. In the design phase, new customers need to think through their requirements, rather than re-engineering the system once it has been developed.
  • The system is rarely deployed in large-scale, multichannel operations of large, distributed international service environments.

Kana

Kana has one line of business focused on the public sector, another on midsize- to large-enterprise customer service and another focused on customers looking for a cloud-based product centered on the midmarket. This multipronged strategy will continue to limit its leadership potential in the emerging CEC market. Our assessment of Kana replaces the Sword Ciboodle assessment because Ciboodle was purchased by Kana in 2012. See "Kana Buys Ciboodle for Improved Customer Service and Social CRM Reach" for a summary of the Kana acquisition of the Ciboodle product.
Strengths
  • The combined assets of Kana could, over time, yield to the deployment of best-in-class CECs. The Kana Enterprise, with an agent desktop, knowledge, social and mobile components, gives the company good material to scale an integrated product.
  • Management has invested in a broad set of customer service and support tools to reach many constituencies: public sector, midsize businesses, the traditional customer service representative and those looking for social media tools.
  • The product can be configured for multiple user roles, which speeds the average handling time for a task, streamlines/shortens the training period and makes new processes easier to introduce.
Cautions
  • Kana requires another 12 months to sharpen its marketing skills and develop third-party partners to sell and deploy its products. Selling multiple solutions within four product families has diminished Kana's ability to excel in the core CSS area — in particular, for deploying what would be considered a CEC.
  • Kana Enterprise is not for complete customer service in a multitenant SaaS platform model.
  • Despite Kana demonstrating good social engagement tools, we have not seen large or complex deployments tied into a customer service engagement center.
  • Prospects should look for the local availability of professional services personnel for the specific product set that they wish to deploy, backed by references.

Lithium Technologies

Lithium Technologies was founded in 2001 and is dedicated to helping organizations engage customers on social media channels. It has raised almost $100 million during the past 12 years, and it has used it to build a broad cloud-based platform of products to understand, support and improve the online customer experience. Its offering is not a traditional customer service CRM system. It is because of its strong focus on customer engagement on social channels, while connecting these interactions (as necessary) to a broader CRM initiative or process, that Lithium is included in the CEC Magic Quadrant.
Strengths
  • Lithium has a very strong community platform, as well as a social moderation tool, which allows support organizations to both support online user communities and engage those customers.
  • The tool easily integrates with other (non-Lithium) CRM customer service systems, allowing a business to focus on the emerging task of better engaging with customers on social media channels.
  • Lithium provides good professional services for setup, advice on creating social media engagement teams (a unique value-add is gamification techniques), and ongoing analytics on the progress and effectiveness of the support organization engaging on social media.
  • Lithium offers additional tools such as a knowledgebase (Lithium Tribal Knowledge Base) and a module to interact with clients on social media (Lithium Q&A), as well as a mobile application. The Private Support Manager module allows an agent to continue a conversation that begins inside a public area, such as an online community, and continues into a one-on-one conversation, whereby more corporate information about the customer can be brought to bear on how to proceed with the client.
Cautions
  • Lithium's system is not a replacement for a traditional CRM system, in the sense that it lacks a customer master and must link to the systems where the customer information and other business rules exist.
  • Industries such as health insurance, telecommunications, governments, universities and most other industries should think of Lithium's system as part of an augmentation strategy to deepen customer engagement, versus a replacement for a CRM system.
  • As a small vendor, with limited global consultancy relationships and a SaaS subscription model, its reach to assist prospects and customers in all geographies and languages needs to be carefully investigated.

Microsoft

Microsoft Dynamics CRM for CSS continues to be used primarily for on-premises deployments and in nontraditional customer service contact environments, where the real value may be in supporting a customer request for information, or the needs of students, citizens or government officials to interact with other people. There are many scenarios across industries (examples are government, healthcare, higher education, real estate and retailing), in which the flexibility of the system to support a range of interactions makes it a good shortlist product. Microsoft has not been able to provide Gartner with complex and scalable examples of the cloud-based delivery model of the product for CECs.
Strengths
  • The Microsoft Dynamics CRM product has good overall attributes, such as built-in workflows, a highly regarded Software Development Kit (SDK), good customization capabilities, a growing end-user community contributing ideas, and multichannel process integration.
  • The product blends sales, service and marketing, as well as tightly integrates with other Microsoft assets, such as Office and SharePoint, and offers the promise of deeper integration of Lync and Skype.
  • There has been continued improvement of the user interface — in particular, screen layout, active fields, intuitive scripting and reduced keystrokes — to accomplish standard tasks.
  • The company has the benefits of solid financial standing and commitment to the CRM product line, global data centers, sales, marketing and service, access to a deep bench of developer resources, and global deployment partners.
Cautions
  • Clients mention as a concern the lack of trained professional services partners that understand best-in-class customer service centers and how to configure Microsoft Dynamics CRM to achieve this.
  • Outside of some areas of the public sector, the product does not provide industry templates that deliver a significant amount of functionality and process flow out of the box. Prospects should look to partners to deliver industry capabilities.
  • For an organization with complex customer service center requirements, on-premises is the only proven option today. Also, arriving at an accurate sense of infrastructure requirements is challenging.
  • Microsoft has not briefed Gartner on direct support capabilities. For third-party support, prospects should evaluate the local partner's capabilities in providing support.
  • A multitenant cloud version of the customer service product for large and globally distributed CECs has not been demonstrated.
  • The integration of social media engagement components has not been seen, although Microsoft's acquisition of Netbreeze is a welcome sign of awareness of the need.

