Has KANA Gotten Its Mojo Back? - Part 1

In this service economy it is not surprising to hear about smart innovative companies whose businesses have been blossoming due to the superior customer service they provide. Zappos and its “Powered by Service” tagline is a crown example.

Many vendors that offer customer service software solutions, especially those that bundle customer relationship management (CRM) with business process management (BPM) capabilities and even infuse knowledge in the service process, have been doing quite well, such as Pegasystems, SwordCiboodle, salesforce.com’s Service Cloud 3, inQuira, RightNow, Microsoft Dynamics CRM Customer Care Framework (CCF), and so on and so forth. But achieving consistently excellent customer service and satisfaction is not easy by any stretch of imagination. Research shows that over the last 15 years customer satisfaction has dropped by over 20 points (true, we as customers are becoming more fastidious, but that is our right, isn’t it?) while the cost per interaction has more than doubled, in great part due to agents’ errors and repeated service resulting in issue resolution calls.

We have all likely been the victims of poor customer experience in our lives, not only being put on hold seemingly indefinitely (judging by how familiar you might be with Kenny G’s muzak opus by now) but also for receiving inconsistent support across available service communication channels (i.e., “brick and mortar” branch/store, online, contact center, e-mail, etc.). Even in a particular channel, say via the phone, customer service experience can be a lottery of a sort based on the proficiency and style of the call center agent or customer service representative (CSR).

Service Managers’ Tightrope Walk

On the other hand, service managers are saddled with a tough balancing act amid competing business metrics and goals. Somehow, as miracle workers, they are supposed to control the costs (under ever more trimmed down budgets) of their service departments, and still become a profit center, follow all the required corporate and regulatory policies, and, surely enough, keep all of their customers happy (with zero churn rate).

First of all, service managers lack control over their disparate standalone IT assets. There is no easy way to keep up with the changes in products, polices, and business conditions if and when the company’s disconnected systems don’t work together. The so-called “swivel chair integration” of constantly copying and pasting between multiple systems (i.e., e-mail, phone, Web page, chat, social media, etc.), by repeatedly leveraging the Alt-Tab command (to switch to-and-fro between the open applications windows), is not exactly the avant-garde technology paradigm of the 21st century.

But even if the technology problem can be overcome via a unified system, there are still the people-, process-, and knowledge-related problems. Indeed, in service organizations where every agent (advisor) is an island that services customers in his/her own way, customers complain about service inconsistency. If agents do not strictly follow company policies, error rates and compliance can become huge problems.

Moreover, customer service processes are hard to understand and enforce due to their dynamic case management nature. Often, there is no common understanding of what the service business process is, which results in processes being buried in people’s heads. On the other hand, business process modeling tools are either too simplistic or too complicated for service case modeling. As a typical result, some conscientious organizations might have documented their processes in Microsoft Visio, only to then not know what to do with these models that languish and quickly get outdated in their repositories.

Finally, with a proliferation of new products and features, service companies are increasingly realizing that knowledge is difficult to access at the “point of truth” when it is bound in “War and Peace”-like manuals. In addition such volumes of information require several months to train personnel. Service knowledge is ever-changing as the pace of innovation increases, and, to make things worse, the so-called tribal knowledge is walking out the door, i.e., as the baby boomer workforce retires and valuable but disgruntled agents (knowledge workers) move on.

KANA’s Evolution

In spite of the apparent need for enabling solutions, not every vendor in the space has necessarily had an easy time or a smooth ride, and one example would be KANA Software. Founded in 1996 as KANA Communications, KANA started as an e-mail management software company, with a focus on customer service. When Mark Gainey launched the company, many companies were more or less ignoring their customers’ e-mails, as there was no robust software for managing these communications. KANA was founded to answer this challenge by offering a tool to help businesses communicate with customers via e-mail as well as Web-based channels.

KANA went public in 1999, and later acquired Connectify (a developer of Web-based electronic direct mail software), Business Evolution (a provider of two-way dialog services for electronic-business Web sites), and NetDialog (a provider of Web-based customer assistance software). In 2000, KANA merged with SilkNet (a vendor offering a complementary e-business customer service solution), and also acquired BroadBase Software (a customer service analytics software vendor). Finally, in 2004, KANA acquired Hipbone, the leading vendor of live chat, file-sharing, and co-browsing software tools to financial, insurance, and high-tech customers.

But, as it has often happened in the enterprise applications industry, these acquisitions have created an integration puzzle for the vendor. The strategic corporate direction to focus primarily on large enterprises and on-premise software solutions has resulted in the exclusion of small and medium enterprises (SMEs).

This decision (or oversight) has left a lot of money on the table for other service solutions providers in the space, and KANA, at the same time burdened by its own mismanagement and financial issues, was relatively quickly overtaken by the new on-demand players such as salesforce.com and RightNow. In addition, despite the number of aforementioned acquisitions, KANA had to deliver the virtual assistant and short message service (SMS) capabilities as embedded original equipment manufacturer (OEM) solutions.

New Charter under New Owner: Service Experience Management Play

Since late 2009, KANA has been owned by Accel-KKR, a private equity firm with a track record of bringing the discipline of private equity practice to the technology space. Formed by the Accel’s partnership with the mid-market technology arm of KKR (Kohlberg Kravis Roberts & Co.), Accel-KKR runs an independent fund with its own governance.

