The Forrester Wave-Customer Service Solutions for Small and Midsize Teams, Q2 2014,

Forrester Research, Inc., 60 Acorn Park Drive, Cambridge, MA 02140 USA

Tel: +1 617.613.6000 | Fax: +1 617.613.5000 | www.forrester.com

The Forrester Wave™: Customer Service Solutions For Small And Midsize Teams, Q2 2014by Kate Leggett, April 7, 2014

For: Application Development & Delivery Professionals

Key TaKeaways

Customer service Is a Cornerstone For Delivering a Great Customer ExperienceHowever, delivering good service is difficult. Nearly 70% of US consumers report an unsatisfactory service interaction during the past 12 months. Organizations must navigate rapidly changing customer expectations and look for vendor solutions that enable the business capabilities necessary to deliver differentiated experiences.

The Customer service Vendor Landscape ConsolidatesThe landscape of customer service solutions has matured and converged as a result of merger and acquisition activity. These vendors offer solutions replete with features and functions, and every vendor can just about tick every box. Customer service leaders must understand the core focus area of each vendor to make the right buying choice.

Keep an eye On This spaceOracle Service Cloud and salesforce.com battle for the lead in this evaluation due to their breadth of capabilities and mature business practices. Change in the customer service vendor space will continue. Suite vendors will fill in functionality gaps with acquisitions. Vendors in adjacent software solution categories will make a play for existing customer service vendors to augment their offerings.

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© 2014, Forrester Research, Inc. All rights reserved. Unauthorized reproduction is strictly prohibited. Information is based on best available resources. Opinions reflect judgment at the time and are subject to change. Forrester®, Technographics®, Forrester Wave, RoleView, TechRadar, and Total Economic Impact are trademarks of Forrester Research, Inc. All other trademarks are the property of their respective companies. To purchase reprints of this document, please email [email protected]. For additional information, go to www.forrester.com.

For ApplicAtion Development & Delivery proFessionAls

why ReaD ThIs RepORT

In Forrester’s 84-criteria evaluation of customer service vendors for enterprise organizations, we identified the 11 most significant solution providers — Astute Solutions, eGain, Kana Software, Microsoft, Moxie Software, Oracle (Oracle Service Cloud), Parature, salesforce.com, SAP (SAP Cloud for Service), SugarCRM, and Zendesk— in the category and researched, analyzed, and scored them. This report details our findings about how well each vendor fulfills our criteria and where they stand in relation to each other to help customer service professionals select the right partner for their customer service initiatives.

table of contents

Good Customer service Boosts Revenue, poor service Increases Costs

The Customer service Market Is On The Cusp Of significant Change

Customer service Vendors Focus On Market segments For success

The Customer service Vendor evaluation process explained

The Results: Buyers have Many Choices To sift Through

The Results: Vendor profiles

supplemental Material

notes & resources

Forrester conducted vendor survey evaluations in December 2013 to January 2014 and evaluated 11 customer service solutions worthy of consideration by large organizations. We also surveyed vendor customers.

related research Documents

navigate the Future of customer service in 2014February 6, 2014

techradar™ For AD&D pros: contact center solutions For customer service, Q2 2013April 17, 2013

transform the contact center For customer service excellenceJune 22, 2012

The Forrester wave™: Customer service solutions For small and Midsize Teams, Q2 2014Due Diligence required: these vendors Are Great At supporting small And midsize teamsby Kate leggettwith stephen powers, michael Facemire, and victoria Boutan

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the Forrester Wave™: customer service solutions For small And midsize teams, Q2 2014 2

© 2014, Forrester Research, Inc. Reproduction Prohibited April 7, 2014

GOOD CusTOMeR seRVICe BOOsTs ReVenue, pOOR seRVICe InCReases COsTs

In the age of the customer, executives don’t decide how customer-centric their companies are — customers do. And providing good customer service is a win-win for customers and companies. In fact, recent Forrester data shows that an investment in customer service technology is the second most important investment that companies are making in 2014 (see Figure 1). Why? Because good customer service has quantifiable revenue impacts:

■ Good customer experiences boost long-term loyalty. Customer loyalty has economic benefits as measured over three dimensions: willingness to consider another purchase, likelihood to switch business to a competitor, and likelihood to recommend to a friend or colleague.1 The revenue impact from a 10-percentage-point improvement in a company’s customer experience score, as measured by Forrester’s Customer Experience Index (CXi), translates into more than $1 billion.2 And customer service, for many companies, is a cornerstone to their customer experience strategy.

■ Poor customer service leads to increased costs. The cost of failing to meet customer expectations is high: 75% of consumers move to another channel when online customer service fails, and Forrester estimates that unnecessary service costs to online retailers due to channel escalation are $22 million per year on average.3

■ Poor service experiences risk customer defections and revenue losses. For example, if a company has 4 million customers and each spends $100 per year, the total projected revenue for a year would be $400 million. Forrester survey data shows that approximately 11% of companies have poor CXi scores.4 That represents 440,000 customers, and typically only about 2% of them complain to the contact center. That leaves 98% who don’t complain, or a total of 431,200 customers at risk to defect. At $100 apiece, this represents over $40,000,000 million potential loss in revenue annually.




