Talking Tech Trends: Security and Customer Experience
Welcome to a special edition of the Upstack podcast. Over the next few episodes, we're taking a deep dive into Upstack's 2024 technology trends report. For those unfamiliar, the Trends Report is our forecast for the digital infrastructure landscape over the next twelve months and beyond, informed by the insights and experience of our leading technology experts. To read the report, visit our website, upstack.com, or see the link in our show notes. We hope you enjoy the episodes.
Speaker 1:Greg, I cannot wait to dig into this topic. Well, I'm excited to dig into any topic we cover on the Upstack podcast, but this one is near and dear to maybe the most near and dear to our heart to date, given what's guiding this conversation is something that we worked with our colleagues to create and and frankly share with the world. It's it's the 2024 Upstack Technology Trends Report. I know I know you've read it cover to cover, and you also contributed to it. Let let's dig into why not start with the top trend, which is in the news seemingly every day, not only within our industry, but the world at large, and that's cybersecurity or security as identified in the tech trends report.
Speaker 1:And joining us today, it's a it's a very hot highly relevant if you're not thinking of focused on and certainly worrying about, but we don't wanna instill worry on the podcast, your security posture. And if it's defensive or maybe open to threats, You certainly should be, but, thankfully, there's people who can can help provide deeper understanding and also help you change that posture if it needs changing, and it very well might. So without further ado, let let's welcome in a a good friend and colleague of ours, the one, the only Frank Fredojian. Frank, there he is. Frank, welcome to the Upstack podcast.
Speaker 2:Glad to be here. Thank you so much for the invitation. You're not going
Speaker 1:to drop your line. A dutiful listener of the podcast.
Speaker 2:Longtime listener, first time caller.
Speaker 1:Thank you. There it is. There it is.
Speaker 3:Frank. We're honored, Frank. We're honored. Actually more honored that security is the topic. We've talked about it previously on the show, and, it's in a light capacity.
Speaker 3:So we're happy to really just dig in deeper with you today.
Speaker 1:Yeah. We we we had there's some great a great episode on cybersecurity, but there's certainly more to unpack. We're gonna get into some of those more detailed trends within cybersecurity more broadly. But, Frank, you're you're one of our partner and managing directors at Upstack, an industry veteran, over twenty years of experience. I I hate I don't wanna date our guests, with a range a range of, expertise.
Speaker 1:And one of your greatest areas of expertise, of course, is security. So when we were looking for fresh perspective on this very hot topic, of course, you came to mind. You graciously agreed, and here we are. Let's talk security, everybody. So tops on the list if we're if we're looking at the tech trends report.
Speaker 1:The top trend identified by our leading technology experts, that's a group of over 40 industry veterans who are part of the Upstack team. And keep in mind that as part of the tech trends report, this is based off of survey results. So we polled our team members, and they provided the insights that guided the report that hopefully everyone's now enjoying today. The leading trend within cybersecurity is the idea of expanding edge is increasing surface area of attack. So I'm gonna interpret this to mean, without reading the report verbatim, that additional vectors are being opened up.
Speaker 1:We're expanding the reach of our infrastructure. There's new endpoints that are providing great value to companies and helping companies deliver optimal experiences to customers and do their business more efficiently. But with that comes potential areas for threat. I liken it to every time I add a new smart home device to my network, which is a COVID holdover. It's my obsession.
Speaker 1:I need to make sure it's it's secure. But, Frank, if we start there, this idea of the edge, also a very popular topic, and how it relates to cybersecurity, what are your thoughts on that as a new threat vector, one to be addressed through an improved security posture?
Speaker 2:It's a very interesting area because we're all using a variety of outsource or cloud based solutions nowadays. And every one of those is, as you mentioned, a threat vector for us. And not only do we have to now protect our physical infrastructure, we also have to now protect our virtual infrastructure, which some folks make an assumption that the providers are going to protect us, but we really have to take that upon ourselves to make sure that those areas are well protected within our own scopes. So
Speaker 3:that's actually a really good point. So the client should be putting in as much effort as the provider to really understand what this means to their organization. So with such a lack of what we call expertise, right, within the CISO community, I mean, seems to me as though the larger organizations, Fortune 500 plus, are the ones that can afford and keep working a formal CISO, right? So if you lack the experience on your internal teams, how do you go about doing that?
Speaker 2:You know, it's a great question, Greg. And there are a number of great providers out there that we can get fractional, maybe a quarter of a time, half the time. So we don't have to make that heavy investment in those resources. We can essentially take a fraction of their time to make sure that our cybersecurity posture is to a point that we as an enterprise feel very comfortable with the direction that we're heading. So just because we can't afford one full time, we can certainly, there are a number of great options that, we can get on a fractional, or timeshare basis, right?
Speaker 2:Even our virtual, chief information security officers are now can be leveraged as a timeshare type of product.
Speaker 1:So the resources of no matter the size of your organization, this resource, this capability is available, which should be offer some assurance to customers no matter the size of of your organization.
Speaker 3:Do you feel that when you do look for a fractional person, that person should be relevant to your vertical? Like if you're a financial company, is it important to get somebody out of that community or is anybody capable of kind of satisfying? Or does it get really that specific within the security industry?
Speaker 2:Great question, Greg. We want to take the time to understand our customers vertical, what the requirements are. Applications are somewhat different. The threat vectors are somewhat different. So we always look for that virtual or partial CISOs, but have that expertise in those verticals.
Speaker 2:I think it's important if you're at a financial institution that you're the part time resource that we're getting or full time whatever, they have those expertise in understanding the uniqueness of the financial industry versus a group that is a software development. So there are some specific, although at a high level, the understandings are similar, but there's also some uniqueness in each vertical, right? So that we wanna make sure that as we work with our customers, that we understand their vertical and provide the right solution, right? Provide the right fit to make sure that they're fully protected.
Speaker 1:You mentioned threat vectors, Frank. I think that's one of the common terms, or dare I say buzzwords within security. Posture is another. Defensive, maintain a defensive posture. Some companies prefer to main an offensive posture, being more proactive and making sure these threats are neutralized before they even reach their front gates.
