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Over the past few years, more organizations have gone all in with migrations to the public cloud. But for some “without a concrete strategy, it has led to some obvious challenges with respect to measuring the real value from their cloud investments,” says Ricky Sundrani, a partner in the pricing assurance practice at Everest Group.

Cut to one of the most significant concerns across enterprises today: rising cloud costs.

“Many enterprises are getting some unwelcome sticker shock surprises for their cloud services that are coming in much higher than estimated and blowing up the business cases they used to justify their program in the first place,” says Andy Sealock, senior partner in the advisory and transformation practice at West Monroe.

While inadequate planning at the start of the cloud journey is a major driver of this disconnect, there are plenty of others: limited visibility into cloud consumption and patterns, unchecked cost leakage, cloud sprawl, lack of workload optimization, and weak demand management policies, to name a few. More than two-thirds of organizations are not realizing the full value of their cloud investments, according to an Everest Group survey of CIOs.

The business case for cloud remains the same: greater scalability, increased efficiency, better data security, increased reliability and resilience — and, potentially, lower costs. But realizing those benefits requires deliberate and active management of cloud deals.

There are a number of actions IT leaders can take to maximize the value of their current and future cloud investments, from well before partners are narrowed down to long after the contracts have been signed. The following dozen tips are worth adopting.

Assemble a cross-functional cloud team

One of the biggest missteps when pursuing cloud opportunities is failing to make these cross-functional efforts from the top down.

“When cloud transformation is driven by a CXO office without close involvement of business units and development teams, finer nuances are missed, leading to ineffective cloud adoption from a cost and efficiency perspective,” says Mukesh Ranjan, vice president of IT services at Everest Group.

IT leaders should assemble a team with representatives of all key stakeholder groups during the planning stages of the cloud transformation journey, Ranjan says. A 2022 PwC survey found that companies that were achieving transformational benefits from the cloud and reporting fewer barriers to value typically involved five or more functions at the start of their cloud projects. Doing so later on in migration, though less ideal, is still an option to ensure that 360 degree view of enterprise cloud requirements and usage.

Define baselines and (realistic) expectations

Too many organizations lack a full understanding of the benefits they expect to gain from the cloud vis-à-vis their existing environment. That requires assessing the value of the current environment, the value they seek from cloud adoption, and timelines for achieving that value.  Only then can they select the providers, solutions, and expertise that best align with their cloud goals, says Ranjan.

It’s important to take off the rose-colored glasses during this process. “IT leaders must be realistic in how much of their premise-based compute footprint can be migrated to the cloud and how quickly this can happen,” says Sealock.

Build a full business case

During the pandemic, many organizations rushed to the cloud — and for obvious reasons. But migrating to the cloud without a well-thought-out business case is not an optimal strategy. A hurried lift-and-shift approach typically results in increased costs over the long term. During a migration frenzy, companies can take shortcuts that result in technical debt that dilutes the impact cloud transformation can have.

“Think of cloud as a modernization journey and not just a migration,” Ranjan advises. “Undertake application modernization initiatives such as refactoring, rearchitecting, replatforming, and replacing as needed to optimize applications running on cloud.”

Analyze (and negotiate) cloud contract terms upfront

Many IT leaders lack the relevant market data required to conduct informed negotiations with cloud vendors.

“This could be pertaining to expected discounts, more favorable terms and conditions offered to certain buyers, and better transformation timelines, among other things,” says Sundrani.

Marina Aronchik, a  partner in the law firm Mayer Brown’s technology and IP transactions practice, recommends accounting for the terms in cloud agreements as part of the broader evaluation of potential cloud solutions and providers. 

“In the current economic environment, customers may have a unique opportunity to secure more flexible and favorable contractual terms,” Aronchik says. “To do so, IT organizations should build time into the process for reasonable engagement with several cloud providers on a competitive basis, or a single cloud provider with a reasonable opportunity to pivot to an alternative solution if needed.”

Read the fine print

The value of a cloud contract is not fully represented in the fee schedule. What the customer may assume to be “permitted use,” the cloud provider may deem “excess use” or an “overage.”

“To maximize total value of a cloud contract, IT leaders should look for contractual and technical clarity on the metrics that are used to calculate relevant fees, reliable tools for monitoring consumption, and the methodology for addressing actual or potential excess use,” says Aronchik.

Beware of minimum commitments

It can be tempting to agree to certain volume or spending levels to secure deeper discounts for ongoing cloud usage. But it’s one of the leading causes of stranded value in cloud contracts.

“It’s important to not overcommit on the minimum commitments,” Sealock warns. “This often depends on an enterprise being able to accurately predict how much of their premise-based footprint they can actually migrate to the cloud and at what rate.”

If an IT organization runs into issues that delay or prevent moving on-premises systems to the cloud, and thus miss a minimum commitment, there will be costs involved. “Longer term commitments, use of ‘sticky’ native services may drive larger contract discounts but also impact your technology plans,” says Sealock.