Figure 1 Organizations Are Investing In Customer Service In 2014

Source: Forrester Research, Inc.113657

“As your firm considers its software strategy and investments, which departmentsor business groups is it focusing on the most? (select up to three)”

Sales 38%

Customer service 32%

Finance 25%

Marketing 25%

Research and development 25%

Field service 22%

Order ful�llment 21%

Manufacturing 18%

Procurement 16%

Supply chain 14%

Human resources 13%

Of�ce of the CEO and otherexecutive management 7%

Other 4%

Base: 2,074 IT executives and technology decision-makers

Source: Forrsights Software Survey, Q4 2013

Good Customer service Is hard To Deliver

Customers want to feel empowered to get service anywhere, anytime, and they expect their service interactions to be pain-free. Over half of US online consumers are likely to abandon their online purchase if they cannot find a quick answer to their questions, and three-quarters say that valuing their time is the most important thing a company can do to provide them with good service.5

It’s no surprise that customers are often frustrated with the effort that it takes to receive customer service. Forrester data shows that 67% of US online consumers say that they’ve had unsatisfactory service interactions in the past 12 months.6 This parallels recent data from the Accenture Global Consumer Pulse Research survey, which says that 91% of respondents are frustrated by having to contact a company multiple times for the same reason, 90% by being put on hold for a long time, and 89% by having to repeat their issue to multiple representatives.7




Customer service leaders of small and midsize teams aim to strike the correct balance between customer needs and cost of operations. Specific challenges in finding the right balance include the need to (see Figure 2):

■ Provide multiple communication channels for customer interaction. The breadth of communication channels that customers use for customer service is increasingly varied. Recent Forrester data showed that 73% of US online consumers used the phone, 67% used help or frequently asked questions (FAQs), 58% used email, 43% used chat, 24% used SMS, and 22% used Twitter in the past 12 months.8 Customer service agents supporting these media types must be able to deliver channel-agnostic information — a challenge for 41% of organizations that, for example, are unable to deliver relevant customer information about their account and profile over a range of channels.

■ Support end-to-end customer journeys. Customer service organizations must also support omnichannel customer journeys — journeys that start on one communication channel and move to another with a seamless handoff between channels so that customers do not have to restart the conversation — something that only 3% of organizations are extremely effective at doing.

■ Empower customers and agents with consistent answers. Customer service agents rely on knowledge management solutions to effectively answer customer inquiries. In addition, 67% of US online consumers use web self-service knowledge to find answers to their questions.9 Yet, knowledge management implementations have a 58% satisfaction rating among US online adults who have used the channel in the past 12 months.10 This is because knowledge is often difficult to locate, difficult to maintain, and not always relevant to the customer’s context.

■ Monitor customer needs and satisfaction. It is critical for customer service managers to receive direct customer feedback, preferably as soon as the interaction with the customer has happened. It is also critical for them to understand the general impression of their service offering as expressed in the social sphere. Service managers use this information to balance the cost of service with overall customer satisfaction so that they can make realistic tradeoffs.




Figure 2 Customer Service Organizations Struggle To Provide Consistent Cross-Channel Experiences

Source: Forrester Research, Inc.113656

“How would you rate your company’s effectiveness at implementing thefollowing for your multichannel strategy?”

Ability to provide a consistentcross-channel experience

Ability to deliver a channel-agnostic capabilityfor customers to get relevant information

about their account and pro�le

Ability to provide a seamless handoff betweenchannels for customers — regardless of whether

of�ine-to-online or online-to-of�ine

Base: 80 eBusiness and channel strategy professionals(percentages may not total 100 because of rounding)

Source: December 2013 Global eBusiness And Channel Strategy Professional Online Survey

1 = not at all effective 5 = extremely effective2 3 4

12% 26% 19% 18% 5%

9% 32% 26% 10% 3%

15% 29% 24% 9% 3%

The CusTOMeR seRVICe MaRKeT Is On The Cusp OF sIGnIFICanT ChanGe

The customer service vendor space is a mature space. Yet there have been many changes in the five years that have accelerated with time, and more change is likely to continue. Two driving factors will accelerate these changes: consolidation and emerging competition.

Big Fish eat The Little Fish, and each Bite Broadens The Reach Of The Big Fish

In recent years, there has been continued consolidation and turmoil in the customer service solutions landscape. Vendors have acquired direct competitors to fill in gaps in their offering. More importantly, vendors have acquired companies in adjacent spaces to broaden their customer engagement management capabilities and offerings. Notable acquisitions include the following:

■ Oracle uses its acquisitions to actualize its customer experience management suite. Oracle has made a series of acquisitions to round out a customer experience suite that provides consistent experiences across the breadth of interactions and transactions that customers have with companies. Notable acquisitions include ATG for eCommerce (2011); InQuira for knowledge management (2011); RightNow Technologies for multichannel customer service (2011); Market2Lead for demand generation and marketing automation (2012); Endeca Technologies for web commerce and business intelligence: Eloqua for marketing automation (2012); Collective Intellect for social intelligence (2012); Involver for social media development




(2012); Vitrue for social marketing (2012); BigMachines for configure, price, and quote (2013); Compendium for content marketing (2013); Responsys for marketing orchestration (2013); and BlueKai for data management (2014).

■ SAP makes a few key strategic moves. SAP, like Oracle, is focused on providing consistent end-to-end customer experiences via its breadth of products. It has made a few, but key, acquisitions to round out its capabilities in this area: Sybase for its mobility platform (2010); Ariba for procurement (2012); Syclo for mobile asset management and field service; KXEN for predictive analytics (2013); and hybris for multichannel eCommerce (2013). In addition, SAP partnered with NetBase for social media analysis (2012) and eGain (2010) and MindTouch (2013) for knowledge management.

■ Salesforce.com has become an acquisition monster. Salesforce.com made a series of moves to quickly round out the capabilities of its Service Cloud, namely: Instranet for knowledge management (2007); Informavores for visual workflow (2009); ActivaLive for chat (2010); Radian6 for social media monitoring and engagement (2011); Assistly for small and medium size business (SMB) customer service (2011); GoInstant for cobrowsing (2012); and Prior Knowledge for predictive analytics (2013). It has used this same tactic to broaden its customer relationship management (CRM) footprint, with the notable acquisition of Buddy Media for social media publishing (2012) and ExactTarget for business-to-consumer (B2C) marking automation (2013). Adding maturity to its end-to-end customer relationship management (CRM) solution, the introduction of salesforce1 in 2013, a platform for mobile application and development, has allowed salesforce to expand its reach beyond the traditional CRM category and set its sights on becoming a viable competitor in the platform-as-a-service space.11

■ Kana Software has built its portfolio via acquisitions and in turn has been acquired. Kana has made a number of recent acquisitions to build out its customer service portfolio, which include the following: Lagan, a government-to-citizen (G2C) CRM solution (2010); Overtone, a social media listening company (2011); Trinicom, a midmarket, cloud-based multichannel customer service vendor (2012); and Ciboodle, a business process management (BPM)-centric customer service vendor (2012). Kana, in turn, has been acquired by Verint Systems (2014), a workforce optimization company looking to unify customer service and agent utilization and performance capabilities. This cross-category acquisition indicates a possible consolidation of two mature software spaces.

