After roughly 20 years in the contact center market and four years issuing an annual report on workforce optimization (WFO), Donna Fluss wasn't expecting a whole lot from this year's Quality Monitoring/Liability Recording Product and Marketing Report.
"I expected to be bored this year, and I was anything but bored," said Fluss, president and founder of West Orange, N.J.-based DMG Consulting. "I really wanted to use these applications."
Released yesterday, this year's report pegs the market for WFO technology in the contact center at $2.3 billion in sales and predicts a 10% increase in 2008. That counts sales from all vendors of quality monitoring, liability recording, coaching and eLearning, performance management, workforce management, surveying and speech analytics.
Despite the relative maturity of the market, there are a couple of key reasons for the growth, Fluss said. One is mergers and acquisitions. At the top sits NICE, which last year acquired Performix and IEX and their respective workforce and performance management technologies, as well as Verint, which acquired Witness this year. As a result of the consolidation, smaller, standalone vendors are emerging to compete on innovation and price, providing organic growth for the market as well, Fluss said.
Vendors are pouring that money back into R&D, and it's showing.
"We're seeing the functionality both within core QA recording as well as performance management get better and easier," Fluss said. "Better in that there's more of the things we want it to do, and easier in that it's easier to implement and use."
In fact, she said, the user interfaces in the quality-assurance recording applications -- historically a challenge for contact center technology vendors -- took a big step forward in 2007.
Internet Protocol (IP) was also on the upswing in 2007. Sales of IP recording grew 40% in 2007, and that number should increase to between 50% and 55% in 2008, the report says.
The midmarket is also providing fertile ground for WFO technology, particularly for smaller vendors and vendors with standalone applications. Analysts and industry observers have underestimated the size of the midmarket, Fluss said.
"When I look at the penetration of workforce optimization or QA recording, it doesn't appear penetration is going up in the midmarket," she said. "But what's happening is more and more organizations are discovering that they really are call centers."
For example, many companies have inside sales organizations that are growing rapidly and will need QA recording.
"The large part of the QA recording market is penetrated, but next tier down -- 250 agents and under -- there's still a significant amount of opportunity," Fluss said. "Thirty to forty percent of the contact centers I visit actually have a really old QA recording app or aren't using it."