Speaker 1:In our conversations leading up to today's episode, you talked about offense versus defense and how that might be changed in light of new technologies that have entered the market with force in the last twelve months. AI would be the one that comes to mind. And you had some really interesting thoughts on that.
Speaker 2:The last twelve months in the cybersecurity space has been really interesting where both the threat actors and our security posters are using a combination of AI and machine learning, not only for protection, but also for attacks. So it's become very interesting that both sides of eye for lack of a better word are leveraging those technologies, not only to defend, but also to attack. So finding, and being able for an AI on a defense to be able to outmaneuver an attack vector has become a really an interesting challenge. And it's developed significantly, especially in the last twelve months. And it's intriguing that, we're trying to be a couple of steps ahead of the attackers all the time.
Speaker 2:That's our goal is be a couple of steps ahead of them Because they're very creative. I mean, they are, the creativity that we're seeing from various threat actors is extremely interesting.
Speaker 1:In AI, and certainly machine learning is able to analyze the behaviors, identify trends, and that's where it could be neutralized in advance. Are you seeing those cybersecurity providers on the supply side featuring AI more and more in their own technology stacks and what they're offering technology leaders?
Speaker 2:Yeah, absolutely. I mean, this is even to a point that a number of providers, as we see various threats coming in, their AI engines can provide us guidance as to what needs to be done in order to isolate and eliminate those threats. While before we had to somewhat rely on, an individual guidance or somewhat of a little bit of a clunkier methodology as to what we need to do to isolate things, here we can get to that attack significantly quicker, which in our space, in our industry, is really time is of the essence. If I can minimize that attack, if I can isolate that attack, before it does more damage, the better it is. So that quickness of response has been one of the greatest attributes of machine learning and AI.
Speaker 2:We can quickly isolate things. We can quickly identify what we need to do to get on with it and get that threat neutralized.
Speaker 3:I'd like to shift gears a little bit if everyone's okay with it to vendor management within this area, right? I think this is an important topic because it seems that most companies get overwhelmed when thinking about cybersecurity and what this means to their organizations. It's obviously an important one, probably the most important one. So if you think about it, a knee jerk reaction for most organizations is to try to use a single vendor for everything. And most vendors won't turn down the revenue.
Speaker 3:They'll say they can even do if they have somebody on staff that's done it for four hours. And when it comes to cybersecurity, you know, obviously the golden rule is to try to use a pure play based on each major segment, whether it's honeypot or network monitoring, etcetera. So what kind of advice could you give to some of the businesses out there when considering vendor selection? You don't wanna go to your general practitioner for a cardiac issue. You wanna go to a cardiologist.
Speaker 3:How do you advise your clients on this type of topic?
Speaker 2:Our role, Greg, and you know what mean? This is where peers in our industry, our goal, our job is to essentially mute that noise for a few minutes because there's a lot of noise coming from, I'm the best, know, the other people are not in it. Our job is to essentially mute that noise for a few minutes. Let's get an understanding of what are we trying to accomplish together and let's go find best of breed. And there's a lot of great organizations that we can leverage, organizations such as CATO where we can start from the outside coming in and then from the inside coming out.
Speaker 2:So there's a lot of great ways for us to do that. But I think if we can just mute the noise for just a little bit of time so that we can just talk through the business challenges, talk through what our objectives are independent of what all of these providers are trying to do, then we have accomplished our task is making sure that we are, like you mentioned, Greg, if we're trying to do this, there are a number of best of breeds. Others may be good at it, but they're not best of breed. So let us put together a holistic, but again, we have to look at this as a holistic approach rather than just throwing tools at it, right? Look at it holistically, identify the gaps and let's bring in best of breed because I think there's a lot of great organizations out there that can help us with that.
Speaker 2:But we got to mute the noise because there's every time you turn around, somebody else is trying to say that they're, the best thing since sliced bread.
Speaker 1:I say that about myself from time
Speaker 2:to time, but
Speaker 3:it's true.
Speaker 2:You are, Alex. Usually,
Speaker 1:usually I get shouted down by pretty much everybody. So Frank, if we're thinking of the technology stack, you want to take a step back, survey your stack, and figure out what are the optimal solutions to secure that stack. There may be overlays. There may be, Greg, kind of what you're touching on is offerings from the vendor or the provider that go alongside or are part of their technology. But just don't take it.
Speaker 1:You see the bigger picture and figure out, as we've learned in a previous episode, a lock is better than no lock. A good lock is better than good locks everywhere are better than a great lock in a few places. But it is about, not hysteria, but take a deep breath. Right. Work with a trusted third party if you need to, and let's get a clear sense of what we're trying to accomplish.
Speaker 1:Frank, some will say it's not a matter of if you're breached, it's when. And that touch what you were just discussing, you know, it's containing. When there is a breach, when that threat makes it through the outer gates, how can you how quickly can you contain it, neutralize it, and move on with your your regular business? What can a technology leader do if when that breach happens? Is it on you, the principal there, the holder of the P and L to manage that?
Speaker 1:Are there other resources they can call upon?
Speaker 2:And you're spot on Alex. It's not a matter of if, it's a matter of when. So there's a few things that we do throughout our process. And one of them is let's gather all of the key stakeholders from the legal department to marketing, to the executive leadership, to, you know, all of these key stakeholders need to be what we call a tabletop exercise. Let's have a set of practice, let's practice what will happen when we get breached.
Speaker 2:Just like any athlete goes through a rigorous ongoing training before the game day, we need to do that ourselves as well. So in the event that this happens, what is the marketing message? What does legal need to do? What does IT need to do? Because again, our reputations are at risk.
Speaker 2:There's a significant, you know, the posture that companies take needs to be prepared. Will we pay the ransom? Will we not pay the ransom? As we saw not too long ago, one of the great casinos decided not to pay the ransom and it cost them over a $100,000,000 Another casino decided to pay the ransom. It only cost them 15,000,000.
