Circle of Life

Posted: 7/2003

Circle of Life
CRM Key To Survival In The Telecom Ecosystem

One truism of todays telecom marketplace is that every service provider depends on other carriers to deliver its services. Providers that have persisted through the dark times have done so because of their ability to reach markets through channels and provide those channels with superior service. It sounds like generic customer relationship management  speak when wholesalers say their goal is to make it easy for others to do business with them, but the complexity behind such statements is remarkable. The carrier- to-carrier relationship has pushed the bounds of what CRM solutions and strategies must encompass  tying back to core OSS capabilities. While some providers have succeeded with off-the-shelf CRM packages, others have spent years inventing the specialized art of customer and supply-chain management to drive the vision of a multitiered, telecom ecosystem that lets wholesalers empower their sales channels.

CRM IS A SURVIVAL SKILL

Some skeptics remain, however, theres enough market data to show that CRM has been a key to survival and success for companies in many industries, and telecom is no different. CRM isnt technology, its a way of doing business, a strategy, says Denis Pombriant, vice president of CRM research for the Aberdeen Group Inc. Theres enough data out there that says CRM is something valuable to do. So, if youre not doing it already, why not? Aberdeen recently conducted a study of the Siebel Systems Inc. user base and found that an overwhelming majority were experiencing better than 10 percent gains in productivity, which has in turn lead to improved sales and customer retention. Pombriant says, however, that one of the biggest long-term benefits is that you stay in business.

While doubters will turn to the more notorious anecdotes about implementation and vendor failures, CRM has matured to a point where success is far more common  whether its a vendor-based or internal initiative. Often, those that fear failure or wasted investment in a CRM strategy today are gone tomorrow. Fear drives amateurs. As managers, we all need to be dispassionate about something like this. We must take fear and greed out of the equation and ask ourselves, whats the reality going to be? For those standing and succeeding in telecom wholesale today, the reality is that CRM has enabled them to expand their reach and empowers the ecosystem that feeds their businesses.

TIER 2/3 ECOSYSTEM GROWS

It is often difficult even for industry insiders to understand the many subtle hierarchies and niches various service providers fill. From core to edge, big pipes to small, transport to access and business to residential, there are literally thousands of possible specialties any one provider might pursue. No provider  including a behemoth like AT&T Corp.  can reach every market in the United States independently.

Every carriers network is necessarily composed of interconnected network technologies, and leased and owned resources. Some, like WilTel Communications LLC, specialize in delivering large pipes that others, like Z-Tel Technologies Inc., carve into smaller pieces and redeploy. Still others, like New Edge Networks Inc., specialize in the complexities of access technologies, and in dealing with ILECs who are notoriously difficult to work with. These larger wholesalers live near the top of the food chain and feed ecosystems of entrepreneurs who do the real pavement pounding, particularly in underserved, midtier markets. In this world, CRM is all about having the right systems in place to receive and deliver the right information to the right people at the right time, says Pete Bell, vice president and general manager of sales for WilTel.

Smaller ISPs, aggregators, agents and valueadded resellers handle most of the direct sales and relationship management with end customers.These entrepreneurial players can provide local presence, and a level of face-to-face service thats not generally possible or cost-effective for a larger entity to handle on its own. Wholesale has been a push for us from the beginning, says Dan Moffat, president of New Edge Networks. We couldnt put direct sales in 350 markets and we ... believe that ISPs or agents are suited, by virtue of their presence, for belly-to-belly selling. Often, however, its the smaller entrepreneurs that have the least resources with which to market to, sell to and care for the end customer. As service complexity grows, they are increasingly dependent upon their wholesale suppliers to provider more than network facilities. They need them to provide some alphabet soup  CRM backed up with integrated OSS.

CRM AND OSS AS DIFFERENTIATORS

In the wholesale world, CRM and OSS are nearly impossible to separate. When a channel makes a sale, it needs services delivered as fast as possible. The channel, such as a VAR or agent, needs access to customer and service information, with the ability to make provisioning requests. It also needs to know that its request will be fulfilled on time and accurately, with as little manual interference as is possible. This puts the onus on wholesalers to integrate their internal systems so that automated functionality can empower the entire distribution chain. The most important thing for us is to automate and tie together our existing internal systems, says WilTels Bell. In other words, the key to improving sales and CRM is automating delivery and minimizing rekeying of information, says Bell.

