Verint Systems has been gobbling up companies with alacrity the last few years. We recently spoke with Mariann McDonagh, their vice president of global marketing, about why that's happening, what it means for their customer base, and where the call center sector is headed in the future. Here are some excerpts from that conversation.
Call Center Magazine: Tell us what's been going on.
Mariann McDonagh: In the past year we acquired the Opus Group for their consulting and operational performance management solution, and not long after that we acquired a small company called CM Insight in the U.K., and they actually are a customer behavior management consultancy. And they're bringing us some very, very interesting stuff. So we've been on the enterprise side, very focused around really wrapping high impact services around our solutions. In general terms, Verint has done eight acquisitions in the past four years.
What we do is look for acquisitions that either open new markets or give us new technology -- and for Mercom it was really about the small to medium contact center space. We had announced and had made a foray into that space several years back with a solution called UltraExpress. And you know we've gotten some traction there, but not as much traction as we would have liked -- our share was not growing as fast as the market was growing. And we looked around and said, how can we really improve the route to market and rapidly grow our share in the space, and the smartest way for us to do that was to buy a company that was firmly entrenched there. When we looked around we found Mercom, and they've got somewhere between 6,000 and 7,000 implementations in the space.
So it was the customer base then, that you were after?
I think even more than the customer base itself, it was their reseller base. They've got over 1,000 regional resellers that are extremely plugged in to this marketplace. That was really the motivation, that broad channel access as well as all of their channel management capabilities that they've got.
Why didn't UltraExpress originally get the traction you'd expected?
I don't believe it was the product, I believe it was the channel. It's a very different experience building a channel in this space. It requires a full turnkey approach, and you've got to find the channels with those routes to market and basically nurture and feed them in a way that probably wasn't squarely in our core competence from the enterprise point of view.
The majority of our enterprise relationships are really co-sell. If you look at the way we go to market with Avaya and BT and Nortel, we're essentially in front of enterprise decision makers together. And so with the small to mid-sized contact center, everything has to be absolutely turnkey. I think it's really about the channel friendliness, and that's what Mercom really brings to us -- an R&D organization that understands specifically how to build and deliver solutions that partners can implement turnkey, as well as, again, that backend channel management operation of how to actually work with these resellers.
Are you planning on pushing other Verint products through that same channel?
That's certainly something that we're talking to these partners about right now. What we have committed to is the extension of the Audiolog product in the space; we're going to continue our UltraExpress product as well, and then probably within 12 months time we're going to have an integrated product, choosing the best of both worlds there.
How much of the product line developed in 10 years at Verint at the enterprise level is really applicable to the SMB market that you can get to through that channel? Do you have to do a lot of development, packaging to get it to the smaller market?
I think there's definitely going to be a play for additional optional modules that include our screen and speech and data analytics. The way that we have designed our solutions, all of our applications are separate from the platform layer anyway, so there's already some very interesting and in-depth conversations going on between the former Mercom R&D folks and our R&D folks to understand the best and the fastest way to do that. But really it's all going to be determined by what we hear from our partners in terms of what the market needs.
Screen analytics is a great new application that we've been getting some excellent traction with on the enterprise side that I think also has applicability in the call center side.
It's about understanding what the agents are doing. Not in terms of Big Brother monitoring, but understanding the best practices in call handling. What screen analyics does is give a supervisor the ability to understand what agents are doing in the process of talking to a customer on a call. The supervisor can look at the ways they can help make them more effective.
It also helps to deliver information back to the IT and systems support people, it says 'hey you know what, in order for us to create a ticket purchase order for a customer on the phone we've got to nav through eleven different systems, and that's not effective for us.'
Is that an outgrowth of Performance Management?
It really is, I think. And that's how we position it. We position it as an agent performance management application. It also gives us the ability to track additional data that we scrape from the screens, like VIP customer names, and things like that, so it helps us to do a little bit different version of QM, with looking at how they operate the screens, as well as deal with the customer on the call.