Speaker 2:So we need to be prepared. We need to have those run books. We need to do those tabletop exercises. So when that happens, everybody knows what to do. And to add to that, we need to make sure we've got a great hostage negotiating team on hand to be able to help us navigate getting our data back.
Speaker 1:Hostage negotiator. So bringing in, don't know if Morgan people Freeman, Simeon Olaje, bringing someone in to actually engage with the threat, with the other party who's breached your systems or has control of your proprietary data, whatever it may be. You mentioned the recent cyber attacks in Vegas, those Shameless two major plug, you actually have a blog on upstack.com just about this topic. What was really interesting about that, it certainly gives you pause, it's a great example of cybersecurity certainly entering the mainstream. It may most surprising may not have been the losses those casinos incurred based on that breach.
Speaker 1:It may not have been how each of the casinos, the different approaches they took to neutralizing the threat, one engaging, one choosing to go analog even. The most surprising piece of this story is what those bad actors used to gain access to the systems. Some would call it smishing. I think phishing was involved. So SMS texting, emailing emailing employees, people with access to these systems, requesting password resets to get credentials.
Speaker 1:Talk about threat vectors, we value our colleagues, our employees. They're critical to running businesses, but we are all a vector. We need to make sure we stay buttoned up. This actually is right in line with what we saw in the Trends Report in terms of social and or behavioral engineering. It's leveraging people to gain access when systems put up pretty strong defenses for the reasons we just talked about.
Speaker 1:Frank, thoughts on the evolution of social or behavioral engineering?
Speaker 2:People in general are very trusting. We have a very trusting nature, which I think is great. This is one of the great human attributes is that we trust. Unfortunately, in this day and age, we really can't afford to be that trusting anymore. We may get an email from our CEO saying, Hey, I need you to do this.
Speaker 2:Those threat actors have become very creative. They have done their homework. They know the organization. Because they've been in, you know, they do their research unlike in the past where they would just send some kind of a email with lots of typos and you could easily identify, they've gotten very creative. So they may send you an email from the CEO, Hey, I need you to do this.
Speaker 2:My password is broken. Can you reset that? Just a general awareness that we no longer have that luxury to be so trusting. And that is also a change in our behavior, right? It is a change that we need to accommodate for to make sure that we no longer have, somewhat we've lost our innocence, but at the same time, unfortunately that is the nature of cyber threats these days that it takes a village.
Speaker 2:We all have to do our part in order to make sure that we have a good cyber hygiene and not be so trustworthy that, hey, just because the email comes from IT or Frank calls from IT wants to reset your password or get access to your computer, let's slow down. Let's make sure Frank actually is who Frank says it is and verify things because Frank is a shady person.
Speaker 1:That was a gem of a comment. We'll dial it back. You don't have to assume ill intent when it comes to every aspect of your life, but you would be wise to pause, trust, but verify. And we talked about AI and ML machine learning being applied in the space of bad actors as it relates to cybersecurity, and that's being leveraged to draft very compelling emails from CEOs that have a lot of urgency in terms of tone and make people take action. Education is probably the best step an organization can take.
Speaker 1:Make them aware of these types of threats. Understand that we all have a duty to each other, our company, and others related to the business to be on guard, not scared, be on guard. That goes back to this idea of posture. I like cautiously. That's the vibe of the Upstack podcast.
Speaker 2:It's only
Speaker 1:fitting. But also creating systems and an approach. You mentioned tabletop exercises, Frank. Pen testing, penetration testing. Password changes, training for the wider organization, vulnerability assessments, all things rapidly maturing and mature organizations do to make sure their defensive defenses remain stout.
Speaker 1:So certainly words to live by. Frank, any parting thoughts when it comes to cybersecurity, its top ranking in the Upstack Tech Trends report or otherwise?
Speaker 2:I am going to do a shameless plug. We here at Upstack are here to help. We deal with this day in and day out. My peer, my esteemed peer, Greg Moss and I, and a number of our others, we're here to help. You don't have to do this alone.
Speaker 2:We're here to help you.
Speaker 1:Maybe not for hostage negotiation. We'll cut that, not real life hostage. Yes, we are, this is something in terms of finger on the pulse, is expressed in, that's one of the purposes behind the Tech Trends Report is democratizing this knowledge and helping make people aware, but there's also trusted partners you can work with to to talk through these scenarios and figure out where your vulnerabilities may lie or how you might be able to change your your stance or your your greater security posture. Frank, I I think we're gonna have to have you back. Much, much more to cover here.
Speaker 1:Bring
Speaker 3:them back, bring them back.
Speaker 1:Bring them back.
Speaker 2:We're at your disposal gentlemen. More than happy. You know, I won't be able to use my opening line of longtime listener, first time callers. I should just say, you know, I'll come up with a new line then.
Speaker 3:You're a superhero. Security is in the sports sector, man. We should have you in a cape next time.
Speaker 1:Bring a cape. Truly, all kidding aside, as we've established, cybersecurity has a role in every single aspect of the technology stack. We know our advisory partners, our technology experts, it's part of the conversation. If it isn't, it should be. Frank, you're a gem.
Speaker 1:Thank you so much for joining us.
Speaker 2:Thank you for your time, gentlemen.
Speaker 1:Greg, we got to keep going with this tech trends report. I feel like every conversation we have, we are scratching the surface, which is kind of the point. We don't want to reveal all the spicy details, we encourage everyone to check it out on upstack.com. But touching on topics like cybersecurity, and as part of that, inevitably AI comes up, but not the hype cycle. Maybe the hype cycle's over.
Speaker 1:Maybe AI, the applicability is broad enough. We can retire the hype cycle. When we look at the Trends Report there, Greg, certainly security ranked first, maybe not surprisingly. I have to say, I I also was not surprised at what came in a very, very close second on on the report, according to our our technology experts. Go ahead.
