Frost & Sullivan's 2016 North American Cloud Contact Center Visionary Innovation Leadership Award

2016 North American Cloud Contact Center Visionary Innovation Leadership Award

2016

BEST PRACTICES RESEARCH

© Frost & Sullivan 2016 2 “We Accelerate Growth”

Contents

Background and Company Performance ........................................................................ 3

Industry Challenges .............................................................................................. 3

Focus on the Future and Best Practices Implementation ............................................ 4

Conclusion........................................................................................................... 7

Significance of Visionary Innovation Leadership ............................................................. 8

Understanding Visionary Innovation Leadership ............................................................. 8

Key Benchmarking Criteria .................................................................................... 9

Best Practice Award Analysis for Interactive Intelligence ................................................. 9

Decision Support Scorecard ................................................................................... 9

Focus on the Future ............................................................................................ 10

Best Practices Implementation ............................................................................. 10

Decision Support Matrix ...................................................................................... 11

The Intersection between 360-Degree Research and Best Practices Awards ..................... 12

Research Methodology ........................................................................................ 12

Best Practices Recognition: 10 Steps to Researching, Identifying, and Recognizing Best Practices ................................................................................................................. 13

About Frost & Sullivan .............................................................................................. 14



Background and Company Performance

Industry Challenges

The contact center market, like the global economy, has gone through rapid and

disruptive change in the past decade. Meanwhile, innovation has become central to help

satisfy a rapidly changing consumer. There is a demand for more feature-rich customer

contact solutions that help drive return-on-investment (ROI) for businesses.

Hosted and cloud contact center services have emerged as a way for businesses to rapidly

and flexibly support their continuously evolving customer service needs. The need for

seamless omnichannel engagement has become a key driver for businesses moving their

solutions to the cloud. In fact, deployments of hosted and cloud-based contact center

solutions surpassed premises-based systems in 2014, and the market for cloud contact

center services is forecast to grow 11% over the forecast period of 2014-2019.

Moreover, many of the early concerns surrounding the cloud, such as security and privacy,

have largely been addressed, increasing customer trust with cloud technologies.

Still, providers of contact center cloud solutions are faced with numerous challenges.

Despite a growing awareness of cloud benefits, IT stakeholders that work in concert with

contact center managers need to be convinced of cloud security, reliability, privacy, etc.

Both constituencies need proof that cloud offerings are as feature-rich as their contact

center systems counterparts and that they offer the flexibility and business agility those

businesses need to differentiate themselves in a complex and competitive market.

Further, despite the growth that is occurring in the cloud contact center market,

prospective customers need to be convinced of the long-term viability of their chosen

contact center solutions provider through solid financials, coupled with a growth plan and

compelling technology development roadmap.

A company that is a visionary innovation leader in this market needs to be in tune with

market trends and demands, be well grounded in what is possible, and be willing to take

risks. In the consumer-driven market for customer care, a company needs to offer a broad

set of customer interaction channels, adjunct solutions, have strong partnerships, and

strong analytics capabilities. And as a provider of customer service, it is imperative that it

also excels at customer support.

A company that can effectively differentiate itself from competitors with a compelling

value proposition will enable it to rapidly expand its base of customers, and in turn get on

the short list when prospects evaluate cloud-based customer contact solutions.



Focus on the Future and Best Practices Implementation

With over 20 years in customer contact, Interactive Intelligence is one of the more

prominent providers of contact center solutions, and is one of the market leaders in

customer care. Interactive Intelligence has been recognized numerous times in the past

for customer value and market leadership, and continues to excel compared to its

competitors based on the following criteria: company culture, vision alignment, and

technological sophistication, a focus on unmet needs, growth performance, and growth

pipeline.

Criterion 1: Company Culture

Interactive Intelligence was founded on a vision of unified customer service

communications applications. The company was one of the first to offer a single-platform,

all-in-one software suite, at a time when the industry consisted primarily of ACD,

interactive voice response, call recording, outbound dialing systems, and best-of-breed

point solutions. The technical innovations that CEO Dr. Donald Brown has relentlessly

pursued since he founded the company in 1994 are impressive.

Other innovations have contributed to the company’s culture of success. Interactive was

one of the first contact center vendors to introduce a hosted version of its premise-based

platform. It’s also one of the first vendors to enable customers to shift deployment from

on-premise to cloud. The company’s work in real-time speech analytics is also noteworthy.

Interactive also designs products that are simple to use. For example, its all-in-one

software architecture enables customers to add features by simply turning on a software

licensing key rather than installing new software or integrating a separate system. The

company also has invested in specific vertical markets such as insurance so customers can

further reduce integration requirements.

In short, Brown’s vision, embraced across the company, is that customer engagement is

changing, and employees across the entire organization are responsible for outcomes.

