Industry executives and experts share their predictions for 2023. Read them in this 15th annual VMblog.com series exclusive.
How will the CPaaS space evolve in 2023 to meet rising customer expectations?
The
last few years have seen big changes in customer experience. Due to the rise in
consumer demands and the proliferation of channels, many organizations have
turned to CPaaS solutions to help manage their customer interactions. But what
comes next? This blog explores five CPaaS predictions for 2023.
Despite a
broad cooling of the technology market
over the tail end of 2022,
consumer appetites for superior experiences with brands have only increased and
enterprise spending to meet those needs continues to be
robust. And that means tools that can help facilitate better experiences and
communications while optimizing costs, like Communications
Platform-as-a-Service (CPaaS) solutions, will only become more important.
In
fact, analysts are predicting that the CPaaS industry
will generate more than $34B by 2026, and CPaaS solutions will be used by 95%
of global businesses by 2025. Metrigy's advanced research study of 400
organizations globally, shows CPaaS adoption at nearly 60% today, with another 25.5% planning for 2023 and beyond.
Beth
Schultz, VP of research and principal analyst, Metrigy, recently spoke about
what we can expect going forward: "CPaaS has become the underpinning of
customer experience transformation, across companies of all sizes, vertical
industries, and geographies. CPaaS brings much-needed agility, and enterprise
expectations will only grow over time."
In
the coming year alone, new trends, technologies, and channels will transform
the way brands and customers interact-and spur even greater growth for CPaaS
platforms.
In
this blog, we'll explore our five predictions for how CPaaS will evolve
throughout 2023.
1. Customer
journeys move beyond SMS
SMS
remains a key player in the mobile messaging space. With 5B people (approximately 65% of the global
population) sending and receiving text messages, SMS isn't going anywhere.
The
consumer use of more advanced digital messaging channels has been around for
some time now, but many are now gaining popularity within businesses as organizations
identify use cases that utilize the potential of richer messaging features and
experiences. These rich messaging platforms will be indispensable for brands
looking for ways to transform their customer interactions through more advanced
communication features.
For
instance, brands already use SMS for both one-directional application-to-person
(A2P) use cases such as security notifications, and bi-directional cases such as
delivery confirmations or recruiting. But as rich messaging platforms like
WhatsApp and Google's Business Messages allow for more complex automation,
there are huge opportunities for those who can shift messaging over to
platforms that enable smarter, richer interactions with features like company branding,
lists, and carousels to provide an interactive, app-like experience.
2. IT becomes democratized, and low-/no-code
thrives
This
year, 71% of CEOs anticipated that skills shortages would
be the biggest disruptor to business-and it's easy to see this disruption
continuing into 2023 and beyond. The digital skills gap is just one part of
this disruption, but it's a significant one that could cost businesses trillions of
dollars by the end of
the decade.
This
skills gap will heavily affect many parts of a business, for example organizations
won't have the developers they need to deliver complex, digitally reliant
customer journeys and experiences. To mitigate the negative impacts on CX, many
enterprises are turning to low-code solutions to help non-IT teams develop
their own customer journeys. According to Metrigy 55.2% of all companies are
using low-code solutions, compared to 37.1% using full-code and a further 27.9%
using no-code software. Customer support, at 56.9%, is the functional group
most using a low-code platform, followed by IT/communications managers (54.5%).
While
many traditional CPaaS solutions still rely on organizations leaning on their
technical teams to build and maintain customer journeys, we expect to see more
CPaaS providers expand their visual flow builder functionality, and other capabilities
that help democratize IT. And we expect to see more enterprises taking
advantage of these features to improve innovation, lower development costs and
speed up time to market.
3. CPaaS capabilities evolve
To
meet the changing needs of businesses-and the customers they serve-CPaaS capabilities
are evolving to support new use cases.
Naturally,
part of this is supporting the continued shift from SMS to richer messaging
channels. RCS in particular has been around for a while, but we believe it will
become even more important for businesses in the coming years as it enables a
branded, visual experience that has proven to deliver direct business and
financial benefit. Juniper Research are predicting there will be 3.8B RCS
users by 2026 (that means approximately 40% of all global mobile subscribers
will be on RCS).
Rich
channels like RCS and OTT messaging apps also support features like carousel
menus, images and video support. CPaaS providers will continue to support these
features to enable automated and self-serve use cases over these rich channels.
