Episode Transcript
[00:00:23] Speaker A: Hello and thanks for tuning in to this, our latest and last metrosite episode of 2022. I'm Beth Schultz, vice president of research and principal analyst, responsible for our employee experience research. Joining me today are my colleagues, Robin Garris, who heads up our customer experience research.
[00:00:43] Speaker B: Hello, Beth, and welcome to everybody listening and viewing today.
[00:00:48] Speaker A: And we also have Erwin Lazar, who heads up our workplace collaboration research.
Hey Beth.
[00:00:54] Speaker C: And hello to everybody watching or listening as well.
[00:00:57] Speaker A: And last but not least, Diane Myers, who heads up our CX and UC market forecasting and vendor benchmarking services.
Hi, Beth.
[00:01:05] Speaker D: Yep, great to be here.
[00:01:07] Speaker A: So first of all, on behalf of the metrogy team, let me wish everybody listening to have a happy holiday season. I hope 2022 has been a good year for all and that 2023 will be even better.
As we close out the year, we wanted to get together for a look back at highlights of 2022 across our primary coverage areas, and then we wanted to share a few thoughts on what we'll be on the lookout for in 2023. So let's start with the highlight reels of 2022. Robin, kick us off. What do you consider the three or so most notable industry news, product developments or trends that you've seen in CX this year? And then, of course, tell us why.
[00:01:49] Speaker B: Well, that's a loaded question because there's been a lot going on in Seacs this year, a lot of news announcements, some consolidation, a lot of innovation. Pretty much every provider out there has done something interesting in this space. So I'll try and kind of consolidate what I see some of the big trends of the past year as being first. I would say that automation and analytics have absolutely become key areas for investment. I know we've been talking about it for a while, and even just a year or two ago when you talked to CX leaders and it leaders about this, yeah, it's interesting. We're planning to do something, but there wasn't much activity. Now we really see companies doing more with it. So I see analytic tools are continuing to improve and more importantly, becoming more integrated into everything NCX. So I think that helps give decision makers the information that they need to continuously improve. Whether that's improving the customer experience, the employee experience, the technologies that they're using, their sales or marketing strategies, there's always ways to improve.
I think, you know, one of those big examples too, of getting that data that you need are the combination of predictive analytics with CSAT, you know, so I think that's a big area. Dial pad baron. They do things like this, where we know we don't get CSAT back from every customer, but we can use predictive analytics to predict with a very, very high degree of certainty what those actual numbers would have been should that, if that customer or that prospective customer had returned, you know, a survey form, for example. I also think that some of the tools that automate functions, so things like automated transcriptions or scheduling or capacity planning, agent assist, things like that, have really stood out this year with helping on areas like worker shortage or productivity issues. So when we see companies now, for example, that are short, they're short, their contact center staff is short, they don't have enough people. Those companies spend about 52% more on technology than those who are fully staffed. So we're really seeing hard numbers that are absolutely showing that CX and the technology around it, or the technology that supports the customer experience is really doing a lot more than it's ever done before, and it's helping in very functional ways. So that's a very long first one about automation and analytics. The second one that has been very interesting to me this year is that CRM has become the core customer engagement platform for the majority of companies. And that's ahead of contact center and CPaaS platforms, which in the past have been sort of the core platform. And what we mean by that is, if you're gonna put in a new application, what does it absolutely have to integrate with? As one example, and CRM is, more than half of companies have said CRM is the core platform. And I think that that really underscores the value of non voice digital channels, because that's where a lot of companies are doing their digital interactions with customers through their CRM platform, you know, oftentimes in addition to cpaas or ccaas platforms. But, you know, it's definitely moving up the chain there in how companies are communicating with their people. But I will say that even though we hear a lot about digital channels, so that would be anything but voice. Voice is still king when we look at our research, whether they start in the channel. So about 65% of interactions start in the voice channel.
Those that start digital channels, you know, about 70 ish, 76% or 79%, I think it is, actually, are resolved in that channel. So if you crunch those two numbers together, basically you're seeing that about 73% of all interactions require voice. So we've heard a lot about that big story, Frontier Airlines eliminating voice calls. I strongly believe that that's going to prove to be a huge miscalculation on their part, unless, you know, their customer base becomes one that does not care at all about customer service and they just want a cheap airline ticket. Maybe it'll work and maybe, maybe that's what they're banking on. But I don't see companies succeeding without having voice as an option.
