We know that the Contact Center-as-a-Service (CCaaS) market is growing; an increasing number of companies are choosing this flexible model to support their CX operations, and this will continue through 2023. Vendors are also increasingly expanding the capabilities of their CCaaS solutions and evolving them at speed. What can we expect over the next 12 months? Here\u2019s where Avaya sees the market heading\u2026 \n\nThe Growth of Hybrid Cloud Among Large Enterprises\n\nSMBs will continue to benefit from CCaaS this year with the ability to consume advanced capabilities that were previously out of reach. Enterprises, however, will use 2023 to gravitate towards a hybrid cloud approach as public cloud adoption grows and off-premises capabilities continually improve. Overall, it\u2019s expected that 60% of enterprises will be using CCaaS by 2025. \n\nThis transition is happening for several specific reasons:\n\nAccess to vendor-specific capabilities: The complexity of digital customer journeys, where no single vendor can adequately cover every necessary element, motivates vendors to partner and form multi-cloud systems. Large enterprises that leverage hybrid cloud benefit from innovative solutions composed of complementing capabilitieswithout having to abandon their on-prem investments. \n\nInnovation overlay: The pressure is on for enterprises to become more digital and agile using technologies like AI, automation, and API customization. A hybrid cloud environment allows them to leverage an innovation model that safeguards the stability of their existing operations. \n\nReduced dependencies: A hybrid model allows enterprises to bring disparate IT environments together under a single management framework, minimizing dependencies between systems that run in different environments. \n\nInvestment protection: Enterprises often contend with requirements of specific countries, industry verticals, or compliance and security policies and mandates. A hybrid cloud approach enables them to mitigate disruption as they migrate to the cloud in alignment with these requirements, ensuring service innovation and CX improvement irrespective of global economics and geopolitics. \n\nCost optimization: Existing IT investments can\u2019t be cost-effectively discarded in favor of new technology. A hybrid deployment model improves the economics of current investments by not disrupting users\u2019 present environment. In fact, a recent study conducted by 451 Research across 10 countries found that, overall, the average savings possible for an enterprise with a hybrid cloud approach is 29-45%. \n\nOn-premises and cloud both have demand for enterprises today. We expect 2023 to be a watershed year for enterprise CCaaS adoption, driven by hybrid deployment. \n\nTop CCaaS Capabilities of 2023 \n\nA continued driver of CCaaS adoption will be innovation without disruption. Organizations are limited by proprietary, on-premises technology (hence why hybrid adoption will grow among traditional enterprises), meanwhile CCaaS capabilities continue to get better and better. These are the capabilities Avaya expects to be most popular this year:1. AI and Machine Learning (ML)\n\nAI and ML will continue to experience steady growth in the coming years. Large enterprises especially benefit from the ability to uncover operational efficiencies more quickly, reduce call volume (and thus, the burden on live agents), and help reps access information faster to accelerate resolution of issues. \n\nA quickly growing AI capability is AI noise removal, which eliminates unwanted background sounds for customers and agents during service conversations. AI-based voice and chatbots will also continue to grow in popularity. Any company that underestimates the value of AI in these areas will inevitably fall behind in 2023. \n\n2. Attribute-based Routing\n\nIt makes sense from both a cost and CX perspective to match customers with resources more intelligently based on business rules, internal and external context, and desired outcomes. Organizations can fine tune conversations, deepen customer relationships, and help agents succeed while improving First Contact Resolution (FCR) and reducing costly transfers.\n\n3. Automated self-service\n\nGive customers the freedom to choose their experience while reducing repetitive and routine calls for agents. Large enterprises once again stand to benefit most from the ability to automate processes and deliver faster response times across customers\u2019 channels of choice. Web self-service portals, conversational IVRs, SMS, and live chat will all be in high demand for self-service this year.\n\nThe \u201cfreedom to choose\u201d aspect of self-service is paramount and must be a top focus in 2023. Customers should never feel like they\u2019re fighting an automated assistant to get what they want, nor should they be forced to use it. \n\nGreater Emphasis on Cost Containment\n\nCCaaS helps contain contact center costs by improving contact duration and deflection, however, contact center projects in 2023 will need to show even more hard-cost savings in order to move forward. Avaya expects the following investments to be front and center as companies further tighten the reins: \n\nIdentity and verification: Verifying and authenticating a customer in a contact center using common methods like Knowledge-based Authentication (KBA) takes anywhere from one to two and a half minutes. Research shows eliminating this time using Identity-centered Security can save as much as $3 a call, creating the potential for millions in annual savings while at the same time providing a better customer experience. \n\nDigital redirection: Redirecting calls to a digital or mobile self-service experience like SMS, messaging, chatbots, or a mobile app can save $3-5 per call, reducing interaction costs by up to 80% while giving callers the information they need more efficiently. \n\nCTI screen pops: The faster agents can access information, the faster they can resolve issues and move on to assist more customers. CTI screen pops can also help increase sales through targeted cross-selling and upselling by providing agents with the right information at just the right time. This will be a key investment in 2023.\n\nDemand for Cloud Efficiencies and Security \n\nA big focus for 2023 will be minimizing the impact to the customer experience with increased data protection and privacy in the contact center. Can zero trust initiatives be successful without affecting customer perception? Absolutely. In fact, this is why Avaya is partnered with Journey, a digital identity verification and authentication platform provider that is blazing a trail in this field with award-winning innovation. \n\nImproving the speed, accuracy, and techniques used in contact center customer verification and authentication will be crucial this year for making necessary improvements to operational efficiency, security, customer experience, and costs. You can read this blog to learn more about how Identity-centered Security better protects customer data while increasing organizational efficiency. \n\nWant innovation without disruption? Register to attend Avaya Engage 2023 this June to learn what Avaya Experience Platform can do for your business.