From Inside-Out: A Different Perspective on Customer Service

Posted: 11/1998

From Inside-Out: A Different Perspective on Customer Service

By Spencer Perry

MIS and engineering leaders are probably the champions of TMN in most
enterprises … if any champions exist at all. The financial, marketing and executive
leadership needs to understand and support TMN deployment to make it happen and ultimately
derive the competitive benefits.

The world’s three greatest questionable truths: "The check’s in the mail,"
"Yeah, I tried it but I didn’t inhale," and, "We’ve got great customer
service!" With all due respect to the U.S. Postal Service and President Bill Clinton,
many service providers rely on the last "truth" to differentiate themselves from
the rest of the pack. But all too often the assertion rings hollow.

A well-trained call center staff and help desk is not a sure-fire formula for
successful customer service. Indeed, the traditional notion of customer
service–friendliness and responsiveness to questions and problems–must be redefined. In
today’s competitive environment, successful customer service should be defined as meeting
the customer’s service needs the first time, all the time; flawless execution of service
delivery; and no inbound calls other than sales inquiries. If a customer is calling to
report a problem, chances are he or she is about to become an ex-customer. To whip the
competition, service providers must meet or exceed customers’ expectations in every way
that they are touched: provisioning (fast and accurate), service delivery (flawless),
maintenance (never see it), customer contact (never need it for anything but an add-on)
and billing (timely, accurate and understandable).

icon.gif (618 bytes)
Image: The TMN Model

These functions typically involve various network elements (such as switches, voice
mail platforms and digital cross-connects) and management systems (such as customer care,
billing and operations support systems, or OSS). The data and information on each customer
from these disparate elements and systems must be able to pass between and among one
another to validate settings or to spot and fix (or notify operations of) problems before
they reach the customer.

In short, any and every action that affects a customer’s service should involve a
"closed loop" to ensure the customer request is met. Take the simple example of
a customer’s request for voice mail service. The request, logged into the customer care
platform, should trigger a process that ensures the billing system and voice mail platform
are synchronized. They should talk to each other and agree that they each have done their
job to satisfy the customer’s request. Finally, the agreement should be fed back into the
customer care system for management status update. Paradoxi-cally, this is the only kind
of system that allows a customer care representative to know truly what’s happening with
the order or service. Thus, the capability that allows the representative to know in real
time what’s going on with a customer is the same system that ensures the problem never
reaches the customer in the first place.

TMN–The Road to the Service Holy Grail

This capability was developed more than six years ago as an operating model called the
Telecommuni-cations Management Network (TMN). (See diagram on page 152.) The model defines
an operational architecture and set of protocols in which management data from various
platforms and devices (known as network elements) is shared with OSS and network
management systems. From there, data is processed into information and is integrated into
a service management system that, in turn, becomes information that is fed in real time
into the business’ financial system. In theory, when fully deployed, a bad card in a 5ESS
that interrupted service would result in an alarm on the chief financial officer’s (CFO’s)
computer, reporting the problem in terms of lost revenue per minute using variables such
as customers served by the network element, customer calling patterns, usage data, rate
data and others.

The degree of automation built into provisioning and service management systems is
inversely proportional to the amount of highly trained and expensive technical resources
needed to operate the business.

To date, no service provider (that I’m aware of) has come close to fully deploying TMN.
It is incredibly expensive and exceedingly difficult to deploy. Incumbent providers are in
the worse position to deploy TMN because they have to support ancient legacy systems that
are typically mainframe-based and written in archaic code. Despite the enormous financial
and operational challenges, nascent service providers should embrace the model and develop
a strategy to incorporate TMN into their growing infrastructure. There are, however,
relatively low-cost deployment strategies that providers may pursue, depending on their
individual circumstances. Perhaps the most daunting challenge lies within the management
ranks of the service provider. Managers of information systems (MIS) and engineering
leaders probably are the champions of TMN in most enterprises … if any champions exist.
The financial, marketing and executive leadership needs to understand and support TMN
deployment to make it happen and ultimately derive the competitive benefits.

The Case for CLEC TMN Deployment

The Telecommunications Act of 1996 has attracted many long distance service providers
into the $100 billion local exchange market. Though various strategies have been pursued
to succeed in this market, one fact is inescapable: competitive local exchange carriers
(CLECs) must quickly establish solid reputations by delivering service that is at least
equal in quality and reliability to that of the incumbent LECs (ILECs) they seek to
compete against. This is a tough goal given the underlying economic foundations of
competing against the ILECs.

The ILEC networks were built over decades of rate-of-return regulation in which costs
to ensure redundancy and high service levels were guaranteed to be recoverable. The ILEC’s
high-level service standards were partly a function of world-class switch and other
network element design. These standards also were a result of creating service and network
management processes that were every bit as robust as the switches and other network
elements in the service delivery chain. Every ILEC operates today on the base of
"gold-plated" network and operations, administration and maintenance (OAM)
systems. This legacy has created the market’s high-performance expectations of all service
providers and low tolerance for even minor failure.

The underlying cost structure for resale of ILEC services allows little margin for
error in building and operating a network. The early days of feature group A (FGA) and
feature group B (FGB) interexchange competition saw 55 percent discounts in network
access. This allowed for healthy margins while pursuing aggressive pricing strategies. In
contrast, local resale discounts of 17 percent to 22 percent are forcing service providers
to pursue (lucrative) niche opportunities while simultaneously outperforming the ILECs in
the service business–at incremental costs far below the ILECs’.

The capital requirements to acquire network elements have lessened due to switch and
platform vendors’ recognition of the demand for lower-cost solutions to traditional
offerings. The facility and operational costs, however, will not support aggressive
pricing strategies. Customer-focused service strategies have great potential to develop
significant differentiation with incumbent providers.

Customer-Focused Service

The traditional operating model is "network-focused." Under this model, the
switch and facilities are managed for optimum performance with "aggregate
traffic" serving as the client. While the aggregate is served, information about
individual customers and their experiences are lost. A "customer-focused"
provider is able to capture and analyze pertinent information at the customer level …
information that correlates with purchase and retention decisions. To be of any value, the
information must be immediate and actionable and, above all, focused on the individual
customer rather than an aggregate customer profile. After all, no customer is

Spencer Perry
is president of SLP Associates, a Redmond, Wash., consulting firm to the CLEC industry. He
can be reached via e-mail at


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