Point of View

Concentrix acquires PK, but will this be transformative to its CX capability, or yet another fringe addition?

January 6, 2022

Concentrix recently announced its latest acquisition of global UX/CX design engineering company PK in a significant bid to break into the “design engineering” market. However, Concentrix’s traditional customer base is focused on the day-to-day delivery of customer service operations, while PK typically works with CMOs, Chief Digital Officers and CX leaders who rarely get involved with the operations. So can Concentrix find ways to bridge physical operations with digital CX/UX transformation to make this acquisition truly additive, or has it added another fringe capability unrelated to its core business?

Concentrix’s traditional customer base is not where PK’s capabilities lie

Branching into the UX/CX design area requires a very different talent set, branding, and commercial strategy that is foreign to both today’s typical CX leaders and traditional call center providers.

Unlike the recent Sitel takeover of Sykes, this acquisition is not aimed at merely adding immediate scale and global reach and could represent a major strategic shift for the contact center provider.

Most customers of call center providers today expect routine customer service delivery via people with some augmentation (and automation) from digital associates and chatbots. When it comes to rethinking the whole customer experience, will enterprises take their traditional call center providers seriously, or will they continue to view the likes of Accenture, Deloitte, and co as their transformation partners? Let’s delve a little deeper…

Net-net, call centers and other BPOs have generally struggled with breaking into adjacent – and more transformational – markets over the years. The big contact center providers have largely gone for plays that elevate scale and global delivery, as we’ve seen with Concentrix/ Convergys and Teleperformance/ Intelenet. More automation focused (SYKES/ Symphony) or boutique-y acquisitions (Concentrix/ Tigerspike) have struggled to bear fruit. This has been the case generally with service providers seeking to buy their way into unchartered territory, with many niche investments (Tech M’s Pininfarina, Genpact’s TandemSeven) remaining on the fringe as under-developed, under-utilized assets.

Tigerspike clearly didn’t satisfy Concentrix’s desire to infiltrate the UX/CX design space

Concentrix has made a play in this regard before – in the form of UX/ CX design firm Tigerspike – which has remained primarily siloed within CNX and focused on mobile app design and other tactical digital projects and has struggled to scale and develop as a major CNX offering. Concentrix with PK is now making the big bet that design engineering is just what its clients need to bridge the gaps within their customer lifecycles.

Why “design engineering” and why now?

Traditionally, engineering design is associated with physical products and is not only crucial for product development but also from the aesthetics point of view. Increasingly, we observe that experience management is becoming a critical differentiator in addition to the standard product features. For example, much focus was on the exterior part and the performance indicators (like fuel efficiency) in automotive. With the advent of new concepts like infotainment, customers are looking for advanced connected car features. Though this trend more commonplace in the B2C world, the B2B world is also picking up space as UI/UX design can enhance the ease of use for the audience who are not so tech-savvy and less familiar with the product features.

PK takes CNX into the entirely new markets of product engineering and IoT

Enterprises are re-designing and rewiring their experiences to meet a tremendous shift in customer expectations. PK’s capabilities have the potential to bring CNX into a new realm of services, where physical + digital CX are designed in tandem. PK’s experience with drive through experience design with Starbucks for example, puts the firm in competition with the food services gurus at Cognizant. This has the potential to open many new doors for CNX- if it can retain PK talent and convince clients it has what it takes to do this work.

For CNX, if the firm wants to increase these additional PK revenues in the mid-long term it needs to train its existing client managers to understand how to sell design capabilities and develop new relationships beyond customer service leaders. This means the firm really needs to understand how to target decision-makers right across their clients’ customer life-cycle – and far beyond their comfort zone of the call center. PK clients need to see the value of PK being part of a much larger entity and be convinced that CNX will invest in the value of their existing services. Moreover, CNX must invest much more aggressively in its own branding and marketing as it seeks to change the perception of the firm as a traditional call center provider. There is a lot of work to do to make this acquisition a long-term success.

The Bottom Line: CNX clients must connect the dots across the customer lifecycle to take advantage of PK’s capabilities

CNX clients might finally have the chance to connect the digital dots across the customer lifecycle – but need to break down their own siloes to take full advantage. Concentrix’ traditional clients will not be phased by its newfound capabilities when companies are not set up to see the customer lifecycle end to end – and contact center decision makers are not incentivized to care about experiences beyond their remit. It is due to these very siloes that customer experiences largely remain disjointed, inefficient and not loyalty generating.

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