1. In 2005, OnviSource completed its acquisition of CadCom Telesystems, Davacord, and Business Solutions. Please explain the rational behind these acquisitions.
Enterprises are continuously faced with challenging tasks while trying to effectively manage their customer interactions, transactions and services. Their critical, and at the same time conflicting objectives range from cost reduction to increasing revenues and customer satisfaction, optimizing their labor intensive operation, integrating technologies from multiple vendors and effectively acquiring and utilizing customer intelligence.
Our mission is to enable enterprises to cost effectively manage their customer interactions while successfully fulfilling their conflicting objectives of cost reduction vs. customer satisfaction and revenue growth.
We achieve this goal by providing them with highly affordable, end-to-end and vertically integrated customer interaction management software and outsourcing solutions that can capture, distribute, fulfill and manage the customer interactions while integrating, automating and optimizing the required functions, processes and resources.
Our vision of VICIM software and outsourcing solutions was conceived in 2004 in response to a set of strong market drivers supported by analysts such as Raymond James and Associates, Pelorus Group, and others:
Customer Interaction Management (CIM) has rapidly established a set of requirements, technologies and services that call centers and enterprises demand to effectively manage their customer interactions and transactions
Call centers, and contact centers within various enterprises, trend toward small to medium size sites. Studies have shown that they are currently the largest, fastest-growing market segment. These sites demand highly affordable Integrated Customer Interaction Management (ICIM) solutions with flexible purchasing options.
Typical customer interaction remains heavily labor intensive. Call center optimization technologies and services that can reduce labor costs are in high demand. Call recording is the largest market segment and first logical purchase, followed by workforce automation and optimization, performance optimization, analytics and e-learning.
Customers increasingly require bundled solutions beyond recording and preferably from as few vendors as possible, further emphasizing vertically integrated solutions. Vertically Integrated Customer Interaction Management (VICIM) supplied by one vendor reduces costs by offering a vertical set of call center functional layers, ranging from capturing the interaction to distributing, fulfilling and managing while the required processes, functions and resources are integrated, automated and optimized.
Additional and related market drivers were considered by OnviSource in successfully delivering VICIM solutions and expanding its business to offer outsourcing services:
Offering both products and outsourcing services creates market differentiation while building internal business diversification, financial strengths and cyclical synergies.
A unique, sizable and growing target market is the enterprises with a large customer base in competitive markets selling commodity (highly competitive?) products, such as telecom, cable & utility companies. They are in need of cost effective and flexible customer interaction outsourcing, especially in telemarketing and sales campaigns, customer transaction management and customer retention.
In order to effectively and rapidly implement the company’s vision, OnviSource pursued an acquisition strategy to integrate call center products and outsourcing solutions from certain emerging companies with an established customer base and products that could contribute to building various layers of the VICIM.
In 2005, OnviSource acquired three emerging product and outsourcing companies with over 20 years of combined experience in call center market. Each acquisition brought specific strengths to OnviSource’s mission. CadCom Telesystems provided interaction capturing, as well as a series of call center enterprise applications. Davacord offered call center optimization layers. Finally, Business Solutions, Inc. enabled the company to offer outsourcing services options, differentiating and diversifying the company.
The acquisitions, followed by additional organic product developments, enabled OnviSource to offer highly affordable and end-to-end VICIM software products, called OnviCenter, and outsourcing solutions, called OnviServ.
OnviCenter product portfolio provides voice-data-IP-based interaction capturing; interaction distribution and optimization thru workload distribution, workflow integration, workforce optimization, recording and quality assurance; and interaction fulfillment using fully integrated applications such as teleservices, resource dispatching-scheduling and order processing-fulfillment.
OnviServ outsourcing services offer performance-based and award-winning services in telemarketing-campaign management, customer transaction management and customer retention management.
OnviSource has successfully completed the integration of all facets of the business, products, services and customer base while producing positive and profitable financial results. Furthermore, the company has created market differentiation, business diversification, financial strength and internal synergies by offering both OnviCenter software products and OnviServ outsourcing solutions.
OnviSource solutions have been acquired by more than one thousand customers with installations in North America, Europe and Japan. Our outsourcing services have been awarded, and were ranked number one in multiple categories by one of the major and national telecom service provider in the last 4 consecutive years.
2. The integration of companies is usually a difficult task. What approach are you using to bring together the R&D, sales, and support organizations of these companies? What progress have you made?
Following are critical factors in the success of any acquisition:
Preparing a precise set of objectives and justifications for why you are acquiring a certain business.
Making sure that you already have a team of seasoned, capable and dedicated management assisting you in the planning, acquisition and integration.
Developing a comprehensive and measurable plan of how you acquire and integrate with your existing business. Plans must consider all facets of business, including financials, market, customer base, technologies, organizations and cultural issues.