It appears from the way you describe it that there are still some missing pieces -- a race among the vendors of traditional recording tools, including Nice and Witness and others, to fill in the missing pieces across the agent development spectrum. With either new product offerings or strategic acquisitions. It begs the question of what's next in your product portfolio, what's missing?
It's problematic for me to speculate. But when it comes to a race being on, I think what's happening actually is that the leaders in the space are differentiating themselves. Witness I think has made a very clear choice to focus on the workforce optimization space. And in fact the workforce management message has eclipsed in many ways their quality message. I'm not sure exactly what Nice is doing today with their stuff, but they really are focused on recording and in the contact center space. But more than anything else we continue to look at the big value being about the intelligence from the customer interactions, and the drive toward additional value added applications that help people really use this unstructured customer information. Whether that unstructured information is in a voice call itself, whether it's in the screens, whether it's adding the contextual information of all the stuff that comes from the switches and the CTI -- that's all really the direction that we're going in. And what we see as the biggest bang for the buck. That, and again this packaging of services around the solution.
We are looking to get a firmer footprint in the enterprise. We think that the back office is a place that's radically underpenetrated, where there's a great deal of growth for us, and Opus positions us very very well there because we've got solutions that are really very different from the classic performance management, with what they do for claims processing and other transaction intensive operations back there. There are somewhere in the neighborhood of 100 times the number of seats in the back office than in the front office.
Are you saying that over time you're going to try to penetrate that from an analytics and performance management point of view, rather than through traditional telephony recording and monitoring?
I wouldn't count anything out, but I think that the great value is from the performance and analytics point of view. That's really where all the value is generated. We think that enterprises want to spend money on solutions that help them to improve service and reduce costs, and those two things really are two paths that are crossing very heavily in the back office that have yet to be joined to the front office. There's this whole service value chain that runs through the enterprise and parts of it have been addressed, but not the entire part. I would say that if you looked at what Verint's acquisition ideology is, it's about looking at that service value chain from beginning to end, from back office to front office, and about understanding how our existing solutions can impact that service value chain.
So you're either erasing or acknowledging the erasure of the distinction between the call center and the other parts of the customer infrastructure.
I think that with many of the organizations that we work with, that the boundaries are continuing to blur there. It depends on the sophistication, and where they are on the journey, but we're starting to see a great deal of interest from our customers in connecting their in-person operations, things like walk-in centers and retail branch banking, and having the same sort of quality processes that run across all of them. Being able to record and to mine the in-person customer interactions.
So when you combine the agent interactions with the retail branch operations interactions, with the interactions that happen in the back office, it really does become a much more enterprise view of how we interact with customers. As opposed to the more limited view that we've historically taken that says that the customer interaction is 'myself and an agent on the phone talking about my account.'
Do you see a different person at the executive level taking control of that broad-based customer interaction, or is that just in the realm of theory at this point?
It really depends. Every once in a while we run into that, that elusive chief customer officer. How many of those have you actually seen on people's business cards? More often than not what we find in this kind of work is that there are a lot of committees, groups of users that are conjoined together. Or what we're doing is actually creating the linkage, where there are multiple efforts happening, and a lack of visibility to them, so that we're approaching from one side and then from another side and saying 'did you know that we're talking to the vice president of branch services here.'
In the real world you're pushing toward the small and mid-sized -- isn't it harder to accomplish that linkage between different departments and workflows at the smaller end of the scale?
Yeah, and I think that what I've been describing to you is really the higher end of the market. The other thing is that we're going from a horizontal solution that we sell into one market to more of a portfolio solution provider. That's changing our organization, how we do things, who we go to market with. I think that what I've described to you is really unique at this point to the higher end of the market, where we've traditionally been. And I think we've got a long way to go probably before the small to mid sized has that level of sophisticated view of the customer.
Is it going to verticalize? Are you going to be pinpointing solutions to say insurance, financial services, and so forth?
Absolutely, yeah. And we've had a lot of conversations of late about that. I think there are probably two directions that we'll go in. The first is verticalizing by literal vertical, by industry market. But also, verticalizing by solution types, so first call resolution as a vertical offering.
How would that work?