Leave no cloud stones unturned

There are a number of internal factors that can impact cloud value realization. “Challenge your IT department to pull all levers for efficient cloud usage,” advises Sealock. There may be an opportunity to refactor applications to make them more efficient users of cloud resources, adopt cloud native services instead of lifting and shifting existing system to IaaS, or move to SaaS options as part of ongoing application rationalization.

Increasing the focus on application modernization is crucial to extracting the full value of cloud, says Ranjan.

Invest in a cloud management platform

Real-time visibility across the cloud environment goes a long way in preventing unexpectedly huge bills from cloud providers. But “cloud pricing and ordering options are at a sufficient level of complexity that it is beyond the capacity of a ‘smart person with a spreadsheet’ to manage effectively,” says Sealock.

There are numerous cloud cost management tools on the market from established players and startups alike. These tools should have real-time interfaces to the cloud service providers’ pricing engines and be able to automatically match the enterprise’s cloud usage patterns with the right cloud services (e.g., IaaS, PaaS, native) and configurations (e.g., service instance type/size, storage tier). Sealock advises evaluating multiple platforms, looking for the following attributes:

Financial (in addition to technical and operational) management capabilitiesIntegration with automation tools for orchestrating technical deploymentsCapacity to pull usage from both cloud and on-premises environmentsAbility to model what on-premises environments would look like (and cost) on multiple cloudsEngineering support to ensure the tools remain properly configured over time

Secure scarce cloud management talent

“Cloud pricing can be very complex and dynamic and is highly dependent on usage,” says Sealock. Without the proper governance, unnecessary costs can quickly accumulate. Adopting a cloud management platform is step one, but these tools are themselves complex. IT leaders must also recruit technology professionals who know how to use cloud management platforms to continually refine cloud service usage to meet enterprise SLAs at the lowest costs.

Enterprises  are seeing premiums for cloud skills outpacing those for standard IT infrastructure skills, according to research by Everest Group.

“Cloud expertise is in short supply, but without in-house experience it is difficult to avoid the wasteful pitfalls,” Sealock says. “Invest in the people to use the cloud tools properly who can also design the policies, processes, and procedures of a cloud governance framework.”

In some cases, IT leaders will create a cloud center of excellence that can be leveraged across multiple lines of business. 

Get serious about demand management

Ease of use and self-provisioning are two of the big benefits of using the cloud, but they also open the door to unmitigated (and sometimes invisible) cloud sprawl. IT organizations must create and communicate clear policies and processes for cloud demand management.

“Training can be used to increase the socialization of the policies and processes to users, but good compliance also requires those policies to be enforced within the programmed workflow of the tools,” says Sealock, who suggests putting some teeth into demand management. “Communicate top down that there will be smart constraints on cloud usage that will be reinforced via training but also codified in the workflow of their systems.”

Address overruns right away

Some IT organizations may view cost overruns as inevitable. But ignoring them is a mistake. “They do not get better on their own,” says Sealock. “It takes action to change the dynamic.”

Unexpected — or worse, inexplicable — cloud costs are a red flag. Understanding the root cause of the usage and addressing it as soon as possible is important. “You do not want to discourage cloud usage, but you must insist that the usage be smart, deliberate, and cost-effective,” Sealock says.

Continuously monitor and measure cloud value

Having clearly defined SLAs to measure performance against expected value is crucial. “Unless enterprises have a well-built process to continuously monitor and measure value against their stated goals, they will slip off in their transformation journey,” says Ranjan.

Cloud vendors, consultants, and other partners are likely to keep pushing more cloud, but its critical for IT leaders to periodically re-evaluate the cloud march to ensure the organization can achieve the intended value. 

Budgeting, Cloud Computing, Managed Cloud Services

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Gartner recently cut their expected IT budget prediction from 5.1% to just 2.2% in 2023. This is three times lower than the projected 6.5% global inflation rate. As the world continues to experience economic uncertainty, IT leaders look to tighten budgets, consolidate tools and resources, and generally become more risk-averse when evaluating new investments. So how can you request a new investment from your decision-makers while ensuring minimal costs and maximum ROI this year?

Here’s four pieces of advice from procurement on how to evaluate and propose new IT investments during an economic downturn.

Involve your procurement team from the beginning

McKinsey surveyed more than 1,100 organizations worldwide and found that the best-run procurement teams can generate twice the annual savings of those in the lowest quartile. Procurement professionals are skilled at negotiating contracts, identifying cost-saving opportunities, and evaluating vendors.

By bringing them into the conversation early on, you can leverage their expertise and get the best cost and contract structure available upfront while you focus on the technical requirements. This can also help you avoid a long and onerous contract process with better quality in the long term.

To get started, develop a list of criteria your IT and security investments should meet. This might include things like cost, feature set and functionality, reliability, scalability, and vendor support. Once you have this list, work with your procurement team and use it to evaluate potential solutions and vendors.

Consider the total cost of ownership

When investing in IT and security, businesses need to consider more than just the initial purchase price. The total cost of ownership (TCO) considers all costs associated with an asset over its lifetime, including shipping, taxes, installation, training, maintenance costs, and more.

