Why don’t technology suppliers put their money where their mouth is?
The contact centre is awash with talk of return on investment – every press release, every piece of marketing material and most definitely every sales presentation.Carl Adkins shares his views with us…With messages that are convincing about reducing costs, improving performance and increasing sales, it is a wonder that we are not forming orderly queues outside the technology vendors’ doors to take them up on their compelling offers.
The truth is, regardless of how compelling the story, there remains one fundamental issue that does not change: all of these technology vendors require the contact centre to take all of the risk. The contact centre has to purchase the technology up front and then hope that the claims of return on investment hold true. Surely this cannot continue, it must be time to change, time for vendors to share the risk with the contact centre and guarantee their claims?
All of the contact centre decision makers I have spoken to recently face a similar dilemma; they can see the gaps they have in technology and the productivity shortfalls that these are creating. They have spent time looking in detail at the technology options available to them, been on the reference visit and are convinced of the cost savings or increase in revenue that can be gained. However, with so many projects competing for corporate funds, they are reluctant to take the risk of committing to a quick return on investment.
The current economic downturn is only compounding this dilemma; many capital expenditure budgets have been cut, a lot of organisations have halted all CAPEX, internal system development projects have been placed on hold, and where scarce budgets are available payback has to be proven and timescales are reviewed in months rather than years.
If there is to be one positive that emerges from the current economic climate I hope that it is the long-overdue change in the way that software and solutions are sold and purchased. Suppliers need to stand up and share the responsibility. If they promise cost savings and expect contact centres to make an investment based on these promises, then they have to share the risk.
Whereas some suppliers are being more flexible in their purchase models, few suppliers are embracing this necessary change, by stepping up to the plate and guaranteeing the claims that they are making.
Why am I so passionate about this? Because I have sat on both sides of the fence; I have purchased contact centre technology and now at Infinity I am a supplier of technology. I see both sides of the risk/reward argument and feel that we need to get the balance right.
We all know the lessons learnt from previous recessions, those who continue to forge forward and develop their businesses in a downturn emerge stronger and as leaders when the economy starts to grow. It is therefore more important than ever that contact centres analyse their operations, identify the gaps in their technology and continue to invest. However, this will only happen if the technology vendor community wakes up to the changing world and changes its thinking in terms of commercial models.
Carl Adkins
Carl Adkins is Managing Director of Infinity CCS (www.infinityccs.com)
Fortunately Carl, you are not alone. We have always worked with call centre customers to help them test measurable productivity improvements and having met these goals the customer gets to choose what procurements options fit their needs. I know of many other very credible suppliers to the contact centre world who do likewise so your comments are a little one sided and perhaps aimed at a minority or suppliers.
Comment by Kevin McAteer — 27 May 2009 @ 8:52 pm
I don’t think Carl has spread his net very wide when looking for vendors that will support the client financially and share the risk. We have been doing exactly this at TouchStar for the past four years (a long time before economic downturn) perhaps this is why we have grown consistently over the same period; most interestingly it’s also why our customers have grown! We don’t take on every one who turns up wanting to open a call centre; we vet their business strategy and make a value judgement on their ability to survive long enough for both parties to benefit from the relationship. Perhaps Carl should put his money where his mouth is and offer better than a 20% effiency or productivity improvement, a very poor figure in this market!
Comment by David Fricker — 28 May 2009 @ 1:01 pm
Note I didn’t say “no one does this” guys so don’t get too tetchy! But how many vendors out there currently say to prospective clients – “Take the solution and pay us only if you are happy with the performance gains?”
or will guarantee to underwrite, contractually, their results? The ONLY vendor who ever offered me this when I was on the other side of the fence was Avaya, after they bought Mosaix but they don’t seem to offer anymore. If more vendors join us then that’s great news for customers and our industry!
Comment by Carl Adkins — 28 May 2009 @ 7:31 pm
Carl, I would agree with your commentary and would further add in that some companies lead customers into a false sense of ability through the sales pitch process. My experience is more on the WFM side of tech, but I am sure other areas see it as well.
Selling tech enhancements that are filled with promises on efficiency gains are also followed with :
· monthly lic fees,
· annual maintenance costs
· add on features
· upgrades
all cost above and beyond initial purchase with again no skin in the game from the tech companies. ROI should be a full on up front project plan, the companies with the solution have the experience to say where you will save and where the challenges will be.
The customer has the challenge of implementing and at times changing the culture and getting buy in.
I would suggest to companies this economy is perfect opportunity to change this and ask for a pilot. Prove to me ROI, walk with the company through the implementation process beyond training and truly help direct the customer on realizing gains.
This is the core of the problem and the area of focus in my mind, this is also where SaaS is going to continue to grow !
Cheers !
Comment by Jody Powers — 28 May 2009 @ 7:54 pm
Great article Carl and very thought provoking.
I whole heartedly agree with the sentiment that all technology vendors should put their money where their mouth is and that customers know where their gaps are but are unconvinced that the vendors they are speaking to can actually solve their problems and have their best interest at heart. We have noticed that technology vendors are polarising into two camps. Those that, to quote the famous Ronseal ad, “do what it says on the tin” and those that don’t. There are a few defining features that separate these two groups:
Try before you buy
• The good guys are so confident in their technology that they offer low and no risk (types of risk: financial, time and integration) trials, as they know that once a customer actually uses the technology they will experience the business benefit for themselves within days, making the decision whether or not to install a permanent solution an easy one.
Transparency
• The good guys welcome transparency, regulations and benchmarking believing that they are a force for good and that suppliers with underperforming technology will eventually be forced to leave the market.
• The bad guys paint a negative picture of regulations and benchmarking and miss the point that the regulators are there to protect customers and end users from bad practice. This is a fine example of shifting the blame to divert attention from the inadequacies of their technology.
Product development
• Some vendors don’t invest in developing new technology that is fit for purpose. Instead they shift the burden and ask their customers to bare the cost by disabling key product features that seem to be presenting a problem. This adds to already stretched overheads and ultimately impacts on profitability.
• Not only are some vendors avoiding “try before you buy” but if they manage to make a sale they then ask the customer to turn off a key feature of the product.
This may sound farfetched but it happens in many sectors. Currently, many manufacturers of outbound dialling technology struggling to make their solution conform to the latest Ofcom regulations and therefore advise their customers to disable key features that add to efficiency, in particular answer machine detection.
To illustrate how illogical this situation is, let’s look at another industry that it is high profile and heavily regulated. Imagine you own a formula 1 racing team, you abide by all the regulations and manage to build a winning car. The next season the authorities change the rules. Do you simply remove the offending component and accept that you will never win a race again or do you develop new and better technology that allows you to gain the race winning speed in other ways?
I would implore anyone who is looking to upgrade or buy new technology to avoid any supplier that does not offer trials and embrace those that say “bring it on, benchmark me, test it for yourself” this clearly suggests that they have a solution that is fit for purpose and your best interests at heart.
Jonathan Slobom itCampus UK
j.slobom@itcampus.eu
0796 234 7000
Comment by Jonathan — 2 Jun 2009 @ 4:36 pm
That risk needs to go both ways Carl. If you have a contractually agreed level of improvement and the solution underperforms then the supplier gets paid less. if the solution overperforms, then the supplier gets paid more. Would any call centres be willing to sign up for this?
Comment by Richard — 4 Jun 2009 @ 10:39 am