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NICE Uses Acquisitions to Expand in Contact Center Market

May 23, 2006
NICE Systems, provider of telephone call digital recording systems, recently made key acquisitions to expand its presence and capabilities in the contact center business performance and analytics market, buying workforce management company IEX and performance management company Performix.
 
I was interested in knowing more about NICE's strategy behind these acquisitions, so I asked Eyal Danon, VP of global marketing, to respond to some questions ….
 
 
1. Please tell us a something about recent developments at NICE and where the company is going.
 
2006 so far has been a very exciting year for our dynamic marketplaces.
 
In Q1 of 2006, the increased focus on improving business performance contributed to significant growth in demand for interactions analytics solutions. Our solution, NICE Perform continues to enjoy a growing number of new customers and also repeat orders from existing customers.
 
The latest examples include leading outsourcer Teleperformance, which recently expanded its NICE Perform implementation, and placed an order for five UK sites, in addition to the successful deployment of five sites already running in France, and another deployed in Finland -- for a total of 11 sites altogether. Another is Sitel, which last quarter we announced expanded to two new sites in India. Following on that success, this quarter Sitel placed orders for three more sites in Belgium and Germany, for a total of six.
 
The VoIP recording market has passed the pilot phase and is well into full deployment, with mass proliferation of large scale implementations.
 
VoIP based contact centers all over the world are beginning to share Insight from Interactions across different locations and across the enterprise, regardless of the agent's location, whether at headquarters, at home or offshore. 
 
Also with VoIP NICE is seeing larger and larger deals, including major multi-million dollar projects with tier-1 customers, which include the world's leading banks. These customers are selecting NICE for massive projects, with thousands of channels that span hundreds of branches.
 
This is further validation of our leadership in providing compliance and liability solutions for the banking and financial services industries, and our key role in ensuring their smooth migration to IP technology.
 
And as we announced on April 28th, to lead the trend of Contact Center Business Performance and Analytics we are acquiring IEX Corporation and Performix Technologies.
 
 
2. What are the important trends right now in call center monitoring, and how are those trends driving your product offerings?
 
The need for solutions to help organizations ensure regulatory compliance and achieve quick and effective dispute resolution is still an important trend both in call center monitoring and for call center customer interaction analytics. 
 
The grand move to IP-based communications is also still on the rise. 
 
And we are seeing that more and more organizations are turning to interaction analytics to help them understand what is really going on with their customers, to help them increase customer satisfaction and retention, to compile competitive intelligence -- that is otherwise impossible to attain, and to drive new revenue streams.
 
 
3. Why is it important for companies to give increased attention to call center monitoring?
 
One reason, of course, is compliance with regulations. By performing quality monitoring and speech analytics on 100% of the customer interactions, contact centers have unprecedented opportunity to extract insight from interactions, mitigate risk and promote premier customer service. 
 
Contact centers that have been performing random sampling understand that calls containing critical information are escaping notice. By analyzing all customer interactions for any combination of words or phrases such as: "do not call" or "this is the 3rd time I asked to remove," managers can provide immediate feedback to agents on how to improve upon their interactions with customers. The risk is further decreased with the capability of alerting a supervisor to such occurrence before the issue becomes a legal action. 
 
Without performing 100% quality monitoring along with analytics, a QA supervisor must monitor a call before it can be determined whether a violation occurred. And since QA supervisors generally monitor no more than 20% of the calls, an immediate alert to violations is critical to mitigating risk. 
 
Another is a two-fold reason -- improved agent performance, resulting in improved customer satisfaction. With precision QM that is integrated with an Agent Coaching solution supervisors, QA, and contact center managers and director now have access to real-time performance data, online. Real-time performance data is also available to agents, who can evaluate their own calls and sign-off on evaluations electronically. In the past coaching was an off-line, time consuming, one-way dialogue.
 
Behaviors that required improvement were treated slowly, prolonging customer dissatisfaction. Good evaluations often didn't reach the agents, prolonging the lack of reinforcement. But now, on-line, real-time, two-way communication empowers agents to respond with questions or request assistance, and be able to calibrate behaviors for improved customer satisfaction.
 
