Convergys and Intervoice: Blurring The Lines?

Having worked for a teleservices firm as well as having covered/covering this industry I completely understand the rationale behind Convergys's acquisition of Intervoice. The app/platform firm provides a great and innovative set of solutions, a strong customer base, and revenues. There is also, as Reuters cites Oppenheimer analyst Shaul Eyal, 'marginal overlap of products and customers.'

This last rationale is key. To survive outsourcing firms need new revenue streams because the margins on providing contact center services, which have always been tight, are being corseted even further.

Increasingly sophisticated voice and web-enabled self-service solutions are eating away the low end of their business. At the same time more of the top end work from clients is going in-house to improve customer satisfaction, which one longtime contact center executive told me "is becoming the enterprises' only differentiator in the marketplace." Clients that once relied on outsourcers to have the latest and greatest technologies to support these calls are now bringing those tools in-house as well.

Outsourcing firms, therefore, "risk becoming nothing more than temp agencies" i.e. being there for overflow, the after-hours, the short-term, and the emergencies rather than as full fledged partners handling contacts on an equal basis.

There is nothing wrong with that, provided that's your business model. Answering services, which were the first teleservices outsourcers through answering after-hours calls for family doctors, and many of which have reinvented themselves as full-service contact centers in the wake of devastating competition from voicemail, have long operated on that basis.

Not surprisingly outsourcers have been buying/entering their way into app hosting, billing, HR, market research, and consulting markets. All of which makes sense because there are, when implemented right, strong synergies with their core contact center functions.

Yet is buying an app/platform firm, one whose type of product and services are no doubt used by other outsourcers, going a little too far? Isn't it blurring the lines between solutions and services? If I was responsible for technology with a teleservices firm I'd think twice about buying a product/service from a company owned by one of my biggest competitors.

I could be wrong here. But I could not help thinking what's next...Teleperformance buying Siemens???