#CounterpunchWithSVG E10: IBM To Focus On The Contact Centre And This Time It’s About Data & AI. But Are The Clients Ready?

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In the past month, I have spoken to over two dozen contact centre decision-makers on how they have managed the floor during #COVID19 times – all have stated the need to invest in more technology as key for operations hereon – this change is real! More time I spend on this topic, the more I get fascinated with the pace & quality of change on the ground. For one I truly think we need to stop calling this “Contact Centre” and rather call it the “Engagement Centre” – a hub for all things customer engagement.

In this 10th exchange (E10) of #CounterpunchWithSVG, I host Lula Mohanty, General Manager, IBM Global Business Services (GBS), Asia Pacific. While she has a much larger charter in the region, in this exchange I quiz Lula about IBM’s efforts around Contact Centre Transformation. Incidentally, and not surprisingly, she is also the owner of this business unit at IBM in the Asia Pacific region.

P.S.: For the uninitiated, #CounterpunchWithSVG is an executive dialogue series by Greyhound Research. As the name goes, this series is about sharp, honest, and unfiltered conversations. The format is simple. SVG throws punches at his opponent (asks tough questions that most wouldn’t) and gives his opponent an equal opportunity to counterpunch. In a world full of marketing hype, we at Greyhound Research believe #CounterpunchWithSVG makes an insightful read. We bet you will share our sentiment once you’ve read this exchange!

SVG: Lula, thank you for making time for this conversation, much appreciated. While I would love to have a broader conversation about your charter at IBM and in the region, I want to keep this focused on one of the fundamental changes we are witnessing in the market, i.e. of a sweeping transformation of contact centres. From what was once a stand-alone function and operations, has today become the core for any organization looking to deliver on the agenda of customer experience. I firmly believe we as an industry should stop calling it the contact centre and instead call it the engagement centre since it’s no more about inbound and outbound calls but about engaging the customer across touchpoints. In your view, as someone who is leading this initiative at IBM, how do you see this industry evolve as we speak?

Lula: “Sweeping transformation” is indeed an apt phrase for the dramatic evolution of contact centres or “engagement centres” as you put it. Customer expectations, the evolution of technology and the tsunami of change brought in by inevitable outside forces such as the global pandemic, have demanded a strategic shift in how corporations think about their business, including the role of contact centres. 

You’ve probably heard that: “The last best experience that anyone has anywhere becomes the minimum expectation for the experiences they want everywhere.” With the growth of digital channels such as chats, WhatsApp groups, blogs and others in addition to the usual websites, customers expect seamless experiences across all interaction channels. 

Today’s rising customer expectations require a more responsive and strategic contact centre that can also foster brand differentiation and customer loyalty. That is the outside-in driver for change. 

From an inside-out perspective, drivers for change include how the current COVID-19 crisis is increasing the strain on the existing infrastructure and customer service agents to solve more complex customer cases, handle manual and cumbersome workload issues, whether at their desks, or remotely. IBM has been partnering with clients to accelerate Contact Centre transformation from “single contact management” – impacted by low customer satisfaction and high operating costs – to an “Intelligent Workflow enabled engagement centres” which integrates tech such as Artificial Intelligence (AI) to deliver a seamless omnichannel and personalized customer experiences throughout the Customer Lifecycle, across all touchpoints 

To summarise, we have seen that there are three key themes which are driving the evolution of the contact centres:

Over the last few years, enterprises have focused on rapidly increasing their presence across various channels and hence customer experience. Now, there is a more concentrated effort on ensuring not only a seamlessly omnichannel experience but also proactively engaging with the customer to solve potential problems before they arise. 

This leads us into the second theme of Data and Technology, which are the tools companies need to bring the customer experience to life. This includes leveraging AI and analytics to increase call deflection, improve agent interactions and reduce their cost to serve. With AI-enabled Intelligent Workflows, organizations will be able to streamline and orchestrate processes that cut across various business functions to deliver one unified experience to the customer. 

This need to integrate information across channels and departments drive the third key theme – infrastructure. Legacy systems are preventing the effective transfer for information and restricting the speed of their transformation. This naturally opens the doors to conversations around containerization and shifting these workloads to a hybrid cloud architecture.

