The CPaaS Revolution: What You Need To Know

Rohit Tripathi and Markku Helin

Today, we all expect a smooth experience in every aspect of our digital lives, whether that’s talking to friends, making a purchase, planning a trip, or contacting a brand for customer support. All businesses and app developers today are participating in the experience economy, where the experience they provide to customers can have just as much weight as their product, service or app itself.

When we’re thinking about businesses communicating with consumers, the experience economy means choosing the right channel at the right time and in the right context. It’s no longer a case of the business dictating which channels users can or can’t use to contact them – you now have to interact with individuals on their preferred channel and on their terms.

In its recent Ovum paper, “Understanding the Complexity of Messaging Channels and Digital Engagement,” SAP Digital Interconnect reported that email is the preferred messaging channel by which consumers interact with their service providers for a number of use cases, followed by SMS, and then voice. This doesn’t mean that one channel is necessarily superior to the other, it’s just a matter of personal preference and context. Each channel has its own benefits and drawbacks, depending on factors such as the customer, use case, urgency, and data connectivity limitations. There are simple interactions where SMS, WhatsApp, or Facebook Messenger are the perfect means of communication between brand and customer, but for more complex cases, a voice call, email, or live chat might be necessary.

Right now, however, this isn’t how most businesses are approaching the customer experience. We all know that it costs exponentially more to acquire a new customer than to retain an existing one but, as most companies have undergone digital transformations, many haven’t included customer service as part of that process.

This is a huge opportunity. An SAP study showed that 92% of leading companies have a mature digital transformation strategy in place to improve the customer experience, compared to 22% for non-leaders. Achieving this kind of transformation requires an omnichannel approach – and this is where CPaaS comes in.

What is CPaaS?

CPaaS, or communications-platform-as-a-service, refers to a cloud-based platform that simplifies the integration of communications services – meaning SMS, email, voice, push, social, RCS, chatbots, any channel or microservice such as authentication you care to name – into existing back-end systems and apps.

As companies begin to realize the consumer demand for communicating via social and other messaging channels, it might be tempting to buy a separate solution – but this results in siloed processes for each channel. This is how you end up with that age-old frustration of customer service, where you begin a conversation with one representative only to be told they can’t help you, and you’ll have to ring a different number, with no continuity between the two conversations. By contrast, CPaaS offers a way of fully integrating all channels, allowing you to interact with consumers across lines of business in the channel-agnostic way they expect from an intelligent, interconnected enterprise.

CPaaS also allows for two-way communication and handovers between channels. To explain why this is important, let’s take the example of chatbots. Bots represent a great opportunity for automation, but they need to be deployed correctly – meaning that, if the bot cannot really provide proper help for an issue, it can pass the conversation onto a human representative who can handle it. In many applications of the technology today, this isn’t the case, and this kind of fallback functionality needs to be built in from the very beginning.

The importance of APIs

This holistic approach applies not only to the channels being used but to where it all fits within your wider business. It can be tempting to treat communication as a separate entity, standing apart from other operations, but this is seldom the case.

Let’s take an example we’ve likely all experienced. Say you’re a delivery company about to deliver a package, and you want to notify the recipient that it will arrive shortly. To do this, your logistics application needs to be connected with your communications platform so that it knows when, where, and how to send the notification.

Next, say that the consumer responds to the notification, saying they need to change the delivery time or address; this information needs to be passed to the relevant business application, which may or may not be the same as the one that triggered this process in the first place.

This simple interaction would require a degree of manual effort that couldn’t be scaled up to an entire business – and so instead we can use APIs and intelligent interconnectivity to enable each service. A single API from a CPaaS leader can connect to all channels, whether it’s SMS, in-app push, social, or whatever is needed for the situation or customer.

One company making the most of these benefits is Metropolitan Utilities District, which provides water and gas to nearly one-third of the state of Nebraska. It has complete 360-degree viewability of its customers, meaning that when one of them reaches out with a problem, whether it’s a phone call or a live chat, Metropolitan can immediately see the details of their current contracts and invoices. Customer service reps can then skip the usual introductory questions and get straight to the heart of the matter to resolve the problem during the first contact.

And in the case of an outage, the utility company can detect where a call to its contact center is coming from and play a specific outage prompt to all callers within the affected area and update the prompt with the latest details. It can even deploy proactive notifications, sending SMS messages to the affected consumers. This all adds up to a much better experience for those individuals who have already been inconvenienced enough.

Making it easy

One of the key benefits of APIs is that they are configurable, enabling businesses to progressively build upon them to serve the needs of their customers, rather than locking them into a single solution. APIs are also easily consumable, which contributes to our overall goal: to simplify the underlying complexity of interconnectivity between multiple channels, apps, devices, and data on the behalf of enterprise customers so that they needn’t worry about the technical aspect, just the experience they’re delivering to customers and partners.

This is what CPaaS is all about – bringing secure and reliable omnichannel communications capabilities, scalability, and agility to companies, large and small, without any of the associated headaches and expense. It’s perhaps not surprising, then, that revenues from CPaaS are projected to grow to $5.2 billion (£4.3 billion) in 2023, and 67% of enterprises expect CPaaS to have an impact on their organization within the next three to five years.

This will open up more opportunities in the future – whether it’s improved analytics of the customer experience or creative use of technology, like automatic recognition of a customer’s tone of voice to understand the best approach – because CPaaS is a platform on which we can all build.

The important thing is making sure you’ve got the right platform to build on in the first place.

SAP Digital Interconnect is focused on making it easier for our enterprise customers to make it easier for their end customers – ensuring a great and interactive experience at a time when that has never been more important.

Learn more about CPaaS by reading this Ovum whitepaper “The Critical Role of CPaaS in Reaching Customers on Their Channels of Choice.”

This article originally appeared in Mobile Marketing magazine.


About Rohit Tripathi

Rohit Tripathi General Manager, Head of Products, SAP Digital Interconnect, and brings with him over 20 years of experience in software and business operations. In his current role, Rohit focuses on bringing to market value-added products and solutions that help SAP Digital Interconnect customers get more engaged, secure, and gather actionable insights in the Digital World. Previously, Rohit held various leadership positions at SAP in the areas of technology and products. Prior to joining SAP, Rohit was with The Boston Consulting Group where he advised senior executives of Fortune 500 companies on business strategy and operations. Rohit also serves on the North American Board of Directors for Mobile Marketers Association.

Markku Helin

About Markku Helin

Markku Helin is Head of Product Management, SAP Contact Center 365, and SAP Digital Interconnect at SAP.