the role of customer experience in telco transformation

© Copyright Ovum. All rights reserved. Ovum is a subsidiary of Informa plc.1

The Role of Customer Experience in Telco Transformation

Clare McCarthy, Evan Kirchheimer

[email protected]; [email protected]

September 2012

mailto:[email protected]


© Copyright Ovum. All rights reserved. Ovum is an Informa business.2

Drivers for innovation and transformation

Telco investments to improve the customer experience

The telco as an enterprise, and as a service provider

Agenda


Market drivers: Enterprise telco revenues migrate to professional and value add services

Port/bandwidth

connectivity

HostingIP

expert

Informationservices

Basicservices

IPservices

MPLS VPN

IP telephony

Mobile remote access/CRM/Equip sales (Cisco)

Conferencing

Applications centric networking

Enterprise apps managementFixed voice/GPRS/LAN VPN/

LAN IPT/LAN-based VPNPSTN/SOS calls

Maintenance (Co-branded)/Mobile/VoIP (vendor)

User portals NPM tools

Professional services Data

management

Projectmanagement

Changemanagement

Intelligent network


Competition from telco peers: The shift to enterprise ICT services has competitive implications

Snapshot from Ovum’s Telco-led ICT Services Deals Database


Mapping SI competitive positioning

Service Line: IBM HP TSI Fujitsu CAP CSC AtosWorkplace

Remote Infrastructure Management

Managed Data Center Services

Managed Storage Services

BC/DR

Managed Security

Managed Networking

Technical Support Services

IaaS

= successful execution = strategic importance


Pressure from the customer - CIOs

Source: Ovum survey, Business and investment trends for IT, June 2011. What are you business priorities for the next 12 months


Pressure from the customer – consumerization drives enterprise expectations

Consumer as Connected Customer

Consumer as Employee

Consumer embedded in

business process

The consumer as a connected participant in a process, whose context & behaviour can be influenced & derived by a combination of location intelligence, transactional footprint, and network of sensors.

The consumer as a smart, connected customer of personalized services, social engagement and dynamic context. The media is the application, the CMO is a data miner, and the CIO acts as marketing technologist

The employee brings consumer technology into the workplace as a preferred tool, opting for enterprises with BYOD policies, mobile apps and data strategies – but protected with effective security & governance


Commoditization of core services

Telcos cannot justify premium charges for core service. Consumer and enterprise customer expect more features and value-add for the same price regardless of the rise in cost to service

Our tracking of telcos contracts shows they are bundling more in to the deals with their suppliers.

Telcos are turning to their suppliers for greater support.


On the one hand - bundling

Fastweb has announced new business offerings for SMEs. It has launched a

managed HD video service, VideoPartecipa, in collaboration with Cisco and a unified communication service, ComunicaCon. It has also announced a small business fixed

telephony and internet service, which includes hosting, two voice lines, all

fixed-line national calls, unlimited internet and up to 100 MB of web space at no extra cost. In a promotional offer,

Fastweb is offering this at a starting price of €50 per month with an additional voice line free indefinitely. Fastweb has

launched an initiative that provides a bonus of up to €3,000 for companies that decide to replace their old PBX with IP-

based technology.

Telefonica's VoIP service provider, Jajah, has announced plans to include voice

calling to Microsoft Lync Online, a cloud-based next-generation

communications and collaboration service. Telefonica will market the joint Microsoft-Jajah service to its business customers globally. The service will be

available later this year through Microsoft and Telefonica sales networks.

Telefonica's mobile arm Movistar has unveiled a series of offerings in unified communications specifically for SMEs. Announced in a road show called "Entre Professionales", they include a one-number PBX extension service for mobile

phones called Puesto de Voz en Red Total (PVR Total), GPS tracking of company mobiles for organizations with field forces or sales forces that need managing, a videoconferencing service called Spontania and Oonair, a mobile app that turns a phone into a video camera to transmit moving images to a network (also called Oonair) where all the other users

on the network can see the footage.

Deutsche Telekom has launched DeutschlandLAN, a service, based on

the Ericsson Business Communication Suite and combining fixed and mobile telephony, a 10Mbps SDSL connection,

VoIP, hosted PBX and a hosted Exchange service, with support for up to

20 simultaneous calls and eight IP addresses.

