Episode Transcript
[00:00:22] Speaker A: Everybody, and thanks for tuning into this metrosite. I'm Beth Schultz, vice president of research and principal analyst. And with me today are my colleagues, Robin Garris, Erwin Lazar, and Diane Myers. I think many of our listeners know us, but for those of you who don't, why don't each of you guys go around and introduce yourselves? Robin Erwin, Diane.
[00:00:47] Speaker B: Hi, I'm Robin Garris. I'm CEO of Metroge, and I lead our coverage in the area of customer experience. So that includes contact center, CRM, customer loyalty, apps, things like that.
[00:01:01] Speaker A: Great, Erwin.
[00:01:02] Speaker C: Hi, everybody. Erwin Lazar, vice president, sorry, president and principal analyst at Metrogy, lead our coverage around unified communications collaboration. We call it workplace collaboration, basically calling, meetings, messaging, and all other forms of real time and non real time collaboration.
[00:01:20] Speaker A: Great. And, Diane?
[00:01:21] Speaker D: Yeah, hi, everyone. I'm Diane. I'm principal analyst, and I lead our metricast practice, which really looks at the market, forecasting, some of the market trends and the benchmarking across the customer experience and the workplace collaboration areas.
[00:01:37] Speaker A: Okay, so thank you, guys. And before we get started with our predictions on behalf of the Metro Deep team, let me just extend our well wishes for a great 2024 to all of our listeners.
[00:01:50] Speaker D: Okay?
[00:01:50] Speaker A: With that said, robin, why don't you go ahead and kick us off? What do you consider the three or so most notable trends coming up in CX this year, and why, of course?
[00:02:00] Speaker B: Well, Beth, it's kind of hard to boil down the predictions because there's so much going on in the CX space. So I will do my best to try.
I think one of the big things that I am seeing is that there are already, and I think will continue to be a lot of gaps in what the vendors offer, what their customers buy, and what consumers want. So, for example, there are a lot of organizations, a lot of vendors right now offering chat bots and chat bot related offerings. And when you look at the data around that, only about 39% of enterprise or any sort of buying organization are actually using them, and 13%, only 13% of consumers prefer using chat bots. So that's a pretty big disconnect. You've got the vendors investing a lot in chat bots, certainly not close even yet to the majority of their customers using them and their own companies, and then very small percentage of consumers preferring them. Similarly, you can look at things like generative AI. So vendors are weaving generative AI into many offerings. And definitely there's a lot of interest in the space, don't get me wrong, but only about 20% of business leaders fully trust the technology and only 13% of consumers do. So I think what we'll be seeing more and more of in 2024 is alignment across these groups, or at least I hope to see a lot of more alignment across these groups. I think vendors are always going to overhang the market a little bit, but the question is by how much? And then what are we going to see companies doing to educate consumers about using the technology?
We also definitely see a big age gap in the technology. So 45 is kind of the dividing lines. The people under 45 are more apt to be accepting of some of these newer technologies. 45 and older are not.
In general, there's always exceptions. So I think we're going to have to start looking more at the buying patterns and where we should be investing.
Another thing I would say is self service will continue to improve as an option for companies and their customers, with generative AI definitely helping to improve the success rate considerably. So if I'm going in as a consumer to generative AI and I'm typing in a prompt and I'm these days maybe not getting what I need, as generative gets better and better, and as companies start deploying it properly, I think you'll start seeing more and more responses that actually resolve problems. Right now we see nearly 70% of companies saying that they need to improve self service. So I think we're going to see companies focusing in this area. I also think that along those same lines of self service, voice will slowly decrease as an interaction channel as a result of self service and other digital channels. But it is not going away. So all this talk more so about a year ago about, oh, voice is going away. I never did and I still do not see that as something that will happen.
Okay, so next thing I would say is that companies are going to focus on their underlying data and knowledge base in order to make AI successful. Right now, data is way too fragmented in organizations, there's multiple data sources. Some of those data sources conflict. So to fully leverage AI's promise, I think it's really imperative to integrate these data sources and to focus more on data. A lot of the contact center platform vendors think of someone like nice or I mean, they're really focusing in on the data platform, even Salesforce, there's a lot of companies really focusing in on that. So to look at the data sort of along those same lines, also looking at the knowledge bases, I think almost every company I talk to says, yeah, our knowledge base needs some work, we need to be updating it, we need more multimedia content, there's still some inaccuracies in it. We're not reviewing it regularly enough and if we want AI to be really successful, it's going to pull from our data. So we've got to focus on the data and we've got to focus on our knowledge bases and make sure that they are up to par.
