The New Future for Contact Centers and Facilities Management

Businesses and consumers talk about the importance of good customer service. But more and more leading companies are putting greater value on the customer experience. If you have great customer experience, you won’t need customer service. Think of customer service as an insurance policy in case something goes wrong.

These past several months of the pandemic have brought no shortage of opportunities for things to go wrong. We saw that up close in our work with enterprises managing contact centers and other facilities. Lockdowns had businesses switching to a work-from-home workforce overnight. This left enterprises scrambling to acquire laptops, strengthen networks and manage operations amid peak demand of questions, cancelations, rebooking and refunds; in many cases while seeing a plummet in revenues.

The pandemic hit captive operations especially hard. While demand for an enterprise’s core goods plunged overnight, the business’s costs remained the same. Recognizing this, some enterprises are taking a second look at their captive strategy. Enterprises that have never outsourced are now approaching service providers. At the same time, providers are interested in entering new markets and are buying their way in rather than selling their way in. In other words, they’re looking at intellectual property in captives to leverage for other clients.

This has led to a recent trend of increased captive monetization activity, including local operations in the U.S. and Western Europe as well as other offshore low-cost areas of the world. Service providers, being more agile and having broader scale, are in a better position to pivot and handle changes in demand as well as sudden changes in delivery model.

The alternative to captive monetization is modernization. Contact centers have been evolving over the past decade — even pre-COVID — as technology developments have offered innovative solutions. A decade ago, contact centers relied almost entirely on voice interactions. Now they’re predominantly multi-channel interactions — with chatbots, social media and virtual systems. Some of the responses made to adapt to the pandemic are working so well they’ll likely become the new standard even more quickly than we previously anticipated.  

The market may very well bifurcate into bimodal operating models — one for mass customization with omni-channel options like virtual chatbots and machine-learning avatars that shape responses based on past encounters; and the other for high-priority customers who get white-glove treatment. The ultimate goal is to have a cognitive contact center that proactively reaches out, so customers don’t have to initiate contact or call between certain hours.

Facilities management is weathering COVID surprisingly well, too. True, businesses may have to accept lower margins, at least temporarily, amid CDC mandates for health-related maintenance and configuration requirements, but we are seeing facility management firms off set this negative cash flow with working capital improvement initiatives, capital expenditure deferment and by selling excess capacity that is resulting from migration to work-from-home. We’re already seeing monetization of captive facilities in the marketplace.

The recovery for facilities management won’t be one-size-fits-all. COVID-19 has left a lasting impact on commercial real estate, but we’re still optimistic about the market’s potential long term. Health care, biotech and high-tech will lead the resurgence. Logistics and supply chain-related facilities will likely rebound sooner and stronger than brick-and-mortar retail or hospitality. Right now, people may be leery of working in high-density cities or open office layouts because of the health risks. But human nature pulls us to interact. People will return to office space, especially once a vaccine is widely available and consumed. We still expect co-working and flex-space models to have a strong future; though this model will evolve and look different from the WeWork model of 2019.

As has happened with other disruptive forces, leading businesses will find ways to gain market share; others won’t. Enterprises that survive the pandemic and come back stronger will have a workforce that is a mix of bots and humans, one that offers convenience and anticipates customer needs. 

Fit these aspects together right, and you’ll have customers talking about your great customer experience, not judging your customer service. ISG helps companies navigate the short- and long-term impacts of COVID-19, including captive monetization. Contact us to find out how we can help.

About the authors

Michael Fullwood is an ISG Partner with extensive financial planning and analysis experience. His areas of expertise include sourcing assessment and RFP management, contract negotiations and transitions. He has guided major multinational companies in the Americas and Europe through multi-functional outsourcing projects and shared services transformation. Michael has more than 20 years of experience advising clients on strategy and implementation and is an accomplished leader who articulates a compelling point of view for ROI optimization and speed to value. His work enables companies to optimize support services operations, contract for and implement digital/automation, and formalize processes, metrics, governance and reporting.

Mr. Furlong is a Partner at ISG and has over 25 years of experience in assisting companies transform their general and administrative functions including finance and accounting, human resources, and procurement. He has expertise in formulating strategies and designing alternative service delivery models (Global Business Services, shared services and outsourcing), transforming processes, driving organizational change, and implementing emerging technologies such as advanced analytics, mobile solutions, cognitive computing and cloud based solutions.  Mr. Furlong leads ISG’s Business Advisory Services practice and serves on the Americas Leadership team.

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