Nice Systems

Nice Systems continues to improve its messaging and experience around driving insightful customer interactions. Its set of customer support functionality includes next-best-action, cross-channel interaction, process automation and guidance, interaction analytics, and compliance and recording tools. It is a nontraditional provider of CEC, in that it does not own the customer record. Nice's tools are more of a complementary offering, often making it a complicated purchase decision for customer service managers. Nice offerings provide the agent with actionable information in real time.
Strengths
  • Nice's Real-Time Impact (RTI) product helps with decisioning and is useful for customer service organizations tasked with upselling/cross-selling during inbound interactions.
  • The integration of real-time feedback and the advances in support of the mobile customer, together with a partnership with Amdocs, are giving Nice not only greater appeal to prospects, but also greater reach.
  • References cite the ease with which information and data from multiple systems can be assembled and the workflows created to drive the customer dialogue.
  • The integration of RTI with the rest of the vendor's assets for recording, agent training, governance, analytics and back-office workflow support creates good synergies for prospects owning other Nice products.
Cautions
  • The company's success in markets outside of the customer service agent world has inhibited a focus on deploying more (and better trained and incentivized) sales teams globally in this area.
  • Not all organizations find the methodology of the Nice professional services group intuitive or easy to follow. The company can be flexible, although it requires some persistence.
  • Nice does not spend sufficient energy focused on the emerging need for customer engagement by service agents on social media channels, such as Facebook, Twitter and user communities.
  • There is no multitenant cloud version of the core RTI product.
  • Pricing policies are not clear and explicit.

Oracle (RightNow Cloud Service)

Oracle RightNow Cloud Service is the customer service product acquired as a part of Oracle's RightNow Technologies acquisition in early 2012. Its products continue to be integrated to parts of the Oracle technology stack (see "Oracle to Acquire RightNow Technologies, Boost Cloud Portfolio"). It is the cloud offering for Oracle customers and prospects looking for a customer service solution with a SaaS subscription model.
Strengths
  • The acquisition of the product by Oracle will lead to greater scalability as the product leverages Oracle technologies. Oracle has multiple technologies that it can weave into the offering to augment its capabilities.
  • The system provides a cross-channel customer service functionality in the contact center and for Web self-service.
  • The system, delivered as a subscription service in a SaaS model, is straightforward to set up and configure, and it doesn't require heavy IT involvement.
  • Oracle RightNow Cloud Service has strong industry representation in the high-tech industry; government agencies; retailers; education, travel and consumer electronics industries and branches of telecommunications. It does not focus deeply on industry-specific processes — for example, billing, price catalogs, order execution and underwriting.
Cautions
  • The functional components of the Oracle RightNow Cloud Service continue to undergo development, with a number of new add-ins to other Oracle products that may create complexity.
  • Gartner has not seen large deployment teams or configuration teams from the largest system integrators and global consultancies, such as IBM, Accenture, Deloitte and Capgemini, for the CEC or traditional contact center desktop.
  • During the transition period of RightNow Technologies into Oracle, Gartner has observed a theme of client inquiry about the turnover in the sales and professional services staff, as well as new approaches to contracting, which requires an adjustment of expectations for existing customers of RightNow.
  • Organizations leaning heavily in the direction of an all-Microsoft environment or a non-Oracle stack could face resistance from their IT organizations in regard to deepening the commitment to the Oracle RightNow Cloud Service product.
  • The product lacks an on-premises software model, and prospects will need to consider an on-premises Oracle product, such as Siebel, or another alternative.

