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The Role of Customer Experience in Telco Transformation
Clare McCarthy, Evan Kirchheimer
[email protected]; [email protected]
September 2012
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Drivers for innovation and transformation
Telco investments to improve the customer experience
The telco as an enterprise, and as a service provider
Agenda
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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
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Competition from telco peers: The shift to enterprise ICT services has competitive implications
Snapshot from Ovum’s Telco-led ICT Services Deals Database
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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
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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
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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
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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.
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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.
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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.
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Drivers for innovation and transformation
Telco investments to improve the customer experience
The telco as an enterprise, and as a service provider
Agenda
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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%
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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
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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
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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
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
Phone call with CSR
Two years ago Today
Note: The survey included 2,000 respondents from France, Germany, the UK, and the US.
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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
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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
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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?
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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
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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?
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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
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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
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Drivers for innovation and transformation
Telco investments to improve the customer experience
The telco as an enterprise, and as a service provider
Agenda
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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
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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
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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
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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.
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Thank you
Clare McCarthy, Practice Leader, Operations
Evan Kirchheimer, Practice Leader, Enterprise
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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
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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
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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.”