Less than five years ago, Performance Management technology was unknown in the contact center industry. In a relatively short period of time, Performance Management has risen from obscurity to become one of the most highly sought after solutions, and one of the fastest growing markets, in the contact center industry today.
At Saddletree Research, we recently took an in-depth look at the industry in support of the publication of our annual Performance Management market report. What we found was a rapidly maturing market that still holds potential for significant growth while evolving to take on a role of greater responsibility within the enterprise.
For those of you not familiar with Performance Management technology it is, in a nutshell, software that makes existing contact center resources, both human and technological, work more efficiently. When I first started writing about this somewhat unknown and definitely underrated contact center solution in 2002, I dubbed it "Performance Optimization," which made more sense to me. According to Webster's dictionary, the word "Optimization" is defined as "The act, process or methodology of making something as fully perfect, functional or effective as possible." This, to me, succinctly defined the purpose and function of contact center Performance Management.
Despite my best efforts, the "Optimization" part of the term only stuck around for awhile, then was adopted by a contact center solution known today as Workforce Optimization (WFO). Although Performance Management is only a single, albeit very important, component of a complete WFO solution, I still find it intriguing enough to look at as a standalone solution as well.
Although it is too early to have final shipment numbers from suppliers, we are confident in our forecast that the U.S. market for contact center Performance Management tools grew over 30 percent in 2005 with resulting revenues of about $70 million. We expect this market growth to continue over the next five years with revenues reaching $340 million by 2009. This is pretty impressive growth for a market that barely existed three years ago.
There are a number of factors that will fuel the market growth that we see occurring over the next several years. Foremost in driving growth is the strong trend that we see toward the adoption of analytics as an important practice in the daily operation of the contact center. Anyone who has ever worked in a call center or contact center knows that the typical customer contact operation is awash in reports of every description. Each system in the contact center spits out numbers that can be collected, collated, corroborated and distributed in any number of ways. What's usually missing in this "numbers nirvana" is Analytics, which is the branch of logic that deals with analysis.
Although the words "logic" and "contact center" are rarely heard in the same sentence, I believe the analysis of the numbers routinely collected will be critically important to the successful operation of any contact center in 2006. I also believe that the providers of Performance Management solutions will take the lead in applying analytics to the performance information that their systems provide, thus spurring market growth through the remainder of the decade.
Performance Management solutions represent the best that the contact center industry has to offer today. Performance Management offers a measurable Return on Investment (ROI), a verifiable contribution to shareholder value and an immediate impact on productivity and profitability. This triplethreat will be more than enough to ensure Performance Management's industry-leading growth for the rest of the decade.