 
4. Your CEO Haim Shani recently said that NICE is "is providing the first truly holistic view of an organization's contact center activity." What does Shani mean by that?
 
Indeed, the combination of NICE Perform with IEX's and Performix's solutions provides the first truly holistic, i.e., most comprehensive view of the contact center, which addresses, for the first time, all contact center and enterprise stakeholders -- including customers, agents, supervisors, managers and decision makers in the enterprise.
 
This powerful combination constitutes both the broadest offering available today and the only one that includes the leading solution in each market segment. 
 
NICE Perform provides the leading solutions in interaction analytics, Voice over IP and TDM recording, coaching, and quality monitoring. IEX is the leading vendor in workforce management, strategic planning and performance management solutions for the contact center market. The Performix set of tools will provide the umbrella that will combine the business information that is generated by these best-of-breed solutions.
 
In addition it will also allow our customers, who have other vendor solutions to be fully integrated under the Performix suite.
 
The contact center industry is very complex. It needs to combine operational efficiencies, whose natural goal is to minimize resources and expenses, with the need to provide the organization access to its customers, understand its market, and react quickly to new and changing competitive environments. 
 
Here's a real life example: A new sales campaign is out. Significant call volume increases, and the call center manager that receives thousands of calls an hour needs to understand what's happening with his business; he needs to correlate actual sales results from one system with planning for his workforce, understanding why customers are calling and in what context, and needs to make cross-references between these different data points to plan ahead. 
 
 
5. How have your recent acquisitions increased NICE's capabilities?
 
The recent acquisitions complement NICE's organic growth, and extend our global reach, expand our technology and solution portfolio, broaden our customer base, and increase the distribution channels. 
 
With the acquisition of Dictaphone's CRS business we expanded our services organization to be the largest in the industry, as well as our customer base -- also, the largest in the industry.
 
Now with the acquisitions of IEX and Performix we are offering an extended solution that enables the contact center managers to have on their dashboard unified reports that will help them address the different issues and take immediate actions. They will also be able to compare actual results to Key Performance Indicators such as customer satisfactions, sales targets, handling time of customers and more.
 
Through this essential correlation decision makers at every level can extract ever more wide-reaching and valuable insights to better understand what's going in on the contact center and enterprise and correlate them to their operational and business goals, such as upsell and cross-sell opportunities, customer churn, business intelligence, operational efficiency, and even compliance and fraud.
 
 
6. How is your company going about integrating IEX and Performix into the company? How is NICE trying to make the best use of the acquired companies' people, products, business processes and other capabilities so as to benefit the larger organization?
 
The integration process of IEX and Performix is already on its way.
 
We have a strong track record of successfully integrating acquired companies. Our teams around the world are now working with the IEX and Performix teams to ensure very smooth integration and immediate move into business after closing.  
 
Together with IEX and Performix we are truly the undisputed leader, with a uniquely holistic approach that is based on the broadest, most advanced solutions, the largest services organization and customer base, and of-course the strongest financial standing. In addition to this new and exciting offering, the acquisitions bring significant and immediate commercial benefits to NICE.
 
First, we are bringing approximately 1000 new IEX customers, who will join the NICE customer community, already the largest in the industry.
 
These hundreds of new customers in many verticals, such as financial services, telecommunications and more -- are going to be a great asset for NICE, as we will introduce them to NICE Perform as well as to our combined solutions.
 
IEX and Performix will now have access to NICE's large customer base and will enjoy a major upside on the international front.
 
NICE partners will have the broadest set of best-of-class solutions and I believe this will strengthen our relationship with many of them, and especially with our strategic global partners such as AVAYA, SAS and CISCO.
 
And finally, IEX is a clear market leader in its space with a very attractive financial model, which will contribute to our financial performance in 2006 and beyond.
 
 
7. What's the most exciting thing about what's going on at NICE right now?
 
We are excited about the expansion of Insight from Interactions, which we are seeing in each of our markets, and about creating the market of contact center business performance and analytics. We are proud to head these new paradigm shifts in the way organizations make critical business decisions and improve performance. 
 
AB -- 5/23/06
 


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