Despite Economic Recession, Product and Service Demands Keep NICE Steady and Successful in 2009
Kelly McGuire, TMCNet Editor
Originally Published: December 29, 2009, TMCNet.com

When looking back on the year, it’s no surprise 2009 was a tough one on many companies. But for NICE Systems, a provider of advanced solutions for companies to capture, store, retrieve and analyze customer interactions for contact centers and enterprises, despite the difficult economy, this year turned out to be one of the most successful yet.

And while the company’s fourth quarter 2009 results are not publicly available yet, NICE’s Director of Americas Marketing, Matthew Storm, shared some very detailed information during a recent TMCnet interview, on how the company performed this past year, its major announcements and what to expect in the New Year.

The full exchange is below.

TMCnet: How did your company perform this year? What major product, services and partnership announcements did your company report?

Matthew Storm: In 2009 NICE has made numerous strides to solidify its leadership position as the global provider of solutions that enable enterprises and security organizations to extract insight from interactions, transactions and surveillance to drive business performance, reduce risk and ensure safety. These announcements included acquisitions, new product capabilities and enhancements, and business momentum achievements. In addition, NICE announced the results of its thought leadership initiatives, as well as industry analyst and award recognition.

Products:

Enterprise/Call Center and Branches

We announced several new NICE SmartCenter capabilities, enhancements and solutions.

On Dec. 9 we announced that Interaction Analytics business solutions of the NICE SmartCenter suite are now powered by multi-channel analytics capability which allows organizations to identify and analyze customer behavior patterns across a broad variety of available contact channels, from email and chat to telephone and social media. As a result, companies can deliver a consistent customer experience, improve first contact resolution, increase up-sell and cross-sell of products and services, and reduce churn , thus significantly increasing customer satisfaction and operational efficiency, as well as generating additional revenue.

On July 8 we announced that NICE is expanding its reach into corporate branches and small-to-medium contact centers with NICE Perform eXpress, delivering cost efficient, enterprise-grade regulatory compliance recording.

On June 17 we announced the launch of our Interaction Analytics Business Solutions as a hosted service for rapid time-to-value and low total cost of ownership.

On April 22, we announced our Enhanced Virtualizations and SIP-Based Capabilities to help customers reduce costs.

On April 20, NICE announced the launch of Quality Optimization, the next-generation quality management solution for contact centers
Expansion of Security Portfolio of Solutions:

On Sept. 21, NICE announced the release of its NiceVision eXpress IP video surveillance solution designed for small and mid-sized deployments.

The release of NiceVision 10.8 features significant enhancements, including Visual Parameters Optimization software, new H.264 capabilities, and a smart network video recorder.

On March 30, NICE announced the release of SafeRoute, the company’s first mobile digital video surveillance solution. SafeRoute further expands NICE’s suite of security solutions, offering companies in the transportation sector a comprehensive solution for monitoring and improving security system-wide, in stations, rails, critical infrastructure, and fleets.

Acquisitions:

On August 31st, NICE acquired Fortent’s compliance and risk management business. This acquisition made Actimize, a NICE company, the largest and broadest financial crime and risk solutions provider. Following the acquisition, all of the top-10 global banks and a majority of the worldwide largest banks are now using Actimize. We are best positioned to leverage the anticipated wave of global regulations for financial institutions, given the size and scope of our product portfolio and client base.

On June 17th we announced Actimize’s acquisition of the assets of Syfact, a pioneer of enterprise investigative case management solutions. Syfact’s expertise, technology and best practices will help Actimize customers further improve investigative operations, increase compliance with regulations and reduce overall operational costs. The acquisition also enhances the joint company’s footprint and competitive position, providing immediate benefits for both Actimize and Syfact customers.

On August 31st, NICE announced the acquisition of Hexagon, which we believe is the provider of the world’s most cost effective cellular location tracking technology. This grants our offering a uniquely competitive edge which enables law enforcement, internal security, and intelligence agencies to fight crime and terror more effectively. The Hexagon solution will further bolster the NiceTrack portfolio in addressing the growing demand for location tracking capabilities.