Oracle (Siebel)

Seven years after Oracle acquired Siebel Systems, the Siebel Contact Center and Service product continues to be sold, maintained and modernized, albeit not rearchitected in a SaaS/cloud multitenant model. It has broad functional coverage and a diminished partner ecosystem from its peak (in regard to the numbers of engaged professionals on new projects), yet it has areas of deep industry expertise. It remains a standard for large-scale call/contact centers looking for scalability and access to a global pool of third-party professional services, and with an inclination for the Oracle product line.
Strengths
  • Siebel remains the only large-scale customer service contact center product deployed globally by large enterprises in 2013 across multiple business-to-business (B2B) and business-to-consumer (B2C) industries.
  • The new Siebel Open UI on versions 8.1.1.x and 8.2.2.x when referenceable (Gartner expects this to be by the end of 2013) will introduce a much-improved user experience. There are application limitations that we believe are due to the nature of Internet Explorer, rather than an issue with Siebel.
  • The acquisitions and native developments that are a part of the Oracle Social Relationship Management product lines will give Siebel greater capabilities for social media management when referenceable on the Siebel platform.
  • The product line has global software support and distribution, and a global presence of professional services for multiple industries.
  • Oracle continues to fund enhancements to the v.8.1.x and v.8.2.x product lines, as well as is extending integration in areas such as knowledge management, marketing, real-time decisioning, workflow and policy administration. Upcoming agile development capabilities and a better user interface will energize the product.
Cautions
  • End users continue to find Siebel nonintuitive and the interface outdated for the current generation of customer service agents. The UI changes are underway, and this needs to be accompanied (for many of their clients) with deeper and simpler Microsoft Outlook integration (unless clients have purchased the Oracle product — Siebel CRM Desktop).
  • The product is neither best-in-class for mobile consumers wanting in-line support, nor best-in-class as a peer-to-peer community capability tightly connected to the customer service process. We have not seen the system providing an advanced social media management capability.
  • Siebel is an on-premises software product, and there are no plans to rearchitect it to deploy with a subscription cloud product.
  • Before making a decision for Siebel Contact Center and Service in their industry and geography, prospects should perform reference checks of similar businesses that have deployed the prospects' version of the product in the past 15 months to ascertain that the software version has local professional resources to assist with the deployment. Oracle does offer customers the option of having the application managed for them as a private cloud deployment.
  • Non-Oracle customers running B2B customer service or technical support centers may find Siebel Contact Center and Service either too functionally rich or costly (that is, if prospects have simple requirements or a small number of users).

Parature

Gartner has been following the U.S.-based and privately held Parature since 2003, just two years after its founding, but it is only in 2013 that we see its product sufficiently robust, and corporate leadership and marketing sufficiently staffed, to place it in the Magic Quadrant. The company has subtly shifted from selling to mostly small and midsize companies to selling to larger enterprises, albeit for smaller customer support organizations.
Strengths
  • Parature has a good management team that has scaled and improved its clout in the market, making it better able to build partnerships and assure prospects that it is a company with growth potential.
  • The underlying product is very strong architecturally, built on a multitenant SaaS model. For analytics, it embeds Business Objects, and for companies looking to integrate the product into a more complete CRM system, open APIs and partnerships with Microsoft Dynamics CRM and others facilitate the integration.
  • In the past two years, Parature has added good mobile capabilities, as well as social media engagement capabilities, to complement its problem resolution/trouble ticketing ability.
  • The product is not limited to customer service for the support agent: It has modules for customer Web self-service and assisted service, as well as the ability to assist customers and/or prospects on social media channels.
Cautions
  • We would like to see larger and more-complex processes supported by the product, as well as a stronger presence outside of the United States.
  • Parature is often not a substitute for a CRM suite, but rather, a complementary piece of an ongoing sales, marketing and support initiative or system.
  • The company is not well-known in most parts of the world, and to grow and deepen its presence outside of the United States would require a much more serious investment of time and money than the company has made to date.

Pegasystems

Pegasystems' license revenue grew approximately 18% in 2012, and its overall revenue reached more than $461 million, as it continues to exploit weaknesses in the software market for stable, modern solutions that incorporate business process management (BPM) as an integral part of the customer interaction.
Strengths
  • In the CRM space overall, Pegasystems has the best ability to model and predict a customer's behavior, create a workflow to support that customer, and to then associate the best action to execute with (and for) the customer.
  • The company has expanded the reach and depth of its professional service partner network, as well as improved slightly in the area of partnerships with complementary vendors.
  • The company delivers industry-specific best practices that we have evaluated, specifically for insurance, healthcare and financial services, as well as prebuilt templates, which accelerate adoption.
  • Pegasystems offers a highly scalable solution (1,000 or more concurrent users in an integrated environment with 99.95% uptime) and provides good support.
Cautions
  • The majority of IT-driven organizations do not favor Pegasystems' BPM, model-based approach (which is different from traditional software coding environments) for CEC Whereas industries such as insurance, healthcare and financial services are drawn to a product with a rule engine to resolve complexity, the product may not be the ideal choice for a shortlist in which there are infrequent changes and low complexity.
  • Pegasystems has less multi-industry experience outside North America and the U.K., and prospects should look for references with similar requirements.
  • The company has more work to do to demonstrate its vision for mobile device support, and it demonstrates a lack of commitment to customer engagement across social media channels.