Okay, so that's number two, CRM digital channels. What we see happening there, and I would say the third one, is that all the metrics that we're looking at right now are really pointing to the recognition of the value of CX. It's been the most important business priority for three straight years, ahead of things like product and service quality, security, investor satisfaction, employee satisfaction, all that. So it's a very important area. We all know that if we don't have customers, happy, if we don't have customers, we don't have a business. So I think there's some of that.
I also saw this year that more than half of companies were involved in a CX transformation project.
So they are transforming their investment, investing in the technology. And in fact, our research success group, those who show the highest measurable success when using various technologies, it's tied to technology investment. That's not always the case. So successful companies in CX spend nearly twice as much on those technologies as non successful companies do. So, Beth, those are my three.
[00:07:02] Speaker A: Okay, well, thank you, Robin. Now, Erwin, how about you? What are your takeaways from 2022?
[00:07:08] Speaker B: Sure.
[00:07:08] Speaker C: So, if you think about the key trends and highlights, there are a couple that pop into mind. I think the first one that we've seen is the resiliency of the market itself. We published our workplace collaboration metricas. Research recently showed overall about a 5% annual spending growth anticipated over the next three years in workplace collaboration technologies. That includes voice, video, associated management tools, endpoints, as well as things like virtual whiteboard. We found in our tech spending outlook that we published also recently, only seven, a little over 7% of companies, had planned to cut their workplace collaboration spending in 2022. So that kind of ties us into the second key trend, which is the hybrid workplace is, I guess, the be all, end all, or the key focus area. As we've conducted our research over the last year, companies are trying to figure out what's the right mix. Do I bring people back? If so, how often? And if I bring them back, what does the workplace look like? Is it the same as it was before? Is it more centered around meetings? How do I support video more effective, effectively, and not only video, but other forms of collaboration? And how do I ensure that people who are working remotely have that same level of experience as those who are in the office. If you think about the way meetings and collaboration were in the past, the people who are at home were at a significant disadvantage. So we don't want to recreate that as we move to a hybrid workplace. And I say the last one, you know, it's been a tough market. I mean, we've all seen the last few months, a lot of layoffs, declining valuations of many of the companies that compete in the collaboration market. As we mentioned, the growth rates still there, but definitely slower than it was in the early days of the pandemic. And so I think that's going to continue to govern the market going forward. Vendors are responding by broadening their offerings, trying to become platform vendors versus application vendors, trying to integrate contact center, trying to integrate analytics, some of what Robin just talked about, and trying to figure out where they play in a market where Microsoft has become a heavily dominant vendor across the board. So I think all of those taken together have been my key trends for 2022.
[00:09:16] Speaker A: Well, let me jump in with mine then. Around employee experience, I would say that this first one that I have, it's not kind of didn't start in 2022 for sure. It's a continuation of what we saw in 2021, but it is the solidification around the idea of the employee experience platform. And I think a lot of this has to do to the entry of Microsoft into the market now that took place in 2021. But Microsoft is continue to build up its Viva platform. This year. It expanded the platform with a bunch of new capabilities, collaborative goal settings, that kind of OKR approach, and then role based modules. There's frontline workers or sales.
And a lot of the vendors that I've talked to in employee experience have really, you know, Microsoft entrance here really has made them sit up and take notice and kind of evolve their own platforms, their own kind of rethink their strategies.
So, you know, them jumping in the market, you get a lot of attention from the industry itself. You also get a lot of attention from enterprises.
The second thing I'd point out is through the growing desire to take advantage of all that behavioral data that can be drawn out of the workplace, collaboration apps, right, as well as the equipment that is a part of that collaboration ecosystem.
And this really did start again in 2021, but continued throughout 2022. The more we use those collaboration tools, the more we use especially those meeting tools.
We have just tons of data that we can gather.