Another big trend that we really started seeing emerging in 2023 and I think will continue to grow in 2024 is looking at agent experience and any associated technologies to agent experience. I think those will grow in importance over time.
I think this year we really saw CX and business unit leaders see the value of things like reduced attrition in the contact center and improved CSAT. Happy agents equal happy customers. There's a link there. In fact, we did some research a couple of years ago and it was like, okay, if you can keep your turnover rate, your agent turnover rate, attrition rate below 15%, your CSAT will go up by 26%. There's definitely a link between the two. And I think by using AI in a lot of different areas, specifically, I would say virtual assistants for agents, specifically transcription, translation for sure, quality management for supervisors in a contact center for training and coaching, sentiment analysis and predictive analysis. I think when companies start adopting all of these capabilities, we see metrics all heading in the right direction. So for example, sales are going to increase the more you use, accurately use predictive analysis and virtual assistants to kind of coach the agent, really agent assist there.
I think agent efficiency goes up with transcription and translation. More agents can talk to more people who have different languages. Transcription reduces after call work, very straightforward ROI there. I think performance improves with quality management.
Being able to AI enable quality management so supervisors aren't listening to calls, but AI is, and giving them a transcript and using that also for coaching and even sentiment analysis, all of that will go up. And I think when you look at all of those things combined, the ultimate result is higher CsAT. And that's where we all want to be. We want our customers to be more satisfied so they give us more referrals so that they buy more from us, so that they're happy, all that kind of stuff. And I would say the last thing is customer insights and voice of the customer program. So we've had those around for a while. But I would say in many companies they've been around with limited success because I don't think companies use them properly.
If you've only got about 30% at best of your customers responding to, say, post interaction surveys, is that really what you need to make decisions? Well, it gives you an indicator, but maybe that indicator is just people who are really happy and really not happy. So you want to get a more full fledged look at what's going on. And I think inferred sentiment. So using AI to predict what a customer would have said had they responded to a post interaction survey, those algorithms are getting very accurate. So I think that's really important, and we'll see more and more companies doing that. But in general, I think looking at voice of the customer programs and utilizing them more is something that we'll see happening across organizations. And why is that? Well, without it, you're at a big disadvantage. I think moving forward, those customer insights from voice of the customer programs will guide companies in a lot of different areas. Like how do their customers like or dislike these technology advances? Do they want to talk to a chatbot? Did this chatbot experience work? But this one didn't. Okay, that gives me information to know how I can maybe adjust what I'm doing as a company. And they need to also, though, act on that information. They can't just, believe me, there's a lot of companies out there just gathering information and analyzing it, but not acting on it. So I think they need to take that information and utilize it in so many ways, their technology decisions, their sales and marketing campaigns, their product development. So it's not just the contact center that benefits from this. It goes throughout the entire organization. So that's what I'm thinking.
[00:10:10] Speaker A: Okay. You've given us a lot to think about going forward into 2024. How about you, Erwin? What are your predictions for workplace collaboration?
[00:10:19] Speaker C: Sure. So Robin mentioned a couple of times, generative AI, that is really right now where a lot of the focus is in the communication and collaboration space. We've seen in the last six months that companies have either introduced or announced generative AI assistants or copilots, whatever you'd like to call them. What we've seen in our research is a tremendous amount of interest in these applications or these assistants. About 86% of companies are planning on deploying them in some fashion next year.
