Executive Summary: ISG Provider Lens™ Customer Experience Services - U.S. 2023
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CX excellence is essential to enterprises for experiencing exponential growth
There is a strong and growing market for managed services BPO, with contact center agreements contributing heavily to this growth. In the last three years, the demand for resilient and advanced digital customer experience (CX) increased, leading to a surge in investments activities in this space.
CX has become an essential focus for all U.S. enterprises, creating stronger market demand than ever before. Businesses of all types are transitioning from captive operatives to external service providers to drive transformation and improve their business dynamics.
Globally, contact centers generated over $2 billion in annual contract value (ACV) in 2022, recording a 34 percent YoY increase. The number of awards in 2022 also increased by almost 30 percent over the last year.
Overall CX trends observed in the U.S. market
Several trends are shaping and driving the contact center industry in the U.S., aligning with global trends. We have identified key trends that impact the industry, driving operational and model changes within the U.S. market.
Cost optimization programs
ISG Research found that most executives worldwide consider CX a top strategic priority that should be exempt from cost optimization efforts. The global ISG Buyer Behavior Study conducted in February 2023 surveyed more than 250 senior executives, revealing that 48 percent of respondents consider CX extremely important to their organization’s strategic direction. Further, 53 percent stated their intention to completely protect CX from cost optimization programs, aligning with most enterprises’ strategic goals.
Churn and staff retention — agent experience (AX)
The contact center industry has historically experienced high churn rates, which can have significant cost, knowledge and service coverage impacts in the contact center space. Addressing this issue is crucial, as recruiting and training new personnel on increasingly complex technological solutions remains challenging.
Flexible working conditions and AX support mechanisms are key drivers for attracting and retaining talent. Innovations in this space, such as introducing flexible working conditions and implementing agent support and wellness programs, have resulted in reduced attrition, increased productivity and happier employees.
Service providers are taking multiple measures to enable remote or hybrid working with enhanced AX.
• Providers heavily leverage automation technology, such as AI and cloud platforms with RPA, to drive hiring and training. Companies have introduced extensive learning platforms developed in-house or in partnership with universities to facilitate training, reskilling and upskilling.
• Enterprises are also investing significantly in platforms that can enable remote employee engagements, utilizing interactive involvement programs such as gamification. In addition, many are also performing inquiry or quiz-based employee health checks and sentiment analysis to ensure remote employees remain involved and satisfied in their workplace.
• Social interaction tools and platforms are being invested in to help enhance AX, with some providers exploring metaverse technology for collaborative environments.
In response to the growing pressure for overall cost reduction, many providers have either already opened or plan on open nearshore centers in Latin America (LATAM) to service the U.S. market or in locations such as Malaysia and South Africa.
ISG believes that the industry is increasingly likely to retain the hybrid working conditions model in the current and the long-term, as it brings together the best of both worlds in terms of cost, AX and efficiency.
Technological change and advancements
Technology plays a crucial role in shaping the CX industry, providing good AX in both the U.S. marketplace and globally. Over the past three years, many organizational and technological changes have occurred, including automation and modernization of the CX space, redefining enterprise agility, business flexibility and improving customer satisfaction (CSAT) results.
Key technologies driving these changes include:
• AI has become a de-facto standard inclusion in most CX solution offerings today. Virtual agents, chatbots, AX systems, social media analytics and many other advanced CX elements rely on embedded AI.
• Generative AI, while still emerging, has immense potential to disrupt the CX. Use cases and POCs exist, but security concerns and defining guardrails need resolution before mainstream adoption.
• Enterprises’ cloudification is now endemic throughout major U.S. enterprises, making implementing and utilizing cloud-based solutions easier than ever.
• Secure remote working technologies are now becoming mainstream, with voice biometrics, facial recognition, auto desktop lock, video proctoring, safe environmental area checking, VPN and biometrics being commonplace in remote environments.
• Many CX offerings now embed a wideranging and powerful set of tools, including predictive analytics, sentiment analytics, speech analytics, speech-to-text, text analytics, intent analytics, skill routing, social sentiment analytics and customer sentiment analytics. These tools empower agents to enable contextual interactions and proactive interventions.
• Social media engagement services are delivered effectively through social channels, with enterprises leveraging AI and analytics to predict customer sentiments, moderate content and manage product portfolios to promote trust, ensure safety and build and protect their brands.
• True multichannel CX has become crucial for delivering advanced CX across all channels used by enterprises.
CX solutions and services retain their utmost importance and are critical to enterprises’ success in the U.S. Selecting the appropriate solution tailored to each enterprise is vital and a key component to overall enterprise health and market success.
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