Wellness is a big goal here. Productivity, engagement and our employee experience and workplace engagement study, we saw that about two thirds of managers are already viewing their depersonalized behavioral engagement data for their teams. And then I using that to help guide their folks that report to them. And they work most closely with in some positive directions. And then a little bit more than 50% of employees receive individualized insight for their own sort of self improvement.
And then the last thing I want to point out is, and it kind of dovetails with these other two, but the broadening of responsibility for employee experience beyond HR to include other business leaders across the company. So it, of course, and it really when we start to talk about Viva, because there's so much interlacing between what Microsoft is doing on the workplace collaboration side and what it's doing on the employee experience side. But corporate communications, legal health and safety, it really depends on the starting point for an employee experience strategy or initiatives within the enterprise.
So that's employee experience. Diane, how about you?
[00:12:05] Speaker D: Yeah, thanks, Beth. So, you know, when I, when I look back, right, and, you know, and I see a lot of the things that Erwin and Beth, yourself and Robin see, but when I think specifically around workplace collaboration, where I spent most of my career, I really think of the last two years, but definitely in 2022, when we think about unified communications and collaboration, a lot of it now has become an extension of what we think about in terms of office productivity tools, your spreadsheets, your word documents, your email. And that has really continued to benefit Microsoft. So not to get completely on the Microsoft bandwidth, we're talking a lot about Microsoft, but the reality is that Microsoft Teams as a platform has just become the biggest competitive threat in the market. For when we think about UCNC, they are the one that everyone else, you know, has to, you know, is looming in the background or in the forefront.
[00:13:03] Speaker B: Right.
[00:13:03] Speaker D: So I really think of that. But then there's a really, you know, another wave of growing evaluation around Google within the UCNC space also because they have, you know, they own, not own, but they have the eyeballs. They have that desktop with Google apps and Gmail. And, you know, and as businesses think about those productivity tools and think about UC and C as an extension of that, you know, those vendors tend to come out a little bit ahead.
A second one would be around Ucas, right. So, you know, Beth talked about, Robin talked about calling within the contact center space, but I think about calling in the, you know, with the PBX, right, hosted PBX and cloud calling, and we're not even, we haven't even crossed the threshold of 50% yet who's actually moved the installed base to cloud calling. And so if we look back into 2022, there's still a lot of premise based pbxs and early deployments of kind of dedicated cloud out there. And so we're still, we're still not a lot of room to move. And so not as much investment has been made by businesses as they have in the meetings and the team collaboration space. But, you know, it's definitely an area to, you know, to kind of continue to look at and evaluate because there is still such a long run ramp into, you know, as we go forward in the next couple of years. So, Beth, over to you.
[00:14:32] Speaker A: All righty. Well, thank you. Thank you, all of you guys. But now let's kind of look ahead. Erwin, why don't you start us out with this round? What are you watching for in 2023?
[00:14:43] Speaker C: Sure. I think hybrid work's going to dominate. You know, again, we talked about that being one of the key trends in 2022. We've started data gathering, preparing for our upcoming study, Workplace Collaboration 23 24, which we'll publish in early February. And, you know, in the early interviews I've done or the initial interviews I've done, I should say this is still what's keeping people up at night, trying to plan what the workplace is going to look like, trying to resolve conflict between employees who may not want to come back or employees who may not, you know, have the choice to come back. And then how do you justify bringing people in if there is a choice? You know, what do you do to make that workplace enticing to them? So I think that's going to be the biggest challenge that folks responsible for communication collaboration have going forward into the next year. I think the second one is just going to be around cost rationalization. People added a lot of apps in the last couple of years. They've got a lot of overlapping apps. We tend to see most companies using more than one meeting application, for example, maybe more than one phone system. Seen a lot of new apps come in, things like notion for note taking and wiki replacements and Asana and Wrike and others for project and workplace or workflow management. So we're seeing an interest in revisiting the mix of applications. And can we reduce costs, can we simplify, can we move on to a single vendor platform that might make life a little bit easier for both employees as well as it? And then I think the last area is going to be around that hybrid work equity. I mentioned that earlier in the 2022 trends, there's a lot of technologies hitting the market now that are able to improve the ability for people, remote and in the office to communicate and collaborate. Things like center camera systems, most recently introduced by Logitech solutions from companies like Owl, Crestron and Poly and others that have multiple cameras that you can put into rooms. The idea is now I can capture everyone in that room and capture their face, no matter where they're looking, and present to the remote employees the same kind of experience they would have when everybody was on a virtual meeting. Then I might add touchscreens into those rooms so that people can ideate around, whiteboard and so on. Might leverage AI to improve the experience as well. So I think a lot going on in 23. You know, it's going to be a tough time, but certainly excited to see how these technologies evolve.