Other acquisitions of note include Microsoft’s acquisition of Netbreeze (2013) for social listening and Parature (2014), which helps Microsoft Dynamics round out its knowledge management and chat capabilities; Nuance Communication’s acquisition of VirtuOz (2012), a virtual agent company; Nice Systems’ acquisition of enterprise feedback monitoring (EFM) vendor Fizzback (2011); and Verint’s acquisition of EFM vendor Vovici (2011).




Vendors From adjacent Markets emerge as Competitors

New customer service point solution vendors (for example predictive analytics, mobile customer service, virtual agents) are popping up at an unprecedented rate and deliver modern interfaces and a mobile-first strategy. You just have to look at the entry list for the yearly CRM Idol (www.crmidol.com) competition to get a feel for the range of these vendor offerings.

However, the most interesting disruptor to this space may be coming from another well-established category of vendors — the contact center providers and, in particular, the cloud-based contact center providers. These vendors provide an end-to-end solution for customer service: a unified communications infrastructure, robust routing, and queuing engines for interactions of all types — voice, digital, and social. They have integrated workforce optimization engines for agent quality management, scheduling, and forecasting. Today, they tend to have lighter-weight case management and knowledge capabilities, which can be easily hardened or acquired. Most importantly, these vendors have proven small; midsize; and enterprise-ready, large-scale deployments. This category of vendor may well contain candidates that will appear in the next update of this evaluation as they add more sophisticated customer engagement capabilities to their products.

CusTOMeR seRVICe VenDORs FOCus On MaRKeT seGMenTs FOR suCCess

In this mature customer service market, you will find that each of the leading vendors offers a checklist of features and functions. Customer service buyers must remember that more is not better — this is especially true for small and midsize teams; many times, more is just more. In fact, when you don’t need — or can’t use extra features — more is sometimes worse. Customer service organizations of all sizes need to carefully understand the customer service market segmentation in order to focus in on the right category of vendor that is the right size for their needs.

start By asking what size Of Organization each Vendor Targets

Even with consolidation, customer service solutions fall into two primary groups to choose from, although the distinctions between these categories have become less pronounced over the past three years (see Figure 3):

■ Customer service solutions for enterprise organizations. Customer service vendors focused on large organizations — organizations with typically 1,000 or more agents who are primarily phone agents — offer robust case management capabilities. These vendor solutions can scale to serve very large agent populations, in the tens of thousands — and higher. They offer their products primarily through the traditional on-premises licensing model, but many now also offer hosted and SaaS deployment options. Many vendors offer deeply vertical solutions and have pre- and post-sale company resources dedicated to supporting their vertical products. Vendors in this




category also target midsize organizations, offering prepackaged versions of their solutions with more-affordable price tags. We have highlighted the leading vendors in this category in our Forrester Wave™ evaluation of customer service solutions for enterprise organizations.12

■ Customer service solutions for midsize and small organizations. Vendors primarily target these solutions at teams with hundreds of customer service agents or fewer who support inquiries over a breadth of voice, digital, and social communication channels. Other vendors target their solutions at divisions of customer service organizations that have dedicated teams for digital and social customer service within a larger contact center. These solutions are highly usable, often have very good mobile capabilities, and have a broad and deep set of multichannel customer service capabilities. They are predominately SaaS solutions, offering a rapid time to value. Some vendors in this category have upgraded their solutions to be more suitable to enterprise-class buyers and are gaining acceptance in this segment. The leading vendors in this category are highlighted in this report.

Figure 3 Customer Service Solutions Fall Into Two Distinct Categories

Source: Forrester Research, Inc.113657#

Not all vendors target the same size of business

Agentnumbers:

Channelmix:

Deployment:

Small Midsizeorganizations

Enterpriseorganizations

10s

SaaSMixed, buttrending to SaaS

100s 1,000s 10,000s

Primarily multichannel Primarily voice-based

On-premises

Number of deployments




Drill Into The Customer service Functions That you need To Be successful

The customer service needs for a business-to-business (B2B) company are not the same as the needs for a B2C company. Likewise the needs of a phone customer service agent are not the same as that of a customer service agent supporting digital or social channels. As you refine your vendor selection, carefully evaluate the criteria in this evaluation to pick a solution that is right for your needs. Categories to evaluate include:

■ Case management. Some vendors have heavyweight case management functions that can extend to guiding through predefined workflows. Other vendors provide lighter-weight case management functions that support simple process flows and are suitable for many B2C customer service interactions.

■ Multichannel management. Customers today want to interact with customer service organizations over the breadth of voice, digital, and social communication channels. But it’s not a good strategy to deploy all available channels to your customers. You must understand what communication channels are important to your customers based on their demographic, issue type, and the journey that they want to take with you. You must then choose a vendor solution that is able to support your customer’s end-to-end omnichannel journey.

■ Knowledge and content. Customer service organizations are increasingly leveraging curated knowledge base content in order to provide accurate, relevant, and complete answers to customer questions or virtual agents in order to support automated natural language conversations with customers. Organizations are also increasingly leveraging social content from discussion forums to complement their curated content. Vendors provide the breadth and depth of knowledge and content capabilities, which must be the right size for your business. In this case especially, having too many knowledge features is often overkill for organizations with lightweight needs.