salesforce.com

In 2012, salesforce.com's revenue grew 37% compared with the previous year and exceeded $2.25 billion. Gartner estimates that 60% of new revenue came from the Service Cloud line, making salesforce.com the leading vendor, as measured by sales volume. However, it is not a leader in complex B2C service centers and lags in certain aspects of best-of-breed social media engagement vendors.
Strengths
  • For B2B customer service operations, especially those with an established salesforce.com presence in the sales department, Service Cloud is recognized as a de facto shortlist product by most North American and Western European organizations. Several key new Service Cloud global deployments in B2B demonstrate the product's scalability.
  • Key new customers — both B2B and B2C — have shown enough faith in the customer service contact center product to invest more than $10 million per year, as well as to retire homegrown systems and/or systems from competitors that were at an end-of-life stage, and they consider the salesforce.com application platform a strategic asset.
  • The salesforce.com product for customer service has an excellent GUI, simple design tools, intuitive navigation and a good understanding of the importance of Web communities, although it is primarily partners that provide the Web community capability. There is good integration with back-end systems, such as Oracle ERP, SAP and telephony infrastructure.
  • The added benefits of the customer portal, partner portal, social media monitoring and the Salesforce Ideas products draw customers to the Service Cloud.
Cautions
  • We have heard from Gartner clients, who have set up salesforce.com in multiple parts of their organization, that they have found themselves with multiple salesforce.com "orgs" (often thought of by users as "instances"). These instances are built with different workflows, tabs, custom objects and integration points that could need rationalizing. As a result, companies must develop a strategy that addresses if, when and how they should combine different orgs.
  • Salesforce.com support does not demonstrate sufficient depth or consistency yet to deal with a global set of complex customer service environments in a timely manner (for example, those that require integrations and ongoing support of phone switches, email exchanges or back-end real-time processing systems).
  • References relate that product pricing for complex customer service environments is not as transparent as the published guidelines suggest.
  • The vendor is largely unproved in large, complex, retail, B2C contact centers — that is, large-scale, high-volume call centers where processes must be continually synchronized and monitored, such as retail banking, loan origination, insurance policy administration, bill processing and fraud management. Prospects should base decisions on proven references in their industry and process model.
  • The company has limited Asian, South American or Eastern European presence in larger-scale (more than 200 seats) customer service contact centers.
  • The product's analytics capabilities and complex sentiment analysis functionality continue to improve, but as with the support of customers on social channels such as Facebook and communities, need to be better.

SAP

The SAP Customer Service solution has the advantage that it is often bundled into a more comprehensive SAP licensing deal, which makes it attractive to some clients. There is good growth of the reference base for B2B support, but far less evidence of large Customer Service deployments in B2C contact centers that require the support of high-volume, complex business processes, or customer engagement on social channels. Examples of segments that require this support include financial services, retail banking, retail mobile operators and healthcare.
Strengths
  • SAP is a strong and profitable company, mitigating the financial risks of making a large and ongoing investment in the product.
  • Once we have references who can validate the product for customer service, the current SAP EhP2 (also known as Enhancement Package 2) for SAP CRM 7.0 could provide useful customer support capabilities.
  • Capabilities for the customer engagement center should improve through the third quarter of 2014 due to partnerships, such as with the social analytics vendor, NetBase. NetBase is at the foundation of SAP Social Customer Engagement OnDemand. Prospects should look for references of the recently released SAP Jam, an enterprise social networking product released in November 2012.
  • SAP's marketing of an integrated business application suite that supports end-to-end customer processes is compelling to clients from an IT and line-of-business perspective, because it simplifies the application portfolio and promises better speed-to-solution delivery.
Cautions
  • SAP lags market requirements for a proven, scalable CEC application suite in all of its geographic regions. It is not expected to close this gap through 2014.
  • We have yet to see deployments of the Customer Service solution for a complex environment in a multitenant cloud model.
  • The company has not kept pace with market demand for advanced real-time decisioning/next best action solutions, content aggregation and delivery, or knowledge management. SAP clients looking for CSS solutions on the Web, mobile device, contact center or peer-to-peer communities should not expect SAP to close this gap through 2014.
  • Gartner has observed a significant leadership change in the CRM practice during the past 12 months. This situation may account for the low awareness that Gartner clients reflect regarding the key reasons for looking at an SAP offering for Customer Service solutions, particularly in the contact center and evolving CEC. Until such time as SAP demonstrates the benefit of an integrated all-SAP approach for CSS over best-of-breed choices outside SAP, it will continue to fall behind the competition.