[00:16:55] Speaker A: Thanks, Erwin. Robin, why don't you take us away now?
[00:16:58] Speaker B: All right, I'll try and go quicker than I did before.
I think it's still going to continue. It's not going to end just as the calendar year ends. But there are a few other things that I see going into 2023. I think that business and technology leaders are going to continue to see how vital CX is. In our recent research, despite the uncertain economy, 65% of companies still plan to increase their CX spending in 2023. I think that will kind of snowball effect. You know, the more they invest in technology, the more they'll see how technology helps and the more they'll keep investing in technology. I think that those who don't are going to see themselves at a competitive disadvantage fairly quickly. You know, customers wield a lot of power right now through social media and web based ratings and things like that. Companies that don't continue to push the envelope and improve the way that they serve their customers are going to start seeing problems in their ratings and maybe some social media posts and things like that.
So that's one thing, I think. Another is that because of the economy, the C suite is definitely under pressure to examine their spending to make sure that they're showing return on investment. So I think you'll see a lot of really smart CX and it leaders really measuring success in ways they hadn't in the past. So smart ones, whether it's CX, whether it's ex or it's uc, whatever it is, they're going to draw tight links between technology deployment and business success. So by deploying this technology, how did it help our revenue, or how did it reduce costs? How did it improve customer ratings, employee productivity, all those kinds of things. I think that's going to really start shooting up in 2023.
And then lastly, I would say that success in the context center that we're seeing already is going to expand to other areas of the company. So, for example, we see a lot of the contact center providers. You know, I got, you know, five, nine, Dialpad, Cisco, you name it. They're Avaya, Genesis. They're all doing a lot with things like automated coaching and performance analytics, gamification, quality management. You know, some of this is all wrapped into workforce optimization. So you can see things, companies like Baron in that space, for example, as well. But you see all these new technologies coming into place in the context center. And I always wonder, well, why aren't we doing this in other areas of the company? Why aren't we also doing this in sales and marketing and field service and product development teams, for example? So I think there's a lot of room for some of these same tools that we're using in the contact center to be used in other areas of the company.
[00:19:31] Speaker A: Thanks. Thanks so much, Robin. Diane, what about you? Do you kind of see the watching for the same sort of things that Robin and Irwin are watching for or some others?
[00:19:40] Speaker D: Yeah, a little bit. I was going to echo Erwin's thoughts on the application rationalization. Right. Because I know over the last couple months, I'm hearing from a lot of businesses the desire to really collapse disparate applications for voice and meetings and messaging into one. Right. So instead of having three, having one, but also to reduce the number of different service providers they're using, particularly for meetings and messaging and collaboration inside of an organization.
You know, the larger the organization, you could get up to three, four different meeting applications. So, you know, I really would view in 2023 that we're going to see a lot more it departments really trying to get a handle on this, whether different divisions or different departments, like it or not. I think, you know, not everyone's going to get to. To be able to hold on to their, you know, their team collaboration app or maybe their meeting app. So. So that's something. The second one I was thinking about, I had to, you know, I kind of chuckled a little bit because I feel like I've actually talked about this every year for probably eight years now, but really continued consolidation in the market, particularly around the UCAs market. We now have roughly three or four dominant providers and a lot of, you know, smaller or niche providers that, you know, will survive in a local market or really specializing on a specific vertical. But there's a large number of providers in that middle, right. That are struggling, especially in the current investment climate, that we just don't see being able to continue or I don't see being able to continue long term. And so there will, I think, you know, be some forced, continued forced consolidation in the market. And then the last would be kind of going on my theme around, you know, we're only 50% into cloud calling, but voice isn't dead.