Speaker 3:CX? CX,
Speaker 1:known as customer experience, which for some, they might be familiar with technologies but not realize it's now part of this greater customer experience ecosystem, something where we've seen many of our customers, many of our clients benefit from tremendously and truly transforming the way their businesses operate and most importantly engage with their end customers. So as we always know, we could try, but we can't carry on this conversation ourselves. So not only do we have a guest, we have two guests today. Bring in our own Ed Degenhardt, Upstack managing director, who brings with him over twenty years of industry experience helping customers solve those very tough problems, leveraging technology and more and more leveraging customer experience solutions to solve those challenges those businesses face. Then we're also very excited to welcome one of our old friends, Andrew Preifogle, the legend himself, founder and CEO of CX Effect.
Speaker 1:CX Effect, for those who aren't aware, an outshooter that prepares companies for transformative customer experience, and that is talk about tip of the iceberg. This is going to be an awesome conversation. Andrew, many of you may know, be familiar with you from your time at the TSD Intelisys. I know you headed up the Cloud Solutions organization over there. But thank you so much for being with us, both of you.
Speaker 4:Good to be here. Thank you. Thanks for
Speaker 1:having us. Thank you. We could talk about a range of topics, but when you have Andrew Preifogle and Ed Dagenhart on, we got to start with CX, and the people want to hear. We touch on a number of areas within CX in the trends report. Automation was first.
Speaker 1:And that's I I I again, I can't say I'm surprised. And Andrew and all of our conversations and and what we've been working together, the solutions we've been working together to deliver to our customers, automation is playing more and more of a role, maybe for some organizations that don't realize the value it can provide.
Speaker 4:Yeah. Yeah. Yeah. No doubt. I I would I'd say to Alex, probably a really important question is to ask ourselves why automation came to the eye.
Speaker 4:Right? Why automation? What's driving what's driving the interest around that? And it's not it's not just because it's a it's the latest whiz bang technology that gets people excited, the shiny thing that you know, it's nice to have. I really believe and I'm hearing this from customers all over the country right now that automation is becoming a strategic imperative for them to solve the fundamental issue, which is a labor problem.
Speaker 4:And, you know, for for years, as as brands build out their their kind of their customer experience strategy, As they grew the company, they would exponentially grow their people in the contact center and salespeople and support people to meet that growing demand. And there's been a few developments that have happened over the past number of years, really accelerated by COVID, of course, which is it's become increasingly difficult to hire those people. I can't find them. I can't hire them. If I do hire them, I can't retain them.
Speaker 4:Churn rates are incredibly high in most companies right now. It's not uncommon that we deal with customers that have fifty, sixty, 70% annual churn rates. Imagine, imagine that, right? Meaning losing losing half of your employers every year of your employees every year. And so if I can't solve the labor problem as like I used to be able to, then I'm forced into a position where I have to look at things like automation because the demand on me continuing to provide services, continuing to grow revenue, continuing to support my customers, that demand just gets bigger and bigger and bigger.
Speaker 4:Right. And and when the when the leadership in the business says to me as a CX leader, hey, we're going to we're going to grow revenues exponentially over the next year, but we need to do it at a lower cost to support a lower cost to sale with fewer people. Go figure that out. That's the monster task that some these CX leaders are faced with right now, and it's why automation is becoming such an important thing.
Speaker 1:Question for the group, because we have a quorum here today. How quickly are we seeing companies adopt automation when it comes to their CX posture profile?
Speaker 5:I think if you look at the technology RPA, robotic process automation, the underpinning technology originally was UPATH and others have evolved to bring it on. The adoption rate was amazing because it allowed the tech to handle repeatable tasks, offsetting the labor requirement in answering phone calls and processing information. It was amazing to see how that spread like wildfire through our customers.
Speaker 3:Are there particular verticals where automation has had more success? I can see the difference in healthcare and finance, for instance. Can you talk a
Speaker 4:little bit about Those our top three verticals that we support today. You mentioned two of them, health care and finance are our big ones. And in right up there is also online retail. So any any customer that has a is an online retail brand, that e com space is bullied up around automation as well.
Speaker 3:Are there differences in how they approach automation based on the vertical? Right? Because obviously healthcare has HIPAA compliance, finance has obviously some added layers of security. Yep. Do you see any are there products specific to those verticals, or is there more generalized services that you can then fine tune?
Speaker 3:Sure.
Speaker 4:You know, let's take it's a great question. Let's take some examples of that, Greg. You know, in a highly regulatory environment with healthcare and finance in particular, the adoption of automation is more complicated. Need to have humans in the loop to validate I'm talking to the right person that talking to. I'm protecting information.
Speaker 4:A bot's not just willy nilly sending PII to anybody out there. You have to put in the protections around that. The good news is, is that the solutions that we're seeing get adopted in that space have really fought that through. And in fact, I would argue that many of the more innovative solutions out there on the front end automation side of the house are doing a better job of protecting protecting customer data, information better than than a team of humans. Certainly, Just by definition, the team of humans can can be, you know, can be a bit of a of a sieve, if you will, right in the wrong situation.
Speaker 4:So, you know, that front end automation is what's really, really key. And that's the number one thing that has to be solved for. If a customer if a company is going to leverage automation to to drive down labor costs, which is in solve their labor problem. Right. They have to be able to automate, but they have to do it in a really a really good way.
Speaker 4:I am I'm I'm moving right now. My my house, I'm moving from California to Western Massachusetts. Movers show up on January 21. I was told it's a it's a really, really mild time of the year to move to the Northeast, so I'm I'm looking forward to this nice weather. Should be great.
Speaker 3:You should go glue some gloves and a scarf with your Yeah.
Speaker 1:We'll we'll we'll send you some fur lined boots as a welcome gift.
Speaker 4:Yeah. Yeah. Thank you. Thank you. I appreciate that.
Speaker 4:But what what struck me is I I started this process yesterday of having my Internet and cable service moved from my old house to my new house. And between multiple calls yesterday and navigating through an online experience, and then an hour and a half call this morning at 6AM Pacific time, I finally got my new service, you know, ordered up and in place. And it was incredibly frustrating. But what's interesting about it is the the company, I won't mention their I won't mention their their name unless you unless you want me to. I No, I won't.