Zendesk

Zendesk was founded only in 2007, yet it has grown and scaled the company to support more than 30,000 customers across the world, 80% of which we estimate are small implementations of less than 20 users. It has raised almost $100 million in investment capital, and it may launch an initial public offering by the end of 2014. Zendesk's product has a cloud-based SaaS subscription model and appeals primarily to organizations with small to midsize support organizations with simple needs. The company has several product packages, and we evaluated the Enterprise package for this Magic Quadrant.
Strengths
  • The user interface is very well-designed and receives high praise from reference customers. For supervisors, in particular, many of the product features are also available on mobile devices, such as the Apple iPad.
  • As a modern system with published interfaces, it is straightforward to integrate with social media tools or telephony products. Because it is not a CRM system with an underlying customer record, it often will integrate with other CRM packages, such as Microsoft Dynamics CRM.
  • The SaaS architecture allows the product to be deployed in most key world markets.
  • The company has a good presence for support and data in Western Europe and the United States, with additional facilities in Australia.
Cautions
  • We were unable to validate the solution for large and/or complex customer support organizations. Prospects should demand industry-, geography- and process-specific references before proceeding.
  • References have found that creating business process rules or workflows for multiple user types or complex processes is difficult. Reporting and analytics are acceptable, although customers would like more-advanced features.
  • The company will need to continue to reassure prospects and clients that an isolated security breach will not recur.
  • Zendesk's customer support tool is not feature-rich. It assumes that the user group will use the open APIs to integrate into the underlying systems that hold the rules for other customer activities.
  • The product is not a replacement for the core system of record but rather, it integrates to such an ERP and CRM system.

Vendors Added or Dropped

We review and adjust our inclusion criteria for Magic Quadrants and MarketScopes as markets change. As a result of these adjustments, the mix of vendors in any Magic Quadrant or MarketScope may change over time. A vendor appearing in a Magic Quadrant or MarketScope one year and not the next does not necessarily indicate that we have changed our opinion of that vendor. This may be a reflection of a change in the market and, therefore, changed evaluation criteria, or a change of focus by a vendor.

Added

The following vendors were added: Kana, Lithium Technologies, Parature and Zendesk.
Oracle RightNow Cloud Service replaces Oracle RightNow CX Cloud Service.

Dropped

Sword Ciboodle was replaced by Kana as a result of its acquisition by Kana. Kana Enterprise is the product evaluated for this Magic Quadrant.

Inclusion and Exclusion Criteria

We look at the presence that a vendor has in the market and the momentum of its growth. A vendor with stagnant sales or an ineffectual marketing organization should concern prospective buyers. Gartner's criteria specify that vendors should:
  • Have a minimum of 15 customers using the software for CSS functionality in a contact center, including examples of social media integration
  • Have at least five new customers for CSS during the past four quarters in at least two geographic regions — for example, the Asia/Pacific region, Latin America, South America, North America and Europe
  • Be able to demonstrate at least $7 million in software revenue for core CSS in the contact center (that is, as the desktop of record) from new clients during the past four quarters
  • Demonstrate that they will equal or exceed the previous four quarters of business results in the upcoming four quarters
  • Appear regularly on client shortlists
  • Have a practice with sufficient third-party consulting and integration firms to grow at a double-digit pace for five years
  • Have sufficient professional services to fulfill current and future customer demands during the next six months, as well as have at least enough cash to fund a year of operations at the current burn rate
  • Have the technology to support an extension to cross-channel customer service, without the need to code in a new development environment, including mobile and social media
  • Be trendsetters or market movers, based on their software and strategies