In a survey by Deloitte, 65% of organizations reported that cost reduction was a top business priority, and 52% cited TCO reduction as a key strategy for achieving this goal. By evaluating TCO, businesses can make more informed decisions and avoid unexpected expenses down the line.

Reduce the perception of cost

Change can be scary, especially if there are dollar signs attached to it. By reducing the perception of cost and associated risks, you can help decision-makers feel more comfortable with investing in new solutions and technologies.

To do this, consider taking the following steps:

Validate proof: Check references and testimonials, ask for proof of concept, and talk with the vendor’s partners. Compile this information and use it as part of your analysis and presentation to decision-makers.Focus on positive impact: Focus on the benefits and ROI of the proposed investment, such as increased productivity, better security, or improved customer satisfaction. Present these benefits in a clear and concise way, using data and real-world examples to support your case.Consider your company scorecard: Your procurement team has a scorecard with clear metrics to evaluate purchase decisions. Consider their metrics to make informed decisions and best support your proposed investment.Present the facts and numbers: Be transparent about the costs associated with the investment. Provide detailed information about the total cost of ownership, including any ongoing maintenance, support, or upgrade costs. This can help decision-makers understand the full picture and make informed decisions.

Evaluate the risk of doing nothing

In addition to ROI, it’s also important to consider the risk of doing nothing. This may include lost productivity, increased downtime, and slower time to market. Provide decision makers with credible industry research, as well as your own team’s statistics to support your request.

For example, if you’re proposing to invest in a security solution powered by AI and machine learning, it would behoove you to present cost savings from automated security, such as that from IBM.

Or if you’re finding that building your in-house web application platform is locking you in, report on the specific challenges associated with the project, such as hidden costs, maintenance fees, and compliance issues your team faces. These are common problems that procurement and IT/security professionals should work together to address.

Wrapping Up

Collaboration between procurement and IT/security professionals is crucial to evaluating current and future investments in order to minimize costs and maximize ROI, especially during an economic downturn. By clearly defining needs and requirements, evaluating TCO, and performing risk assessments, these teams can work together to help their business leaders make more informed decisions for an improved bottom line.

Edgio’s holistic applications platform helps address challenges associated with website security and performance, hidden costs, maintenance, and compliance requirements. Learn more here.

SaaS

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Customer Experience management company Qualtrics on Monday said private equity firm Silver Lake and Canada Pension Plan Investment Board (CPP Investments) have agreed to buy the entire company for $12.5 billion in an all-cash transaction.  

CPP Investments, according to a joint statement, will pay $1.75 billion in equity and another $1 billion in debt for the deal.

US-based Silver Lake, which already owns 4% stake in the company, along with CPP Investments will acquire 100% of the outstanding shares in Qualtrics, including the entirety of ERP software provider SAP’s majority stake, the companies said.

“Qualtrics will become an independent, privately held company,” Qualtrics said, adding that it will continue to remain headquartered in Provo, Utah, and Seattle, Washington with CEO Zig Serafin at the helm.

SAP acquired a majority stake in Qualtrics in 2018 for $8 billion with the idea of marrying customer experience management with ERP software systems. By doing this amalgamation of real-time customer experience data with operational data, enterprises would be able to make adjustments to business strategies to perform better against their competition in their respective segments and domain.

In January, SAP said it is also exploring selling its majority stake in Qualtrics to refocus on its core business.

However, despite selling off its entire stake, SAP said it will continue to remain a technology and strategic partner with the company servicing joint customers.

The acquisition of Qualtrics by the investment firms, which is expected to close in the second half of 2023, will see SAP garner approximately $7.7 billion for its stake in Qualtrics, the ERP software provider said in a statement.

“Since we acquired Qualtrics in 2019 the company has more than tripled its revenue while delivering profitability,” Christian Klein, CEO and Member of the Executive Board of SAP SE said in a statement. “SAP intends to remain a close go-to-market and technology partner, servicing joint customers and continuing to contribute to Qualtrics’s success. The number of companies and brands using Qualtrics software has risen from 10,000 at the time of SAP’s purchase to over 18,000 today.”

Enterprise Applications, SAP

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The economy may be looking uncertain, but technology continues to drive the business and CIOs are investing big in 2023. At the same time, they are defunding technologies that no longer contribute to business strategy or growth.

It’s not a stretch to say that across the board, CIOs are continuing to invest in some form of AI. Upgrading cloud infrastructure is critical for deploying broad AI initiatives more quickly, so that’s a key area where investments are being made this year.

Fifty-two percent of organizations plan to increase or maintain their IT spending this year, according to Enterprise Strategy Group. This includes spending on strengthening cybersecurity (35%), improving customer service (32%) and improving data analytics for real-time business intelligence and customer insight (30%).

The numbers are higher from Foundry’s 2023 State of CIO survey, which finds that 91% of CIOs expect their tech budgets to either increase or stay the same in 2023. CIOs anticipate an increased focus on cybersecurity (70%), data analysis (55%), data privacy (55%), AI/machine learning (55%), and customer experience (53%).

