Avaya at GITEX in Dubai
Almost two years after filing for bankruptcy protection under Chapter 11, unified communications company Avaya is steering a path to renewed growth. Jim Chirico, who took over as CEO in October 2017, discusses the company’s transformation in the past year and the strategy going forward.
What have you learned about Avaya and the way the customer experience has evolved in the ten years since you joined the company?
When I became CEO, it was clear we needed to transform. We had a rich history but, we needed to become credible, predictable and consistent, and return this crown jewel called Avaya to its rightful position in the market. The fact is, the company hadn’t shown growth in over 6 years. We needed a roadmap to get there.
First was around go to market. Customer experience has always been a massive part of that road map. We put significant effort into engaging and reengaging customers and partners globally. We intensified our focus on outreach, invested in sales, channel and marketing.
Jim Chirico, CEO, Avaya
Second was around investment, into people and into technology. Sometimes you have to close a door to open one. We needed to bring a new set of expertise into the business. Importantly, key “Avayans” wanted to return and new markets and adjacencies required us to attract and recruit new talent.
On the technology side, we increased investment, this last two quarters more than we did in all of FY17 and we have made significant strides in UC, CC, Cloud and AI that is customer driven. Our tech pipeline is loaded
This represents a major evolution over the 10 years I’ve been here where previously we were focused on technology only, and now over the last several years the focus is on what will drive value for our customers.
It’s one-year on October 1st since you are the Avaya CEO, during which time you’ve listed on the NYSE, stabilised revenue and grown the business. What can you tell us about how the year has felt for you?
I have been CEO for a year, I’m proud of our progress to date: Proud we are outpacing our plan and proud of our R&D pipeline, how our business looks today and of how we’re moving forward.
I’ve spent a decade with the company and this has given me a well-rounded perspective of a company that has undergone significant change. I know where the company’s strengths lie and what makes us unique, and also where we can do better.
I also had the benefit of history and hindsight, meaning I came to the role of CEO knowing what had and hadn’t worked in the past. History is powerful in that learning from it makes us better and stronger as individuals and as a business. It also informs us of how customer and partner needs evolve and strategies we can use to better meet those needs.
So, on October 1st a year ago, it was quite clear to me what needed to be done to steer Avaya towards growth and build momentum in what had become a very different market. In many respects, we already had the wind in our sails because of Avaya’s iconic brand, historic association with innovation and a proud 100-year history of putting quality first. None of these things has ever changed.
These strengths can also be challenges. As the incumbent market leader, you’re always going to be up against new entrants and aggressive competitors.
It’s therefore crucial to stay deeply engaged with customers, listen and be responsive to their needs and to maintain credibility and a reputation as the company that delivers consistently ambitious and relevant solutions.
Next was to focus on a new strategy for investing in people and technology. We wanted to bring new expertise and fresh insights to the business. Our existing markets and their proximity to new ones meant we had the opportunity to attract and recruit new talent with new skills across new geographies, which has been a very exciting process. We have invested more in new technologies and R&D in the past two quarters than the entirety of 2017 and made significant strides in UC, CC, Cloud and AI – all of which has been customer-driven.
As of today – one year in to my job as CEO – I’m pleased to say that we continue to lead the market in terms of innovation and technology development. We are the largest pure play UC and CC company and have been recognized again in Gartner’s Leaders Quadrants for both UC and CC.
We continue to drive for growth in our core business and in new markets, with our Cloud offerings now accounting for roughly 11% of revenue. Cloud has grown for us over 40% in the mid-market and over 100% in the large enterprise segment; new products account for over 30% of product revenue and we signed over 1,000 new partners in FY18. We’ve also won 5,000 new customers in the same period. That’s an incredible testimony to our momentum, and confidence from customers. Additionally, we are seeing strong demand for our private cloud services that bring all these elements, UC, CC and multi-vendor all into one ecosystem to manage on behalf of our clients.
And as a publicly-traded company, we have shown our shareholders that we are able to deliver consistency and predictability by being focused on operational excellence and relentless execution. We do what we say we will do.