The process of building and integrating CRM and OSS capabilities is expensive for any carrier. For smaller service providers, its usually cost prohibitive to deploy such systems for themselves. Larger wholesalers need to reach as many markets through as many sales channels as they can. In order for them to attract good channel partners, they need to offer the best tools to support them. These tools in turn enable the smaller providers to be more effective  they can leverage sales, marketing and service fulfillment resources they cant provide themselves. When the folks doing the selling become more effective and efficient, the entire service provider ecosystem will benefit. Everyones sales increase down the chain and the investment in CRM and OSS is returned and spread among all participants. Successful wholesalers know this. Theyve made significant investments in their CRM and OSS capabilities, sometimes through vendor packages, but just as often by inventing flexible systems that can keep pace with their businesses.

DIFFERING APPROACHES

For specialized wholesalers like Z-Tel, which supports many midsized and smaller providers in 46 states, OSS is not an afterthought; its a core part of the business. We view ourselves as more of an application solution provider that has telecom as a component, says Robert Curtis, senior vice president of strategic planning for Z-Tel. Z-Tel employs roughly 120 software engineers that build and maintain the wholesalers automated operations environment. Curtis says the company had little luck finding a vendor solution that could meet its specific requirements, or keep pace with its business. Further, he says Z-Tels ideal customer is someone who identifies a unique niche and says, if only you could build some software to let us do this... and we are interested and willing collaborate on those sorts of efforts. For a company focused on providing customized functionality to meet niche requirements, a vendors quarterly  or less  release cycle is just too slow to keep up.

New Edge Networks Moffat tells a similar story. His company began its CRM initiatives trying out various vendor systems, but had little success. We found [our vendor] could not move fast enough for us ... . We used to update CRM once every three months. Now (since bringing development in-house) we do it twice a month. New Edge owns a 600-switch footprint in regional areas, as well as a national backbone with interfaces to the major providers. It supports several partner sites, which it continually upgrades, to provide automated ordering and provisioning. The sites also serve a knowledge management function that delivers marketing and sales tools to its channels. Further, the company goes so far as to purchase prospect lists and sort through them to help channel partners identify the best opportunities. All of this is backed up with teams of people, so if the system breaks down, theres always a live person there, says Moffat.

In-house development is clearly critical to these players that add-value further down the chain. Vendor offerings are actually more suitable for providers like WilTel, which specializes in delivering high-capacity facilities  big pipes with fewer customizations. WilTel is a Siebel Systems customer, and has used the vendors product as part of its automated CRM and OSS offering. Weve got a couple of initiatives to let customers come to a portal, see pricing, and enter orders. Were also looking at what our customers are doing ... well lower our cost of serving them because well be closer to where they need to go, says Bell.

All of this functionality revolves, again, around a common customer Web portal that exposes WilTels host of back-end functionality to its channels. Its a good strategy to build a portal and give a customer something they cant afford on their own. The end user needs a cost effective service that works, and we need to make sure that our customers in the middle can sell, provide information and then deliver. he says. Z-Tel is a WilTel customer itself, and gives the carrier credit for its ability to meet its specific needs  a positive statement for the efficacy of its integrated systems and vendor packages. [WilTel] has customized some stuff for us, which is a little unique and one of the reasons we went with them, says Z-Tels Curtis.

THE VENDORS VISION

Where CRM vendors have one clear advantage is in their ability to draw on experiences from many industries. While telecom carriers are focused on the specifics of their networks and service delivery processes, its sometimes easy to overlook the next steps in CRM evolution. While many are focused on the obvious first steps  integrating internal systems to optimize delivery processes  there is a logical progression for how CRM generally advances.

The next logical step is sales force automation, says Rich Caballero, product line manager for Siebel Systems communications group. Ordering is the biggest bang for the buck. But then, how can I be more productive on the sales side? Companies are bringing in forecasting to figure out where they are versus their quota, and what they can do to change a scenario and hit their numbers, he says.

After SFA, the progression typically continues through more advanced partner relationship management (PRM) and continues into areas such as analytics. [One large carrier] has some 700 partners, and only 10 percent are profitable, but they dont know which ones, Caballero explains.

Analytical applications help carriers to analyze captured customer data in order to identify their most effective channels, practices, promotions, and other stimuli that consistently spur new business.

PeopleSoft Inc. offers a similar capability, and points to the importance of owning customer data in order to protect the end-customer relationship.

When you own the customer, you dont just own the network. You own the customer information, billing usage, spending patterns  and you need that information to grow your business, says Daniel Kenyon, vice president of communications strategy for PeopleSoft. You see smaller companies using more powerful applications ... they need intrinsic knowledge of the customers likes, desires and growth patterns. As they grow, their best customers will become targets for LECs, and they need to be aware, he says. Having customers cherrypicked by slicker competitors is a risk all service providers face. So, while maximizing delivery and sales capabilities is critical to winning customers, knowing which are worth fighting to keep will be the critical next-step.