Q&A with Alex Black, CTO at Enghouse Interactive

In this section, Enghouse Interactive’s CTO Alex Black discusses the company’s approach to acquisitions and what this means for customers and for the company’s solutions roadmap. He then goes on to evaluate key market trends that may impact the business in the future…

Q: At a high level, how would you describe Enghouse Interactive’s current acquisition strategy?

A: Over the past five years, Enghouse has grown consistently quarter on quarter; year on year. Part of this growth has been driven by an acquisition strategy that focusses on businesses that add value to our organisation financially, as well as creating a richer solution set for our customers. Enghouse typically acquires three or four companies every year.

Our strategy is never to destroy what we acquire but instead to focus on collaborating to improve it. The approach can be summarised in two words: “better together.” The process always start with a focus on research. We analyse multiple parameters – and we only buy companies which can cover a market or product gap and whose products complement our portfolio. With our ‘Better Together’ strategy we then add value to our portfolio by integrating the acquired product with others to create a much richer offering. For example, our Communications Center product integrates with our speech analytics product to greatly enhance agent performance. Additionally, CC also integrates with our enterprise IVR application, Communication Portal, which adds rich self-service and mobile access services. This allows Enghouse to offer a very powerful portfolio which protects customer’s investments as well as helps us to optimise our R&D expenditure.

It’s also worth highlighting that while acquisitions are one of the most important investments we do every year they are not the only one. There are also a range of other strategic internal investments that we make to improve upon our products and our market/financial performance.

Q: What has the acquisition strategy you have pursued over the past five years meant for your existing customer base?

A: Our acquisition strategy focusses on acquiring companies that add value to our business in a number of ways. That could be geographic expansion, where it gives us a footprint or critical mass in a particular region or country. It could be product-led. We evaluate the merits of build versus buy. If it’s quicker and more effective for us to acquire a specific piece of technology as opposed to build it from scratch, we will do that. Finally, we look to the future and will acquire technologies and IP where it will give us and our customers a competitive advantage.

As mentioned above, our ‘Better Together’ initiative means that customers get significant improvements in functionality when we integrate the technologies from our acquisitions together. This added functionality improved the return customers get from their previous investments with us and it also gives them opportunity to significantly change/improve their own customer service offering.

Of course, we can understand any acquisition might lead to uncertainty for customers. Most of them already know us well, however, and they see the acquisition as an opportunity because the product they have already purchased will become more features-rich in very short time and a larger company is now behind it. For any customers that do have concerns, we only need to explain our strategy and show many of our success stories with previous acquisitions to reassure them.

Q: How has it enabled you to more successfully target prospective new customers?

A: Our approach is similar to a car manufacturer. We don’t believe in ‘one size fits all’ – so within our core contact centre offering, we effectively have a range to suit a range of needs, size of company and budget. This has allowed us to successfully address a large section of the overall market while, just like a car manufacturer, leveraging common components throughout our range.

Q: How has this strategy impacted your own research and development roadmap and new solutions development?

A: Unlike many software companies, who are wedded to a build mentality, we are pragmatic about what will drive the highest and fastest value to our end customers. If that means buying a specific piece of technology, we will do that ahead of spending years in R&D trying to re-invent the wheel.
It’s our view that we should continue evolving and maintaining the products of the companies acquired and expand its feature set by integrating with complementary solutions we already have in our portfolio.

We realise that many companies in this industry acquire companies to substitute a product line they own already or to buy the installed based. We do not adopt this approach, because it leaves a considerable negative impact with customers who are forced to migrate into a solution they never actually chose in the first place.

Q: What do you see as the key strategic growth areas for the business over the next 2-3 years?

A: Today’s consumers are increasingly embracing the mobile digital revolution. More and more interactions will flow through mobile digital channels. More and more will be handled intelligently through self-service and automated mechanisms. This shift is moving quickly. As early as 2011 industry analyst, Gartner predicted that by 2020, customers will manage 85% of their relationship with the enterprise without interacting with a human. So, we are always looking to enhance our portfolio of solutions to further address this major shift in the way business will be done.