InformationWeek
Defining The Business Value Of Technology
September 14, 1998
Clearer Connection With Customers
IT is at the core of carriers' plans to offer service advantages, consolidated billing
By Mary E. Thyfault
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Telecommunications companies are locked in a race to put customers in command. That's not an easy transition for an industry that just a few years ago was a stable oligopoly where the carriers were in control. The Telecommunications Act of 1996 has changed all of that. Now local, long distance, and cable television carriers compete for each other's customers, using whatever advantages they have-particularly IT."Information technology really is at the heart of everything we do," says Lance Boxer, CIO at MCI. IT is at the center of the industry's extensive efforts to bundle services and bills in packages convenient to customers, to provide more personal customer service, and even to speed repairs.
Older local carriers such as the Bell companies previously dominated their markets. They particularly feel the pressure to use IT for strategic customer service advantages now that they face competiton from upstart carriers that are able to build customer management systems from scratch. Also, traditional local and long distance companies are adding services, complicating the customer care services they need to offer.
Nowhere is the pressure to use IT to improve customer service more pronounced than in billing. Carriers provide customers packages of local, long distance, wireless, and Internet services, but find themselves billing customers with old, single-product systems. But customers don't want two and three bills from one company; they want the convenience and economies of consolidated billing.
AT&T, for example, has separate systems for each process on each product line. For example, one system generates bills for private line services and another generates bills for toll-free services. Each product also has a separate marketing, order entry, maintenance, and customer service system. As a result, AT&T can't mine data for trends across several products.
Over the next two years, AT&T will replace legacy systems with one system for all processes. "With flexible systems, we can bundle services when customers want to bundle, and not bundle when they don't want to," says Alan Jones, AT&T's CIO. "It takes out the expense involved in doing it manually."
AT&T already offers more than a million customers bundled local and long-distance bills.
Southern New England Telephone Corp. has a different approach. Instead of building new bundled systems for billing and customer services, SNET is linking systems, packaging cellular and traditional phone services, and preparing to add Internet capabilities.
Combining separate systems is a challenge for carriers involved in mergers. There's a large number of deals: No. 4 long distance carrier WorldCom Inc. and No. 2 MCI are closing their merger; AT&T is merging with cable giant Tele-Communications Inc.; SBC Corp., which just gobbled up Pacific Bell, is now merging with Ameritech and SNET; and Bell Atlantic acquired Nynex.
These mergers mean consolidating hundreds of IT systems. For example, long distance carrier WorldCom has acquired more than 65 companies; MCI is its biggest target yet.
John Sidgmore, vice chairman of WorldCom, says the key to consolidation is being methodical. With its last large acquistion of local telecom competitor MFS, the company "picked one system and went with it," says Sidgmore, who oversees IS. WorldCom and MFS consolidated operatons in three months and systems in nine. Within nine months, the company was able to deliver one bill to its customers.
Sidgmore expects similar bundling with the MCI merger. "One advantage of this long regulatory process is that we've been able to plan," says Sidgmore. Most of the systems will be consolidated within six months, with just a few taking close to a year, he says.
MCI, which already offers bundled bills, has spent the last 18 months fine-tuning billing, letting customers connect to MCI using a Web interface, manipulate their billing data online, and declare how they want to pay it.
Billing services isn't the only area carriers are focusing on. Other customer services are being consolidated and improved.
AT&T also has consolidated customer information from across all products. Within 400 milliseconds of a customer's call, AT&T matches the phone number that the caller is calling from against its database, a screen pop tells the service representative who the customer is, which language they speak, bill payment history, and other details.AT&T representatives now have the ability to provide customer service across several products, including long distance, wireless, and Internet services.
Over the last year, SNET has improved the customer service front end, enabling agents to access infomation quickly about multiple products and services. The result: customer care centers are seeing productivity improvements of 10% to 20%. "We are meeting the needs of customers faster and quicker," says CIO Richard LeFave.
Installation and repair capabilities is one area where telecom providers are using IT to improve results. "We're trying to automate as much as we can," says John Gerdelman, MCI Services president. "I want to get the time to provision a circuit down by driving computing into the network and letting us put a cable in from a keyboard."
SNET has developed Repair Access Provisioning System, a Visual Basic Windows application that pulls together four systems and provides repair personnel with a graphical user interface front end as well as access to maintenance records, customer information, and technical information. It also lets the repair person access and examine a line prior to arriving onsite. The system has already improved repair productivity by as much as 20%, SNET says.
Even customers are getting the tools to do more for themselves online. AT&T is testing a service that will let customers add additional ports and circuits to their network via a Web interface. Customers will also be able to open trouble tickets, and start a preliminary dialog on problems.
Internal Improvements
Telecom companies are also using IT to improve software development and other internal capabilities. For example, MCI is speeding software development, making it easier to develop and sell services. "Once you get past the fiber optic and switching, all of the feature richness in MCI's services is done by software," says CIO Boxer.
To shorten software development time, MCI has moved as much development as possible off mainframes to client-server systems. Setting up a distributed architecture lets MCI put the applications closer to developers. It now takes MCI 29 weeks to get out a software release, down from 55 weeks previously.
Using mirroring and shadowing, MCI can deploy 20 copies of an application, and let 100 developers from three states work on it. When developers use the mainframe, MCI uses Web-enabled front ends to get them into the mainframe faster.
To sell services, MCI has also outfitted its 11,000-person sales force with customer service and sales tools that it developed in-house. For about 80% of customers, sales representatives can build the contracts online.
MCI is also looking for new ways to find customers. It's moving multiple databases of information into a single repository to get a common view of customers. MCI is using a 140-node IBM network with 7.5 terabytes of active data to pump out
7 million new customer leads a day at a cost of about 4 cents a lead. That compares with a cost of 77 cents a lead three years ago. MCI can add information from an outside database to generate new leads in its database of 40 million households in just two hours, a process that used to take six weeks.
Carriers also want to give employees and others better access to information. MCI is using massive parallel processing and a cluster and cascade configuration to enable internal users to set up their own parameters for gathering customer information without burdening the IT organization.
AT&T is using the Web and its own telephone Interactive Voice Response systems that respond to touch-tone commands to make it easier for employees to answer their own questions. "One major goal is to have self-sufficiency of the labor force," says Jones. "It will reduce the expense-to-revenue ratio."
In the first half of 1998, AT&T spent in the double-digit millions to move its human resources systems to PeopleSoft, enabling employees to do their own change of address. The new HR system frees resources to concentrate on external business, including customer service. Whether doing projects internally or externally, AT&T's Jones adds, "the IT challenge will be to stay aligned with evolving nature of the business."
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