Speaker 4:We
Speaker 1:can guess. We can guess. They might be the sponsor of this episode for all we know.
Speaker 4:They might be. And so it won't be nice to them, right? Because important to note that I'm not changing for a provider because you know, when it when it's actually installed and working on the happy camper, right? It's the it's the installing piece that is that's challenging. But they've taken a lot of steps to try to automate this example, can go online, I can click on a button that's moving and ask me a bunch of questions.
Speaker 4:And in theory, that works great. If I could do that soup to nuts with a seamless experience with removing all the friction, I'm good. But no, that's you know, more often than not as consumers, we're experiencing automation solutions that result in us just getting more and more frustrated. Am right? You know, where where within within minutes we're yelling into the phone representative And yeah, it's Harold.
Speaker 4:We're seeing what we can to try to get around that automation solution because it's not resolving my issue and it's just frustrating me. So this has evolved a lot, guys. Think where what's really important is for companies that are thinking about how do I automate more and more of my customer experience, they got to be thinking about what I call delightful automation. Right? What are the solutions in place that you've really designed right and tested and continue to test and validate that it's actually improving the experience, not complicating the experience, right?
Speaker 4:If it can save me a bunch of dollars on the back end, but I'm pissing customers off at the same time, that's not a that's not a win. That makes no sense at all. Right? And there are brands out there that whose entire reputation is now being impacted by, their poor attempts to automate the experience. So it's a bit of a minefield.
Speaker 4:You've got do it right.
Speaker 1:There's a greater it's kind of an overlay to this conversation. Yes, customer experience, and we're working to define that for the listener, but the benefit it can have for your business by delivering a premium experience, a turnkey experience, experience a customer maybe they expect or they're delighted to find it exceeds what they expected, and the greatest benefit that can have to a company. Talk about things like NPS score, but customer for life, customer retention. If you're able to move your services seamlessly, even if that company is using automation and you're not interacting with human per se, you're probably more likely to recommend them to a friend or stick with them when you decide to move to warmer climates after freezing freezing for the the the following winters. But that I feel like that that's at play here.
Speaker 1:Point I was trying to make. You talk about labor. Labor constraints for various different reasons and companies having to make up that deficit. So it's not personnel replacement or human capital replacement, to use a scary term. There is a need here that you're unable to find people to do it.
Speaker 1:There's solutions. You can leverage technology not only to fill those gaps, but perhaps it will provide a more optimal solution. So how is this impacting the international markets? I'm super and
Speaker 3:again, this may be off topic a bit, but I'm curious. Interesting. You've always outsourced. Right? Yeah.
Speaker 3:With The Philippines or India. I mean, this must be at some level hurting their markets because these guys aren't collecting that revenue anymore. Right? They're being replaced essentially with technology.
Speaker 4:Now, Greg, I think it's insightful. I think earlier in twenty last year in 2023, ICMI came out with a report that predicted that 2023 would represent the very first year where global contact center seats have gone down. The number of global contact center seats have gone down. Why is that? Right?
Speaker 4:If I'm a if I'm a BPO operating in The Philippines or in India or Central America, wherever, there's a lot of pressure. There's there's the there's certainly an increasing interest in people outsourcing labor because they're finding it so difficult to solve that problem themselves. But in all actuality, your legacy BPOs, the the companies that are doing that work, are struggling with the same exact issues around labor. Right? So they're they're trying to solve it, but even at scale.
Speaker 4:So I I think it's an interesting thing. Every BPO that I talked to, we talked with a bunch. Every one of them are trying to figure out their automation strategies, just like every enterprise CX leader is trying to do the same. Because that's where this is headed. If I can't solve for that, it's just gonna it's just gonna create a bigger and bigger gap.
Speaker 4:If I don't have the people or the technology to satisfy my end customers requirements, then my customer sat, my NPS, it suffers, right? Other brands that have figured it out, they beat me. My sales start to go down. And think that's also it's the challenge, but it's also the opportunity. Because I think a lot of CX leaders that I work with, for decades, they've been kind of categorized in the overall corporate budget as a cost item.
Speaker 4:A cost center for the company, right? This technology is now enabling many of these people to pivot their organizations into profit centers for the company. If I'm a CIO or if I'm a VP of customer experience, whatever, and I'm trying to fight for budget dollars and I'm trying to figure out how do I provide a better outcome for my business. Now I can make the argument that these investments are actually going to increase sales, not just drive cost out, it can do that for sure, but actually increase sales. That make money argument puts them in a far, far better position in the C suite.
Speaker 4:Agree? I mean, convince I C level that these investments are going to drive increased revenues, increased profitability, suddenly the entire conversation changes.
Speaker 3:Is that also data collection or is it just increased revenues? What do you mean by that? So basically it becomes less of a cost center, more of a profit center, is interesting, but I think when you're automating something, you have the ability to collect data, right? Oh, As opposed to a human intervention. You can record phone calls, right?
Speaker 3:But it's really hard to extrapolate out that data when you're Yeah. Yeah. And it's an environment where you're dealing with technology, there may be an opportunity to collect that data, harness it to be better, not just internally, but externally. An unprecedented amount of insights that business leaders have today because of this technology. And
Speaker 4:you know, we talk a lot about automation on the front end, calls coming in, I'm automating a voice call or a text or an SMS, know, a chat, an email. That's all well and good. But how about on the back end? How about how do I leverage automation to help my my agents be radically more efficient? And how do I also use that same technology to collect what you're talking about all that data, everyone ingesting 100% of the interactions and then letting AI decipher what are my customers telling me?
Speaker 4:What are the biggest call drivers? What are the issues that we're facing? Where are the opportunities for improvement? And for all that data not just to be, hey, here's a bunch of data have at it, but here is actionable data with very specific actions that you can take to go improve the business. You can do that at an unprecedented level today.