■ Business intelligence. Customer service is all about metrics and measurement. These measurements are used to monitor and manage in real time the success of your operations — for example customer issues and expectations, as well as agent workload and performance. Customer service organizations must also forecast the success of their future operations using predictive modeling, simulations, and statistical analysis. Small organizations have simple real-time and historical measurement needs, while larger organizations may look for these capabilities from a vendor solution or look to extract pertinent data from a customer service solution to be processed via a business intelligence engine.

■ Usability and cost. Customer service organizations, both large and small, need highly usable solutions with modern user interfaces and user experiences that help reduce training time and increase job satisfaction with the tool set. Good usability goes a long way to combatting the high turnover rate in most organizations. Similarly, overall cost of ownership is an important evaluation dimension — and particularly important to small to midsize teams looking for solutions that don’t break their budgets.




The CusTOMeR seRVICe VenDOR eVaLuaTIOn pROCess expLaIneD

After examining past research and through conversations and inquiries with customer service professionals and vendors, we developed a comprehensive set of 84 evaluation criteria. Combined, these criteria provide a detailed look at breadth of capability, strategy, and market presence of 11 small and midsize customer service solutions. We grouped the criteria into three high-level buckets.

■ Current offering. Each vendor’s position on the vertical axis of the Forrester Wave graphic indicates the strength of its current product offering. We looked at the strength of each vendor’s products across a wide spectrum of customer service capabilities. These included case multichannel support, knowledge and content, business intelligence, architecture and platform, mobility, usability, and cost.

■ Strategy. A vendor’s position on the horizontal axis indicates our assessment of its strategy. We assessed the strength of each vendor’s product strategy and vision. We assessed the application ownership experience and corporate strategy of each vendor. We used a combination of vendor evaluation responses, documentation, and customer feedback and vendor strategy briefings to complete this section.

■ Market presence. The size of each vendor’s bubble on the chart indicates its market presence. We gauged the size of each vendor’s customer base and evaluated the depth of human and financial resources available to enhance its products and serve customers.

eleven Vendors Offer a Diverse Range Of Capabilities

We included 11 solutions in our assessment of enterprise customer service solutions, including: Astute Solutions, eGain, Kana Express, Microsoft, Moxie Software, Oracle Service Cloud, Parature, salesforce, SAP Cloud for Service, SugarCRM, and Zendesk.

We did not include in the assessment solutions that specialize in one or a narrow set of customer service functionalities such as, for example, knowledge management vendors, chat vendors, or social engagement vendors. We did not include vendors focused on a single industry. We also did not include in our assessment customer service vendors that are suited for enterprise-size customer service organizations. Leading vendors in this category are covered in our customer service evaluation for enterprise organizations.13

Each vendor included in the evaluation (see Figure 4):

■ Offers a multifunctional customer service application. Each vendor included has functionality in the following customer service subdisciplines: case management, knowledge management, multichannel management, and business intelligence.




■ Provides multichannel self-service and agent-assisted customer service capabilities: The vendors and products in this evaluation can support a minimum of four of the following customer interaction channels: phone, web self-service, email, chat, cobrowse, customer service via social channels (e.g., Facebook, Twitter), and virtual agents.

■ Has a strong presence in the customer service solutions market. Each of the evaluated vendors has hundreds, if not thousands, of customers and over $15 million in revenue from customer service licenses and users in 2012.

■ Has a product now in general release and in use by customers. The solutions we included have a specific release that was generally available at the time of data collection for this evaluation with references available for contact.




Source: Forrester Research, Inc.

Vendor

Astute Solutions

eGain

Kana Software, a Verint Company

Microsoft

Moxie Software

Oracle

Parature

salesforce.com

SAP

SugarCRM

Zendesk

Product evaluated

ePowerCenter

eGain 11

Kana Express

Microsoft Dynamics CRM

Spaces by Moxie

Oracle Service Cloud

Parature Customer Service Software

Service Cloud

SAP Cloud for Service

Sugar 7

Zendesk

Product versionevaluated

8.7

11

Version 13

2013

9

Nov-13

13.1

Winter ‘14

1311

7

Nov-13

Versionrelease date

September 2013

September 2013

June 2013

October 2013

Summer 2013

November 2013

N/A

October 2013

November 2013

November 2013

November 2013

Vendor selection criteria

Offers a multifunctional customer service application. Each vendor included has functionality in the following customer service subdisciplines: case management, knowledge management, multichannel management, and business intelligence. Products promoted primarily as best-of-breed solutions for a single functional area were not included.

Provides multichannel self-service and agent-assisted customer service capabilities: The vendors and products in the evaluation can support a minimum of four of the following customer interaction channels: phone, web self-service, email, chat, cobrowse, customer service via social channels (e.g., Facebook, Twitter), and virtual agents.

Has a strong presence in the customer service solutions market. Each of the evaluated vendors has hundreds, if not thousands, of customers and over $15 million in revenue from customer service licenses and users in 2012.

Has a product now in general release and in use by customers. The solutions we included have a speci�c release that was generally available at the time of data collection for this evaluation with references available for contact.

Figure 4 Evaluated Vendors: Product Information And Selection Criteria




The ResuLTs: BuyeRs haVe Many ChOICes TO sIFT ThROuGh

The evaluation uncovered a market in which (see Figure 5):

■ Oracle Service Cloud and salesforce battle for dominance. Oracle and salesforce have distinct and compelling visions for customer service. Oracle focuses on end-to-end cross-channel customer experiences, supported by its solutions. Salesforce focuses on connected customers, who controls the relationship that they have with companies. The depth and breadth of both companies’ deployments in the marketplace — from very small to very large — reflect the maturity of the customer service capabilities and company resources to support their customer bases.