These
automation features will be of particular importance for brands looking to
deliver proactive service to customers, without adding extra costs. By
automating the most common service requests, processes, and questions customers
have, organizations can save valuable person-hours, without compromising the
customer experience.
But
some of the most significant wins will be in how CPaaS solutions enable combined
digital and human interactions across channels, rather than disparate
interactions with different chatbots and agents broken up across customer
journeys. A big part of this will come from integrated capability that will
help consolidate the number of engagement platforms brands use, so there's less
chance of important context being lost across customer journeys.
Similarly,
we'll see a continued shift from one-way to two-way, proactive communications.
While this is already happening, it will reach a new level over the course of
2023 as consumers continue to look to use digital channels as their preferred method
of communication. CPaaS will lead the way in helping businesses achieve this,
and the improved operational efficiency and CX this type of communication
creates.
4. APIs and pre-built integrations expand
As
all these new approaches to customer communications become commonplace, CPaaS
providers need to focus on how organizations can make the most of data held in
existing back-end systems to deliver relevant and personalized communications.
That means a priority will be helping businesses leverage their capabilities by
integrating with third-party applications. This will happen across both horizontal
and vertical use cases. And it will include CPaaS platforms powering digital
channel enablement for other solutions such as Contact Center-as-a-Service
platforms.
CPaaS
solutions will need to offer robust APIs to support these new integrations.
With 29.8% of companies planning to
drastically increase their usage of APIs to power new customer experiences, CPaaS providers will
inevitably focus on expanding the functionality and usability of their APIs to
capture this market.
However,
to support teams without extensive developer resources, many providers will
also focus on offering simple pre-built integrations that can quickly and
simply be included into customer journey workflows.
So,
whether your organization has the capacity to work with APIs or not, you should
be able to bring services together to help automate processes, reduce costs,
and improve CX throughout 2023.
5. Security becomes an even more pressing
concern
In
2021, over 22B records were exposed by cybersecurity attacks. And that
number is only rising. Security is a major concern for organizations, and so CPaaS
providers will develop even more robust security capabilities to reassure their
customers. Robust, personalized, conversational interactions almost always
require integration to other systems within the enterprise, so security will
remain an area of focus moving forward.
"As
enterprises expand and elevate their use of CPaaS, especially to deepen
customer engagement, security has become the number one challenge for many.
Particularly worrisome to enterprises are securing and assessing
vulnerabilities of applications created using low- or no-code platforms." Beth
Schultz, VP of research and principal analyst, Metrigy
CPaaS
providers will expand on their platform's in-built features to ensure
organizations remain secure, including adherence to common security standards and
compliance with data privacy and protection regulations. Leading providers will
also offer capabilities to manage consumer preferences to further protect data.
As
brands remain focused on trying to protect their customers from fraud,
phishing, and other common scams, CPaaS providers will also continue to develop
tools that help brands better understand customer behaviors. This, combined
with channels that support verification features, will ensure brands and
customers can verify each other's accounts are legitimate during an
interaction.
Ride
the wave of CPaaS growth with the right platform
From
new channels to tighter security and integration features, the CPaaS market is
set to go from strength to strength in 2023-and beyond. But to make the most of
this growth, enterprises will want to partner with a CPaaS provider that offers
a best-in-class, future-proof platform that supports the latest channels and features.
If
you're looking for a partner and platform that can offer everything you need to
ride the wave of CPaaS success, Cisco and Webex Connect can help.
Learn
more about Webex Connect, and how it can help you manage all your customer
interactions at scale through a single, centralized platform here.
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ABOUT THE AUTHOR
Jay Patel, Vice President & General Manager, Webex CPaaS Solutions
Jay is the VP & GM of Cisco's Webex CPaaS business and joined Cisco when imimobile was acquired in 2021. He helped start IMImobile PLC and as CEO led it to a successful IPO in 2014 and then to its acquisition by Cisco. Today he is working on combining the IMI cloud communication platforms with relevant technologies from Webex to create solutions that help clients deliver the world's best customer experiences.
Jay enjoys working with entrepreneurs and fast growth technology businesses and has served as both an executive and non-executive director on the Boards of private and public companies and has led several investment and exits.
Prior to IMImobile Jay co-founded Spark Ventures plc (an early stage venture capital firm) and held corporate finance roles at UBS Warburg and BSkyB. He qualified as a Chartered Accountant with KPMG and has an MBA from INSEAD and an Economics degree from LSE. Jay is passionate about technology, economics and social justice.