On November 23rd, NICE announced its plans to acquire Orsus, a leading provider of security management software solutions NICE to revolutionize situational awareness by connecting NICE security solutions and other 3rd party security and safety systems to provide security organizations with a unified view and automated response procedures

Business Breakthrough Announcements:

NICE won its largest contract ever, a $55 million contract with a government agency which will be implementing NICETrack technology, enabling advanced telecom interception of different types of communication, generating comprehensive intelligence. This win serves as an important milestone in the evolution of our security business, taking it to the next level in terms of growth and contribution in the mid-term.

On November 2nd, NICE announced that a top-ten global bank, through a high seven-digit deal, has selected Actimize as its partner for fighting financial crime. The bank will standardize on the Actimize anti-fraud platform in one of the industry’s largest and most comprehensive moves toward a single enterprise-wide fraud risk management platform.

Analyst and Awards Recognition:

We continue to gain industry endorsements with leading industry analyst firms, including:

Gartner – NICE is positioned in the Leaders Quadrant of the October 2009 “Magic Quadrant for Workforce Optimization.”

Gartner – Actimize was the only company to receive the highest possible rating, “strong positive,” in Gartner’s September 2009 Enterprise Fraud Management Marketscope Report.

DMG Consulting – DMG named NICE the worldwide leader in speech analytics with an estimated 37 percent market share in its new “2009/2010 Speech Analytics Market Share Report.”

Ventana Research – On Oct. 14, 2009, NICE announced the results of its first annual Benchmark of contact center business and technology trends. The comprehensive global research focuses on growth expectations, technology investment priorities, operational tactics and strategies, and market trends and initiatives. The research results were published in a white paper entitled, “Preparing for the Upturn: Research on Contact Center Operational and Investment Practices.” The Benchmark was commissioned by NICE Systems and conducted by Ventana Research, an independent third-party firm. For details, see Web site.

Government Security News, or “GSN,” – GSN selected NICE as the winner of its 2009 Homeland Security Award in the category “Best Video Storage/Digital Transmission System.

TMCnet: At the start of 2009, the economy slowed to a deep recession. How did that affect your company’s performance? More specifically, what affect did it have on demand for your goods and services, if any?

MS: Like all businesses, NICE has faced challenges related to the economic slowdown around the world, but they have been balanced by a strong demand for our products and services based on several factors.

Due largely to the economic climate, companies are especially conscious of the need to satisfy existing customers and minimize customer churn. This need spans many industries including healthcare, communications services, retail and banking, as companies are more aware than ever of the high cost of acquiring new customers vs. keeping existing ones. The analytics-based solutions of the NICE SmartCenter suite help companies better understand customers and build longer-lasting, profitable relationships with their customers. NICE’s Interaction Analytics also offers an opportunity to understand how resources can be used more effectively and business processes can be improved to streamline operations and reduce costs.

The need for NICE’s solutions has become particularly urgent in the financial industry as the crisis in the financial sector has increased pressure on the contact centers of organizations such as banks, mortgage companies, and 401(k) investment portfolio managers. Call volumes to these institutions have increased as people become more concerned about their investments, have trouble paying their mortgages, or are comparing deals among competitors. NICE’s customers, as a result, are more reliant on our solutions, whether they need to record/store calls for regulatory purposes, better train agents on handling new types of high-emotion calls, more efficiently schedule agents for peak call times, or increase their understanding of why customers are calling.

The financial crisis has also resulted in an increased focus on compliance and risk management. Financial services organizations are facing greater scrutiny and the penalties for non-compliance are stiffer than ever before. Companies are keen to avoid the consequences of non-compliance and are also very aware of the possibility of rogue employees damaging their reputations. Actimize’s solutions provide customers with the benefit of an integrated platform for anti-money laundering, real-time cross-channel fraud prevention, brokerage compliance, and enterprise case and investigation management.

Another factor in the financial sector that creates an opportunity for NICE is the consolidation of financial institutions. Companies are relying more and more on Voice Over Internet Protocol (VoIP) to streamline contact center operations, particularly when a merger or acquisition requires consolidation of contact centers. NICE’s solutions support financial institutions’ needs to improve customer experience, manage risk and agent performance, and handle the increasing call volumes. One example of this type of consolidation is the announcement made by NICE in September 2009 about a $4 million dollar deal with a major US bank to consolidate its contact center operations and standardize on NICE SmartCenter recording and quality management (QM) solutions following an acquisition and the need to deal with an increased number of calls into its contact centers.