■ eGain, Moxie Software, and Oracle Service Cloud enable high-volume multichannel service. eGain, Moxie Software, and Oracle Service Cloud support robust multichannel customer service, with each vendor having examples of small and large deployments. SAP Cloud for Service is a new entry in this space, with a subset of overall multichannel functions. These solutions appeal to customer service organizations that handle very large volumes of digital and social inquiries. These organizations often have dedicated agent teams for these channels, with separate teams dedicated to the voice channel. In many cases, these teams are often part of an eBusiness or digital operations organization instead of a core customer service organization. A foundational layer of robust knowledge management delivers channel-specific answers to customer inquiries.

■ Astute Solutions, Kana Express, Parature, and Zendesk power small teams. These vendors offer a breadth, although not depth, of customer service capabilities. They have a broad range of packaging options, which are attractive to smaller teams not requiring the full set of functionality. These solutions are targeted at small teams, but due to their sound architecture, they are finding homes in smaller divisions of large enterprises.

■ Microsoft and SugarCRM focus on supporting phone agents. With their strong case management capabilities, computer telephony integration (CTI), and reporting, Microsoft and SugarCRM offer customer service capabilities for phone agents, but they lack the multichannel and knowledge management capabilities that other vendors offer. Microsoft has recently addressed this deficiency by acquiring Parature and will integrate this solution into Dynamics CRM. SugarCRM relies on partners to fill these gaps, and, with its commercial open source development approach, it is increasingly catching the interest of larger organizations.

The customer service market is a mature market. The first products were introduced in the 1990s, and leading vendors have had solutions in the market for well over a decade. This evaluation of the customer service market for small and midsize organizations is intended to be a starting point only. We encourage clients to view detailed product evaluations and adapt criteria weightings to fit their individual needs through the Forrester Wave Excel-based vendor comparison tool.




Figure 5 Forrester Wave™: Customer Service Solutions For Small And Midsize Teams, Q2 ’14


RiskyBets Contenders Leaders

StrongPerformers

StrategyWeak Strong

Currentoffering

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Market presence

Oracle ServiceCloud

salesforce.com

Microsoft

eGain

SAP Cloudfor Service

Moxie SoftwareZendesk

SugarCRMKana Express

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Figure 5 Forrester Wave™: Customer Service Solutions For Small And Midsize Teams, Q2 ’14 (Cont.)


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CURRENT OFFERING Case management Multichannel capabilities Knowledge and content Business intelligence (BI) Architecture and platform Mobility Usability Cost STRATEGY Product strategy and vision Application ownership experience management methodologies Corporate strategy MARKET PRESENCE Customer base Total number of employees Financial performance

4.054.264.514.584.404.324.002.323.66

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3.33

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All scores are based on a scale of 0 (weak) to 5 (strong).

The ResuLTs: VenDOR pROFILes

Leaders

■ Oracle Service Cloud delivers strong support for B2C companies. Oracle Service Cloud is a key asset in Oracle’s customer experience management portfolio. It provides a flexible, easily configurable customer service solution and is particularly strong in delivering consistent cross-channel customer service experiences. It has strong multichannel capabilities: very strong cobrowse and forum capabilities; strong chat, email response management, social customer service, and knowledge management; and sound social listening, backed by very strong reporting. It gets high marks for usability and provides sound case management capabilities. The solution offers quick time-to-value due to its SaaS deployment model. It has an average




deployment size of fewer than 250 agents, and customer service organizations use it as a companywide customer service solution, as a standalone solution to support its digital and social channels, or in a hybrid deployment to extend the digital capabilities of an on-premises customer service solution.

This product came to Oracle via its 2012 acquisition of RightNow Technologies. Since the acquisition, the product team has continued to execute on a robust road map of enhancements, many of which focus on tighter integrations to other solutions in Oracle’s customer experience product portfolio. It benefits from Oracle’s mature practices for implementation, user adoption, and support. However, Forrester clients tell us frequently that they have lost some of their personalized touch that preceded its acquisition. Oracle Service Cloud is best suited for midsize B2C teams that offer robust web self-service and multichannel customer service to their customers and that emphasize the value of customer experiences.

■ Salesforce extends its reach into customer service with clear vision and sound execution. The salesforce vision is one of a “connected customer,” where customers control the interactions that they have with enterprises. To support this vision, salesforce provides pervasive social and collaboration capabilities in Service Cloud. In addition, salesforce provides very strong case management capabilities, social customer service, and social listening. It has a sound knowledge base, overall sound multichannel capabilities, strong reporting, but very weak business analysis tools — relying on its AppExchange partners to complement its product offering. All capabilities are delivered via intuitive interfaces at a sound cost structure. It has a strong architecture and platform, and, with an average deployment size of 200 agents and a range of packaging and pricing options, it is suitable for midsize teams.

Salesforce is adopting an increasingly vertical strategy. It currently focuses on a handful of key verticals (financial services, media, government, healthcare, retail, and automotive), and it relies on strategic partnerships for deeper vertical offerings. It has also segmented its sales and support functions into two business units — one dedicated to enterprise accounts and one to midsize accounts, which helps better support each type of account. Salesforce’s differentiated vision and aggressive product road map has allowed it to rapidly increase its footprint of customer service deployments — both large and small. Salesforce best suits organizations looking for a SaaS-based, easy-to-use, rapidly deployable customer service application with strong social capabilities.

■ Microsoft offers a flexible, cost-effective customer service solution. The primary buyers of Microsoft Dynamics CRM are upper midmarket and enterprise customers that require easy-to-use, flexible customer service solutions that yield productivity gains for their customer service organizations. As a result, Microsoft’s strategy focuses on delivering these results across a choice of deployment options (on-premises, cloud, partner-managed, or hybrid), payment options (license, subscription, or financing), and access points (mobile, Outlook client, browser, or SharePoint




site). Microsoft Dynamics CRM provides strong customer service capabilities delivered via a robust, scalable platform and architecture and gets high marks for usability (based on the familiar Office user interface [UI] look and feel). It offers very strong support for native business process management and provides strong support for case management for phone agents.