Actually, we package some very specific speech analytics, call categorization capabilities as well as services, and market that specifically as a first call resolution solution. And then there may be a 'first call resolution in telcos' product, for example, a market that we're very strong in. So if I could tie these things together, at the high end, really our focus continues to be more value-added applications that help folks make sense of these enduring business problems, the ones that never ever go away regardless of how much we throw at it. With reference to the small to mid-sized space, solutions really more often focus on the cost-reduction side of the equation, because that's typically the first thing that the smaller end of the market is concerned about.
Is there a danger that the traditional call center manager -- who is very activity focused, very immediate - is not the appropriate person to be looking enterprise-wide at the customer relationship?
At the end of the day that is the key to our challenge. And the challenge is number one, to always educate and evangelize to our bread and butter customers. A lot of what we sell is quality monitoring solutions to those guys, at a first step at least, before we start to try to get in and change the game. We need to continue to encourage the contact center managers that we've traditionally sold to for the past fifteen years to look beyond just where they are today and to actually recognize their own strategic value in the organization.
When we started to talk to contact center managers about speech analytics, four years ago, we said look, you want to change your strategic value to the organization, you become the clearinghouse for customer intelligence. You go back to the business and say 'here is what I can provide to you.' And we will power that, we will show you how to do that through our speech analytics and reporting capabilities. Being able to push these categories out to people in the business. We not only help ourselves to sell, but we help these guys to take a broader view. That is an ongoing evangelical goal for us. Because they're in a highly frontline, fires-burning operational environment.
Absolutely. I think it's absolutely more true there.
Don't you create a headache for yourself if you go down-market, towards smaller and mid-sized centers?
It's about the segmentation thing. When we're down-market, we're not telling exactly the same story. We're much more focused on the performance management aspect. We're talking a lot more about operational effectiveness than we are trying to tell a big broad story about bringing down the walls and unifying your view of the customer and all of that. That's again key to the transformation that we're in the midst of -- being able to have a portfolio of solutions that addresses different market needs and a very robust set of messages and business cases of ROI behind it that help these people understand what do I really need? Depending on where we are as a business today.
That makes me curious about the role of the corporate cultures that you've acquired, and the pace of integration -- whether you have to keep certain aspects of the cultures separate so that you can speak with a multitude of voices in different contexts.
We want to speak with a multitude of voices that are all Verint. And that's the most important thing. As the chief brand steward. That's most important to me, that people recognize that Verint is a portfolio solution provider and we do have different things for different people that have different messages. But they're all part of the big value proposition of actionable intelligence, cause that's a vision that we believe in whether we're up, down or sideways market -- it's part of our DNA and it's core to who we are.
I will say that there's been great influence as a result of the different corporate cultures that have come to us in terms of acquisitions, and it keeps us humble, because when we acquire these companies, we acquire them for a particular expertise. Sometimes what happens is that companies run down this integration path and don't necessarily listen to the people that they've acquired. They say hey, you know what, we've acquired you for your expertise in the enterprise, but guess what, you're just going to fold in with everybody else, we're not really going to listen to you, we're not going to change our business as a result of the things we hear from you, and we're not going to continue to innovate. And that is what we're really focused on doing, in making the most of these acquisitions.
So essentially you have people who can speak the language of down-market or the language of services, or speech, or telephony or data?
Absolutely. The first time I got in the room with one of the Verint Opus performance optimization guys I was completely and totally floored by how different the things were that they were talking to people about. Because at the end of the day, you say performance management is performance management, right? But I didn't know anything about claims processing, about billing and finance. Really where I was focused was these folks in the contact center. And you're right, it's a different language.
But a lot of the questions and problems and business challenges are the same, it's just a different point of view. It's healthy -- it informs the way we go to market, the partners that we choose, the next acquisition ... because of what we learn from the last.
The problems continue to be the problems from time immemorial, but when you look at all the complexities, how many different ways we serve the customer, through how many channels, how many touchpoints, that stuff has continued to become more and more complex over time.
Copyright 2006 CMP Media LLC. All rights reserved.
12/1/06, Issue # 1912, page 36.
