Concentrix’s investors, SYNNEX, were clearly so impressed with IBM’s performance to reach the Winner’s Circle for customer experience management, they wanted a piece of the action for themselves.
So what does this mean – wasn’t IBM such a stalwart call center BPO provider? And wasn’t Concentrix a small player?
In short, IBM is exiting the customer services call center arena, which began with its purchase of Daksh in 2004. It will focus on its core business of providing the enabling technology services and tools for customer experience management. Concentrix increases its footprint massively and becomes one of the significant providers in the customer experience management industry. The big question, now, is whether Concentix can maintain IBM’s vaunted position in the Winner’s Circle for customer experience management services.
IBM has stated that it wishes to focus on its higher-value BPO businesses, namely finance and accounting, supply chain management, procurement, HR, and mortgage services, with specific focus on its analytics and Smarter Workforce initiatives. During the analyst call, IBM has stated it wants to move more into cloud-based service provision, where it is steadily spending its way through its $20 billion war-chest.
HfS sees Concentrix quickly becoming the new “IBM of contact center services”. This deal represents a significant play for Concentrix, increasing its footprint from 5,000 to 45,000 in one full swoop. Concentrix has strong customer lifecycle management capabilities, and, combined with IBM’s enterprise CEM clients, experienced delivery organization and leadership, strong account management team and technology integration capabilities, Concentrix will be a significant company to watch in all things customer care.
The Bottom-line: The end of an era for IBM and the dawn of a new one for Concentrix
So many of the leading BPOs started off in the call center business, before evolving their offerings across the back office into HR, finance, supply chain and industry specific areas. IBM was no exception, making a concerted play with Daksh nine years ago. But – today – the firm’s leadership clearly sees limited value (and profit margin) continuing to grow its footprints in CEM, despite an encouraging series of client wins and high-end customer marketing focus in recent years. IBM wants to focus elsewhere… especially with its dedication to the cloud.
Our question, simply, is where IBM’s focus will be in another couple of years. Call center alone is completely commodotized, and it’s understandable why IBM decided it was time to exit, while retaining its technology enablement opportunities. Will the same happen eventually with finance or HR? Will IBM tire of processing paychecks and invoices, like it has done with taking customer service calls? With significant client investments, such as Cemex (F&A) and Kraft (HR), it doesn’t appear that the firm will do a 180 anytime soon, but with this decision to exit CEM, it does raise doubts as to the company’s long term focus outside of technology services and software.