Evaluation Criteria

Ability to Execute

Product/Service (Weight 2013 and 2012: Standard)
Advances in software architectures — particularly in Web orientation, support of mobile devices, video and Web communities — are all Web 2.0 requirements that complicate the user's choice. The vendor must have a scalable SaaS model or have the option of an on-demand delivery model for some part of its platform to be a Leader.
  • We weight the extent to which the company offers a componentized offering, as well as complete functionality across several service models.
  • We continue to see greater need for strong mashup capabilities that enable organizations to embed applications in the customer service representative's desktop. We also see a strong demand for declarative systems that enable flexible logic flows. User organizations prefer to design their own business objects, workflows and business processes, without resorting to vendor support. We expect this demand for composite applications (through in-house development and application extension to the Internet/website) to accelerate.
  • We see a great need for advanced (real-time) decision support and complex knowledge solution capabilities, business rule engines and customer feedback management.
  • The CSS application should have out-of-the-box functionality, which means a strong set of industry- and process-specific business logic and data. Through process design or functionality breadth, the system must support end-to-end customer service processes (from customer need to resolution) for the chosen market. Published APIs are critical to connect (or expose) an application's customer service functionality with another system or process. Vendors will be measured on the capabilities of their product releases to support customer service, and on the technical support of their multichannel and cross-channel environments.
  • The vendor must have either a stable product development team for each product module it sells or a demonstrably successful strategic partnership.
Overall Viability (Weight 2013: Standard; 2012: High)
We evaluate the capability of the vendor to ensure the continued vitality of a product, including a strong product development team to support current and future releases, as well as a clear road map regarding the direction that the product will take until 2015. The vendor must have the cash on hand and consistent revenue growth during four quarters to fund current and future employee burn rates and to generate profits. The vendor is also measured on its capability to generate business results in the CEC market.
Sales Execution/Pricing (Weight 2013 and 2012: High)
We evaluate the capability of the vendor to provide global sales and distribution coverage that aligns with marketing messages. It must also have specific experience with selling its CEC to the appropriate buying center. The strength of the management team is key as well.
Market Responsiveness (Weight 2013 and 2012: High)
We evaluate the vendor's capability to perceive evolving customer requirements and articulate that insight back to the market, as well as create the products for readiness as demand comes online.
Marketing Execution (Weight 2013: High; 2012: Standard)
We evaluate the capability of the vendor to consistently generate market demand and awareness of its CEC solution through marketing programs and press visibility. In an ideal world, marketing execution should be less critical than some other factors; however, the business reality is that marketing success can fuel future growth and improvements.
Customer Experience (Weight 2013 and 2012: High)
The vendor must produce a sufficient number of quality clients and references with varying levels of sophistication to prove the viability of its product in the marketplace. References are used as part of the evaluation criteria for the ability to execute and create a vision for how organizations can improve customer service. Included in this criterion are implementation and support. The vendor must be able to provide internal professional services resources or partner with system integrators with vertical-industry expertise, CEC domain knowledge, global and localized country coverage, and a broad skill set (such as project management or system configuration) to support a complete project life cycle. The critical point on customer experience is to ascertain the degree of change management that accompanied the implementation. Often, the end user experiences discomfort from the change processes that were introduced with the new system, not from the new software. The vendor's customer support organization must also be able to provide satisfactory, prompt service to its customers in all regions of the world.
Operations (Weight 2013 and 2012: Standard)
Clients must understand where the vendor's CEC business is currently, and where it is going, with regard to viability and direction. The vendor must offer consistent and comprehensible pricing models and structures, including for such contingencies failure to perform as contracted, or mergers and acquisitions. The vendor is measured on its flexibility to support multiple pricing scenarios, such as on-premises licensing, as well as application on-demand offerings, such as hosted and multitenant. The vendor must have sufficient professional services — in-house or through third-party business consultants and system integrators — to meet evolving customer requirements.
Table 1. Ability to Execute Evaluation Criteria
Evaluation Criteria
Weighting
Product/Service
Standard
Overall Viability (Business Unit, Financial, Strategy, Organization)
Standard
Sales Execution/Pricing
High
Market Responsiveness and Track Record
High
Marketing Execution
High
Customer Experience
High
Operations
Standard
Source: Gartner (May 2013)