The industry is seeing relatively high numbers of acquisitions and consolidations. What would companies like yours look for as you invest through acquisition?
No question, we there is a lot of M&A going on in our industry and frankly across a lot of high tech. Specific to Avaya as it relates to technology we consider the build / partner / buy options when we go about bringing new capabilities and solutions to market for our customers.
Avaya has an extremely disciplined process and approach to evaluating potential strategic opportunities, whether acquisitions, joint ventures or other alliances. That process has us focused on time to market, competitive advantage and ways to drive shareholder value.
As a CEO who has successfully taken the company from red to green, what are the lessons learned?
Staying true to who we are by providing value. We have the world’s largest customer base with over 90% of the Fortune 100 relying on us for their mission critical processes. In the communications business and it is because we are at our best – and deliver the best – when we work closely with our customers and partners to develop technology and solutions that help organizations differentiate themselves from their competition. This means being more customer-driven, which is an important mindset. It’s a very important distinction to make. We’re not driven by innovation for innovation’s sake: we’re driven to create impactful, relevant technologies that enable our customers to achieve growth and success.
Our re-energized approach is working, building on our position as the largest pure play UC and CC company in the market. 130K enterprise-size businesses entrust their customers and employees’ experiences to Avaya, including 90% of the Fortune 100. We should never lose sight of the fact that there are lots of innovators out there – but we are the ones delivering what our customers want and need.
Our journey has also reinforced a value that has always been important at Avaya – recognizing your people as your number-1 asset and driving a culture that has strong, consistent principles to reinforce that.
With 2019 on the horizon, going beyond the buzz, what do you believe will be the technology trends that will have an actual tangible business impact for organizations?
We’re in the midst of a technology revolution; and for Avaya in the tech industry especially, the world is changing at an accelerated rate. Being a customer-driven company, we closely monitor these changes and the three distinct trends we believe will have the highest impact on our customers and the way they do business in 2019 and beyond are: Data privacy, the rise of the API economy, and the progress of voice-based technologies.
Long gone are the days when businesses had a free hand to monetize ownership of their customers’ or consumers’ data. However, when the dust settles, following this movement from the data Wild West to a more secure and private model, opportunities will still be there. Provided you are compliant, secure and have access to the right tools, you will still be able to gain actionable intelligence from data from a variety of sources.
Next is the rise of the API Economy. Customer experiences are going to define next-gen loyalty but no single vendor can deliver every milestone on the experience journey. As a consequence, almost every organization will need to open its doors to collaborators. As an example, open banking is just the beginning of a transformation that will touch every other industry where, whether we like it or not, we all become platforms. Don’t be afraid to design from the outside in and help build the API economy and the ecosystem around it.
Additionally, as new technological advancements rapidly become the norm, customer expectations have risen. Today’s consumers don’t only want service anywhere and at any time, they expect it to be delivered in the most convenient manner possible. Voice and gesture are intuitive, and billions of dollars are being poured into enhancing their accuracy and the machine-learning that supports them Businesses that adopt voice across channels will be pioneers of the new UX. But voice is hard. This is where Avaya has a distinct advantage, being an expert and innovator in voice technology for decades. Now we are leveraging that expertise in conjunction with new innovations to enable our customers to deliver truly exceptional customer and workforce experiences that matter. Experiences that are increasing the satisfaction of their customers, the productivity and efficiency of their workforce, and the growth of their business. And we are just getting started. I’ve never been more excited about our future.
Your visit to the region coincides with GITEX Technology Week 2018. Any highlights you’d like to share?
GITEX is a global technology platform that has been a mainstay on the global tech calendar for many years. The fact that it’s in Dubai is not an accident – it’s one of the most technologically advanced cities in the world with a population of early adopters and public policy that enthusiastically embraces the power of innovation across society. It’s a bold, exciting city that leverages technology to improve the efficiency and performance of services and enhance the quality of life of its citizens and residents. So, it’s completely natural for us to be here showcasing some incredible new ideas at GITEX in Dubai. I think visitors and customers will be incredibly excited about what we have on show this year. Watch this space!
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