Internet Self-Care—What to Consider

In five years, chances are the 15-minute wait in a phone queue for customer service will be as antiquated as manual typewriters. Remember those? Ink ribbons, crumpled piles of paper, that chalky correction tape… But upgrading to Internet self-care is nowhere near as easy as tossing that old typewriter out the window.

Business process and technological issues must be addressed for a successful implementation of Web-enabled self-care, says Deb Strong, principal at consulting firm Business Edge. New parameters for sales and service channels need to be defined, including the amount of capability access to be given to customers via the Internet, how the e-business will integrate with existing channels, and what is required to prepare the back office for customer self-care, she says.

New market geographies must be approached at a different angle, considering how e-business will impact competitors and their competitive response. There are no geographic barriers on the Web, which impacts sales channels, customer segmentation, and regional pricing and promotions.

The Approach

First, consider how your organization defines its e-business plans. “Web-enabled customer care in its broadest sense can encompass four distinct, but related, areas of customer interface with the carrier,” says Mark Nielsen, president and CEO of Avery Communications, a San Diego-based billing system software developer.

? Electronic bill presentment and payment (EBPP) enables invoices to be sent over the Internet and provides the customer an opportunity to pay the bill electronically.

? Provisioning allows a customer or agent-reseller to activate, add, change or cancel services over the Internet from a Web browser or kiosk—without the service providers’ staff having to be involved with the transaction.

? Self-serve customer care enables consumers to perform various actions and inquiries on their account, such as checking invoices, balances and payments, making address changes, or changing service plans or features.

? An “Internet storefront” allows a service provider to sell products, such as accessories, to consumers on its Web site with an “Internet catalog.”

Consultants at AMS believe the implementation of Internet functionality is provided in a phased approach (see figure 1). They see most carriers moving along the scale in an effort to eventually push their business to the Web, although they say the telecom industry as a whole is moving slower than other industries. (see sidebar) Carriers need to “accept that the market is ready for robust customer self-care sites. Research shows that the market is ready for sites that provide basic customer account information, online ordering, and account analysis and profiling capabilities particularly for business customers,” the consultants state in a recent report entitled e-Commerce in the Telecommunications Industry: Trends and Innovations. “Shortly the market also will value sites that adapt to individual customers’ preferences. However, current efforts to implement self-care sites should not overachieve until the customer base is defined and secured for e-care services.”

No matter what approach service providers take, the common denominator for business on the Internet is integration. Mark Olson, CEO of Nexcen, a CRM provider, says that although billing companies have a customer care package, customer access to that usually yields only billing information. Telecom companies’ push should be toward a unified view. Having customer care that is packaged with a billing system—or an order manager or a trouble ticketing system—is not the solution that the world is looking for, Olson says. “Carriers should be looking for easy access to their information, and the only way to do that is to have a unified front end with a common data store, and to accommodate integration with all the back-office functions.”

Business Process

Implementing CRM for the Internet requires a redesign of all customer-facing business processes, Strong says. Call center staffing and other organizational impacts need to be addressed. Technological changes are required within the call center to support integration of e-mail and phone traffic. Data warehousing needs will be expanded to include data gathering from Web pages. Business intelligence will be required to personalize the customer experience and to customize the Web page with segmented marketing messages and up-sell or cross-sell prompting. These changes will affect marketing strategy, including advertising and marketing paradigm changes.

The AMS report suggests establishing a central organization responsible for executing Web initiatives. “Since Web projects often cross functional boundaries, they may be significantly more complex to manage and cost substantially more than anticipated if poorly planned,” the report says. “In addition, it is essential that business and IT managers share common incentives to ensure consistency across channels, product lines and market segments.”

“CSRs and field service technicians for every product line must be able to view the same data, in a similar manner, as the online customer. It is critical that a customer can easily resolve any problems regardless of the product or service in question, or the interaction channel they are using,” the consultants suggest.

“High quality, scaleable 24/7 online customer care sites are as complicated and expensive as many traditional systems development projects. Organizations often invest heavily to plan the systems development and process improvement stages of projects, but neglect to fully consider the investment required to maintain a dynamic, responsive site on an ongoing basis. Careful planning for both aspects of the project is crucial as online customers are not forgiving,” the report writers state.