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SVG: From ongoing conversations with clients in the region over past six months, I believe the pandemic has changed the broader approach to contact centres and expedited the investments in the overall aggregation and digitization of the existing disparate assets across multiple customer touchpoints. Are you witnessing similar sentiments during your client conversations? And in your observation, are there industries and client types that you believe are pursuing this goal more aggressively compared to the others?

Lula: The COVID-19 pandemic is forcing organizations to rethink and radically change their operations in real-time. Transformation is inevitable, and it is taking place at a significantly accelerated pace. According to a recent study by the Institute of Business Value, some companies have transformed in months what may have taken years previously. 

The pandemic-induced disruption has led to increased pressure on contact centres for reasons ranging from dramatically increased demand to extensive and sustained order or service cancellations. Some organizations have been struggling to meet demand because they didn’t adapt fast enough to changes. Long wait times and disillusioned or angry customers are the consequence. The pandemic has impacted the back office in unprecedented ways, which has in turn also manifested in inefficiencies in the functioning of the contact centres. Therefore, organizations are making investments through the value chain. 

Banking & Insurance, Retail, Telco, health and Government clients have perhaps been the most affected by the pandemic, and we have worked with clients in these industries to help them transform in small and large ways. For example, we worked with a large private bank in India to reduce their email response time from over two hours to 10 mins. IBM’s Cognitive Email Automation and Cognitive Attachment Processing solution use a combination of Natural language Processing and Advanced Computer Vision with Deep Neural Network-based techniques to classify the emails in different classes/intents and further initiate workflow based on business rules. 

With the imposition of lockdowns in some countries, service providers such as telcos and utility companies saw an unprecedented increase in inquiries as well as requests to set up new subscriptions, change plan or cancel subscriptions.

During the pandemic, the digital experience assistant that IBM built for a large Telco client in Australia – was able to successfully take up the additional workload and ensure uninterrupted customer service for its customers. It’s now helping customers with pandemic related information daily, to ensure customers are briefed on plan changes, installation of free data, or allowing customers to ignore a Promise to Pay. This has not only reduced waiting time with prompt and frictionless customer service but also led to significant savings in operational costs.

Globally, IBM has worked with governments to fight against COVID-19 by quickly deploying a virtual agent that can answers questions about testing, symptoms, or other resources. Whether it was in the Children’s Healthcare Center in Atlanta or the Polish Ministry of Health or with the Andalusian Government in Spain – where IBM is providing support both in English and local languages.

In Andhra Pradesh, we worked with the government to deploy a virtual agent to help respond to citizens’ queries about COVID-19 in both English and Telugu. Also, we have been working with government agencies to create jobs and mobilize a virtual workforce to perform contact tracing and provide citizen support.

SVG: What’s also been interesting is the considerable variation in how different organizations across different countries are approaching contact centre transformation. In countries like Australia, where labour costs are expensive, the level of digitization and automation has been relatively higher compared to other countries in the region. However, with an increasing number of start-ups in India, China and Vietnam offering chatbots and other AI services, we are seeing a dramatic shift in how contact centre decisions and investments are being planned. As a relatively matured player in the contact centre space, how do you see different countries make their decisions differently? Also, how do you see the emergence and impact of start-ups impact decision-makers in these countries?

Lula: Transformation is an equal opportunity imperative – it’s inevitable, whether one is in a low-cost or higher-cost market. Technology helps to speed that transformation wherever a corporation is on its transformation journey. The starting points of that journey may be different, but ultimately, the end-goal is the same: How to transform a “contact centre” into an “engagement centre”. And the answer to that is by taking full advantage of technology to make workflows smarter, more efficient, partnering with ecosystems as appropriate and aligned to business outcomes; and built on a robust, scalable, secure infrastructure which is likely to be a hybrid cloud. 

I’d like to touch on your point about start-ups – they and other niche players are very important in the entire transformation paradigm. And that is why IBM has an extensive list of both global and local partnerships we constantly leverage to ensure that clients’ needs are well met. No one company can do everything alone. 