And I really liked Robin's example around frontier Airlines trying to kill off voice because I was laughing when I heard that, because the tendency is clearly to utilize meeting applications or in the call center. We want to use chat, we want to do email, we want to do all these other omnichannel things.
But the reality is that individuals really, you know, a large number of individuals, if they're calling to retail or hospitality or to their doctors, and they still, they're going to reach for the phone, it just requires a quick voice. They don't need to have a meeting. They don't need to set up a video. It's probably a five minute call.
[00:22:03] Speaker A: Right.
[00:22:03] Speaker D: And so voice is still really important. And when I'm, you know, just even in the last month, I'm hearing a lot about and a lot more about the native integration of voice with mobile devices. So, first of all, voice isn't dead. I think voice will continue to be important, but also the native integration with mobile devices, I think it's going to become increasingly important because businesses understand the risk that if I'm using my personal mobile phone, right, most employees today just want to have one mobile device, and businesses don't want to hand out that. They don't want an employee giving out their personal number. They want to give out a number that's utilized for businesses. And so I think we're going to start seeing a lot more two line numbers in that native integration on the mobile side, be some interesting things that are already kind of in development. And that's what I'm going to be kind of looking at and kind of keeping my ear to the ground on. And so, yeah, so, Beth, what are you watching for?
[00:22:57] Speaker A: Okay, so I'll go through mine kind of quickly because we're almost at the out of time here today, but the first thing that I want to, I'm watching for, and I'm really hoping for is continued commitment to employee experience and spending on employee experience technology. Now, indications are that my expectations will be met because in our tech spending study, we did see strong outlook for spending on employee experience technology for 2023.
But that same study also showed that employee experience spending would be kind of the first on the chopping block should the economy become bad enough to force spending, spending cuts. So fingers crossed there, the other one. And this sort of dovetails into what Robin was saying about, you know, extending what's working well within the customer experience realm into other areas of the company.
I'm looking specifically at AI and incorporation of AI into employee experience.
You know, do that in a number of ways. But, you know, there's AI driven analytics chatbots, your conversational AI, you know, really helps guide employees through some of their self service opportunities. So looking to see more AI woven into employee experience products, and then, you know, as enterprises mature, their use of employee experience platforms will see them turning more and more to AI as well. And then the last one kind of goes back to what I had said earlier about sort of the extension of employee experience beyond sort of that traditional HR, and it is the elevation of employee experience to c level responsibility and that, you know, specifically having employee experience or some sort of, you know, turn of that phrase within their title. So not just chief HR officer, but somebody really designated to employee experience.
About 30% of companies that participated in the employee experience study had already done so. We didn't see a correlation with success, though. So I'll be watching for not only for more companies to kind of push the stature of employee experience, but then also for, you know, hopefully to see some success measures coming out of doing so.
Of course, if spending is cut on employee experience, we might not see any of that stuff happening. So we'll see.
Okay, so we are just about, just about out of time, but let's just quickly run through what we've got coming out in first quarter. Erwin, you had already mentioned your I collaboration, the study coming out. I have a study on advanced cpas coming out in the first quarter, Robin. Diane, why don't you give us a quick, quick rundown on what you guys are doing?
[00:25:44] Speaker B: I'm doing the analysis.
[00:25:45] Speaker A: Go ahead, Robin.
[00:25:46] Speaker B: Go ahead.
[00:25:48] Speaker D: No, no, go ahead.
[00:25:50] Speaker B: Doing analysis on a study right now called customer Insights and analytics. Really looking at how companies are gathering data from their customers and using that to make continuous improvements in their organizations.
[00:26:02] Speaker D: Yeah, and at least for the first part of the year, like, we're getting ready to launch our CX Metrocast forecast report, and we should have that out in the first quarter. And then a whole new series of what we call Metro rank. So benchmarking reports in a couple areas, including contact center and CRM, going to.
[00:26:23] Speaker A: Be a great first quarter.
And with that, thanks for joining me here today, guys. It was really fun. And then thanks, listeners, for spending time with us. Until next year. Take care, everybody.
[00:26:37] Speaker B: Happy holidays, everyone.
[00:26:39] Speaker C: Thank you.