Flexible, digital workstreams that cross customer engagement, communications and

collaboration have long been emphasized. Brown also understands the importance of

underlying technologies such as machine learning and big data, and for a deep and broad

partner ecosystem that further adds value to the companies’ solutions.



Criterion 2: Vision Alignment

While continuously building out this vision, one innovation at a time, Brown and his team

saw the limitation of current systems to embrace the changes that were occurring. As a

result, in 2012 he took a huge gamble and went to the company’s board of directors to

ask for money to build from scratch a completely new cloud platform. In keeping with the

company’s innovative heritage, the goal was to build a true next-gen cloud platform that

would be infinitely scalable, secure, reliable, flexible, and give customers immediate and

continuous new functionality.

The result was PureCloud, launched in mid-2015. PureCloud delivers rich customer

engagement features for contact centers, including omnichannel routing, interactive voice

response, real-time speech recognition, recording, quality monitoring, workforce

optimization, reporting and analytics, and outbound dialing. It also includes UC and

collaboration functionality such as IP PBX capabilities, voicemail, fax, audio and video

conferencing, corporate directory, Web chat, desktop sharing, and content management.

In effect, the company took the experiences it had amassed over more than two decades

of customer contact experience, and re-envisioned how to easily and inexpensively enable

companies to give their customers a superior service experience. Customer traction from

PureCloud proved so positive that the company said its new cloud service would be its

primary customer engagement offering beginning in 2016.

Criterion 3: Focus on Unmet Needs

Interactive Intelligence has developed numerous products and enhancements to existing

ones that demonstrate its ability to fulfill the unmet needs of its customers. For instance,

the company acquired Bay Bridge Technologies in 2012 to short circuit the development

time it would take to bring world class forecasting and scheduling capabilities to

customers. It since has improved upon the technology, creating the richly featured

application today that is known as Interaction Decisions.

With PureCloud the company has introduced a full-featured contact center and business

communications offering that is simple, scalable and affordable. In fact, the company

priced this offering to be disruptive to the market. It consists of three services for

customers. PureCloud Collaborate includes persistent chat, presence, five-person

audio/video conference, geolocations, and content management, and is offered as both a

free and paid service ($9.99/user/month). PureCloud Communicate (starting at

$19.99/user/month) is a full-fledged PBX and UC service that also includes the entire

Collaborate feature-set. Finally, PureCloud Engage (starting at $69.99) is a complete

contact center offering that also includes the Collaborate and Communicate capabilities.

PureCloud is modular, enabling customers to deploy full-fledged customer engagement

features, or just the Collaborate or Communicate pieces. The decision to provision telco



resources directly from Interactive Intelligence – an option called PureCloud Voice -- was

also based on making it as fast and simple as possible for customers to deploy the service.

Finally, Interactive Intelligence offers customers month-to-month, pay what you use

terms, rather than annual contracts.

Criterion 4: Technological Sophistication

PureCloud brings significant technological advantages to the market. PureCloud was

architected as a set of stateless, independently load-balanced microservices running atop

the scalable Amazon Web Services Cloud. This architecture was designed to achieve new

levels of reliability, security and scalability. PureCloud also integrates easily with third-

party applications using REST APIs.

To provision PureCloud, the company deploys a virtual or physical Edge device for the

customer that encapsulates all the media server capabilities of the company’s other

solutions, such as speech analytics, voice transcoding, PBX, ACD, and IVR for example.

One particularly innovative feature is that with PureCloud the local Edge provides local

survivability. If an Internet connection goes down, the Edge continues to take calls,

record, provide ACD and IVR functionality, and when the connection goes back up,

everything that occurred gets synced back up with Amazon, so nothing is lost. The

company also gives businesses that don’t want any device on-premises the option to use

the Edge installed within the Interactive Intelligence data centers.

Criterion 5: Growth Performance

PureCloud was initially introduced to the market aimed at the small-sized contact center

with a target of <100 agents. The goal was to test it with a couple dozen customers, then

in early 2016 to rapidly expand to accounts up to 1,000 agents. By 2017 it planned to

expand into accounts of 10K or more. That didn’t happen. Instead, sales took off and

scalability proof points happened more quickly. The company reported in its 2015 year-

end earnings call that PureCloud deployments were happening across all market size

segments, and in many cases it was up and running within weeks of signing.

Criterion 6: Growth Pipeline

Interactive Intelligence has a strong cloud story. Even before PureCloud the company had

been rapidly ramping up cloud sales starting with 5% of orders attributed to the cloud in

2009 to 50% in 2013. And it’s not just replacements of existing systems, but new

customers as well. As of 2014, 95% of cloud customers were new to Interactive

Intelligence, showing that its cloud story is clearly resonating with prospects. With

PureCloud this story can only get stronger.