In a region like APAC, where there are numerous regional languages and cultural nuances, our partners in the markets can bring the local flavour to the solutions. And so it only makes sense that – when the solution warrants it – we work with start-ups and other ecosystem partners so that our clients get a blend of experience and expertise with local knowledge. In the Andhra Pradesh example I gave earlier, we worked with another company which has the ability to provide a solution in Telugu, to augment our experience and capabilities. We often also work with local partners Indonesia and Thailand to provide AI solutions and support Bahasa and Thai, respectively. Our global partnerships with companies such as NICE and Genesys, ensure that our clients have access to industry-leading solutions. 

We often collaborate with ecosystem partners and ISVs to bring innovative solutions to the market.

A great example of this is when IBM Business Partner, Streebo chose to incorporate Watson technology into its new chatbot accelerator. The Streebo Digital Experience Accelerator (DXA) offers a low-code, no-code development platform that can create nuanced, robust and intelligent chatbots without a lengthy training period. 

IBM Watson Assistant acts as the heart of the solution, with the Streebo accelerator built on top. Users can then choose from a catalogue of already developed chatbot templates and widgets to create a customized solution that fits their unique needs. And DXA can also be used with IBM Cloud Pak for Data, allowing deployment of these conversational chat solutions either on-premise or in multi-cloud environments. This is just one of the many ways in which we work with our business partners to drive maximum value for clients.

At IBM, we want to work with our clients as their trusted advisors and partner on their transformation journey. We can leverage the investments clients have already made across various channels by integrating to their existing analytics and AI solutions. With our One AI platform, we can harmonize information that was previously disconnected, support a seamless omnichannel experience and uncover new insights about consumers. Our hybrid multi-cloud strategy can help clients overcome common the restrictions and siloes created by their legacy systems.

SVG: Now, talking more specifically about IBM’s strategy in this space, I must mention that it’s had a bit of a chequered history. I remember 4-5 years ago you tried running a dedicated campaign around contact centre transformation, but it never really took off as expected. While partly the reason was market unpreparedness then, but it was also the lack of localization of both the products and solutions for the region. Can you please give me a sense of how has that changed over the years? Also, I mostly see IBM sales reps using “number of seats” as a critical qualifier for the deals it approaches. Do you think that’s a fair approach to take given the rampant increase in emails and other forms of touchpoints that consumers are now using?

Lula: IBM’s approach to digital transformation is about a holistic cognitive enterprise conversation. An enterprise reaches a fully leveraged state of digital transformation when it has been able to anchor its transformation around a core platform, using data and AI to transform workflows around this core platform, on an open-source architecture, embracing new ways of working. Customer Experience through contact centres and other channels is an important aspect of this transformation; and hence pivotal to IBM’s strategy. 

There are a lot of niche products & solutions in the ecosystem, along with the larger ISVs specializing in the CRM/ Content space.

Hence IBM’s approach is to assemble and orchestrate the best fit for purpose to provide the right contact centre solution to our clients. It’s no longer about a proprietary product or solution, but having the capabilities to play across the spectrum of what’s available and bring it together for our clients, including our capabilities and solutions in this space.

What has also changed are the drivers for this kind of a transformation. It’s a lot more to do about business outcomes measured both as tangibles and intangibles, rather than how many agents I am replacing! 

More and more, IBM Garage is used to “crack open the code” if you like of Contact Centre transformation. This is where we co-create, co-operate and co-execute with clients. Through the IBM Garage, create a “fishbowl” which represents all parts of an organization that will be impacted by transformation and then focus on different aspects of contact centre transformation such as customer and agent experience; omnichannel contacts with virtual agents; and self-help – all to deliver savings with outcomes-based commercial benefits .. and happy, loyal customers of course. 

What we also focus on is leveraging the investments clients have already made across various channels by integrating to their existing analytics and AI solutions. No rip-and-replace. With our One AI platform, we can harmonize information that was previously disconnected, support a seamless omnichannel experience and uncover new insights about consumers. Our hybrid multi-cloud strategy can help clients overcome common the restrictions and siloes created by their legacy systems.

I think we can say with a fair level of confidence that IBM is a leading company for Customer Experience and Design, AI, Data & Analytics and Automation. All these assets and services are core to Contact Centre Transformation.