However, Microsoft Dynamics CRM relies on its recent acquisition of Parature to provide support for multichannel customer service, knowledge management, and social customer service. Microsoft Dynamics CRM relies on its Netbreeze acquisition to provide social listening capabilities. It has a broad range of industry templates for vertical solutions, which complement those available from an extensive partner network. Microsoft offers an attractively priced solution compared with other vendors, especially when the solution is bundled with the Microsoft Office suite and with its recent Parature acquisition. The company also has a solid product road map and vision for future enhancements. Microsoft Dynamics CRM is best suited for B2B companies that have made a commitment to the Microsoft technology stack and that require integration with other Microsoft solutions such as Microsoft Office, SharePoint, and Lync.

strong performers

■ eGain excels at knowledge-powered digital customer engagement. eGain solutions have been a mainstay in the multichannel customer service space for over a decade. eGain provides a customer engagement hub: multichannel capabilities that access a common knowledge base and a common case management framework, backed by solid reporting. This enables eGain to deliver consistent service experiences across digital channels and to support customers in their cross-channel journeys. eGain has overall strong multichannel capabilities, but has a dated UI. It has very strong email response management, page push, and cobrowse; strong chat, including very strong video chat; and sound social customer service and social listening. eGain has very strong knowledge management and virtual agent capabilities that include the ability to guide the user to the best answer. Companies deploy eGain as a suite or for a subset of channels (for example, email, chat, and knowledge) or as a singular channel (for example, email, chat, knowledge). eGain has large suite deployments ranging upward of 20,000 agents, as well as single-channel deployments. With an average agent seat size of over 500 agents, eGain may be too heavyweight for smaller teams.

eGain has a sound cost structure, offering flexible investment options based on agent seats, volume of self-service sessions, or volume of sales offers, as well as tiered cloud and on-premises investment options. It also has packaged pricing for “jumpstart” options. eGain has a long-standing relationship with Cisco Systems, which is the original equipment manufacturer (OEM) for eGain’s email and chat products for its Unified Contact Center Enterprise product. Cisco also resells the entire eGain solution. Although eGain’s solution is comprehensive from a feature perspective, the company relies on customer and partner feedback and organic growth to evolve its products as opposed to a strong vision. eGain is best suited for B2C buyers that need robust engagement solutions with advanced knowledge capabilities to support a breadth of channels or a single digital channel.




■ SAP Cloud for Service complements and extends the SAP CRM solutions. In recent years, SAP has released an end-to-end cloud customer engagement solution portfolio, which includes cloud offerings for CRM, finance, enterprise resource planning (ERP), human capital management (HCM), procurement, and social collaboration. SAP Cloud for Service is a new addition (released in 2013) to SAP’s cloud offering for CRM (SAP Cloud for Customer solution, which includes sales, marketing, service, and collaboration products). SAP built all these cloud solutions on a common architecture using SAP Hana as its platform, and it leverages common application services such as reporting and analytics, security, integration, and collaboration. SAP Cloud for Service is positioned as a separate product, but it can also be deployed in a hybrid mode to complement and extend the native capabilities of SAP CRM.

SAP Cloud for Service has a sound architecture and platform, strong integration, sound customization and configuration, and very strong security capabilities. It also has a solid set of predefined key performance indicators (KPIs), reports, and dashboards for customer service. Its multichannel and knowledge capabilities are varied in maturity. It has sound email and social customer service capabilities. It does not have native chat, social listening, or knowledge management capabilities; instead, it leverages SAP Business Communication Management for customer-to-agent chat, SAP Social Media Analytics by NetBase for social listening, and MindTouch for knowledge management. It has few deployments to date, with an average deployment size of fewer than 100 agents. However, the product is strengthened by SAP’s strong vision for customer service, its sound application ownership experience, and SAP’s very strong corporate strategy. SAP Cloud for Service is best suited for companies that are committed to SAP, that need to rapidly deploy customer service solutions to its customer base or that are looking to augment the capabilities of SAP CRM.

■ Moxie Software allows customers and employees to connect for service. Moxie offers two interconnected solution suites: Customer Engagement Spaces, a digital customer interaction hub, which provides multichannel customer service, and Community Spaces, which allows collaboration within and outside of the enterprise. These solutions bring customer and employee engagement together making it easier to capture and share knowledge and service customers. Moxie’s Customer Engagement Spaces offers very strong multichannel capabilities: very strong email response management, social listening, page push, and cobrowse and strong chat, including very strong video chat and social customer service. Moxie has a strong knowledge base and sound forum support. It also has very strong reporting for customer service. Companies often deploy Moxie software as a suite, for a subset of channels (for example, email, chat and knowledge) or for a single channel (for example, email, chat, knowledge).

Moxie has a strong architecture and platform and an average deployment size of 500 agents. However, it has weak business process and workflow tools. Moxie has a sound cost structure and attractive pricing for very small teams starting at 20 agents or 100 knowledge articles. Moxie has




a sound cost structure, vision for solving customer facing problems, and application ownership experience. Moxie is best suited for customer service or sales buyers needing support for high-volume digital interactions.

■ Zendesk’s mobile-first mindset delivers highly usable customer service solutions. Zendesk targets its mobile-first customer service solution to customer service teams with between 10 and 250 agents. Its simplicity, usability, and application ownership has garnered it over 40,000 customers since its inception in 2007. Zendesk offers a straightforward solution with sound, simple case management and multichannel management and knowledge base capabilities. It has very strong reporting and dashboarding, enabling teams to track correlations between related key performance indicators. In addition, Zendesk allows users to compare their KPIs to their peers. KPIs are available by industry, audience, and company size and help users understand the level of service that they deliver. It has a sound architecture and platform that is robust enough to support large implementations of over 5,000 agents.