O2 has launched a service called IP-Voice-Plus combining an SHSDL connection, flat rate domestic voice and data and mobile telephony in a single package for businesses. Prices start at €129.00 per month, or €139.00 with flat rate data, or €154.00 with flat

rate mobile.

UPC has given more details of its service bundle aimed at SMEs which integrates Internet telephony with Microsoft's Office 365, giving customers access to online versions of

Exchange, SharePoint, Office Programs and Lync. The option of access to Office 365 services will be added to UPC's existing broadband and voice bundles and the

portfolio will also include managed voice services in the form of a hosted PBX. The new service bundle will be

available first in five of the ten European countries where UPC operates. The service is already available in Ireland,

Switzerland and Austria, and is expected to be made available in Poland and the Netherlands by early 2012.


On the other – cutting pricesCosmOTE has introduced a program

for business customers which includes unlimited intra-company calling, fixed monthly fees and low-cost domestic call rates. With Greece headed into

economic misery thanks to the government's austerity plans, it is

clearly a good moment to offer special programs to keep business customers

loyal.

BT Business has announced the launch of a new finance scheme, Kick Start, that allows start-ups to get up to £15,000 worth of technology on lease. The main aim of this scheme is to help

small businesses raise funds in a challenging economic climate and

avoid over-dependency on banks. The scheme is open to businesses under

three years old.

Blueface is offering three phone packages based on Panasonic

hardware including a fixed reception phone and a choice of either two, four or six cordless desk phones.

This new deal, targeted at cash-strapped Irish small businesses

needing to upgrade or possibly start-ups buying their first PBX, is not really a partnership - just voice

bundled with a Panasonic PBX. It shows just how low prices for voice

have fallen.

Telefonica has announced a scheme whereby SMEs and the self-

employed can start a business, acquiring all their IT requirements

with a 40% payment up front, paying another 10% of the cost over the next 18 months, then the other 50% in the 19th month, provided they contract all their communications services

with the carrier. With Spain in a difficult economic situation, this

move by Telefonica is a good way of stimulating new business

Virgin has announced a connectivity trail with THECUBE. Virgin will provide

a dedicated 1Gbps internet access, which will be available to start-ups to use on flexible commercial terms. It will be free of charge for one year. During this time, the incubator will

explore a range of commercial models and packages. This looks like a smart

move. On the one hand Virgin gets good PR from supporting UK small

start-up high tech businesses at a time of economic hardship and on the other hand it gets its partner/reseller to test out new commercial models.

Telefonica will take part in a €100m program of joint public and private

funding for start-ups in the ICT segment, It is part of public-private

initiative, under which the government plans to allocate €300 million towards development of businesses across a

variety of industry sectors. This program is not only good PR for

Telefonica, but also should enable it to cherry-pick future acquisition targets in

ICT, as well as helping to shape the things start-ups are developing to make them relevant for its cloud

offerings,

O2 has announced a workspace in the O2 retail store in Central London for

local entrepreneurs and small businesses. This workplace provides the businesses that have relinquished

their own office space due to the economic crisis, with open

workstations, meeting rooms, free Wi-Fi access and even technical advice

services. The new workplace can cater for up to 75 visitors and has open

workstations for up to 10 people. This looks like a good marketing idea from

O2.

Dutch MVNO Simpel has launched a new SIM-only subscription, Simpel Business, for very small businesses and the self-

employed. The plan allows businesses to prepay bundle costs and postpay running

costs. This is an interesting offer from Simpel, who is targeting the potentially

large number of small businesses with no payment record - Simpel will not be doing

credit checks. It looks a fairly low-risk approach with a combination of

prepayment, two-year contract and maximum size.





Agenda


CIO Survey: IT budget split by functional area in 2011

The functions directly impacting customer experience received the greatest share of IT spend in 2011. CRM, contact center, customer care, service assurance, network management, billing, and provisioning systems all featured at the top of the list.

What share of your overall IT and technology budget in 2011 is spent on the following system components?