Although PureCloud addresses the entire market range, there is a large untapped potential

in the under-served SMB market, which Interactive Intelligence can capitalize on. SMB

customers are seeking the same functionality as their larger counterparts through vendors

that can help them deliver expert customer service without the costs associated with

premises-based deployments.

Finally, the company took a number of steps to make it easy and affordable to adopt

PureCloud. It created a subscription plan that enables customers to pay monthly for what

they use, with no commitment and no hidden fees at competitive prices. It also

implemented an online ordering process that enables organizations to purchase directly

from the company’s website, and lets customers change their subscription at any time.

Conclusion

Interactive Intelligence has produced a winner with the strategy behind the design of

PureCloud. Its rapid scalability, flexibility, ease of use, and affordability address key needs

in the market. With its strong overall performance and potential to increase its market

presence with PureCloud, Interactive Intelligence has earned Frost & Sullivan’s 2016

Visionary Innovation Leadership Award for Cloud Contact Centers

What Customers are Saying?

―Given our small IT staff, we needed a cloud contact center service that would be really

simple to deploy and manage. And we needed it to easily and cost-effectively scale to

accommodate intervals of high call volumes. We selected PureCloud Engage℠ because it

met all these requirements, and its architecture was more streamlined compared to

competitors. This meant we would reap the benefits faster. And with continuous delivery

of the most innovative functionality, we’re confident that PureCloud Engage℠ will keep us

one step ahead of the competition.‖

- Quicken Care

―We can’t say enough about the value PureCloud Engage℠ has brought us – from

improved service to increased efficiencies. It will certainly be a selling point in the future

as we potentially expand the properties we service.‖

- Universal Protection Service



Significance of Visionary Innovation Leadership

A visionary innovation leadership position enables a market participant to deliver highly

competitive products and solutions that transform the way individuals and businesses

perform their daily activities. Such products and solutions set new, long-lasting trends in

how technologies are deployed and consumed by businesses and end users. Most

important, they deliver unique and differentiated benefits that can greatly improve

business performance as well as individuals’ work and personal lives. These

improvements are measured by customer demand, brand strength, and competitive

positioning.

Understanding Visionary Innovation Leadership

Visionary Innovation is the ability to innovate today in the light of perceived changes and

opportunities that will arise from Mega Trends in the future. It is the ability to scout and

detect unmet (and as yet undefined) needs and proactively address them with disruptive

solutions that cater to new and unique customers, lifestyles, technologies, and markets.

At the heart of visionary innovation is a deep understanding of the implications and global

ramifications of Mega Trends, leading to correct identification and ultimate capture of

niche and white-space market opportunities in the future.



Key Benchmarking Criteria

For the Visionary Innovation Leadership Award, Frost & Sullivan analysts independently

evaluated two key factors—Focus on the Future and Best Practices Implementation—

according to the criteria identified below.

Focus on the Future


Criterion 2: Visionary Scenarios through Mega Trends


Criterion 4: Blue Ocean Strategy


Best Practices Implementation


Criterion 2: Process Design

Criterion 3: Operational Efficiency



Best Practice Award Analysis for Interactive Intelligence

Decision Support Scorecard

To support its evaluation of best practices across multiple business performance

categories, Frost & Sullivan employs a customized Decision Support Scorecard. This tool

allows our research and consulting teams to objectively analyze performance, according to

the key benchmarking criteria listed in the previous section, and to assign ratings on that

basis. The tool follows a 10-point scale that allows for nuances in performance evaluation;

ratings guidelines are illustrated below.

RATINGS GUIDELINES

The Decision Support Scorecard is organized by Focus on the Future and Best Practices

Implementation (i.e., the overarching categories for all 10 benchmarking criteria; the

definitions for each criteria are provided beneath the scorecard). The research team

confirms the veracity of this weighted scorecard through sensitivity analysis, which

confirms that small changes to the ratings for a specific criterion do not lead to a

significant change in the overall relative rankings of the companies.



The results of this analysis are shown below. To remain unbiased and to protect the

interests of all organizations reviewed, we have chosen to refer to the other key players

as Competitor 2 and Competitor 3.

DECISION SUPPORT SCORECARD FOR VISIONARY INNOVATION LEADERSHIP AWARD

Measurement of 1–10 (1 = poor; 10 = excellent)

Visionary Innovation Leadership

Focus on the

Future

Best Practices

Implementation Average Rating

Interactive Intelligence 10 8 9.0

Competitor 2 8 7 7.5

Competitor 3 7 6 6.5

Focus on the Future


Requirement: Implementing a robust process to continuously unearth customers’ unmet

or under-served needs, and creating the products or solutions to address them effectively