Here is a look at five hot technology investments CIOs and other IT leaders are making in 2023 and two that have grown cold.

Hot: AI and VR/AR

With digital transformations moving at full throttle, and a desire to stay innovative, it should come as no surprise that use cases for virtual reality, augmented reality, and artificial intelligence continue to grow in several verticals. For example, New York-Presbyterian Hospital, which has a network of hospitals and about 2,600 beds, is deploying over 150 AI and VR/AR projects this year across all clinical specialties.

In one use case, AR and VR are being used to re-create people’s spines in a model so that surgeons can look at them in advance of surgeries to help them perform better, says Peter Fleischut, group senior vice president and chief information and transformation officer.

Besides surgery, the hospital is also investing in robotics for the transportation and delivery of medications. Massive robots are being used in pharmacies to automate processes such as pulling pills, ointments, and creams, putting them into packs, sealing them, and transporting them to floors, he says.

The hospital is using automated voice and AI technologies to deploy virtual chatbots in its call centers and is making “significant investments in Salesforce” to better understand its consumers from a CRM perspective, Fleischut says.

In obstetrics, the hospital has invested in a platform that uses AI to monitor and inform a doctor about any fetal issues a mother or baby is experiencing for faster and quicker intervention.

Other organizations are equally bullish about continuing their investments in AI this year. “I’d be remiss if I didn’t say AI, AI, AI,” which “will probably accelerate faster than anyone can think,” says Chris Nardecchia, chief information and digital officer at Rockwell Automation. The company is embedding AI into each level of the tech stack it sells to customers, he says.

“We run factories and help companies run them and optimize them” and AI is used to optimize everything from getting more throughput to better quality to preventative maintenance, productivity, and cost optimization, Nardecchia says. “It’s all about uptime and input. And there’s a labor shortage in those industries so [the focus is on] more automation and more AI.”

This applies to his IT group as well, specifically, in using AI to automate the review of customer contracts, Nardecchia says.

Dental company SmileDirectClub has invested in an AI and machine learning team to help transform the business and the customer experience, says CIO Justin Skinner. One of IT’s first big projects is embedding AI into its SmileMaker platform to access its user database “to create an educational experience for our customers and show them what SmileDirectClub can do for them. This technology will help our customers get started quicker and will also allow us to reach more people.”

AI is also enabling users to do a quick 3D scan of their mouth with their mobile phone, so they can see their potential new smile in a matter of minutes, Skinner says. 

The company will also shift investments toward using AI “as an outsourcing model” to free up human capital, Skinner adds. That way, employees “can focus on creative ways to move their respective areas forward. We need to reduce investment in projects that require transactional workforce attention.”

Modern-day CIOs or CTOs have to start thinking like business owners if they are to be successful, he says. The idea is to “free up as much of our team members’ time as possible to be more strategic, customer-focused, and value-driven.”  

Hot: Zero trust and other security initiatives

In 2022, the College of Southern Nevada moved its data center to the cloud to implement cloud access security broker (CASB) technology to secure all student email traffic and mitigate trusted identity breaches.

Now, as more faculty, staff, and students are accessing information on-premises and in the cloud, IT has a borderless network and the team is implementing a zero-trust network architecture, says CIO Mugunth Vaithylingam.

“This adds additional context to our security layer and allows us to grant access to just what our users need — and no more — when they need it,’’ Vaithylingam says. “These network, security, and cloud changes allow us to shift resources and spend less on-prem and more in the cloud.”

New York-Presbyterian will also invest in zero trust this year, adding a security operations center (SOC) for 24/7 network monitoring as well, Fleischut says.

Cold: On-prem infrastructure

As they did in 2022, many IT leaders are reducing investments in data centers and on-prem technologies.

“We will continue to reduce our investment and presence at our on-prem data center,’’ says Raju Seetharaman, senior vice president of IT and transformation at life insurance company Legal & General America. “We have been moving our workloads to the cloud while we create new cloud-native digital business capabilities.”

At the same time, Seetharaman says not all legacy technology is cold, and LGA is embracing legacy systems that enable continued business growth. “We are investing in modernizing and migrating our legacy [systems] so we can leverage the cloud-managed services,’’ he says. “This should secure our business strategy for the next five years and longer.”

On-prem infrastructure will grow cold — with the exception of storage, Nardecchia says. Some storage will likely stay on-prem while more is pushed into the public cloud, he says.

Vaithylingam says the College of Southern Nevada will shut down its on-prem data center — one of the largest in Nevada — and plans to fully move all workloads and infrastructure to Microsoft Azure.

Hot: Data and cloud infrastructure

At New York-Presbyterian, using technology to reduce friction for patients and providers in the short term means increasing investments in multimodal data, Fleischut says.

For example, the hospital wants the ability to look at imaging and pathology data so staff can better diagnose patients faster and quicker, he says. That also requires investing more in cloud infrastructure for storage and compute power resources so data scientists can process data, understand it, and be able to translate it “for benefits at the bedside,’’ Fleischut says. 