1%

1%

3%

3%

4%

4%

4%

5%

6%

8%

8%

8%

6%

13%

9%

9%

8%

9%

15%

13%

15%

9%

10%

15%

20%

13%

13%

27%

18%

18%

25%

20%

30%

20%

27%

29%

27%

41%

41%

28%

28%

38%

29%

23%

32%

29%

32%

25%

46%

33%

35%

34%

43%

32%

27%

39%

16%

34%

24%

23%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Internal installation and maintenance

Revenue assurance

Internal networking and communicationsinfrastructure operations

Inventory management systems

Internal and field-force workforcemanagement systems

Business intelligence systems

Customer provisioning systems

Data warehouse and storage systems

Billing systems

Services from systems integrator orIT outsourcer

Service assurance and networkmanagement systems

CRM, contact center, andcustomer care systems

>30% 20% to 30% 10% to 20% 5% to 10% <5%


CIO Survey: IT investment targets telco customer experience problem areas

The areas within telco IT that impact customer experience the most are billing problems and poor provisioning. As a result, both feature strongly in the list of investment priorities.

Within CRM, obtaining a single view of the customer is the most important objective for the majority of telcos. This also supports the need to move to the unified, cross channel view

Within these domains, which are the most important investment areas?

Activation

Network and service policy management

Testing, fault reporting, probes, and alarms

Provisioning/fulfillment

Charging – converged (fixed & mobile)

Billing – converged (fixed & mobile)

Fraud management

Charging – converged (pre & postpaid)

Billing – converged (pre & postpaid)

Charging – Realtime/dynamic/intelligent

Multi-channel integration

Service personalization

Single view of the customer

OS

S

BS

SC

RM

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

22%

24%

29%

33%

16%

16%

23%

24%

24%

33%

16%

20%

38%

52%

44%

51%

47%

42%

47%

42%

33%

42%

38%

46%

53%

43%

22%

29%

18%

15%

24%

20%

28%

34%

22%

22%

33%

23%

18%

5%

3%

3%

5%

9%

10%

6%

6%

9%

6%

5%

4%

1%

0%

0%

0%

9%

6%

1%

3%

4%

1%

0%

0%

0%

High Priority Mid-high priority Low-mid priority Low priority N/A


Investing across all sales and support channels is key (1)

1. Having visibility into the entire customer journey regardless of channel

2. The ability to track the customer through a potentially complex labyrinth of interactions across multiple channels in a single session.

3. Understanding customer channel preferences, behavior and context.

Social

Web

Phone

IVR

Agent

Callback

Web

Store

Preferences Behavior Context


Investing across all sales & support channels is key (2)Portals and web chat are increasingly important, but speaking with an agent, emails, IVRs and stores all feature prominently

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Video

Fax

Social media (Facebook, Twitter)

Text messaging

Paper mail

Web chat

Store

Phone automated speech recognition system

Web self-service

Phone automated touchtone system

Email

Phone call with CSR

Two years ago Today

Note: The survey included 2,000 respondents from France, Germany, the UK, and the US.

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Video

Fax

Social media (Facebook, Twitter)

Text messaging

Paper mail

Web chat

Store

Phone automated speech recognition system

Web self-service

Phone automated touchtone system

Email

Phone call with CSR

Two years ago Today

Note: The survey included 2,000 respondents from France, Germany, the UK, and the US.


Enterprises need to consider every aspect of the customer experience across the lifecycle…

Engagement process

•Configuration•

Service activation•

Mediation• Customer

management

•Customer management • CRM• Self help•• Network management •Service assurance• Diagnostics and fault

resolution

Marketing & acquisition

Provisioning Service usage BillingCustomer

management

•

- settlement

TV, Internet, web portal, press, billboards, High Street stores

Web site, call centres, post, banks

• Product catalog• Product and price

plan comparison

Channel

Web, call centres

•Account management• Care, retention & loyalty programme

Engagement process

•Configuration•

•

•• CRM••••Service assurance & mgmt• Diagnostics and fault

resolution

Marketing & acquisition

Provisioning Service usage BillingCustomer

management

Rev mgmt - charging & billing- mediation

TV, Internet, web portal, social mediapress, billboards, High Street stores

Web site, contact centers, post, banks

•• Product and price

plan comparison

Channel

Web, contact centers, social mediaHelp Forum,

•Account management• Care, retention & loyalty programme

PCRF

Device mgmt


Customer behavior is evolving …

Customers have access to information

from their peers.

