WFO’s Journey into the Future
The contact center workforce optimization (WFO) market is in transition. Companies large and small need WFO applications to optimize employee performance and to capture and analyze customer insights. The most frequently purchased WFO applications are recording, quality assurance (QA) and workforce management (WFM). Other WFO applications that are part of feature-rich WFO suites include speech/text analytics, surveying/voice of the customer (VoC), performance management, desktop analytics (DA), gamification, eLearning and coaching. WFO applications are now available from a variety of vendor categories, including the WFO suite vendors, stand-alone vendors, contact center infrastructure providers, consulting firms and business process outsourcers (BPOs). DMG expects to see additional IT segments, such as customer relationship management (CRM), enterprise resource planning (ERP) and human resource information systems (HRIS) add WFO functionality to their suites, as these management and analytics applications are complementary and a logical expansion of their existing capabilities.
Outlook for WFO Vendors
The number of WFO suite vendors has been decreasing for the past few years, a trend that DMG expects to continue. Many WFO companies were founded 20 – 25 years ago, and some owners are looking to cash out if they can find a buyer who is willing to pay their price. As companies look for an exit strategy, they often cut back on research and development (R&D) investments in an effort to make their bottom line look good. As a result, the company ends up with old applications running on dated architectures, which is not highly compelling for companies that want to use these solutions or those that want to buy a WFO vendor.
The story isn’t all negative, as there is still a great deal of innovation in the WFO market. There is also opportunity for new competitors to come to market with well-designed and easy-to-use applications that run on highly flexible and scalable architectures.
The Future of WFO
The big question is what is going to happen with the WFO market going forward. The WFO market exceeds $3.5 billion, as of December 31, 2016, of which the contact center is responsible for $1.6 billion. Inorganic growth coming from acquisitions has accounted for most of the incremental revenue in the WFO sector for the past 10 years, even as leading and innovative vendors have introduced new applications to their suites. Given the size of the WFO market, it will be hard to pick up momentum without a major shift, which would happen if the vendors are successful in breaking open the opportunities in back office departments and branches. (This is more likely to occur if the CRM, ERP and HRIS vendors incorporate WFO applications into their suites.)
Acquisitions that introduce new functionality and revenue streams are likely to continue to drive most of the growth for the traditional WFO suite vendors. But these acquisitions may change the landscape of the sector so significantly that the name WFO will need to be replaced by a more appropriate term. Another growth opportunity may come from a break-out solution, for example customer journey analytics, as these solutions are intended to address all customer touch points, not just the contact center.
The WFO market is evolving, and the changes present opportunities for both vendors and the companies that use these solutions. To learn more about the performance of the WFO market, please see DMG’s 2017 Workforce Optimization Market Share Report, released in May 2017.
DMG Consulting LLC is a leading independent research, advisory and consulting firm specializing in unified communications, contact centers, back-office and real-time analytics. Learn more at www.dmgconsult.com.