ROI

Nielsen at Avery Communications says that the extent of functionality a carrier decides to provide will dictate the level of technical effort required for integration with its billing system. “If the carrier merely wishes to provide EBPP, it must provide an output file of the invoices from the billing system to the EBPP application. That bill presentment application will be homegrown, a third-party licensed application, or provided by an EBPP service bureau. The carrier must also provide an application program interface [API] or some custom program to accept the payments processed through the EBPP system and apply them into the billing system,” he says. “Using a service bureau is probably the simplest approach, but the cost can add up quickly. Prices normally range from $ .25 to $ .75 per invoice provided or accessed on the Internet per month. If running the application themselves, carriers must pay close attention to security and firewalls. They must also consider a mechanism to either actually e-mail the invoice to the customer or send an e-mail notification with a URL link that brings customers to the carrier’s Web site.”

The return on investment (ROI) of an EBPP implementation can be surprising, Nielsen says. “Taking a carrier that creates 500,000 invoices a month as an example shows a potential ROI of almost 100 percent the first year and over 1,700 percent after 5 years. This example assumes an average paper bill cost of $1.00 and bill payment cost of $0.50, versus an EBPP cost of $0.09 and a bill payment cost of $0.10. It further assumes a cost of around $500,000 for the EBPP software (amortized over 5 years) and 20 percent annual maintenance. Finally, the example assumes only 7 percent of the carrier’s customers use EBPP the first year, growing to about 25 percent by the fifth year,” he says. “Similar ROI can be calculated for other portions of Web-based customer care, particularly where the customers serve themselves and allow a carrier to reduce labor overhead.”

The Technicalities

The technical implementation of Web-based customer care beyond EBPP poses a number of additional considerations. Usually, the first stems from scalability—a system that can only handle a small number of concurrent users is worse than no system when it comes to customer perceptions, Nielsen says. “While the number of customers accessing the system over the Web may be small in the beginning (except in the case of ISPs), it doesn’t take many customers trying to access the system to cause delays and blocking to the site, if the system is not designed properly.”

Nielsen believes that a three-tier architecture can provide the greatest flexibility and scalability. “This means having HTML or Java or some combination of the two for a thin-client, which allows a user to have a browser without requiring a very powerful desktop machine or ‘thick-client’; an application server where the business logic resides; and a relational database as the third tier,” he says. As more users need to access the system, additional application servers can be added or the database can be expanded.

Most companies also implement an intranet for internal staff (CSRs, etc.) and use the Internet for external agents and resellers, and customers with firewalls and encryption for security, Nielsen says. Typically a firewall is placed between the Web server and the application server for all logged-in users. Secure socket layer (SSL) would be used for encryption so that all transmissions over the Internet between the carrier and its customers or agents would be encrypted. In the United States, users can employ 128-bit encryption techniques, but systems exported from the United States are limited to 56-bit encryption. For an added measure of security on provisioning by agents and resellers, a service provider can require its agents and resellers to have their own client-side certificate for secure Internet transmissions between them.

Aside from the standalone implementation issues, there are obvious issues surrounding the interface with a carrier’s existing billing system—particularly when a Web customer care system is obtained from someone other than the billing vendor, Nielsen says. “A large amount of data must be passed between the billing system and the Web-based customer care system, such as balance information, address, subscriber services and features, etc. If the carrier is also allowing provisioning from the Internet, interfaces are required into the carrier’s switches or mediation/network control system by using APIs.”

The question then becomes how often the data needs to be exchanged between the applications—in real time, nightly, weekly, or some other frequency. “While everyone would naturally say real time is the best, such a requirement can place a tremendous load on the billing system, perhaps unnecessarily,” he says. For much of the information, a nightly exchange or few-hour time lag may be acceptable, but for provisioning, a real-time exchange is probably necessary. “There also may be instances where a time lag may result in an error coming back from the billing system after the customer has already made his or her entry and is no longer on the Internet. How a carrier deals with these occurrences can make all the difference in the ultimate acceptance and use by the customer base. At minimum, some type of e-mail or notification back to the customer will be required, so that the customer does not go on thinking the last transaction was accepted.”

