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March 13, 2000

Telcos Turn To Analytical Tools To Stay In Touch
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But business intelligence isn't just a weapon for large providers. Convergent Communications Inc., a $10 million Denver company with fewer than 100 employees, relies on business-intelligence and CRM tools to improve its data, telephony, and custom network-integration services. The company uses tools from Oracle and other vendors to gather and analyze information pertaining to financial management, for example, as well as customer sales, service, and buying trends.

Mike Dykstra, Convergent's CIO and senior VP of IT, says the best way providers can differentiate themselves is to use business intelligence to generate a uniform profile of each customer and use that information during every interaction. "We want our customers to be able to talk to one person who knows how that customer's ordering, billing, and trouble-management issues are being handled," says VP of engineering Brian McManus. "When technical support is needed, the customer only has to go through that one representative instead of being passed around from one department to another."

Convergent gathers and combines data on the type of equipment that customers or potential customers have; how much they spend on long-distance service; their purchasing patterns for other communication services; their industry or market; their revenue; and the number of employees and locations they have. "If a potential customer has lots of locations, that might indicate a need for a robust data communications network," Dykstra says. "We could design one that's more efficient than their current service. This type of intelligence helps us target and sell our services more appropriately."

Before US West Inc. began using business-intelligence products, the process of creating concise financial reports for executive managers was labor-intensive and time-consuming. Executive management considered these reports as they made decisions affecting the telco's competitive strategy and marketing programs. But since it took business analysts weeks--sometimes months--to transform lengthy, detailed reports from each department into a single report, the data on which the report was based was often outdated by the time the report was completed.

During the past two years, US West has used business-intelligence tools to facilitate this process so the company can make more timely, customer-focused decisions. "It's a big issue for all regional Bell operating companies as we transfer from a monopoly to a competitive environment," says David Loutzenhiser, operations and technology management information director for US West, in Denver. "It's a huge issue as it relates to marketing and what services we bundle to induce customers to buy a complete package."

With the right tools, US West can determine, based on market segments, which services to include in various bundles and how to discount them, then relate that information to profit margins and return-on-investment calculations. Because US West is a mature company, "we have information across all kinds of platforms," Loutzenhiser says. "There's a big push for us to bring together information across all hardware and software platforms and integrate it to develop better information to support the decision-making process." One effort is built on a middleware technology developed by Information Builders Inc. called Enterprise Data Access. It provides access to legacy platforms, such as mainframes, and various databases throughout the company.

In US West's Network Finance Division, Enterprise Data Access is used in concert with Information Builders' WebFocus, an analytic and reporting application suite. WebFocus applications gather and consolidate data from various operating systems and databases, including mainframe and Unix systems, for both Web and online analytical processing reporting. As part of a new Internet-focused business strategy, Information Builders modified Enterprise Data Access to convert data to HTML automatically, which lets users access the information with a browser. At the same time, Information Builders added Extensible Markup Language support to WebFocus, along with an XML engine to enable bidirectional XML data conversion with Enterprise Data Access.

Terry Ruel Photo by Bill Kennedy WebFocus applications generate concise financial reports on topics including employee pay and performance that can be used to improve internal performance, and service-related issues such as time to repair, open orders, orders more than X days old, the cost of a project, and return on investment. US West plans to use these reports in part to help deter-mine how it can reengineer its organization and operations to compete more effectively. The company will be able to determine if it has the right number of employees, for example, and whether they are working effectively, as well as how it can improve its repair and new service provisioning efforts.

Since 1995, SBC Communications Inc. has used analytic tools in Hyperion Solutions Corp.'s Enterprise application suite to track and analyze key business indicators, which indicate whether revenue is headed up or down across its global organization, according to Terry Ruel, SBC's corporate manager of financial systems.

Hyperion Enterprise includes analytic applications that address enterprise performance management, financial consolidation, budgeting and planning. Key business indicators vary for different lines of business. For local service, they include the number of access lines, revenue per access line, and minutes of use per day per customer. The information is used in a variety of ways. For example, by learning that caller ID penetration is higher in one region than in another, SBC can compare the two areas to find out why. Once best practices and problems are identified, the company can refocus its efforts to add customers in the weaker region by developing special marketing programs and promotions. "The reports we create help executives spotlight business trends and perform analysis," Ruel says.

New versions of Hyperion Enterprise include various CRM tools and incorporate an OLAP engine and data integration tools to link the applications with data source systems, such as enterprise resource planning and transaction systems. E-business applications introduced last October analyze Web-site activity such as the impact of E-marketing programs and E-commerce sales activity. And built-in application development tools let users create specialized applications to analyze call-center activity, for example, or the effectiveness of marketing campaigns.

"Once you understand what business-intelligence systems can do for telcos, you can see why they're critical," analyst Winter says. "Understanding customers, how to acquire and retain the profitable ones, how to keep them happy, how to get a share of major new markets--there's almost nothing more important."

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