Of course, gaining a good understanding of customers has long been a major challenge for service providers, with their multiple billing and operations support systems for various services and/or networks. Vendors in this segment say the imperative for service providers to increase profit per customer is driving a significant new movement in CRM.
“The No. 1 trend in this industry is profit per customer,” says Daniel Kenyon, vice president of communications industry strategy for PeopleSoft Inc. “Customer profitability management is one of the latest trends in the U.S., Asia, Europe and even Latin America. That means understanding customers’ revenue contributions and understanding their costs too.”
Pinpointing Profitability
Collecting and analyzing such information can allow service providers, or for that matter any type of organization, to create what Kenyon refers to as a “profitability metric” for customers or customer groups. “Companies have gone simply from wanting to have as many customers as they can have to understanding which [customers] have the highest propensity to churn, the value of churn and the average profitability per user.”
Kenyon says PeopleSoft’s customer profitability tools employ activity-based costing, which attributes pooled costs to a customer segment.
He adds that predictive analytics built into the PeopleSoft tools also enable service providers to know the potential value of particular customers going forward based on their past buying patterns and possibly other data. “This is really at the cutting edge,” says Kenyon of predictive analytics. “Most service providers are still trying to get the 360-view together. But several of our customers are purchasing the customer behavior modeling product from PeopleSoft, which lets them do predictive analytics and incorporate customer value into the CRM screen so the CSR can in real time assess the value of the customer without having to do calculations.” This tool assigns each customer a value based on a numerical scale and displays that number on the CSR’s screen.
Other players in the CRM and billing space include Amdocs, Info Directions Inc., Oracle Corp. and Siebel Systems. Each now offers tools to help service providers identify high-value customers. “There’s a saying that 10 percent of your customers bring in 80 percent of your revenues,” says Don Culeton, president of Info Directions. “Our software allows service providers to set up business rules to make sure [they’re] paying attention to [their] most valuable customers.”
Information Integration
Gaining a better understanding of customers often requires service providers to integrate information from various support systems, says Rich Caballero, wireline segment lead at CRM company Siebel Systems. “What we’re trying to do here is build a platform so our customers can have a 360-degree view of their customers and so their customers have a single view of their service provider,” Caballero says. “We call this the customer-driven service provider,” enabling the customer to interact with the service provider through a variety of mediums including the phone, the Web or other interfaces.
Offering that level of integration, however, is a real challenge for companies that have numerous support systems, Caballero says. So Siebel Systems creates a front end that ties together a carrier’s different billing and operational support systems to deliver customer service reps and others in the organization a single view of the customer.
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The Siebel solution is based on the company’s XML-based integration architecture called the Universal Application Network, which is based on the concept of using standard integration servers from companies such as BEA Systems Inc. and TIBCO Software Inc. Siebel applies a common object model on the integration servers to allow for out-of-the-box integration between the CRM front end and the back-office systems, Caballero explains. That level of built-in integration means far lower integration costs for service providers, who can then avoid spending time on point-topoint integration with each integration server.
Service providers’ move toward bundled services is one of the key drivers of spending in CRM and back-office integration, according to Caballero. Different back-office systems need to talk to one another to enable service providers to bundle different services that run on different networks with various billing and operations systems, he says. That’s key considering service providers often want to offer discounts on particular services for subscribers of their other services. The desire by service providers to lower their operating costs is also driving more integration in the back office, he adds.
Consolidation and customer profitability is also central to Amdocs’ strategy in the CRM space. In June, Amdocs announced its ClarifyCRM 12, the latest version of its CRM software that aims to help companies increase customer loyalty and reduce costs. Amdocs ClarifyCRM 12 features the Customer Interaction Manager module that unifies the desktop, uniting within a single screen other Amdocs ClarifyCRM modules and other integrated applications and business processes that are used by support, sales and marketing employees throughout the enterprise. The consolidated user interface and context-driven navigation streamline workflows, enabling all customer requests to be fulfilled in a single interaction — without requiring users to jump in and out of multiple applications.
Other enhancements to the Amdocs ClarifyCRM order-management suite streamline the complete service delivery process, from initial catalog offering and order capture to fulfillment and order completion. The new release also provides marketing tools that help predict future customer behavior and present targeted offers. Anyone responsible for marketing and selling can leverage new campaign tools for collaborative planning, management and analysis; dynamic call scripts for upselling and cross-selling; and the new Opportunity Advisor module that prioritizes and optimizes offers in real time.
Better Mousetrap
Andy Goreing, senior director of development at Oracle Corp., notes that while the idea of integrating multiple support systems, or at least the data from those systems, is not a new one, what’s new is the tools that can handle this task. “What service providers have been trying to do hasn’t really changed for a few years,” Goreing says.
“The thing is it’s becoming easier as more tools come onto the market. For a number of years now service providers have wanted to understand who their most profitable customers are and treat them appropriately. And [also identify their] least profitable customers and perhaps disengage from them,” he says. “We believe the key to being successful is having the right information architecture.We believe strongly in the single data model — it’s a huge step forward.”
Oracle, says Goreing, has a broad range of functionality within the CRM area. That starts with marketing, sales automation, order capture, and order management and fulfillment. The company also sells a suite of service applications including trouble ticketing, field service, in-house repair functions, e-commerce applications and various infrastructure products related to CTI integration and call-center management. Sitting around that are analytics products, he says.
Like the other traditional CRM and ERP vendors, however, Oracle does not have its own billing systems, therefore it doesn’t have a particularly good view of financial information through its own applications, Goreing says. But Oracle uses a single database/single schema architecture so all billing and CRM information run on the same database, which creates a centralized, consolidated, clean database of information. “Oracle believes wherever possible you need to put this information in the same place,” he says. “We don’t have the billing piece, but in our marketing applications we have data mining that allows us to go to third-party applications like billing systems from other vendors [or systems built in-house by service providers] and pull data out of those systems.”
Almost every CRM program requires integration, he adds, so Oracle spends lots of time on preintegration between CRM and ordering and fulfillment systems with the goal of dramatically reducing the costs of order fulfillment. The company is also doing work to preintegrate its solutions with systems from billing vendors.