Data is also critical in the insurance domain, and LGA is continuing to invest heavily in secure, scalable, high-performing data operations to foster business innovation and transformation, says Seetharaman. “We are working to transform ourselves into a data company mindset, finding newer ways to leverage data to support business growth.”

Hot: Low-code/no code

For most business teams, the time it takes to go to market with product updates is key to success and the quicker they can do it, the better, Seetharaman says. “Low code/no code solutions give business teams the ability to deliver changes quickly,” he says.

For example, pricing and underwriting are two key areas where life insurance carriers can bring market-differentiating product offerings to customers, Seetharaman explains. “At LGA, we have been good at continuously improving our ‘time to market’ KPI through multiple technology solutions and one key area of focus is the low code/no code capabilities that we have built within our digital platform.”

LGA will continue to invest in custom-built low code/no code systems to enable the company to deliver changes without hand-crafting code and time-consuming deployments, he says.

And it’s not just applications development where such tools are having an impact. Businesses are exploring new ways to apply low-code data science to unlock insights on how to improve processes, says Matt Mead, CTO at tech modernization firm SPR. “AI and machine learning will be leveraged to continue making enterprises more efficient and although still in its infancy, its application for specific use cases will separate the technology leaders from the laggards,” he says.

Cold: Legacy telecom

Legacy telecom and paging systems that New York-Presbyterian owns have been “deconstructed, defunded, and taken out of the infrastructure,” Fleischut says. The hospital has instead invested in between 20,000 and 25,000 mobile phones for its workforce.

Australian experiential tourism company Journey Beyond recently revamped its contact center as part of a customer experience transformation. Madhumita Mazumdar, GM of information and communications technology, replaced six different telecom systems, along with its contact center, in favor of cloud-based unified communications platform RingCentral.

“The different communication solutions were unable to provide an integrated 360-degree customer view, which made it difficult to ensure a consistent, unrivaled customer experience across all 13 tourism ventures,” she says.

There are indications the voice market is slowing. IDC is forecasting a 5.1% decline year over year in worldwide spending on fixed voice services in 2023. Still, worldwide spending on all telecom services (fixed, mobile, voice, and data) is forecast to increase 2.3% in 2023, the firm says.

Enterprise communications services saw slow but steady 1.6% growth in 2022, according to Gartner. That is not expected to last.

“The unified communications market’s meager 1.6% growth in 2022 masks the massive conversion in the telephony market from premises-based delivery, which will suffer a 7.6% decline, to cloud-based delivery, which will post 12.9% growth,’’ the firm wrote in a newly-published report on worldwide IT spending in Q4 22.

“Across communications markets, we expect to see a slowdown in legacy solutions like enterprise fixed voice services, premises-based telephony systems, and legacy contact center solutions,’’ Megan Fernandez, director analyst, at Gartner, told CIO.com. “Premises-based telephony will see the most significant slowdown in investment as businesses decide to defer their upgrades and replacements.”

The legacy/fixed voice services market segment is expected to decline at a 4.3% CAGR through 2026, Fernandez notes. Further, long-term projections are not expected to improve, she adds, since many businesses will migrate to cloud-based approaches for their communications needs when they do decide to make a replacement decision.

Hot: IT talent

IT talent acquisition is still a priority this year, with 41% of IT leaders planning to ramp up hiring, according to the 2023 State of the CIO. New hires are anticipated in cybersecurity (39%), app development (30%), and data science/analytics (30%) positions in the next six to 12 months, the report says.

Fleschut says he will also hire more IT personnel this year, especially data scientists, architects, and security and risk professionals.

IT talent is a hot area for Rockwell Automation as well, says Nardicchia, who will invest in user experience and QA developers, as well as data engineers, and AI/analytics and cyber talent.

Increasingly, businesses are realizing they need to invest in skills development to leverage emerging technologies, agrees SPR’s Mead. They will also invest in director-level leadership to help lead the charge on new business opportunities, he adds. “Whether it be security, data science, or cloud, it all ties back to your people’s abilities, so reskilling and upskilling will see momentum,” he says. 

Related: 6 tips for making the most of a tight IT budget

Budgeting, IT Leadership, IT Strategy

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Motivated by multiple drivers, enterprises across nearly all industries are increasingly embracing artificial intelligence (AI) and machine learning (ML) to enhance efficiency, profitability, and customer experience while improving evidence-based decision making. Ever-increasing volumes of available data, both structured and unstructured, combined with ongoing innovations in the software and infrastructure space capable of handling large data volumes efficiently, is facilitating this adoption.

Implementation of AI technology and ML solutions can require significant investment. Based on our experience spanning multiple industries, we have identified key considerations which can help any implementation of AI/ML be much more efficient, leading to a successful adoption (as compared to AI technology “sitting on the shelf”) and enhanced return on investment.

Business challenge identification: The first step toward a successful implementation of any AI or ML solution is to identify business challenges the organization is trying to tackle via AI/ML and gain buy-in from all key stakeholders. Being specific about the desired outcome and prioritizing use cases driven by business imperatives and quantifiable success criteria of an AI/ML implementation is helpful in creating the roadmap of how to get there.