Where the decision point is and where I think a lot of the activity is going to happen in 2024 is on trying to understand the business case and the ROI for using and deploying these applications. So if you look at how the market is shaping out, you've got companies like Cisco and Zoom that are essentially giving away their copilots. As long as you have a paid license, you get access to the AI assistant, where you've got companies like Microsoft, most recently AWS, Google, who are charging an additional fee. And that's really where companies I think are going to spend a lot of time trying to figure out does it make sense to roll this out, $30 a month or $20 a month for everyone? Does it make sense to roll it out for specific groups? What is that ROI? Is there actual measurable benefit above and beyond just transcribing meetings, taking advantage of some of the features that might allow you to query data and query activities that are happening within your organization? I think you're also going to see a lot of concerns continued around security and compliance and governance of that data. What is going into that LLM? How do I take that next step away from or above and beyond just summarizing meetings and getting to use my own data in these bots? But how do I do so in a secure fashion? Where does that data live? Who has access to it? And then all that content that's being generated by those meetings? I think you'll see a lot of activity next year to figure out where are those transcripts going? How do we archive them, how do we store them in accordance with compliance and governance policies? I think just looking at the broader collaboration communications market, you'll continue to see consolidation. There's been renewed activity, renewed discussions about companies acquiring companies to either consolidate the market or to expand their offerings. One area that I'm paying especially close attention to is potential convergence of UCAs and CCAs. So cloud contact center and cloud communication companies. Our research shows about 76% of companies are planning on moving to a unified platform or unified integrated service that would allow seamless connectivity between front office and back office. So I think that should continue to drive both partnerships as well as potential ways that companies look to consolidate and pick up providers that can help them better offer a unified offering. I think the third area that I think is really going to be interesting to watch is the focus on meeting equity. Obviously, there's been a lot of discussions around return of the office, growing number of companies that are mandating that people come back, but that's not going to work for everybody. There will continue to be people who are working remote and there will continue to be people who need to participate in meetings that can't physically be in the office. So about a third of companies in our latest research are investing in multi camera solutions, center room cameras. We're starting to see AI directors going into the room that allow you to capture those feeds from all the different cameras so that the person who is attending remote can see essentially that same experience they have if they're talking to their fellow remote participants. That person's face who's in the meeting room is brought into a box versus just seeing a long table with the sides of heads and not really having a truly interactive capability.
So lastly, I mentioned security, governance, compliance. I think that's going to override a lot of every technology development that's having that we'll see over the next year. And then the last thing I just want to touch on AR and VR, it's gotten a little bit more press in the wake of Microsoft's mesh announcements at ignite last fall.
It's something we continue to watch in our research. We just don't see a lot of interest in it. About 15% of companies that are adopting, but they're only adopting for specific use cases like training demonstrations, customer and product support. I still don't see anything on the horizon that says that we're going to be meeting throughout the course of our day in our regularly scheduled meetings in an AR or VR environment. I think it's more of a supplement than a replacement for existing meetings, but something we'll continue to watch over the next year.
[00:15:04] Speaker A: Great. Thank you so much for sharing all of that, Erwin. And how about you, Diane?
[00:15:09] Speaker D: Yeah, I took a little bit of a different approach because I'm not going to dig into the product piece like Erwin and Robin did, but I'm going to kind of look at what's happening from kind of a market landscape, a vendor landscape perspective and forecasting. And I actually went back, we did this about a year ago, right.
We're going into 2023. And I was curious to see what I had said then and kind of how it played out. Right. So I kind of took a little bit of a different perspective. And a year ago, I had said that Microsoft was becoming the biggest competitive threat in ucas.
And the truth is that they just keep extending their lead. Right. So we knew that going into 2023 that Microsoft Teams was the giant, and they just keep expanding that lead. And as we move now into 2024, I don't see that slowing down. Right. We see Microsoft Teams market share continuing to expand at the expense of smaller companies, smaller ucas companies.
Businesses continue to tell us in our studies and in informal discussions that they really want a single provider.
[00:16:23] Speaker C: Right.
[00:16:23] Speaker D: They want a single UCas provider, and many of them have teams as a starting point. Right. They adopted teams a few years ago, maybe three, four years ago, when everything happened with the pandemic for meetings and for collaboration. And now that is the platform that is pulling the phone piece in. Right. So we're ending 2023. Microsoft Teams has a leading market presence for ucas and the ramifications.
[00:16:51] Speaker A: Right.
[00:16:51] Speaker D: We're starting to see those are kind of spread across a couple of areas. One is sip connections, right. So as I go out and I talk to a lot of sip trunking and a lot of PSTN connectivity providers, the number one opportunity and the opportunity to drive activity and revenue is all around by. Right. Bring your own connectivity, bring your own sip and specifically for teams. So if you are not in the Teams ecosystem, whether you're offering direct routing or you're part of the operator connect ecosystem, then you're going to fall behind. Right. It's not to say that they're still sip trunking to on Prem.
[00:17:32] Speaker B: Right.
[00:17:33] Speaker D: There is still a lot of on Prem pbxs, but as people continue to move and we know that Microsoft Teams isn't the only piece, but if I'm using like a ringcentral, an eight by eight, or a vonage and even zoom, often the connectivity is being bundled up.