Criterion 2: Visionary Scenarios through Mega Trends

Requirement: Incorporating long-range, macro-level scenarios into the innovation

strategy, thereby enabling ―first to market‖ growth opportunities solutions


Requirement: Best-in-class process to continuously identify and prioritize future growth

opportunities leveraging both internal and external sources

Criterion 3: Blue Ocean Strategy

Requirement: Strategic focus in creating a leadership position in a potentially

―uncontested‖ market space, manifested by stiff barriers to entry for competitors


Requirement: Growth success linked tangibly to new growth opportunities identified

though visionary innovation

Best Practices Implementation


Requirement: The executive team is aligned on the organization’s mission, vision, strategy

and execution

Criterion 2: Process Design

Requirement: Processes support the efficient and consistent implementation of tactics

designed to implement the strategy

Criterion 3: Operational Efficiency

Requirement: Staff performs assigned tactics seamlessly, quickly, and to a high quality

standard




Requirements: Systems enable companywide transparency, communication, and efficiency


Requirement: The executive team sets the standard for commitment to customers,

quality, and staff, which translates directly into front-line performance excellence

Decision Support Matrix

Once all companies have been evaluated according to the Decision Support Scorecard,

analysts can then position the candidates on the matrix shown below, enabling them to

visualize which companies are truly breakthrough and which ones are not yet operating at

best-in-class levels.

DECISION SUPPORT MATRIX FOR VISIONARY INNOVATION LEADERSHIP AWARD

High

Low

Low High

Best

Practi

ces I

mp

lem

en

tati

on

Focus on the Future

Interactive Intelligence

Competitor 2

Competitor 3



The Intersection between

360-Degree Research and

Best Practices Awards

Research Methodology

Frost & Sullivan’s 360-degree research

methodology represents the analytical

rigor of our research process. It offers a

360-degree-view of industry challenges,

trends, and issues by integrating all 7 of

Frost & Sullivan's research methodologies.

Too often, companies make important

growth decisions based on a narrow

understanding of their environment,

leading to errors of both omission and

commission. Successful growth strategies

are founded on a thorough understanding

of market, technical, economic, financial, customer, best practices, and demographic

analyses. The integration of these research disciplines into the 360-degree research

methodology provides an evaluation platform for benchmarking industry players and for

identifying those performing at best-in-class levels.

360-DEGREE RESEARCH: SEEING ORDER IN

THE CHAOS



Best Practices Recognition: 10 Steps to Researching,

Identifying, and Recognizing Best Practices

Frost & Sullivan awards follow a 10-step process to evaluate award candidates and assess

their fit with select best practice criteria. The reputation and integrity of the Awards are

based on close adherence to this process.

STEP OBJECTIVE KEY ACTIVITIES OUTPUT

1 Monitor, target, and screen

Identify award recipient candidates from around the globe

Conduct in-depth industry research

Identify emerging sectors Scan multiple geographies

Pipeline of candidates who potentially meet all best-practice criteria

2 Perform 360-degree research

Perform comprehensive, 360-degree research on all candidates in the pipeline

Interview thought leaders and industry practitioners

Assess candidates’ fit with best-practice criteria

Rank all candidates

Matrix positioning all candidates’ performance relative to one another

3

Invite thought leadership in best practices

Perform in-depth examination of all candidates

Confirm best-practice criteria Examine eligibility of all

candidates Identify any information gaps

Detailed profiles of all ranked candidates

4

Initiate research director review

Conduct an unbiased evaluation of all candidate profiles

Brainstorm ranking options Invite multiple perspectives

on candidates’ performance Update candidate profiles

Final prioritization of all eligible candidates and companion best-practice positioning paper

5

Assemble panel of industry experts

Present findings to an expert panel of industry thought leaders

Share findings Strengthen cases for

candidate eligibility Prioritize candidates

Refined list of prioritized award candidates

6

Conduct global industry review

Build consensus on award candidates’ eligibility

Hold global team meeting to review all candidates

Pressure-test fit with criteria Confirm inclusion of all

eligible candidates

Final list of eligible award candidates, representing success stories worldwide

7 Perform quality check

Develop official award consideration materials

Perform final performance benchmarking activities

Write nominations Perform quality review

High-quality, accurate, and creative presentation of nominees’ successes

8

Reconnect with panel of industry experts

Finalize the selection of the best-practice award recipient

Review analysis with panel Build consensus Select winner

Decision on which company performs best against all best-practice criteria

9 Communicate recognition

Inform award recipient of award recognition

Present award to the CEO Inspire the organization for

continued success Celebrate the recipient’s

performance

Announcement of award and plan for how recipient can use the award to enhance the brand

10 Take strategic action

Upon licensing, company may share award news with stakeholders and customers

Coordinate media outreach Design a marketing plan Assess award’s role in future

strategic planning

Widespread awareness of recipient’s award status among investors, media personnel, and employees



About Frost & Sullivan

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Frost & Sullivan's 2016 North American Cloud Contact Center Visionary Innovation Leadership Award

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