Now, about that old manual typewriter: if you never threw it out, you're in luck. It'll remind you of the basics—who, what, where, when, why and how—much of which is discussed in the following case studies.

Bell Atlantic case study (courtesy of AMS)

Upon establishing the need for an Internet presence, Bell Atlantic drafted a three-stage Internet plan (see figure 2). During the first phase of the plan, dubbed “quick fix,” Bell Atlantic cleaned up the appearance of its Internet site and improved navigation. At the conclusion of this phase, www.bellatlantic.com enabled customers to view information about various products and services, but customers were still unable to order those services online or review their individual account information.

During the second and current phase, entitled “redesign,” the company is repositioning its customer service capability and giving its customers a reason to visit and return to the site. To present personalized information to customers, Bell Atlantic established a cross-organizational team to define and design the required functionality and to implement Bell Atlantic’s first interactive electronic commerce channel. The team consisted of representatives of consumer marketing, operations, Web Central (a corporate Internet office), and legal departments. Bell Atlantic is now using the team’s recommendations to integrate back-end systems with new applications, add new offerings, and redesign graphics and navigation.

During phase three, the company will provide its customers with enhanced applications, one-to-one marketing and expanded online services, such as new order and trouble ticket status tracking. Bell Atlantic leverages both existing technologies (e.g., electronic data interchange) and emerging ones in implementing its Internet plan—which includes Home Center for consumers and Business@Once for business customers.

Residential

The first release of Home Center was deployed on Bell Atlantic’s Internet site in September 1998. Through Home Center, consumers could order new phone lines, add features to existing lines, and process connects and reconnects. Customers were also able to view their current month’s bill, the two previous billing statements, and enroll for direct debit payment. By the end of 1998, the company was surprised to realize this unadvertised service also had become a significant channel for new connects.

Designed to take a basic telecom user through a complex transaction, such as adding a new line, that may take as long as 40 minutes to complete over the phone, Home Center offers a checklist to help customers through the order process and show progress in completing the ordering information.

Business

Business@Once went live in January 1999. Targeted at all commercial customers, the service offers retrieval of the customer record (including product inventory), bill detail and summary viewing, status of product and service availability, and product and service reference material. In addition, Bell Atlantic anticipates several new releases in 1999, including service order entry, real-time service order status retrieval and expansion to customers in its southern service area. The information displayed in Business@Once is similar to that in the Home Center interface, although it has been tailored to the sophistication level of business customers’ telecom managers.

In order to present bill views and place customer orders, Home Center must talk to myriad back-end applications, such as the ordering, provisioning and billing systems. Since remnants of both Nynex and Bell Atlantic systems remain in production, these applications may also vary depending on the customer’s geographic location. The overall goal of the Home Center initiative was to provide all of Bell Atlantic’s consumer customers with the same services and the same information in the same format, regardless of their physical location in the 13-state service territory.

Bell Atlantic used a centralized group to coordinate architectural decisions to integrate multiple OSSs. In developing the Home Center application, this architecture group recognized a further need for common, reusable business logic to avoid redundancies, speed up development and maintain consistency in Web applications across Bell Atlantic. They created Enterprise Objects, a proprietary tool set, and a virtual team of Web architects from across the entire IT organization to share ideas and business functions (e.g., “create bill view,” “validate service address” and “assign telephone number”) for the Web. As the market units present additional requests for applications integrating Web interfaces with legacy systems, the team continues to develop additional reusable objects that can be included in future Web applications.

When the development of Business@Once began, several Enterprise Objects that were developed for Home Center were leveraged. Although Business@Once provided customer care for business customers, it accessed many of the same systems as Home Center. However, business customers required services and information with unique characteristics and a format different from that of consumers. Enterprise Objects allowed the creation of a new interface without changing the software that interacts with the back-end systems. In areas where Business@Once had to communicate with business-specific back-end infrastructure, the tool set is used to manage back-end processes and provide seamless transactions for the end user. For example, the business logic for viewing a bill is a common Enterprise Object that applies regardless of which system delivers the customer-specific data.

