News Stay informed about the latest enterprise technology news and product updates.

Workforce management software market grows rapidly, but one issue persists

The market for workforce management software in the contact center saw double-digit growth last year, but the technology still needs work, according to one expert.

Despite the global recession plaguing most technology markets, contact center workforce management (WFM) software had a banner year in 2009 -- but the market still faces a significant problem, according to a recent report.

The 2010 Contact Center Workforce Management Report from DMG Consulting, a West Orange, N.J.- based firm, notes that WFM seats increased by more than 30% in 2009, and DMG expects that growth to continue over the next three years.

"There were two product areas we were very confident would pick up -- self-service and workforce management," said Donna Fluss, principal at DMG. "Self-service is growing at an amazing rate, and for contact center workforce management, it was probably the best year ever."

The recession forced many organizations to focus on efficiency as well as quality in their contact center operations, which meant more investment in things like WFM. However, not all is well in the market.

Most WFM vendors rely for their forecasting on one algorithm or a slight variation of it. The erlang-based forecasting algorithm is a mathematical equation for forecasting call volume designed to handle calls that are very short in duration with little delay between one call and the next -- similar to directory assistance calls.

"It got applied to contact center calls, and they were longer with some delay," Fluss said. "Already, it wasn't ideal to fit that challenge. It wasn't awful. It just wasn’t that great. With maybe one or two exceptions, almost all the workforce management vendors depend on [the erlang algorithm]."

Add in the emergence of multi-channel contacts and skills-based routing, and there's more room for improvement, Fluss said.

But until the banner year the market saw in 2009, the vendors in the market haven't had cash to invest in research.

"Workforce management vendors have always been in a [chicken and egg situation]-- they wanted to make investments, but they weren't selling that much," Fluss said. "Now that revenues are increasing, they're able to meet the needs of their customers."

She predicts that the market for WFM software will expand by 8% in 2010 and 10% in both 2011 and 2012, thanks to upgrade cycles, the need for Web-based applications for decentralized workforces, and new functionality. Hosted or software as a service (SaaS)-based applications are also seeing serious adoption.

Moreover, as the market has matured, contact centers are quickly seeing the benefits of automating things like scheduling and coaching agents.

"Workforce management is significantly better than not using workforce management," Fluss said. "If you're multi-channel and have between 50 and 100 seats, you're very complex. Even if you're single-channel, by the time you get to 100 seats, you need WFM."

It's not all about the contact center anymore, either. Some businesses that have deployed WFM are asking whether it can be used for workers in the back office. Although there are some small vendors that provide software to help bank branches optimize their people, there's been little progress. Fluss predicts that some WFM software vendors will begin to fill that hole in the coming years.

The growth is also good news for software buyers, who can now ask for more from their software providers, as well as for those who may have been waiting to invest, she said.

"If you haven't looked at how your workforce management practice is in the past two years or so, take a fresh look," Fluss said. "Given the learnings of the marketplace, you'll be able to get significant benefit even with the same solution. It's really a marketplace where technology is essential, but it's hugely about best practices and applying them on a standardized and consistent basis."

Dig Deeper on Contact center management

Start the conversation

Send me notifications when other members comment.

Please create a username to comment.