Customers can easily share opinions with the large digital communities and the

world.

Smart phones and social media are

becoming pervasive.

Mobile devices have dramatically changed the dynamic between the enterprise and the

customer.

Customer expectations of

service, price and delivery are

rapidly changing.

Customers want access to support from every location and device.

ExperienceMobileSocial


0%

20%

40%

60%

80%

100%

CustomerSatisfaction

First CallResolution

Average HandleTime

Wait Time Net PromoterScore

Perc

enta

ge o

f res

pond

ents Most important today

Most important in 2 - 3 years time

Tomorrow’s priority is the ‘customer experience’

N = 103

Which metrics are the most important in determining the success of your service & support organization?


CRM and social media monitoring are top investment priorities

N = 103

Which of the following technologies are you looking to implement or upgrade within your service and support organization in the short- or mid-term?

0% 10% 20% 30% 40%

Remote support

Online chat

Case management

Social mediamonitoring

Analytics

Surveys

CRM

Percentage of respondents

Short-term (2012)Mid-term (2013-2015)

Short-term priority

Mid-term priority


Track online customer behavior

Pull information back

Educate agents

Update the knowledge base

Alert customers of improvements

Pulling social information into the contact center

But is there a danger we are training customers the wrong way?


Impact of mobile on service

Inbound customer service calls in developed markets

A genuine mobile strategy will take into account:

the underlying data and call routing connections between a mobile application and a contact center or other self-service tool such as web chat or IVR

the process of authenticating a mobile user as an identified customer,

the shared costs (among customer care and marketing departments, among others) of deploying and maintaining service via different mobile contact channels

the KPIs that will indicate the success of a mobile care program

0%

20%

40%

60%

80%

100%

2011 2012 2013 2014 2015 2016

Home landlineOffice landlineNon - smartphoneSmartphonePC and tablet (voice)

By 2016, 36% of customer servicecalls will be made from smartphones


The smart, connected interactions (SCI) model

Level 1Basic

Level 2Supporting

Level 3Enhancing

Level 4Transforming

Features

Design

User acceptance

Availability

Voice

Experience continuity

Context awareness

Multichannel

Brochureware Transactional Engaging Transformational

Leading-edge design elements

<2.5 stars 2.5–3.5 stars 3.5–4.5 stars >4.5 stars

One smartphone platform

Two to three smartphone platforms, one tablet

platform

Multiple platforms, rich mobile web All major devices and

form factors

No mobile-specific design

Basic mobile design Current design elements

Standard voice Enhanced voice Downstream multi-modality

Two-way multi-modality

Unified messaging with resource-dependent

escalations

Little or no context

Basic callback Rich context with clickstream

Seamless switching across channels

One-off mobile application

Aligned, loosely integrated Data and workflow sharing

Realtime switching, lossless state transfer

Basic email Basic multichannel Unified messaging

Mob

ile a

pplic

atio

nsSm

art,

conn

ecte

d in

tera

ctio

ns





Agenda


Retail outlets focus on sales

Static FAQs on web sites controlled by operator

Integrated account info and usage of solutions

Consistent customer information available across channels

Retail outlets for service and support

Dynamic FAQs run by online communities and QA’ed by operator

Multiple logins, passwords, phone # to access information

Sales, service & info organized by product/access type

Hard-coded options and processes for services

Contact centers with limited RFT resolution ability, so multiple handoffs

Good deals avail to new customers

Product centric Customer centric

1 login, 1 #

Good deals available to most valuable and existing customers.

Software driven, agile service processes

Software-driven, customer centric systems and business processes are required

Telco actions to improve customer experience and service


Trends in telco enterprise services

Data center The network as a platform

Managed networks intelligent networks

Managed mobility servicesUbiquity - access M2M

Customer Experience Services “Applications”

(including cloud)Collaboration/UC&C


How telcos are approaching cloud/SaaS

Development tools

IaaS

PaaS

Public cloud

Private cloud

Virtual private cloud

SaaS

SME

Large enterprise

Government

Applications developers

Telco cloud offers Typical customers

Business appsone-stop shop

UC&C

SME

All businesses

Examples


Wrap-up

1. In the face of new competitive threats, telcos are moving up the ICT service stack, bundling services, and differentiating on customer experience.

