WFM Software's Survival Guide in the Era of Generative AI

The Workforce Management software industry is on the cusp of a new evolution driven by the rise of generative AI. Many WFM companies rely heavily on charging per user to generate revenue, with the majority of those users being frontline associates. Companies use WFM tools to track productivity and optimize performance, especially for frontline associates. However, with the increasing integration of generative AI into customer communication channels, the demand for human labor to solve lower-tier issues is set to decline. As generative AI takes over routine inquiries, the need for tier-1 associates will shrink, potentially reducing the number of WFM licenses required by companies.

This inevitable shift poses a threat to the current revenue models of many WFM companies. Fewer associates mean fewer licenses, which translates to lower revenues for WFM providers. If these WFM companies fail to adapt, they risk stagnating, and those that are not cash-flow positive could face even greater challenges, including higher operating losses and difficulties in raising additional capital from investors. In a landscape where innovation is paramount, clinging to traditional revenue models could lead to financial struggles and worst case scenario, closure of the business.

That said, there are alternative revenue models that WFM companies can explore—models that have been successfully adopted by other SaaS companies. Some potential strategies include:

• Charging a fixed platform fee instead of charging per user
• Offering tiered pricing levels based on the platform's capabilities
• Transitioning from seat-based pricing to usage-based pricing

Each of these approaches has its own set of pros and cons, but the core idea is clear: WFM companies must evolve their products to deliver more value to their clients. Whether through fixed pricing, tiered models, or usage-based fees, WFM software needs to go beyond its traditional role of simply tracking employee productivity and optimizing schedules. Companies will no longer find it acceptable to pay for tools that provide little more than basic tracking and optimization; the future lies in offering features that help businesses run more efficiently and strategically.

Some areas where WFM software could add immense value include:

• Integrating with CRM tools and databases to help forecast demand based on core business drivers. Move away from time series forecasting.
• Creating GUI scripting tools, similar to Zapier or Power Automate, that enable WFM administrators to automate workflows and capacity changes by merging data from communication platforms and the WFM software
• Connecting capacity planning tools with financial planning tools to create detailed operating budgets that can be continuously updated and flow seamlessly into financial planning software
• Integrating with HR data to provide real-time visualizations of attrition rates and hiring performance across different lines of business

There are numerous adjacent areas where WFM software can expand its reach and provide greater value to organizations. By connecting with other business tools and offering more sophisticated planning and automation capabilities, WFM software can transform into a more critical piece of a company’s overall operations.

The rise of generative AI is forcing WFM companies to rethink their business models and product offerings. The days of relying solely on simple tracking and schedule optimization features are coming to an end. WFM companies that embrace innovation and expand their capabilities into adjacent areas will thrive in this new era. Those that fail to evolve risk becoming obsolete. The time for evolution is now—those who seize the opportunity will emerge stronger, while others may be left behind.