In the security market, as in the enterprise market, NICE’s solutions can create efficiencies that are attractive to budget-conscious buyers, particularly in a touch economy. For example, organizations looking to move to a cost effective IP network can do so while leveraging their existing infrastructure and solutions such as video analytics and incident management while increasing operational efficiency.

TMCnet: Talk to us about the major news item – whether it was a new product, an acquisition or something else – in your market segment this year?

MS: There have been several notable “news” items in the market this year which have changed the landscape. We’ve touched on virtually all of them in previous questions, including:

The Recession – Today’s economy is driving companies to improve how they interact with customers in order to understand them, satisfy them, and keep them. The need to harness the hidden information present in all customer interactions is driving demand for sophisticated analytics solutions. The recession is also driving a need for increased operational efficiency, a goal that is readily supported through the use of analytics as well as increased capacity to handle larger call volumes due to customers’ concerns about issues related to the economy.

Financial Industry Issues – The mortgage crisis, the volatile Dow, and the consolidation of many large financial institutions mean that financial companies are looking for solutions for managing risk, avoiding fraud, and streamlining operations. The combined power of Actimize and Fortent uniquely positions us to address the anticipated wave of global regulations for financial institutions, given the size and scope of our product portfolio and client base. VoIP-enabled contact center solutions provide a cost effective means for consolidating multiple contact centers following a bank merger or acquisition which very often results in a significant rise in contact center traffic.

Preparing for the Upturn - NICE’s first annual benchmark of contact center business and technology trends validates the trends cited above and identifies several other key issues. This comprehensive global research report focused on growth expectations, technology investment priorities, operational tactics and strategies, and market trends and initiatives. The research results were published in a white paper entitled, “Preparing for the Upturn: Research on Contact Center Operational and Investment Practices.”

An example of an interesting news item relates to phenomenal growth in the deployment of analytics. Survey respondents said that they foresee planned speech analytics deployments growing by 182 percent by 2011 from first half 2009. Also, we found that WFO solutions are ranked much higher for investment than CRM solutions. What this means for our industry is that more and more, companies are realizing the quantifiable business value that is presented by leveraging the insights that can be extracted from their contact center-based customer interactions. The contact center is becoming a key element of organizations’ customer-centric initiatives.

Other key findings of the study include:

Customer satisfaction, operational efficiency, and compliance are top operational priorities: companies are focused on increasing customer satisfaction and reducing operating costs. For financial services companies, regulatory compliance was a key priority, along with increasing customer satisfaction.

Growth in contact center interactions: 44 percent of respondents expect increases in customer interactions, both in phone interactions and as driven by the availability and maturation of alternate communication channels, such as instant and text messaging and web self-service.

Growth in customer interactions is also attributed to the economic turmoil; for example, in the financial industry, many more customers are calling to receive information about their finances, voice their personal financial concerns, and to refinance their mortgages.

Over 50 percent of infrastructures to be VoIP-based by 2010: As a technology that helps reduce operating costs, VoIP was noted as a high investment priority, with 70 percent of respondents indicating that they plan to have more than half of their infrastructure VoIP-based by 2010. Furthermore, large multi-site enterprises are centralizing their contact center operations, made possible by advancements in VoIP-enabled solutions, and as a result are prioritizing investment in VoIP.

Staffing levels to remain steady, growth in home-based agents: 81% of respondents expected staffing levels to remain steady or increase slightly, with 37% anticipating an increase in home-based agents

TMCnet: With signs that the economy is pulling out of the recession, what are you expecting in 2010?

MS: Focusing on the customer and understanding customer intent, needs and wants will remain key as companies strive to retain their customers and grow their top-line revenue. That need will run in parallel to the imperative to contain costs and increase operational efficiency.

Kelly McGuire is a TMCnet Web editor, covering CRM and workforce technologies, and anchor of its daily TMC Newsroom video broadcast. Kelly also writes about eco-friendly "green" technologies and smart grids, compiling TMCnet's weekly e-Newsletters on those topics, as well as the cable industry. To read more of Kelly's articles, please visit her columnist page.