2. The medium-term challenges for differentiating are integrating social media and ‘smart’ mobile interactions in a service strategy.

3. Customer experience delivery should be channel and device agnostic.

4. The more virtual the architecture, the more agile the delivery.

5. There is an opportunity to commercialize internal customer experience services and expertise.


Thank you

Clare McCarthy, Practice Leader, Operations

Evan Kirchheimer, Practice Leader, Enterprise

[email protected] [email protected]




References Slide 4 - Global Services Deals Analysis 2H11: Value in the Middle

http://www.ovumkc.com/Products/Telecoms/Enterprise/Global-Services-Deals-Analysis-2H11-Value-in-the-Middle/SUMMARY

Slide 5 - This is part of a report which has not yet been published.

If you'd like to speak to the author, Thomas Reuner, he can be reached at [email protected]. The report should be out next month. You can search by his name on our knowledge center.

Slide 6, 12, 13 - Ovum survey, Telco Business and Investment Trends for IT

http://www.ovumkc.com/Products/Telecoms/Telco-Operations/Telco-Business-and-Investment-Trends-for-IT/Ovum-Slide-Pack#id_112961

Slides 18, 19 - These were from a consulting project we did which we have not yet published. It was a contact center director survey. I will see if I can source the deck.

Slides 21-22 - The Future of Customer Service in a Mobile World: Smart, Connected Interactions

http://www.ovumkc.com/Products/Telecoms/Customer-Experience-and-Interaction/The-Future-of-Customer-Service-in-a-Mobile-World-Smart-Connected-Interactions/SUMMARY






http://www.ovumkc.com/Products/Telecoms/Telco-Operations/Telco-Business-and-Investment-Trends-for-IT/Ovum-Slide-Pack









Outsourcing – where will telcos’ ‘core skills’ go?

Primary Vendor Client Name Announce-ment Date

Contract Length(M)

TCV ($M)

IBM Corp Etihad Etisalat (Mobily)

06 Aug 2012 60 280.0

Alcatel-Lucent Cellular South Inc 02 Jul 2012 36 60.0Nokia Siemens Networks Optus 31 Jul 2012 36 60.0Nokia Siemens Networks TeliaSonera 31 Jul 2012 36 30.0Ericsson Fastweb 30 Jul 2012 84 70.0Ericsson MTN Group 25 Jul 2012 36 75.0Ericsson China Mobile 19 Jul 2012 36 60.0Huawei Du 14 Jul 2012 60 50.0Nokia Siemens Networks Zain 06 Jun 2012 36 45.0Alcatel-Lucent Chunghwa Telecom 04 Jun 2012 36 36.0Ericsson T-Mobile 08 May 2012 60 1250.0Nokia Siemens Networks T-Mobile 07 May 2012 60 1250.0Nokia Siemens Networks Hrvatski Telekom 26 Apr 2012 36 36.0

Source: Ovum


Outsourcing – it’s not just about the network

IT Service TypeApplication development and support; Infrastructure management; Maintenance/support

Network integration; Network management

Application management; Maintenance/support; Network integration; Offshore contracting; TrainingApplication management; Helpdesk management; Infrastructure management; Maintenance/support

IT Consulting; Maintenance/support; Systems integration

Maintenance/support; Network integration; Network management

Maintenance/support; Network consulting; Network integration; Network management; Systems integration; TrainingMaintenance/support; Network management

Maintenance/support; Network integration; Network management

Maintenance/support; Network consulting; Network integration; Network management; Systems integration

Maintenance/support; Network consulting; Network integration; Network management

Maintenance/support; Network consulting; Network integration; Network management

Application development and support; Maintenance/support; Network integration; Network management

Source: Ovum

“European telcos spent over $15bn on infrastructure and application services in 2011, and are on track to spend over $18bn by 2016. By 2016, half of that spend will be on application services.”

the role of customer experience in telco transformation

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