Zendesk is a SaaS solution that typically requires no implementation. Small teams can sign up for the service and configure the software themselves. For larger deployments, Zendesk uses a network of partners who can assist with more complex implementations, including customizations, design, and data migrations. It offers very strong support, with boot camps for best practice training in customer service. Zendesk has an aggressive product road map, solid business vision, a clear focus on its target market, and strong revenue growth. Zendesk is best suited for small customer service teams looking for a modern, mobile-first multichannel solution and a company to help them understand best practices for service.

■ SugarCRM offers the customization flexibility of an open source platform. SugarCRM offers a flexible platform built on open source components and open standards, which allows organizations to take a basic CRM platform application and build upon it using their own technology management resources or add-on modules that are available through SugarCRM’s partner and developer communities. SugarCRM provides a sound architecture and platform with very strong integration support and security and strong support for customization and configuration. It has very strong usability. It also offers strong case management capabilities and social listening capabilities, but it has weak support for business process and workflow tools. However, SugarCRM provides weak support for most other customer service capabilities, including multichannel capabilities, knowledge base, and social customer service.

SugarCRM has a sound product strategy and vision and a sound application ownership experience. The product is available as an on-premises or SaaS deployment via private cloud, public cloud, and partner cloud deployments. Its average deployment size is 20 agents, however, customer-service-led deals are much larger, resulting in SugarCRM emerging on the radar as a viable option for both small and large organizations. SugarCRM best suits organizations needing phone-based customer support and seeking flexible pricing options with deep customization flexibility in a packaged CRM application.




■ Kana Express balances cost of operations with customer experience. Kana Express is a SaaS-product that Kana Software acquired in 2012 from Trinicom. It is a straightforward multichannel product with strong usability and a rapid time to value. It has sound case management capabilities and a sound knowledge base and virtual agent. It also has sound multichannel capabilities: sound chat, email response management, and social customer service capabilities. It has weak social listening capabilities and very weak forum capabilities. Kana targets this product to small customer service teams with an online focus within midsize businesses and divisions and subsidiaries of larger enterprises, and it has an average deployment size of between 20 and 50 agents. Full implementation, including typical integrations with telephony and back-office systems, usually takes a few weeks.

Kana Express has a small global footprint of 250 customers, with a very small presence outside of the Benelux region and in North America. Although Kana has a sound business vision for the solution, and the product has a sound application ownership experience, Kana’s recent acquisition by Verint, a company focused on enterprise buyers, puts the long-term emphasis of this product in question. Kana Express best suits small organizations focused on delivering multichannel service with sound knowledge management to their customers using a rapidly deployed solution.

■ Parature balances agent productivity with customer experience. With an average deployment size of 45 agents, Parature offers a breadth, but not depth, of multichannel capabilities to over 3,000 customer service teams. It has sound chat, email response management, and social customer service capabilities as well as usability. It offers a simple knowledge base with strong knowledge retrieval capabilities and solid knowledge authoring and publishing workflows. It has very weak forum capabilities and lacks social sentiment analysis and virtual agent capabilities. It offers a flexible portal structure to allow single teams of customer service agents to support separate brands. It also offers strong reporting capabilities, with a breadth of customer service reports to allow organizations to monitor their operations.

Microsoft acquired Parature in January 2014. Microsoft will continue to offer Parature as a standalone product. Microsoft will also leverage Parature’s chat and knowledge capabilities to fill in the gaps in its product offering. It currently offers prepackaged connectors from Dynamics CRM to Parature, which will be strengthened in 2014 as well as attractive bundled pricing to enhance the Parature footprint within the Dynamics CRM installed base. Parature is best suited for small teams looking to deploy a multichannel solution with an emphasis on web self-service.

Contenders

■ Astute Solutions delivers agent productivity with a focus on select industries. With an average deployment size of fewer than 100 agents, Astute Solutions focuses on midsize teams more than on small teams in the consumer packaged goods, retail, restaurant, and airline industries. Its ePC product offers solid, across-the-board capabilities, which are enhanced by other products in the Astute portfolio. ePC offers sound incident management capabilities, with




solid scripting and strong workflow. It has sound multichannel capabilities: sound customer-to-agent chat, but weak chat supervisor tools; strong email response management; and sound social customer service. The core product has very weak native social listening capabilities, instead leveraging the strong capabilities of the Astute social relationship management (SRM) product. It has sound knowledge base and very strong virtual agent capabilities, which are integrated into its core knowledge management solution. Astute ePC has very weak reporting. Full reporting capabilities including dashboarding, advanced data visualization, and advanced are provided by the Astute Insights solution. It has sound integration, customization, and configuration, but weak security and usability.

Astute has a small customer base, which it supports with basic user adoption and support methodologies. Astute continually assesses and optimizes the economic value that customers realize, building strong loyalty within its customer base. The company has a weak business vision for the product, which is centered on simplifying the agent experience by building simple, integrated tool sets in order to deliver better customer service. However, Astute has a sound vision for solving customer-facing problems. Its focus on a handful of industries has allowed it to be profitable and experience strong revenue growth year over year. Astute best suits midsize teams in consumer-focused companies with knowledge management needs, which can utilize the breadth of the Astute portfolio to complement core capabilities of its ePC solution.

suppLeMenTaL MaTeRIaL

Online Resource

The online version of Figure 5 is an Excel-based vendor comparison tool that provides detailed product evaluations and customizable rankings.

Data sources used In This Forrester wave evaluation

Forrester used a combination of several data sources to assess the strengths and weaknesses of each solution:

■ Vendor surveys. Forrester surveyed vendors on their capabilities as they relate to the evaluation criteria. Once we analyzed the completed vendor surveys, we conducted vendor calls and briefings where necessary to gather details of vendor qualifications.

■ Customer reference survey. To validate product and vendor qualifications, Forrester also conducted a survey of some vendors’ current customers.




