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North American Customer Service and Support Applications Markets
Frost & Sullivan, Sep 2007, Pages: 62
This research study looks at market trends, drivers, and restraints for the North American Customer Service and Support (CSS) Applications market. It also provides market size, market share, forecasts and breakdown by size of deployment and vertical market. Vendor solution offerings and strategies are analyzed in a competitive framework and considerations for market penetration and growth are proposed.
Market Overview
Heightened Focus on Customer Experience Ensuring Growth
The North American customer service and support (CSS) applications market, including the markets for customer and account management, case management, problem diagnostics and resolutions, offer management and service and customer analytics, continues the slow and steady positive growth trend of all of its constituent parts. While there is no single technological trend that drives the growth in CSS applications sales, on the whole, growth is derived from an increasing enterprise focus on customer experience, as well as new products and sales tactics aimed at penetrating the underserved small and mid-sized business community. A long-standing drive to transmogrify contact centers into profit generating entities is causing many existing CSS customers to re-evaluate their technology and to seek out adjunct products to help agents cross-sell and upsell.
Interestingly, the sales model of the two leading players in the CSS market – Oracle and SAP – has diverged from the rest of the pack. Since these two market leaders also have deep inroads into enterprise back office technology stacks (including financials, human resources, supply chain, and so on), they tend to sell their CSS applications, as well as other front-office applications, as part of a larger functional suite. "At the same time, new markets have just begun to open up and the public sector, in particular, is beginning to look more seriously at CSS applications," notes the analyst of this research service. "In 2006, it became apparent that government citizen relationship management initiatives such as 3-1-1 and 5-1-1 will drive a new revenue stream for CSS vendors."
On-demand Solutions Growing in Prominence
Quiet significantly, on-demand CSS applications accounted for approximately one-fifth of total market revenues in 2006. On-demand implementations, for the most part, were clustered in smaller agent seat count deployments as larger contact centers shunned the model citing concerns about stability and guaranteed uptime. However, Frost & Sullivan trusts that enterprises will increasingly turn to on-demand applications as traditional on-premise CRM applications have failed to provide a 360-degree view of every customer and every interaction. Furthermore, CSS delivered as an on-premise implementation still faces numerous integration and customization problems, extremely high costs and a lack of extensibility. By the end of the forecast period, Frost & Sullivan expects the on-demand market to account for close to of one-third of all CSS revenues.
Overall, the CSS market experienced moderate single digit growth in 2006, generally in line with expectations. Due to the success of full suite CRM vendors tapping into their traditional large enterprise ERP base, the top end of the market is currently well saturated. "This is not to say that opportunities do not exist in this space as the best-of-breed knowledge management and service resolution management specialists are moving into the space by positioning their technology as an adjunct to traditional CRM suites rather than tackling a full-on replacement game," says the analyst. "Additionally, large enterprises are increasingly being pitched unified communications platforms by their telephony, contact center and networking infrastructure vendors." Enterprises that adopt such technologies will become sales opportunities for CSS vendors savvy enough to pitch their offerings as tools for knowledge workers and other non-contact center enterprise personnel.
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