Data availability: Enough historical data, relevant for the business challenge being tackled, must be available to build the AI/ML model. Organizations can run into situations where such data may not yet be available. In that case, the organization should develop and execute a plan to start collecting relevant data and focus on other business challenges that can be supported by available data science. They can also explore the possibility of leveraging third-party data.

Data preparation and feature engineering: This is one of the most important steps in the development of an effective AI model. In this step — in addition to the usual data cleansing, data integration, use of AI tools such as Natural Language Processing to incorporate structured data, judicious and creative feature engineering, creating the training and test data, etc. — it is also important to consult with the business stakeholders and the legal team to ensure that the data/features being used in the model comply with any relevant regulatory frameworks and laws (e.g., Fair Lending). It is also important to incorporate “existing wisdom” in this step. For example, if the objective is to build a fraud detection model, prevalent fraud patterns already known to the organization’s investigation unit should be incorporated. In addition to enhancing the effectiveness of the model, this builds confidence for the end-users of the solution, thus facilitating adoption of the model.

Selection of an appropriate modeling approach: For any given business challenge, it is common to find that multiple AI and ML algorithms are applicable. Often, the simpler algorithm or model with fewer parameters may be a better choice (assuming the performance of different models is similar). A particularly important step in this process is to consider model explainability — is the selected model able to provide human-understandable, plain-English explanations and reasoning behind its decisions? In certain regulated industries, reasons behind decisions made by an analyst or algorithm are a requirement. Many AI/ML algorithms are, by nature, “black-box” in that the contributing factors for the model outcome are not clear. Model explainability packages, such as LIME or SHAP, can provide human-understandable explanations in such situations.

Strategy for operationalization: Having clarity around how the predictions and insights from AI/ML fit into daily operations is clearly needed for a successful implementation. How does the organization plan to use the model scores/insights? Where does the AI/ML model “sit” within the operational workflow? How will the model insights/score be consumed in the process? Is it going to completely replace some of the current manual processes, or will it be used to assist the analysts in their decision-making? Will the solution be implemented in the cloud or on-premise? How will the data flow into and out of the AI/ML solution when implemented? Is there a funded plan for procuring the necessary hardware and software? Having a well-defined roadmap that addresses such questions will go a long way in making sure that the solution gets operationalized and does not sit on the shelf.

Phased implementation approach: The human factor is one of the hurdles faced in any AI/ML implementation effort. People are often uncomfortable with sudden and dramatic changes to their existing processes. A phased implementation approach can help mitigate such concerns. We often suggest a pilot phase, in which the AI/ML solution runs in parallel with the existing process — so that relevant teams have an opportunity to compare the outcomes of the two and become comfortable with the new process.

Training, skilling, and enablement: Of course, it is important to build teams with expertise in various areas of the AI/ML space. Ensure that the relevant skills and resources to support the operation of the AI/ML solution are available. Any skills gaps should be bridged by either training the existing resources or bringing in new resources with appropriate skills.

Thinking through each of these recommendations and having a clear strategy from the beginning to address them will greatly enhance the chances of success and return on investment for any AI/ML implementation.

Learn more about our artificial intelligence services and emerging technologies practice.

Connect with the authors:

Scott Laliberte

Managing Director – Emerging Technologies Global Lead, Protiviti

Lucas Lau

Senior Director – Machine Learning and AI Lead, Protiviti

Arun Tripathi

Director – Machine Learning and AI, Protiviti

Artificial Intelligence, Machine Learning

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Contact centers don’t look like they did 10 years ago. Technology has fundamentally changed the way they do business.

Alongside that transformation has come steady growth. In 2022, 80% of contact centers planned to expand their workforces, with half of those expecting to create entirely new roles. Only 1% planned to cut staff. Yet, as they grow, they must find new ways to scale effectively. An expanded contact center brings a more expansive technology stack, and it becomes more important than ever to assure that stack is up to the task.

Most contact center leaders would agree that investing in new technology can help contact centers maximize growth and drive future success. Still, they’re left with an important question: What technology should they invest in? With so many solutions available on the market, the true challenge is choosing the ones that will deliver the greatest return.

Toward the flawless CX of the future

Imagine what the customer experience (CX) could look like in the near future. A customer may start their support journey on a brand’s website, interacting via chat. They then seamlessly send the conversation to their smartphone to continue on the go. After they resolve their most pressing questions with the chatbot, they request a call from support for a more complicated issue. 

Ten minutes later, an agent calls them, fully prepared with all the information from the chatbot session. Unbeknownst to the customer, that agent receives live insights during the call, with AI directing them based on the tone and content of the conversation. This allows for a smooth, frustration-free call. Later, the system generates an automatic email follow-up with personalized tips for the customer and the option to reconnect with an agent. There were no award menus and no hold times — just seamless customer service.