[00:17:51] Speaker A: Right.
[00:17:51] Speaker D: So if I'm a sip trunking provider on the retail side, you really want to be connected with teams. And then I would say right after that Cisco Webex competitors are really being stretched on the UCAs side, right. So this is the UCAS competitors are really being stretched to find ways to differentiate themselves.
We see providers expanding into the contact center. With contact center as a service.
They're looking at how do they become part of the Microsoft solution, right.
Whether that be voice options into Microsoft Teams or a direct routing or operator connect offering. And I think if you're a competitor and into 2024, you've got to figure that out. Right. If you're a UCAs company, how can you take advantage of the teams? And then is there a way to differentiate yourself, right. Because at some point everyone will be differentiating themselves in the same way. So I would also concur with. I thought about putting this, but I saw Erwin had was going to touch on it. The UCAs plus ccas. Right. We know that especially for mid market and smaller companies, or I should say smaller contact center operations, there is definitely that drive to have the single solution, the single provider, large contact centers, big formal contact centers, they're still looking for best of class point solutions. So maybe not as much there, but definitely mid market and smaller operations.
Okay, so ucas, I want to talk about ucas.
I'm including it must have the calling component and we still have not crossed the threshold of 50% installed base.
[00:19:31] Speaker A: Right.
[00:19:31] Speaker D: So when we think about all the seats, the endpoints out there, less than 50% are on ucas. The remaining is still with an on prem PBX solution. Right.
On a global basis, when I say we haven't hit 50%, we're roughly around 40%.
[00:19:51] Speaker A: Right.
[00:19:51] Speaker D: And so that's still a big run ramp. Right. An on ramp. Right. To get people to the full ucas. Right. So there's still a lot of opportunity there and I think that's just important. Yes, Microsoft is dominating, as I just mentioned, and they will continue to. But on a global basis there is still a lot of opportunity and how that ripples through into different know, I actually talked about that a year ago. So I'm just reiterating that this is a continuing trend.
Doesn't mean PBX. The premise based pbxs are going to completely go away in the next couple of years. Businesses are still continuing to sweat those assets for the calling piece. And the last piece I want to talk about is around the customer experience. Right. Robin touched on all the really key technology pieces, but most of those technology pieces are in the cloud service.
[00:20:45] Speaker A: Right.
[00:20:45] Speaker D: And so when we think about the platform, the underlining platform for contact centers, CCAs contact centers of service represents the largest growth opportunity and there are so many operations that are actively planning and are in the process of migrating their contact centers to ccas.
[00:21:02] Speaker A: Right.
[00:21:02] Speaker D: And in large part what we hear is that in large part, the big driver is to get access to all of these enhanced features, whether they be AI and an agent assist and all the different capabilities, because those are being represented in the cloud as part of typically contact center as a service.
When I mentioned that UCAs, we're roughly in that 40, just under 50% of the installed base is on ucAs. It's even less on the contact center side. We know roughly about a third are today on a contact center as a service platform. Agents. Right. Agent seats, agent licenses. So the run ramp is very large.
Some of these can be quick turnovers.
[00:21:47] Speaker A: Right.
[00:21:48] Speaker D: That happen in talking to a lot of businesses, especially in the last six months. Some of these deals are happening within two months and some of them are happening over the course of three years. So depending on the size of the opportunity, that run rate really, and that growth really is spread across many years, but it is still the largest growth opportunity across everything that I'm kind of looking at from a market forecasting perspective.
So we expect that to continue Microsoft and continuing moving on the calling side. So, Beth, that's it. Over to you.
[00:22:25] Speaker A: Excellent. So in the interest of time, I'm going to just kind of whizz through what I was going to say around the employee experience area that I cover. And I think you can take a lot of what Robin and Erwin said about AI and customer experience, AI and workplace collaboration, and apply it to employee experience as well.
We see the infusion of AI into a lot of employee experience tools already, and it will certainly continue to be a theme going forward.
So with that said, let's just kind of quickly talk about any goals to share for the year, and then let's also just share quickly what we're doing. And with our research program coming up in the first quarter, Diane, you mentioned Metrocast, so why don't you just kind of quickly share what's coming up?
