Convergys’ Acquisition of Intervoice Brings a New and Unique Wrinkle to the Contact Center Market

| Jul 18, 2008 | Contact Center Solutions | Competitive Intelligence Report

| Analyst: Michael Barbagallo

Current Perspective: Very Positive
Vendor Importance: High
Market Impact: High

Event Summary

July 16, 2008 -- Convergys Corporation will acquire Intervoice and use its enterprise and mobile applications to offer a comprehensive array of automated and live agent services. Intervoice's large customer base and global channel provide Convergys with a number of cross-selling opportunities. Convergys agreed to pay $335 million in cash and will commence a tender offer for shares Intervoice common stock no later than August 1, 2008. The deal is expected to be final in the beginning of 2009.

Analytical Summary

• Current Perspective: Very positive on Convergys’ acquisition of Intervoice because the acquisition opens significant opportunities for Convergys. The acquisition provides Convergys with a set of complementary solutions that will allow it to offer a more complete business processing management portfolio to its customers. Intervoice’s industry leading Voice Processor and Advanced Notification Gateway (ANG) will strengthen Convergys’ self-service solution. Finally, the acquisition provides possible additional penetration into the carrier space as well as access to Intervoice’s customer base for cross-sell opportunities.

• Vendor Importance: High to Convergys because the acquisition of Intervoice spans a gap in Convergys’ portfolio. Specifically, it provides a full-featured contact center solution. The acquisition also adds a differentiator into Convergys’ portfolio. While other business processing outsourcers offer on-demand services, Convergys is the only major business process optimization (BPO) company that can offer on-premise solutions. Furthermore, Convergys is the only contact center solutions provider that can offer a complete solution that includes technology and a large number of agents. Convergys acquired one of the premier voice portals, enabling it to offer more functions and feature than it can currently. Finally, Convergys’ and Intervoice’s customer base have little overlap, providing the company significant cross-sell opportunities.

• Market Impact: High on the contact center solutions market because the acquisition brings a new and unique element into the market. Unlike other consolidations in the contact center space where one solutions provider acquires another for a missing technical element or for customer base, this acquisition combines the two elements of contact centers, technology and filled contact center seats. Few other players in the market can offer business process management solutions, customer interaction technology, and human resources. The acquisition opens the door for other business processing outsourcers, such as Amdocs, Sitel, and ICT Group, to enter the market with their own acquisitions.

Recommended Competitor Actions

• All contact center vendors should characterize Convergys as without a contact center focus. To counter moves by Convergys to paint an optimistic picture of the Intervoice acquisition, rival contact center solutions vendors should suggest that Convergys has little experience with solutions development, integration or plans to advance the technology it has acquired. As such, prospective customers would do well to align with more focused developers.

• Avaya, Genesys, and Nortel should strengthen and expand their voice portal/IVR relationships with their carrier partners and customers. The acquisition of Intervoice by Convergys provides the company with a more feature- rich and powerful IVR and voice processor, allowing it to be more competitive in the carrier space, which Convergys has announced it will be targeting.

• Contact center solutions vendors, both on-premise (Avaya, Nortel, Cisco, Alcatel-Lucent/Genesys, Aastra, and Siemens Enterprise Communications) and hosted service providers (Aastra, XO Communications, Verizon Business, and BT) should investigate strategic alliances and partnerships with BPO enterprises (such as Amdocs, SR Teleperformance, Comverse, and Sitel) and/or strengthen existing partnerships with BPO enterprises if they exist. Partnerships between BPO companies and contact center solution developers should provide similar benefits to both parties as Convergys is gaining from its acquisition of Intervoice, without significant financial output.

• Intervoice’s rivals offering similar business enablement processes (such as Aspect Software, Nortel, Siemens Enterprise Communications, Avaya, and Cisco) should position Convergys’ entry into the contact center solutions market as a first step out of many required to fully engage customers. Over the next several months, the company will be working out the kinks in selling, fielding, and supporting solutions based upon its acquisition. This will require changes within the company’s sales and professional services departments, and it will undoubtedly entail further technological changes in support of broader interoperability and basic solution capabilities.

Recommended End User / Customer Actions

• Existing Intervoice customers should press Convergys to ensure that their expectations continue to be addressed as the contact center suite evolves under the new company banner. Current Intervoice customers will want to make sure their contract language guarantees service levels and penalties for failure to meet any service requirements. Customers should press for new features and functionality that best suits their needs and, more importantly, their customers’ needs.

• Enterprises on both sides of the merger will find this deal beneficial to them, as Intervoice and Convergys clients stand to gain added resources and services from a single source vendor.

• Prospective clients will want to tread lightly as the company works to merge the two enterprises. Clients may want to wait until the dust settles, and the transitions are clearly finalized to evaluate key applications. However, once the acquisition has solidified, enterprises looking to improve business process coordination should investigate Convergys and its solutions.

CLIENTS ONLY

Current Perspective

Competitive Positives and Concerns

Recommended Competitor Actions

| Client access - Full report in Contact Center Solutions | More information

Top