Accel-KKR had (and still has) the vision to create a leader in customer service space by using KANA as a foundation for that growth. KANA is again a private company but this time within a multi-billion dollar portfolio. In this setup, KANA is stable, profitable, and debt-free with operating cash in hand. There has been a new capital infusion for both inorganic growth and new access to key markets, whereby KANA’s responsibility is to focus on execution and growth.

Since going private KANA has acquired more in order to grow, per its new parent’s “platform for growth” vision. In late 2010, KANA acquired leading government customer service company Lagan Technologies, based in Belfast, Northern Ireland (UK). This purchase provided KANA with a large footprint in Europe, Middle East, and Africa (EMEA), as well as domain expertise in government.

The most recent addition to the KANA family is the social media monitoring solution vendor Overtone, acquired in April 2011. Overtone is a cloud-based multi-channel communication listening solution with functionality for advanced text analytics and customer sentiment analysis (opinion mining). This acquisition provides KANA with the means to obtain more detailed and relevant customer feedback via both social and traditional channels (i.e., phone, e-mail, Internet portals, Twitter, Facebook, and other social media platforms).

Needless to say, companies have begun including social media in specific business use case scenarios, processes, and metrics, particularly for their sales, marketing, and customer service activities. KANA plans to further round out its customer service capabilities by building internally or acquiring solutions for managing a customer service-oriented community. Similar communities are currently enabled by social monitoring tools and nurtured by RightNow, Lithium Technologies, SAS, Jive Software, and Leverage Software, as some examples.

What Is KANA Today?

KANA’s raison d’etre is to provide solutions to make every customer experience a positive one. As the leader in the newly minted Service Experience Management (SEM) category (see the SEM platform’s components in Figure 1 below), KANA strives to give managers total control over their customer service process, so that they can take care of their brand while taking care of their customers.

Service managers can use KANA’s Visual Experience Designer to create experience flows that allow quick changes as required (in a matter of minutes, rather than weeks or months). These flows and changes are then orchestrated automatically across people and technology. The SEM loop is closed by listening to customers and measuring processes to achieve improved business outcomes (via effecting necessary changes).


Figure 1

By unifying and adapting customer journeys across the contact center, web site, and social community, KANA's solutions have reduced handling time, increased resolution rates, and improved Net Promoter Scores (NPS) at more than 600 enterprises, including half of the Global 100 and more than 200 government agencies. Some of KANA's enabling tools are the Web-based Visual Experience Designer (see Figure 2) and Adaptive Desktop that provides contextual information for agents and consistently optimized customer service for customers (see Figure 3).


Figure 2

As mentioned earlier, KANA customers include leading business to consumer (B2C) companies in telecommunications, banking, retail, healthcare, travel, and hospitality sectors in North America, EMEA, Asia-Pacific (APAC). Amid its 600 customers, via its Lagan acquisition, the vendor also has a large install base with over 200 customers in local, state, and federal government agencies.

Many of KANA’s customers have reported double-digit increases in customer satisfaction, increased revenue growth, and concurrent decreases in contact center costs. KANA is based in Silicon Valley and has offices worldwide, with currently 350 employees in total (150 in EMEA). The vendor has a number of resellers that expand its geographic reach where it does not have direct presence, especially in APAC and EMEA.

Some of KANA's value added resellers (VARs) include IBM, Kahuna, Virtuos, HitachiSoft, CTC, Brick Street, etc. Some major system integrator (SIs) that KANA works with include IBM, Accenture, and BearingPoint among others. For more information on the company, see TEC’s vendor spotlight report here.


Figure 3

What Does KANA Offer?

Built on its aforementioned SEM platform, KANA offers the following solutions:

  • SEM for Agent Desktop – Targeted for customer service contact centers, the Agent Desktop dynamically responds to the needs of agents during each service interaction. Channel-agnostic and context-driven, the Agent Desktop provides access to all of the contextual knowledge, applications, and tools needed to resolve an inquiry.

  • SEM Web Self-Service – Targeted for Web self-service, this solution guides users through every step of their self-service inquiry - from research to resolution - delivering the right knowledge at the right time in the context of the service experience.

  • SEM Knowledge Management - The idea behind this module is to makes every agent the best agent. CSR's no longer need to spend time searching for the best answer because KANA's knowledge-infused process delivers the right ones straight to them, to agents' advantaged and customers' benefits.

  • Lagan Local Government – For government-to-citizen (G2C) customer service, Lagan Government CRM enables improved service delivery by managing interactions with citizens more efficiently and cost effectively. It helps governments connect anytime, anywhere through flexible communication channels including the contact center (phone, email, text, Twitter) or self-service (citizen portal on the web, mobile connected devices).

  • KANA Overtone,  360° Social Listening -- KANA Overtone is a social listening platform designed for B2C enterprises with high customer volumes. that goes beyond merely monitoring to actually uncovering the topics, meaning and sentiment of customer conversations. Continuous, real-time and deep textual analysis of the massive information from all social media, as well as direct online feedback from the Web, email, and surveys, give users the actionable insights needed to respond faster, make smarter business decisions, and provide better customer experiences.

The above products have been deployed in dozens of languages and KANA supports full localization. Following on its recent acquisition by Accel-KKR, KANA has also launched a cloud solution, but its on-demand install base is still nascent.

Part 2 of this series will analyze KANA’ current state of affairs and conclude with an in-depth discussion with the company’s knowledgeable longstanding executive. Until then, your comments and opinions with regards to typical customer service issues and solutions are more than welcome. I would certainly be interested in your experiences with various related software tools in general and with KANA in particular.
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