Completeness of Vision

Gartner analysts evaluate technology providers on their ability to convincingly articulate logical statements about current and future market direction, innovation, customer needs, and competitive forces and how well they map to the Gartner position. Ultimately, technology providers are rated on their understanding of how market forces can be exploited to create opportunity for the provider.
Market Understanding (Weight 2013 and 2012: Standard)
The market for CEC is highly diverse because of the multichannel nature of customer interaction and the wide range of processes that need to be supported. To succeed, a vendor must demonstrate a strategic understanding of current and future CEC opportunities that are unique to its target market. This may be new application functionality, evolving service models (such as the CEC) or in-line analytical capabilities for unique customer segments.
Marketing Strategy (Weight 2013 and 2012: Standard)
The vendor can describe its go-to-market strategy as something other than growing until it is acquired by a larger company. Even with this as the endgame, it must be clear how prospects will be protected or even benefit from such a strategy. We look for a well-articulated strategy for revenue growth and sustained profitability. Key elements of the strategy include a sales and distribution plan, internal investment priority and timing, and partner alliances.
Sales Strategy (Weight 2013 and 2012: Standard)
The strength of the sales force, especially in a challenging economic period, means the difference between floundering and steady/rapid growth. We are looking for highly trained sales leaders who are able to quickly differentiate the value proposition of products and services over the competition.
Offering (Product) Strategy (Weight 2013: High; 2012: Standard)
Specific vision criteria include:
  • Social (collaborative/social media management) CRM.
  • Intelligent decision automation.
  • BPM (supporting a threaded service task across functional areas, regardless of channel).
  • Creation of content about the most likely customer intentions and how to address them, based on continuously variable business scenarios. The vendor has a sufficiently broad set of products to ensure the success of the product over time. Without an advanced SaaS product plan, a vendor or product cannot be considered visionary.
  • Support of mobile customers.
Business Model (Weight 2013 and 2012: High)
To be a Leader through the second quarter of 2014, the vendor should have a SaaS and an on-premises application option for most of or all of the suites, unless the SaaS infrastructure can provide aspects of a private cloud. Application modules are tightly integrated and have business process modeling capabilities and advanced workflow. The company has a strategy to appeal to its key vertical industries — that is, it integrates with systems unique to an industry, delivers packaged functionality and workflows for an industry (such as those for the telecommunications, automotive and consumer goods industries), and delivers B2B as well as B2C interactions. Vendors with only one or the other model will need to prove convincingly why their model will continue to be successful.
Vertical/Industry Strategy (Weight 2013 and 2012: Standard)
Unless a product is deployed as a strong add-on to an existing technology stack, a deep understanding of one or more vertical industries will be crucial to offer differentiation.
Innovation (Weight 2013 and 2012: Standard)
Innovative vendors incorporate concepts that extend to consumer technologies and service virtual assistants and may have customer service functions embedded in communities (for example, Facebook, LinkedIn, Fan Pages and formal support communities). The vendor understands major technology/architecture shifts in the market and communicates a plan to use them, including migration issues the shifts may cause for customers on current releases. In most cases, the architecture is built to operate in a SaaS delivery model as well as on-premises. We examine how well the vendor articulates its vision to support service-oriented business applications.
Mobile-based applications must be fully supported, applications must have a smart client and be decomposable as widgets or as part of a larger mashup. Applications must help optimize a predictive customer analytics system — directly or through tightly integrated partners. These predictive analytics alert management, agents or customers when service patterns are detected that might signal the need to adjust a business strategy or direction, or indicate that the likelihood of a particular business scenario occurring has changed (for example, customers responding to a notice on defective parts, an accident or financial news). The vendor will be measured on the capability of its architecture to support global rollouts and localized international installations. The vendor must have the tools for IT and business users to extend and administer the CEC application. The customer is the final arbiter of whether a company is Visionary.
Geographic Strategy (Weight 2013 and 2012: Standard)
The vendor understands the needs of the three largest markets — the EU, North America and the Asia/Pacific region — and knows how to build a strategy to focus on aspects of the overall market. In South America, Brazil is quickly emerging as a significant source of interest in CEC solutions, and we examine vendor readiness to serve this crucial current and future market.
Table 2. Completeness of Vision Evaluation Criteria
Evaluation Criteria
Weighting
Market Understanding
Standard
Marketing Strategy
Standard
Sales Strategy
Standard
Offering (Product) Strategy
High
Business Model
High
Vertical/Industry Strategy
Standard
Innovation
Standard
Geographic Strategy
Standard
Source: Gartner (May 2013)

Quadrant Descriptions

Leaders

Leaders demonstrate market-defining vision and the ability to execute against that vision through products, services, demonstrable sales figures, and solid new references for multiple geographies and vertical industries. Clients report that the vendors deliver a high level of value and return on their commitment. The development team has a clear vision of the implications of business rules, and the impact of social networking on customer service requirements. A characteristic of a Leader is that clients look to the vendor for clues as to how to innovate in customer service in areas such as embedded sensors in equipment, mobile support and extension to social communities. The vendor does not necessarily drive a customer toward vendor lock-in but, rather, provides openness to an ecosystem. When asked, clients reply that a Leader's product has affected the organization's competitive position in its markets and helped lower costs. Leaders can demonstrate $50 million in sales to new customers during the past year.

Challengers

The vendors in the Challengers quadrant demonstrate a high volume of sales in their chosen markets (that is, more than 30% of new business by percentage comes from more than one industry, and more than 50% of new sales come from sales into the broader installed customer base). They understand their clients' evolving needs, yet they may not lead customers into new functional areas with their strong vision and technology leadership. They often have a strong market presence in other application areas, but they have not demonstrated a clear understanding of the CEC market direction or are not well-positioned to capitalize on emerging trends. Lacking a SaaS-architect cloud model, the product and/or vendor that may have fulfilled other Leader criteria could be found in the Challengers quadrant. The vendors in the Challengers quadrant may not have strong worldwide presence or deployment partners. Vendors in the Challengers quadrant can demonstrate $50 million in sales to customers during the past year.