Speaker 4:And every single customer out there that is interfacing with customers, you know, inbound, outbound, through whatever channel, they need to
Speaker 5:be thinking about how they improve their data insights. It's a remarkable advantage if you invest there today. We obviously help customers deal with the pace of change in technology as things transition from conversational AI to generative AI. How do you help customers deal with the overwhelming choices? There's obviously a myriad of tech and suppliers that do a ton of different things around the CX space, gamification, fractional labor.
Speaker 5:How do you illustrate for a customer all those capabilities that are available to them so that they can make conscious decisions about that?
Speaker 4:Yeah. The amount of options out there right now, I think I read something recently that there were some of over 4,000 new AI startups in the past twelve months, globally, over 4,000. That's an insane number, right? If I'm a, if I'm a business leader in a company, and I'm trying to figure out, okay, of all this technology, what matters to me? Frankly, over the past year, we've seen kind of paralyzed customers, frankly, more enabling them to move forward, right?
Speaker 4:They're afraid to make a decision, the wrong decision. There's so much going on, and at the pace of innovation to what you mentioned, Ed, it's really unprecedented. The technology that I learned about six months ago that I'm going through this process of implementing into my business, just six months later, there's a better mousetrap already. And so how do I handle that? I think what's important is we as we coach customers on this journey, you know, things be be before something is is is revolutionary.
Speaker 4:It is evolutionary. And what that what that means for me is these are small steps, right? Don't don't try to go transform your entire CX strategy overnight. We're working with companies a lot today, which are what are the what are the easy wins for you? What are simple things that we can get implemented quickly that can start to drive significant value to the business?
Speaker 4:And if you do enough of those, in those evolutionary steps that you take, before you know it, you've transformed your business. But to start off with, all right, I'm going to tackle this big hairy thing called, you know, CX transformation, digital transformation. That's overwhelming. And if you overlay on top of that the pace of change, it's almost impossible thing to do. You got to start with those simple wins, and that's where we help customers focus.
Speaker 1:AI, as we know, comes up in every conversation, including many conversations here. Ed, I know as you engage with customers, Andrew, you as well. It's what's my AI strategy? Where do you see customer? Where do see AI having application in in your business?
Speaker 1:It's actually within CX where it's probably the most applicability. Ed, you mentioned conversational AI. Turns out conversational AI, conversational voice AI, is really interesting, certainly resonated, and it showed up on the on the list of trends under CX. Andrew, can you just help the audience understand, if they're unfamiliar, conversational AI more broadly and voice specifically, because this is an interesting nuance on the on the technology.
Speaker 4:Yeah. Yeah. For sure. This is really where the power of large language models come in, guys, because the the technology is there. You know, every one of us have jumped on ChatGPT, given it a problem to solve.
Speaker 4:I use it for Excel a lot. You know, I ask it to build a formula for me. It's been that's been great. And it has this uncanny ability to immediately come back with this well thought out answer in most cases, right? Because it it's listening to not just words, but the intent and the spirit of it.
Speaker 4:And, and knows how just inherently how it's built, to be able to gather information to quickly be able to provide that answer that insight back, right? It can also it can almost anticipate what it is that I'm trying to do before I even tell it exactly what I'm trying to do. And so if I can apply that same large language model capability into every single one of my customer interactions in my business, I can learn a tremendous amount about what's going on. Suppose for a moment you knew immediately, within minutes, that you were getting a flood of inbound calls because of a product issue that was causing, say, a safety problem with customers. In a traditional world, how would I normally hear that?
Speaker 4:I'd hear that from people on a contact center floor who started to get a bunch of phone calls, and they raise their hand, and they try to get the attention of a supervisor who then hears that and maybe they're hearing from a couple of different places and they shoot an email off. I mean, you know where this is going. It takes time and hours before it gets to somebody that can take action. But that could be that could be an incredibly urgent problem. You know, I would imagine Alaska Airlines in the past couple of days wouldn't wanted.
Speaker 4:They didn't want to have, you know, three, four days past before they knew the doors were falling off the airplanes mid flight, right? They they they would want to know that insight within seconds. And that's what conversational AI is enabling brands to do. It's about it's about the speed of information and the ability to quickly act. And and that that ability is is far, far better and more robust than it's ever been before.
Speaker 4:Right? That's a really key thing. I think the other the other piece is, is that how do I apply that same exact engine to all the different ways we want to communicate? We think of conversational AI, we tend to think immediately about voice, right? Someone speaking, I want to be able to analyze what they're saying, you know, at scale.
Speaker 4:Well, you know, I prefer to chat when I'm dealing with support. How about chat? Can you analyze that? Can you analyze my text messages? Can you analyze my my social posts?
Speaker 4:Where I you know, I'm voicing to the world how frustrated I am with a an internet provider that is making it really difficult for me to move, something like that. Can I analyze every single one of those touch points and be able to bring all that together into one language model that can then drive business insights that will enable me
Speaker 3:to make very quick decisions, right? That's the power. That's the power of conversational AI. So let's go back to your last comment prior to this, and you said there's so many AI initiatives out there, it's overwhelming, right? And you said that you should really focus on, you know, the pillars that are important to Yeah.
Speaker 3:Your know, I have to believe that there's a layer of importance associated to innovation, right? And that maybe 90% of your time is on the pillars and 10% should always be in that innovation lab, right? Those compelling technologies that come along quick that give you Sure. Talk a little bit about that. Is that in how important is that and not just focused on the core?
Speaker 4:Yeah. No, I think it's I think it's really important. I think forward thinking brands out there are making big investments and making sure there's a senior leader in the business that's keeping their finger on that pulse. They have to, I think think they're vulnerable if they don't. I I talked with a guy named Art Weston recently a couple months ago.
Speaker 4:He's the he works for a large national bank, walked up to me at a conference that I was speaking at, and introduced himself as an AI futurist, which was really interesting. They went on to say some really, really crazy, pitting and provocative things, some of which I agreed with, some of it was a bit of a head scratcher. But here's the interesting point. You have a large national bank that's paying this guy to go sit in an office in a dark room and think up these thoughts. Right?