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SVG: Ahead of our conversation, I had a chance to review some of IBM’s positioning around contact centre transformation. What I took back was the company’s clear intent of targeting and being known as the contact centre partner with a laser-sharp focus on the “Data and AI layer”. While that is good and forward-looking, the fact is that not all customers are prepared internally to go as far. The ground reality is that internal systems are still in silos and most are yet to achieve a single view to their data which is a critical bedrock for the success of a data and AI-led transformation approach. Also, across most contact centre engagements today, there is mostly already an IT services or a contact centre specialist that has been engaged to maintain and upgrade the contact centre infrastructure including the centralization of the data centre. Given this background, how do you see IBM’s role in such engagements? Would you prefer to be the sole owner of such engagements that include the core infrastructure, or would you instead only focus energies in the more value add areas of Data & AI? Also, in cases where you would prefer to own the entire contract, can you give a sense of how do you plan to win against the current service providers who work with similar OEM partners (like Genesys) but are much more aggressive in their pricing and hence can undercut IBM easily?

Lula: At IBM, we are always asking ourselves “What is best for the client?” This question helps us define the role that we play in our engagements with each client. As a company and a transformation partner, we have the skills and capability to provide clients with end-to-end support from redesigning their customer experience and creating the data and AI layer to providing the supporting infrastructure.

Within IBM, we have one of the world’s leading design companies with studios spread across the region. This is further enhanced by our global partnerships with Salesforce and Adobe. We provide a full suite of data and AI services including our Watson Assistant and Discovery tools which come with pre-built intents and industry cartridges to accelerate speed to value. Our acquisition of Red Hat positions us as a perfect partner to modernize legacy applications and break departmental siloes by moving workloads to an open hybrid cloud platform. We have done various kinds of deals in this space. 

For example, we recently worked with an electronics manufacturer to transform their contact centre, where our primary role, as a system integrator, was to bring together various solutions – from Genesys, Google etc., – and build the seamless customer experience. Another, slightly different example – we worked with a large healthcare provider to transform their contact centre by deflecting calls onto an AI platform to bring down the cost per interaction. In this model, IBM invested money to fund the upfront build cost and is only charging the client one all-inclusive fee per successfully handled transaction. We also worked with an energy provider to provide end-to-end support for their contact centres, including the infrastructure, location, call agents etc. Our differentiator is our ability to work with the client to understand what they truly need and bring that to the table. That is how we win in the marketplace.

SVG: While I hope that this pandemic leaves us sooner than later, but assuming the situation will be by and large the same for most of 2021, what are your expectations more realistically for the contact centre business? Do you see more large deal closures in the coming quarters where IBM is the end-to-end provider in contact centre transformation deals? Or would you believe there is a larger opportunity that can be tapped by taking a more modular approach wherein you target a specific use-case/touchpoint in the broader engagement?

Lula: Before 2020, many business leaders had plans to pursue end-to-end transformation across their business through the use of technology — cloud, AI, automation, real-time data analysis, and more. For many, those plans stretched out over the years, but Covid-19 compressed those plans into immediate priorities. Business leaders are telling us – as I’ve mentioned earlier – that they’re transforming in weeks what may have taken months or years before.  

IBM has been talking about digital reinvention & intelligent workflows for some time, but in past six months, it is starting to resonate much more strongly with more organizations as something that they needed need to do with urgency,

That said, though, transformation isn’t a quick or easy process. And tech alone isn’t the silver bullet. Whether a solution is end-to-end or modular, the basics still need to be addressed – what is the business driver; what workflows need to change; what data or insights are needed to make those workflows smarter; how must different parts of the organization work together; and who has the experience and capabilities to get things done? 

It’s important to choose a partner that has gone through such transformation, and have large scale global experience. That’s one of the things that I think makes IBM special — we’ve undergone large scale transformation ourselves.

We believe contact centre transformation and upgrades are going to be a critical area of investment for companies going forward, accelerated by the virtual world ushered in with the pandemic. But the drivers and pervasiveness of this could vary between being a quick fix to address staff challenges and take out costs to being a point of differentiation where a company uses this as an entry point to a range of business opportunities – new customer acquisition, customer retention, a data and insights aggregator, which informs what gets done downstream.

SVG: Lula, thanks again for your time. This has truly been a wonderful conversation.

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<strong>Analyst: Sanchit Vir Gogia</strong>
Analyst: Sanchit Vir Gogia

Sanchit is the Chief Analyst, Founder & CEO of Greyhound Research, a Global, Award-Winning, Digital & Technology Research & Advisory firm.


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