Visionaries

Visionaries are ahead of potential competitors in delivering innovative products and delivery models. They anticipate emerging/changing customer service needs and move into the new market space. They have a strong potential to influence the direction of the CEC market, but they are limited in execution or demonstrated track record. Typically, their products and market presence are not yet complete or established enough to challenge the leading vendors.

Niche Players

Niche Players offer important products that are unique CEC functionality components or offerings for vertical segments. They may offer complete portfolios but demonstrate weaknesses in one or more important areas. They could also be regional experts, with little ability to extend globally. They are usually focused on supporting large enterprises, rather than small and midsize businesses.

Context

The established business applications for the CEC function are largely obsolete because of their outdated programming models, lack of a native cloud architecture and poor abilities in social media engagement as a part of a customer service offering. 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. Despite the high value of these systems, they have failed to evolve to incorporate new ideas, such as social experience design concepts, into customer interaction applications for customer service. Without collaboration capabilities baked into the software, interaction among employees and between employees and customers is limited, and best practices are hard to capture or suggest.
The major vendors developing customer management software fail to see sufficient economic value in rearchitecting their software for social experience. They are aware of the innovations brought on by communication software and social software, and they are actively pursuing an acquisition strategy. They understand that the social revolution in software will adversely affect sales of their core systems during the next five years. By pursuing a tactic of acquisition and integration, Oracle, SAP and salesforce.com are making good progress, whereas many other vendors covered in the Magic Quadrant lag behind in innovation in this area.
Organizations are rarely able to migrate from an old system to a new one. More than 500 companies have demonstrated that it is possible to take an augmentation approach by which social CRM tools and internal social tools for collaboration and sharing are integrated into the CEC environment. Workflows and rules are written, often in the CRM system, and passed to the social system. This is not ideal — it's a stopgap step that supports some experimentation and sets the stage for more-complex deployments, as experience is gathered. This is the reason that Gartner is pressing the concept of the CEC as a seamlessly integrated solution that embraces social media engagement.
As more-complete social-centric CSS systems — CEC suites, which have a deeper mastery of real-time analytics — reach the market in 2014 and beyond, the business case for migrating to the new tools will be easier to demonstrate. There are industry-specific and geography-specific considerations that will cause businesses to accelerate investments in innovation in social-centric interfaces. The U.S. is at least one year ahead of Europe and other geographies in social media for business processes. High-tech, media and entertainment, retail and consumer goods industries, telecommunications providers, and banking need to move forward during 2013 and 2014. Mining, chemicals, industrial machines, and oil and gas industries are under far less pressure to evolve.

Market Overview

The market for CEC applications for the CRM customer service is fragmented, based on the complexity of the information required to support the customer and the complexity of the business rules or processes that form the steps in an interaction. In many parts of the world, such as India and China, cloud-based customer service business applications are not yet the preferred model. There are many good vendors not found in this Magic Quadrant, including:
  • BPMonline
  • Coheris
  • Conversocial
  • CRMnext, a division of Acidaes Solutions
  • Dimelo
  • Infor
  • Jacada
  • MPL Systems
  • Pitney Bowes
  • SugarCRM
  • Vertical Solutions
Gartner analysts are available for assistance with evaluations and comparisons of these companies and products, and others.
As a delivery model for CECs, SaaS is being accepted by many organizations. However, Gartner has observed resistance to SaaS in several areas, including:
  • Locations in which there is greater caution due to fears regarding data privacy, latency and application availability — for example, Central and Eastern Europe, many parts of Asia (such as India and China) and South America
  • National/federal governments and healthcare organizations in which regulations inhibit penetration
  • More-complex environments with high call volumes, high transaction volumes and real-time integration with legacy systems, which can slow performance
In our evaluations, we point out when we foresee a potential challenge for a product based on these limitations. Through the second half of 2014, complete customer service solutions delivered in the SaaS model will be most prominent in the B2B, low-volume call/contact center, or in the non-process-intensive B2C centers.
As the market matures, the rating scales from one year to another can shift. The result is that a product that has not improved or declined could still show a shift in position on the Magic Quadrant that has resulted from a change in the weighting of a criterion between 2012 and 2013.
By 2014, as more applications are built in a cloud-based model, SaaS will emerge as a critical selection factor at all levels of the CEC. In 2013, at least 75% of CECs will use some form of SaaS application as part of the contact center solution. This could be for knowledge management, desktop CRM functionality, feedback management or chat. Through 2014, fewer than 20% of organizations will select SaaS for complex business process support.

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