Speaker 4:Why is that? Why is that? Because they because they understand that we can't be in a reactive mode here. We have to get out in front of this. We have to have really smart people thinking ahead of this.
Speaker 4:I think in the Upstack community, I think it's one of the values that that partners can provide, Right? Companies that haven't yet made that investment haven't yet figured out who that owner is of of kind of the future of technology in that business. Lean on those trusted advisers to help kind of carve that path for you. We we work with those partners every day and and their customers to kind of map that out and help them keep a finger on that pulse. We interface with customers all the time where we're like, Hey, you got to know, I want you to spend thirty minutes looking at this new technology.
Speaker 4:I want to get your feedback on this. And let's think about how this plays into our broader strategy for your business. Right? I think it's really, really important for brands that wanna stay ahead of the game to to invest there and make sure that that they're aware of what's going on.
Speaker 1:Contact center is feels like it's at the core of the greater CX ecosystem. Some might think contact center has its own part of the larger technology stack and as we come to learn. It's actually, again, part of CX more broadly with many of the solutions and technologies we've been talking about today. CCaaS, as it's also known, has certainly undergone its own evolution. Know, Ed, I'm curious, you know, as you've engaged with with customers, how have you seen that technology change and and the enhanced value it's been able to provide customers?
Speaker 5:Yeah. I think it's it's definitely evolved. I also know that, you know, cost has come down. Zoom has obviously entered the landscape, and it's, you know, it's driving costs down. The integration of the technologies, the AI elements, I think, are making it more efficient in driving that labor cost out.
Speaker 5:It really maps back to what Andrew said, is the efficiency to handle or solve the problem in advance of the person picking up as an agent, I think, is the evolution, and that's really where we're helping customers position the service. One of our customers, they were taking all the scheduling appointments for vision eye exams at hundreds of different retail outlets, and we helped them with conversational AI and integration to their CCaaS platform, contact center platform, to essentially coordinate all those appointments in an automated fashion without ever having to speak to an agent. It immensely solved the frustration of the customers, it also saved the customer a lot of time.
Speaker 3:Ed, I got one for you. Zoom, obviously to me, a new company. They really took off during COVID. They're still viewed as a pure play to me, meaning when you think Zoom, think video conferencing. You don't really look at the ancillary products you're trying to push.
Speaker 3:And then you get a company like Microsoft who launches Copilot across their platform. And then you see Teams and Outlook and all these things evolve into this much this thing, right? This amazing thing. Sure. It puts Zoom in a position where they don't have really anything to grab onto, right?
Speaker 3:And then the companies that historically were born into Google, right? Because they're young and not a Microsoft and tend to lean towards Zoom or Google, you know, are now starting to say, Wow, should I be on Microsoft? Like, how do you see these vendors battling this out and what do you think the outcome's gonna look like?
Speaker 5:Yeah, I think, obviously, Zoom has a tremendous advantage of pandemic. It's on almost everybody's desktop, so I think they're positioned well as being a technology that's already been decided on as a component. I do agree that Microsoft's expansive tools overlaid with their AI is going to create an impact, but Zoom seems to be responding, developing their own CCaaS platform. They did make a bid to acquire Five Nines, but, you know, detoured that and went on to, you know, build their own platform. So I I I think they'll be a competitive player for for a while.
Speaker 4:Yeah. And I I would act I'd echo that. I think I'll tell you what I've been really impressed with around Zoom. I think it's you're right. The initial inclinations that we we think of them as as the you know, that's that's where I do my video call training.
Speaker 4:That's that's where I live on meetings now, which is fine. But guys, holy cow, the money that they've invested in in unified communications and now a cloud contact center is remarkable. Their their level of their pace of development around feature and functionality in their contact center platform has been really nothing short of mind boggling. I mean, they've closed the gap between what used to be maybe 70% of the key features and capabilities, you know, compared to the big contact center platforms out there, the ICX-1s and Five9 and Genesys and Talkdesk and such. It closed that gap almost all the way.
Speaker 4:It's really been interesting to watch. So I think it's I think the the contact center space is very is very disruptive right now to your you're absolutely right. Microsoft is one of the biggest reasons for that that level of disruption, and it's changing It's changing that entire landscape. But I think Zoom is an equal partner. I think I think Zoom tries a tremendous amount of of activity around this right now.
Speaker 3:I'm going to challenge you on that, you know. Yeah. You know a hell of a lot more about this space than I do. But I, you know, I read the news or I listen to the news. You know, large language models, learning, inferencing, all this stuff takes time.
Speaker 3:What with the big advantages is time. Right? Who started this first? You know, you know, where has this evolved to? And if you look at Copilot, early days with, you know, AI, right?
Speaker 3:They're they're way ahead they're years ahead of the game. So how do you see how do you see Zoom even while building this mass catching up to that that language, right, and that learning?
Speaker 4:Yeah. I think a variety of ways. I I would not I would not underestimate Zoom's existing r and d bench. They've already invested huge, huge dollars in this space. Right?
Speaker 4:They're not so would suggest to you that they are far closer than what you might think. The other is Zoom's got a ton of cash, a ton of cash. And they're sitting on a war chest where they're making key acquisitions and will continue to acquire really innovative technologies that help close that gap even faster. The agility is a huge advantage. And Microsoft, I'm a big fan, but Microsoft has never been like, at the tip of the spear of this stuff.
Speaker 4:They've always been a fast follower. And now now they've got a tremendous amount of of of heft behind them and a lot of credibility. Right? But, you know, they're they're the ones that saw saw what OpenAI was doing that at the tip of the spear, if you will, and said, yeah, we gotta go invest in that. And and they made a huge bet.
Speaker 4:And I would say that that they'll they'll continue. That's kind of been their history is, yeah, they they embrace new technologies every day, but they're not necessarily the ones out there creating those new technologies from from scratch. Right? They're looking for innovators out there that they can partner with, that they can acquire, that they can bring into their family. And Zoom perhaps won't even be one of those.
