The Revitalization of the Workforce Management Market

The workforce management (WFM) market has awakened and is attracting replacements and new sales at rates never seen before. Interest in WFM solutions is being driven by a number of unique events. Contact center managers have been asking for better WFM capabilities for years, but vendors did not see the value in making the necessary R&D investments, because they did not think they could get a sufficient return on their investment. A small percentage of contact centers—the very large and large environments—had invested in WFM solutions, but the rest were not moving quickly to buy these solutions. So the market was at a standstill, and true innovation was highly limited.

European Work Rules Force Change

Something had to give, and it finally started to, as a result of changing market dynamics. WFM vendors were forced to enhance their solutions to address country- and region-specific European work rules. The days of "one size fits all" were coming to an end. WFM could no longer be limited to just one kind of solution. It took too long for changes to become effective, but they are now.

One factor driving change in WFM is the emergence of European solutions in a growing number of countries. Sweden's Teleopti, founded in 1992, Germany's InVision, and France's Holy-Dis are among the many solutions in place throughout the world. While some of the earlier releases of these applications were not as feature-rich as the leading U.S.-sourced WFM solutions, the regional-based solutions addressed the unique requirements of their geographic areas. Over time, these solutions have improved and become highly competitive.

Millennials Are Changing Contact Center Dynamics

The timing of changes to address work rules could not have been better for U.S.-based companies, as they coincided with a shift in the demographics of the contact center workforce. Millennials, a new generation in the workforce, are forcing contact center managers to change their scheduling practices and prioritize agent schedule preferences over the traditional method of optimizing purely for performance. The newer contact center WFM solutions enable managers to balance staff optimization and agent preferences when assigning schedules.

The concept of using agent preferences is still unfamiliar to many U.S.-based contact center managers, but this is starting to change. U.S.-based contact center leaders must realize that they have to change the way they do scheduling or their agent attrition rates will increase. Millennials are not willing to accept any and every schedule, and look elsewhere for work if they are frequently asked to alter their personal commitments to accommodate their jobs.

Ease of Use

For years, leading WFM vendors have prioritized investments in new functionality over enhancements to their existing user interface. DMG agrees that vendors should add new features to their solutions, but we do not see why these solutions should continue to employ user interfaces designed 10 or more years ago. Users of these solutions have to work two to three times as hard to accomplish tasks due to their inefficiencies and ineffectiveness. Even worse, only very well-trained personnel can coax out the best results.

Updated user interfaces (UIs) build logic into the process, unlike their predecessors. New UIs combine steps, instead of forcing users to spend double or triple the time to accomplish the same tasks. When a new UI is introduced, there is an opportunity to rethink some of the back-end processing, which is also important.

WFM Application Accuracy

WFM solutions are used to optimize agent efficiency, even when they are optimized for agent preferences. The purpose of WFM solutions is to keep agent-related costs as low as possible while ensuring that there is adequate coverage to meet service levels. Erlang and modified erlang have been the primary algorithms used by contact center WFM solutions since they were introduced more than 30 years ago. The problem with erlang is that its inherent inefficiencies result in overstaffing, as it assumes that it's better to overstaff slightly than to not meet the service level. While the overstaffing is not an issue in small contact centers with up to 100 agents, it's a very costly problem in larger ones.

WFM vendors are aware of these issues, and some have made investments to improve their algorithms. Others are working to find better algorithms. And still others have told us that their solutions are great and do not need to change.

There is no doubt that improvements and innovation are needed in the area of accuracy. DMG expects this to continue to be an area of opportunity for contact center WFM vendors.

Social Media and Multichannel Forecasting and Scheduling

Most of the WFM solutions claim to handle a variety of contact center channels, and some actually do. Anyone looking for a multichannel WFM solution—which should be all users—needs to see what underlying algorithms are used to address nonphone channels. If erlang is used to address communications such as email and social media, it would be wise to consider a different solution.

Enterprises are struggling to figure out how to properly handle social media interactions. In many companies, marketing is currently charged with handling these interactions, but marketing is often not familiar with WFM solutions. DMG expects the responsibility for managing social media to be passed to contact centers and customer service groups during the next few years. WFM solutions will be needed to forecast volumes and identify schedules that enable organizations to respond to social media interactions on a timely basis. All of the WFM vendors need to make investments to improve how they handle these interactions.

Back-Office and Branch WFM

The size of the back-office WFM opportunity is three times larger than that of the front-office/contact center market in the United States, according to DMG research. At this time, though, few organizations in the U.S. or Europe have invested in back-office WFM functionality. These operating areas are under scrutiny as executives look for ways to reduce operating costs. The more innovative companies have started to incorporate and apply contact center workforce optimization technology and best practices into their back offices. While this is an approach that should be applauded, these managers are challenged to find the right solutions to help them address these opportunities. Most of the leading contact center WFM vendors now claim to address the back office, but when asked to explain the differences between their front-end (contact center) and back-office solutions, they struggle to answer.

The Awakening of a Market

WFM is a market in transition. Any organization that has not purchased a new WFM solution in the past three to five years should take a look at what is now available to see if recent innovations can make a quantifiable contribution to its contact center. Many of the current choices were not available in the past. Prospects can select an acquisition model—a premises-based, cloud-based, or managed service offering that meets their financial and operational needs. They can choose to purchase a WFM solution on a stand-alone basis, or as part of a suite from a workforce optimization or contact center infrastructure provider.

While these solutions are far from perfect, many are better than not using WFM and continuing to depend on worksheets. Without WFM, it is next to impossible to figure out how to find the right balance between agent schedule preference and department optimization. It's also impossible to empower agents to manage their own schedules, vacations, schedule swaps, shift changes, etc. The contact center WFM market has come a long way in the last two years, and the pace of innovation is expected to increase. Progress has been made, and, significantly, more is on the way.

For a detailed analysis of leading and contending contact center WFM solutions, see DMG Consulting's "2012 Contact Center Workforce Management Market Report."

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Donna Fluss (donna.fluss@dmgconsult.com) is founder and president of DMG Consulting, a leading provider of contact center and analytics research, marketing analysis, and consulting.

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