[00:23:20] Speaker D: So, I mean, it's still the focus of what we've been doing, right? So we actually are getting ready to launch our customer experience study that helps drive metric cast. We will continue forecasting the core areas around the platforms and CPAs and CRM, and then we'll do the same on the workplace collaboration area with the studies, the forecasts, and then the metro ranks. So we will continue to do the metro ranks as we move into 2024.
[00:23:49] Speaker A: Okay, Robin, you have an AI study coming up. What can you tell us about that?
[00:23:55] Speaker B: Yeah, I'm really excited about this one. We're really trying to dig into the metrics behind AI. So what are the rois that companies are seeing with the technology? Where are they adopting it and why?
Where are some of their inhibitions? What are some of the things that they're concerned about? So it's a pretty big overall AI study. It's called AI for business success. So we're really trying to look at how the technology is driving business success, both in employee internal communications as well as customer communications. So that's my next thing right after that, Diane mentioned Metricast. Part of metricast is our metric stars. So that is where we look at how companies customers rate them.
So how do customers view their vendor providers on all sorts of areas, technology, innovation and customer service, and bang for the buck sort of value. There's a lot of different factors we look at. And then also how much does each vendor help drive the company's business success? So we do that every year. So I'll be doing those metro stars in probably January, early February time frame, getting those out and seeing who's doing the best in their respective areas.
After that, I jump into the annual study that I do on called customer experience optimization.
So we'll just be updating a lot of the data from a year ago, seeing how things are changing in the CX world. It does also include some AI related activities, obviously because that's so embedded in customer experience, but also gets into the contact center and CRM and other areas of CX. So that'll be coming out. I believe it's second quarter, late first quarter, early second quarter.
And then I also want to point out that with both the AI and the CXO research, we are doing enterprise and consumer parallel research studies. So like what I talked about before about those gaps, we'll be looking at where those gaps are. And then two other things I guess I want to mention is that later in the year we're going to be doing a study focusing on channel strategies. So that's a new area for us. So we'll be doing that a little bit later in the year. You'll hear more about that as we get closer to it. I believe that's early third quarter, but we're going to be looking at what are companies channel strategies and who are the big channel providers, why? What are they looking for, all that kind of stuff. And then another newer report for us is going to be looking at technology buying decisions, which is, I believe, being pulled out of our metricast research, but really just trying to understand what drives somebody to buy a technology in a variety of different areas. What are the most important criteria? We get asked that a lot. So we're going to be looking at that this.
[00:26:44] Speaker A: Okay. Busy, busy, busy. And Erin, I know you're going to be equally as busy, so I like what you have on your.
[00:26:51] Speaker B: Sure.
[00:26:51] Speaker C: So as we're recording this, we're finishing up a study looking at UCAs costs as well as interest in adoption of generative AI. So by the time this is released, that will have published to our clients on our website. After that, I'm working on a study on workplace collaboration, customer engagement, security and compliance. I mentioned that's a core area for us to watch. So we're looking at how are companies organizing around security? How are they implementing policies, what tools are they using to ensure security and compliance, and how are they again, looking at some of the issues that I mentioned earlier related to generative AI. After that, we'll do our annual workplace collaboration study, which will look at trends around hybrid workplace, what technologies people are embracing in order to support hybrid work. What's happening with respect in voice technologies, meeting technologies, including room systems, as well as messaging and we'll look at other last year we looked at AR VR, so that's something we'll look at again, as well as additional areas to be determined. So look forward to chatting with our clients on all of those and sharing the results as they're released.
[00:28:00] Speaker A: Great.
And let me just note that I am working on a trends report on connected workspace, and this is the area of kind of comes up time and time again, but it's that sort of digital work hub this time really focusing on bringing together everything that a team needs to get its work done in one place. So your project management, your document collaboration, you've got your team messaging in there as well, content management, et cetera. So trends report coming up on that and we will follow that with a study as well.
So with that, I really thank the opportunity to share what our predictions are for 2024, where we're headed with our research in 2024. We always are very happy to hear from our listeners. So please do feel free to reach out to us. You can use the contact button on the metropy website to do that. And oh, also, I wanted to kind of put a bug in everybody's ear that Robin and I are going to be at the big it Expo super show in February. That's February 13 through 15th with a brand new program that we're overseeing for them called the Future of CX. And that's really exciting and we hope you can join us there. So with that said, that is all for now. On behalf of the Metro D team, I want to say goodbye till next time and take care, everybody.
You.