Performing a thorough “situation analysis” of the target company to fully understand the strengths and weaknesses. An extremely important factor is to evaluate the employees of the new company and assure that you “get the right people on the bus and the wrong people off the bus.”
Provide a realistic and measurable transition.
Communication, communication and over communication to employees, customers and constituents.
I believe we made every effort to fulfill the requirements outlined here. We transitioned by operating each company as a subsidiary of OnviSource for a period of approximately six months. During that time, we were able to further evaluate, streamline and better execute our plans. We maintained the individual identity of each company while working on the transformation to a unified business entity.
OnviSource has made extraordinary progress in business, infrastructure and product integration and optimization. We completed FY 2005 with profitability and positive cash flow. We are expecting profitability in FY 2006 and beyond. OnviCenter VICIM software solutions have been expanded with many call center capabilities. Our customer base is stronger than ever. Our outsourcing business has been diversified with additional clients and has been augmented with our own technologies and business process management. OnviServ outsourcing services have been awarded number one positions in four categories by one of the largest national telecom provider in 2005, and we are expecting the same results in FY 2006.
3. There are many companies that offer applications similar to your product suite, OnviCenter. How are you differentiating OnviCenter from its competitors?
Many suppliers offer point solutions. Even those who currently provide a set of integrated solutions only offer horizontal functions in a single customer interaction management layer, such as an optimization or application layer. A true cost effective integration and optimization occurs when the customer interaction is managed end-to-end, providing optimization and integration at every vertical level, ranging from voice-data capturing and distribution to workforce and performance optimization and finally fulfilling the interaction through fully integrated applications.
Other differentiating factors about OnviSource solutions are the following:
Integration between agents, system resources and administration provides significant productivity and lower costs to manage call centers and customer interactions.
Our product is significantly lower in price compared to other equivalent solutions, especially when obtained in a fully integrated fashion and from a single vendor.
OnviSource offers multiple procurement options – capital purchase, hosting or outsourcing.
Our solutions are true answers to the requirements of small to medium size call center sites, whether they are owned by small companies or larger enterprises with distributed and multi-site call centers.
We offer award-winning, performance-based outsourcing services utilizing systematic and integrated technologies, agent performance improvements, closed-loop business process management and fully equipped facilities.
Will you be targeting any specific market sectors?
We target enterprises with challenging tasks in managing customer interactions on a global basis.
Specifically, our product solution, OnviCenter, targets small to medium size call center sites or customer interaction management centers; either from small to mid size enterprises, or larger enterprises with small-to-med size, distributed and multi-site centers. This specific market segment is the largest, fastest growing segment and requires same set of capabilities as larger call centers.
Our outsourcing solutions, OnviServ, target enterprises with a large customer base in competitive markets that offer commodity products, such as telecom, cable and utility companies. Studies have shown that these companies are in need of performance-based and flexible outsourcing services in sales, customer transaction management and customer retention.
4. What do you anticipate will be your biggest challenges during the next twelve months?
Establishing the company under the OnviSource name and further communicating and educating our target marketplace about our expanded solutions and OnviCenter VICIM capabilities for contact centers.
5. Staying power is crucial to any company entering this highly competitive market. Please comment on your financial foundation.
Our combined revenues and profits have significantly grown since 2004 due to our acquired synergies, restructuring, strong management and the merger of our capabilities. We have substantially expanded our infrastructure and increased our staff, and we will continue to invest in highly skilled people, strong IT and new product development.
OnviSource completed FY 2005 profitably and with a positive cash flow. We are expecting profitability in FY 2006 and beyond. Our financial stability has been the key enabler to our expansion. Ongoing profitability and access to our own cash resources will continue to support our growth.
6. OnviServ is a hosted solution. What do you anticipate market acceptance will be for your hosted approach? Any predictions regarding the percentage of sales for your on site solutions as compared with your hosted solutions?
Outsourcing provided by OnviServ, fully enabled by our OnviCenter VICIM solutions, currently delivers a variety of customer interaction management services for companies such as ATT, Verizon and Qwest. OnviServ revenues are significant and we are expecting continued growth in our outsourcing revenues.
7. Have user requirements generally changed over the past year? If so, what are some of these changes?
In the past year, we have seen more evidence supporting the market drivers I spoke of earlier, thus confirming our initiatives. Customers generally start with call recording, but move toward workforce automation and optimization, performance management and analytics. Furthermore, they are expecting integrated solutions from fewer vendors.
8. Since OnviSource has a broad array of applications, which ones do you anticipate will have the highest growth rate in the next twelve months?
We believe that the sales of OnviCenter’s call recording, QA, teleservices applications and our outsourcing will continue to increase steadily and strongly. We are very excited about the initial market reactions to our full OnviCenter VICIM and we expect to generate significant incremental sales through expanded solutions, such as workforce automation and additional enterprise applications.