Many of the pieces required to deliver this level of CX already exist. Yet, in 2019, Freshworks reported that sales and service agents in the U.S. wasted 516 million hours a year trying to use their contact center’s software. Customers, for their part, have mixed feelings about their experiences with AI — 61% of them still dislike IVR. 

The possibility for flawless CX is there, but contact centers haven’t quite cracked the code.

4 technology solutions every contact center needs

Where should contact centers direct their resources, then? There are five types of technology they can’t afford to ignore.

Omnichannel communication: Given how we communicate today, many people feel less tied to a single way to connect with brands. We move seamlessly between social media, text messages, emails, and voice communication, so we expect the same from businesses.

This is true whether it comes to sales or service. Seventy-three percent of consumers prefer shopping across multiple channels, and 80% want brands to communicate easily across these channels. When brands make these options available, customers are happier and spend more. 

One of Cyara’s customers does this exceptionally well and points to what a truly fluid CX can look like in the modern call center. Agero delivers premium roadside assistance through intuitive, omnichannel service. Customers — who may be in life-or-death situations — can create their own tickets via mobile or get on the IVR and receive a link to create a ticket via text. While they create the ticket, the IVR stays online to ensure everything goes smoothly. This type of CX meets customers where they are to ensure they get the service they need.

Conversational AI: According to NICE’s “2022 Digital-First Customer Experience Report,” 81% of consumers want more self-service options from businesses. Today’s customers realize that many issues don’t require a long conversation with an agent, and they want the option to solve their own problems without the hassle. 

Conversational AI is the key to creating more self-service options. This technology, which powers IVR systems and chatbots, is what enables bots to have more effective interactions with customers and solve many of their simple requests. Brands that don’t utilize it are severely limited in their ability to meet customer expectations and control the costs of service.

Advanced analytics and sentiment analysis: Today’s contact center managers have an enormous amount of data at their fingertips. Many already have the tools to automatically collect information about every call and every customer interaction. Few actually put that data to use. 

With the capabilities added by AI, it’s possible to quickly and deeply analyze troves of customer data. For instance, contact centers can map and analyze keywords from call logs to assess their relationship with customer satisfaction and handle times. Or they can examine trends in how individual agents handle calls, allowing for more productive coaching. At the most advanced level, contact centers can deploy sentiment analysis technology to capture a live view of a customer-agent interaction and provide real-time direction. 

Together, these advanced analytics enable a more flexible, nimble form of customer service.

Quality assurance: None of the above technology investments can be fully realized without a simultaneous investment in quality assurance (QA). Just as you wouldn’t add on to your house without increasing your insurance coverage, you shouldn’t grow your contact center without investing in a way to ensure your technology truly allows customers to get the help they need, regardless of which channel they use.

It doesn’t matter how advanced a contact center’s AI and analytics are if it can’t execute a consistently great customer experience. Whether it’s problems with voice quality or downtime, the end result is bad for customer satisfaction and the bottom line. The technology that Cyara offers enables comprehensive call center QA to serve as an expanded insurance policy for an expanding contact center.

QA requires continuous testing and monitoring across every CX channel and throughout the entire software development cycle. On its own, this would be a massive undertaking for any contact center. That’s why Cyara’s suite of products is designed to automate this process and enable contact center managers to catch and correct glitches before they become CX problems.

Agero’s exceptional CX delivery wouldn’t be possible without a robust, automated QA program. Especially since the company deals with customers in life-threatening situations, service must be fast and flawless. With automated continuous testing from Cyara, Agero can regularly monitor its IVR and text and web service portals to ensure they’re performing well. Thanks to IVR monitoring, for instance, Agero deflects 25–30% of its calls and creates a smoother, better CX. In a sense, Cyara has become Agero’s insurance policy for flawless CX.

By automating the QA process like Agero, contact centers can assure high-quality CX without their QA costs running wild.

Invest wisely in your technology solutions

Contact centers that succeed in the years ahead while have scaled their business while delivering an increasingly flawless CX. There are countless options for where to invest your resources to make this happen, but no tools are more important than these five. Start here, and you’ll build a strong foundation for delivering flawless CX at scale.

Ready to invest in automated testing and CX assurance for your tech stack? Try a Cyara demo today.

Digital Transformation

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With an economic slowdown all but inevitable, recession is top of mind for most business leaders. If it happens in the near term, it will be a financial cycle like none other.

“We have record low unemployment, with record high inflation. We have prices for technology and services higher than any CIO, IT leader, or business owner has to deal with,” says Ryan Prindiville, partner-in-charge of consulting at accounting and business consulting firm Armanino. “At the same time, businesses are coming off of record growth over the last couple of years. So you have a dichotomy that business leaders, forecasters, and prognosticators have never seen before.”

Cost cutting ahead of recession is conventional wisdom — and there are certainly some targets for reduction that would have limited negative impact on the business. “But better wisdom is to take the opportunities to accelerate investments to improve efficiency long term,” says Rick Pastore, senior research director and IT advisor at The Hackett Group.

CIOs may want to invest, for example, in migrating systems to the cloud because you want the ability to scale up or down in a recession. “There may be investments that IT leaders and CIOs need to make now to withstand and sustain a prolonged downturn,” agrees Prindiville.