Speaker 4:Right? Who knows? The again, the level of innovation around Zoom has been has been really, really impressive to me. They're a legit player in
Speaker 1:this space. There there's a hot take. Hey, now. I
Speaker 3:have one more. I've final comment if we still have the time, Alex.
Speaker 4:Yeah. We're we're overtime, but what about and then
Speaker 1:I have one more point to bring up after you. Go for it.
Speaker 3:I'm I'm more curious than anything. Right? Because, again, you go back to that pure play. Even though they are adopting and acquiring, you still have a situation where, you know, companies like Microsoft, larger companies can just give it away. Right?
Speaker 3:Just like
Speaker 2:Yeah.
Speaker 3:Oh, yeah. You know Google's platform isn't great, right, their meeting platform, but you just give it away. Yeah. And I think that challenges Zoom's core business, especially when you go into Copilot and you type in, you know, a topic within your organization and you can cross. You can see that across multiple platforms, right?
Speaker 3:And be able to get that and really do something with it. Yeah. Well, I I'd say
Speaker 4:two things about that. You're you're right. Microsoft has the flexibility of being extremely disruptive around pricing. They can defer margin for a very, very long time as they kind of change an industry. And they've done that many, many times.
Speaker 4:But I don't know about you. I mean, I'm a team shop. My whole company views teams every day, right? And and I love it. It's great.
Speaker 4:But if I have like a mission critical conference call and I've got four or five, six people that I need to have on that call, I'm using Zoom every time. That's me. I don't know how you feel about that, but that's I mean, I'm using Zoom every time for that call. Yeah. Here's the other interesting thing that we we don't talk enough about because I think the other player in the UCaaS, CCaaS space has been quieter, but they're doing some really some really interesting things, and that's and that's Google.
Speaker 4:And that comes back that comes back to your point about Microsoft being able to give it away. Think about what Google's been doing for the past twenty years. The past twenty years, every elementary and high school student on the planet has had access to Google technology for free. They've been giving Chromebooks out and giving Google technology in the browser, the Chrome browser, and all that technology to all these students for nothing. Well, those students are now leading businesses, right?
Speaker 4:They're now growing companies. These are the next innovators. Where do they tend to gravitate? They're going to gravitate towards what they know. Google has a significant advantage in that space, and it creates it creates a really interesting competitive environment for Microsoft, for sure.
Speaker 3:They do. And one of the it's funny today was the day that it came up on a call that a Google shop because of the young younger generation, right? Start up probably six, seven years old was a Google shop since inception because of the younger generation has just come out of a Microsoft presentation and has decided that they want to take a hard look at transitioning. So I'm just it's interesting. It happens.
Speaker 3:Happens. Happens. Evolution.
Speaker 1:Speaking of evolution, I offer this as an endpoint. I mean, we would love for the conversation to go on. It certainly could. Going back to CCaaS and more specifically, the evolution of the contact center. Mean, So many customers, so many businesses out there first onboarded their CCaaS solution many, many, many years ago, and there have been incredible advancements in that technology specifically, many of which through the other technologies we discuss today.
Speaker 1:Automation opportunities, conversational AI, kind of this ability to leverage CCaaS from an omnichannel standpoint, which that popped in our survey. That definitely popped. Ed, Andrew, as we talk to the end customer, are we seeing these customers proactively looking to explore omnichannel opportunities, or is it, I I have a contact center.
Speaker 5:I'm good to go, or I don't want anything new? I'm curious what those conversations look like or sound like. Yeah. From my perspective, I think it's one, is it solving for your business problems today as is, and what are your goals in the next frontier? What bolt on technologies or capabilities are you adapting to the CCaaS platform?
Speaker 5:A lot of the discussions, again, roll back to conversational AI, to integrations, to the other elements. I'd like to leverage Andrew in some of those discussions because he does a great job with Art of the Possible, which is to illustrate for customers a lot of things that are possible just around the CCaaS elements and all the bolt on technologies that can make it more efficient.
Speaker 4:My take on omnichannel, Alex, is interesting. We started talking about that term maybe ten years ago now, And it was all about how do I equip a single agent to be able to interact across all these different channels, whether it be voice or SMS or, you know, chat or email. And and through that process, a lot of brands adopted this idea of call avoidance or more than anything else. Right? But I'm I'm gonna I'm gonna light up these other channels so that you don't have to call me Because every time I as one guy that Ed and I know really well that runs a support team, Guy Neely, used to say that I lose money every time my phone rings, right?
Speaker 4:Because he's in a support role. This is all they're doing is providing support. If you call me, I'm losing money. Well, a lot of brands adopted that concept that hey, I want to avoid calls at all costs. And if I have all these different channels, they can communicate with me, and I can support that at a cheaper level, then great.
Speaker 4:Let's do that. And omni channel became the thing. Well, I would say with AI and how that's changing that entire conversation is now make it stupid easy for consumers to reach you on whatever channel they want to reach you on. Right? And and leverage AI to drive down the cost of support or the the cost of acquisition because you can now because it's it's evolved to that that mature level where you can.
Speaker 4:And so the companies that hide their phone numbers on their websites, I would push back on them. And I started I started saying, hey, make it easy, make it easy for your customers to reach you. That doesn't necessarily mean that every live interaction is being handled by a live human. Not anymore, right? And that's where all that's converging, and I think that's opened up massive opportunities.
Speaker 1:Yeah, and this goes back to automation freeing up the humans, the people understaffed to hire those higher level tasks, the lower level tasks. Technology can be leveraged just to take care of those in a very seamless way. Gentlemen, we could go on. I know for a fact we could go on. Wanna have we will well, Debbie, you're no longer on the phone with the cable provider, thankfully.
Speaker 1:But, rest assured, this conversation will continue given how rapidly CX is is changing as part of the larger technology stack. So I know, I speak on behalf of Greg. We'd very much look forward to to having that conversation and having you both be a part of it. But for now, thank you very much. Thank you.
Speaker 1:And we'll see you we'll see you next time on the podcast. Thank you for listening to the Upstack podcast. Don't forget to like or subscribe to the show wherever you get your podcasts. We'll see you next time. Hi.