The Forrester wave Methodology

We conduct primary research to develop a list of vendors that meet our criteria to be evaluated in this market. From that initial pool of vendors, we then narrow our final list. We choose these vendors based on: 1) product fit; 2) customer success; and 3) Forrester client demand. We eliminate vendors that have limited customer references and products that don’t fit the scope of our evaluation.

After examining past research, user need assessments, and vendor and expert interviews, we develop the initial evaluation criteria. To evaluate the vendors and their products against our set of criteria, we gather details of product qualifications through a combination of lab evaluations, questionnaires, demos, and/or discussions with client references. We send evaluations to the vendors for their review, and we adjust the evaluations to provide the most accurate view of vendor offerings and strategies.

We set default weightings to reflect our analysis of the needs of large user companies — and/or other scenarios as outlined in the Forrester Wave document — and then score the vendors based on a clearly defined scale. These default weightings are intended only as a starting point, and we encourage readers to adapt the weightings to fit their individual needs through the Excel-based tool. The final scores generate the graphical depiction of the market based on current offering, strategy, and market presence. Forrester intends to update vendor evaluations regularly as product capabilities and vendor strategies evolve. For more information on the methodology that every Forrester Wave evaluation follows, go to http://www.forrester.com/marketing/policies/forrester-wave-methodology.html.

Integrity policy

All of Forrester’s research, including Forrester Wave evaluations, is conducted according to our integrity policy. For more information, go to http://www.forrester.com/marketing/policies/integrity-policy.html.

enDnOTes1 Forrester data confirms the strong relationship between the quality of a firm’s customer experience (as

measured by Forrester’s Customer Experience Index) and loyalty measures such as willingness to consider the company for another purchase, likelihood to switch business, and likelihood to recommend. See the July 7, 2011, “The Business Impact Of Customer Experience, 2011” report.

2 To help customer experience professionals prove the business value of a better enterprise customer experience, we built simple models that show how revenue increases when a company’s Customer Experience Index (CxPi) score goes up. Our models show that the benefits are significant across all 11 industries we looked at. Wireless carriers and airlines have the largest potential upside: more than $2 billion. Customer experience professionals should use the interactive models in this report to estimate the range of benefits their firm might see. That data — combined with customers’ verbatim comments and customer experience stories — will help customer experience leaders make a powerful case for change. See the June 10, 2013, “The Business Impact Of Customer Experience, 2013” report.






3 When consumers switch from the Web to the phone, email, or chat, a company’s cost to serve them goes up dramatically. Forrester built models to add up the unnecessary cost that a retailer might incur as a result of missed self-service opportunities. Calculations showed an extra $22,567,967 in sales and service costs that could have been avoided if the website had enabled users to complete their goals. See the January 13, 2011,

“2011 Will Challenge The Status Quo Of eBusiness Online Customer Service” report.

4 For the seventh consecutive year, Forrester asked more than 7,500 consumers to rate the experiences they had with 175 brands across 14 industries. One-tenth of the brands we asked about earned scores in the

“poor” or “very poor” categories. See the January 21, 2014, “The Customer Experience Index, 2014” report.

5 Over half of US online consumers are likely to abandon their online purchase if they cannot find a quick answer to their questions, and three-quarters say that valuing their time is the most important thing a company can do to provide them with good service Source: North American Technographics® Customer Experience Survey, 2013.

For more data on the effects of customer experience, see the March 11, 2013, “Understand Communication Channel Needs To Craft Your Customer Service Strategy” report.

6 Source: North American Technographics® Customer Experience Online Survey, 2013.

7 Accenture Global Consumer Pulse Survey measured the experiences of 12,867 customers in 32 countries and across 10 industries to gain insight into the changing dynamics of today’s “nonstop” customers and assess consumer attitudes toward marketing, sales, and customer service practices. The survey included 1,256 US customers. Source: “Global Consumer Pulse Research,” Accenture (http://www.accenture.com/microsites/global-consumer-pulse-research/Pages/home.aspx).

8 This data was derived from the North American Technographics® Customer Experience Online Survey, Q4 2012 (US), which asked US customers what communication channels they had used to receive customer service in the past 12 months.

9 Forrester asked 7,506 US online consumers what communication channels they had used to receive customer service in the past 12 months. Source: North American Technographics® Customer Experience Online Survey, Q4 2012 (US).

10 With a 67% overall average adoption rate across generations, help and FAQ sections are the most commonly accessed online customer service channel, and usage of this communication channel has increased by 10 percentage points in the past three years. But with a 58% satisfaction rate, this channel has one of the lowest-reported satisfaction ratings. This is the result of few companies having solid knowledge management programs in place to optimize content based on content usage data, search term analysis, and customer satisfaction ratings. See the March 11, 2013, “Understand Communication Channel Needs To Craft Your Customer Service Strategy” report.

11 Salesforce’s ambitions are to help clients create “Internets of customers” through anytime, anywhere, intelligent interactions and services. Salesforce1 helps unify the weak integration between its various platforms and tools. See the November 26, 2013, “Quick Take: With Salesforce1, Finally, An Integrated Cloud Platform” report.












12 For a detailed evaluation of these solutions for enterprise organizations, see the April, 7, 2014, “The Forrester Wave™: Customer Service Solutions For Enterprise Organizations, Q2 2014” report.

13 Eleven vendor solutions suitable for enterprise customer service organizations are evaluated in our evaluation of customer service solutions for enterprise organizations. See the April 7, 2014, “The Forrester Wave™: Customer Service Solutions For Enterprise Organizations, Q2 2014” report.





Forrester Research (Nasdaq: FORR) is a global research and advisory firm serving professionals in 13 key roles across three distinct client segments. Our clients face progressively complex business and technology decisions every day. To help them understand, strategize, and act upon opportunities brought by change, Forrester provides proprietary research, consumer and business data, custom consulting, events and online communities, and peer-to-peer executive programs. We guide leaders in business technology, marketing and strategy, and the technology industry through independent fact-based insight, ensuring their business success today and tomorrow. 113657

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