These ventures aren’t necessarily short-term fixes. “IT leaders ought to be planning for a more flexible environment over time, but these are three to six months exercises,” explains Michael Fuller, principal at The Hackett Group. “The goal is to think about how they might change the technology organizations holistically and consistently, making sure those investments are leaning out the base and creating flexibility.”

To get ahead of the pending economic outlook, IT leaders should consider making investments in the following areas, especially where such shifts can reap long-term operational benefits, recession or not.

Enabling better insight into costs and value

“IT leaders should maintain a deep understanding of their cost structure as well as the value that the IT services and investments provide to the organization as a whole,” says Patrick Anderson, director of technology, strategy, and architecture at global consulting firm Protiviti.

If you don’t already have this transparency and clarity, now is the time to invest in creating it, as doing so will enable you to make intelligent moves to free up costs or support additional investments.

Knowing how each aspect of the IT infrastructure supports the business is also critical. “In most organizations, this information is tribal knowledge and is not easy to access or action,” Anderson says.

Going cloud native

Boomi recently made the transition to a cloud-centric stack with investments in cloud-native applications and data integration tools. “We no longer rely on legacy solutions that require large teams and budgets or lots of manual work to implement changes or new integrations,” says Boomi CIO Neil Kole. “Our transformation initiative has resulted in high employee satisfaction scores, lower IT cost as a percentage of revenue, and faster ROI on our investments.”

Getting real with FinOps

CIOs looking to optimize their cloud costs can invest in FinOps to more accurately manage IT asset costs. FinOps is a business management discipline with accompanying analytics software designed to calculate cloud costs to help organizations better plan, budget, and forecast cloud consumption and spend. “This provides the transparency to better align your cloud spend with the business value being delivered and eliminate potential waste or misalignment,” says Protiviti’s Anderson.

Doubling down on agile

If you haven’t already invested in agile approaches, skills, and processes, let this downturn push you toward that change. “Creating an agile toolset can’t happen overnight,” says Kole of Boomi. “If your business hopes to stay resilient through a potential recession, now is the time to begin making that transformation.” 

Embracing agile will enable IT to increase the frequency of business check-ins creating greater alignment with business priorities and direction. “It should be a requirement that an agile methodology is used to ensure effectiveness in a shifting environment,” says Eugene Kuerner, CTO at expense management software provider Center. “Increasing the frequency and depth of agile methodology during challenging times underlines connecting and executing to rapidly shifting business challenges.”

Collaborating and getting clarity

“The smartest step an organization can take is viewing it as an opportunity to embrace the downturn wave, and intentionally emerge from the recession stronger,” says Stanley Huang, co-founder and CTO at Moxo. “Organizations should take a step back and outline an overview of their organization’s current business situation — identifying cash-flow trends, and cost structure layout in as much detail as possible.”

Working closely with the executive team to map out that overview enables IT leaders to focus not just on blindly cutting costs but shifting spending. “Without a clarified company overview strategy, IT managers are more inclined to make ad-hoc decisions, whereas they should be spending the time on aligning IT goals with the overall business goals,” Huang says.

Upping the analytics ante

Want to make your finance organization happy? One of the better investments IT organizations can make now is in advanced business analytics and intelligence, giving the organization better tools to understand their own spend.

“Investing in more analytical capabilities, smarter reporting tools, and greater transparency around what’s being spent and why will enable smart CFOs to make better decisions,” says Pastore of the Hackett Group.

Accelerating efficiency plays

Getting ahead of the potential economic fallout is beneficial, and CIOs should push for and protect those projects that will increase efficiency and productivity. “Accelerating initiatives that would otherwise be at risk should be seriously considered,” says Erik Bailey, CIO at IP software and services company Anaqua. “Any initiative implemented now that reduces cost or increases efficiency will result in a better overall position if a downturn does impact the organization.”

The Hackett Group found that the highest performing 10% of IT functions automate 2.1 times more business processes than their peers. As a result, they achieve a 47% greater reduction in the cost to run and manage technology. Some functions ripe for greater automation ahead of recession include HR, finance, and IT itself.

“Any IT leaders concerned about a possible financial fallout due to recession should focus on implementing automation and low-code technologies to enable citizen developers and integrators within their organizations in order to free up their IT team members’ time for more impactful work,” says Boomi’s Kole.

Pursuing promising new technologies

Now is not the time to go into heads-down, defensive mode. CIOs and their teams should keep their eyes out for opportunities to invest in emerging technologies. “Pay close attention to emerging technologies,” advises Huang of Moxo, “keeping a pulse on technologies that can benefit your organization from an internal and external perspective.”

Reallocating operating savings

In a recession, IT’s operating costs may naturally go down. Smart CIOs will divert some of those idle operating costs to new initiatives rather than losing that money to another part of the business or banking it. “Divert that into infrastructure efficiency projects to accelerate existing projects,” says Pastore.

Budgeting, IT Leadership, IT Strategy