Bell Atlantic is planning to expand its use of Enterprise Objects to integrate back-end processes and systems. In particular, the company is developing expressWeb, an application targeted at network engineers who access customer information to accurately fulfill customer orders. Bell Atlantic plans interchangeable use of Enterprise Objects in all applications.

Primus Telecommunications Group case study

Primus Telecommunications Group (NASDAQ: PRTL), a global facilities-based company providing domestic and international long-distance voice, data, Internet, private network and value-added services, currently interconnects 24 countries on five continents and serves 1.5 million customers around the world. Primus has a combination of local and Internet business units in North America, Europe and the Asia-Pacific region.

“Like a lot of telecom companies, we had a lot of ‘sneaker’ apps,” says Larry Whitehead, director of information services. “We had a variety of databases, and in-between them were people who ran back and forth. We literally would have someone walk over to the provisioning team each day and hand those orders over to each individual provisioner. Each provisioner had their own printer. If anyone tried to trouble-shoot—even if we all had a copy of the order—the information on each could vary,” he says.

The company made a Web-based order management system a mission-critical priority in order to streamline order provisioning, reduce costs, enhance customer care and drive new revenues, says Whitehead. System requirements included easy access and a similar look and feel for sales representatives, CSRs and sales agents. In addition, Primus needed a continuous, real-time link to its billing system, as well as its external credit reporting database for provisioning purposes—through intra- or extranet access—which could also accommodate its global multilingual needs.

Primus contracted with Rockville, Md.-based SpaceWorks for its OrderManager software. Whitehead says that the software met Primus’ ordering needs from both internal and external business communities, and provided the appropriate APIs for existing OSS. The application (private-labeled as POEMS—Primus Order Entry Management System) has a browser-based interface which gives users access through the Internet to credit check, customer accounts, telephony computers and third-party telephony providers. The application was launched in second quarter 1998.

Primus’ user group includes direct and indirect sales representatives, customer service representatives, wholesale customers, provisioning personnel, marketing managers, fraud management teams, and network management, Whitehead says. Security is maintained through an on-site administrator who assigns passwords and mandates user privileges.

Whitehead reports that users now process an order in a fraction of the time (several days, instead of weeks), orders are more accurate, and customers experience a shorter wait time on account, billing and trouble-shooting calls. CSRs can pull up a customer’s provisioning and LEC status history real-time; sales representatives can instantly verify rate schedules; and sales agents can enter orders or generate reports 24/7 from a Web-enabled desktop or laptop. “The application also offers account and operations administration tools–enabling customer service representatives to search orders for exceptions and respond to failed credit reports, canceled orders, etc.,” Whitehead says.

He attributes the initiative’s success to several factors, the first of which was company-wide support through a diverse, cross-disciplinary team—including management from operational, administrative, sales and executive departments, as well as SpaceWorks implementation team members—which developed and implemented a step-by-step plan ensuring seamless integration with OSS, and enterprise-wide accessibility. They also considered issues such as the need—whether short- or long-term—for dual systems; security; management of the integration of OSS with the new Web-based ordering environment; and exploration of how the automation of existing business processes affects the output of the entire enterprise.

Whitehead indicates that he is satisfied with the ROI. “Order provisioning efficiencies delivered Primus cost savings of more than half a million dollars in its first year,” he says. “It also prevents orders from getting lost or misfiled, and now delivers additional revenue that would otherwise go unbooked. Internal staff has been largely relieved of the burden of processing orders, allowing for greater attention to sales and customer support. And, perhaps most importantly, customer care has been significantly enhanced, making it harder for other carriers to lure Primus customers away. As a result of related revenue increases and cost savings, Primus experienced a full payback on the initial investment within four months.”

Carriers Still in Low Gear

According to Forrester Research, customer interactions conducted via the Internet cost about $0.04 on average, compared with $1.44 per live phone call. In addition, shifting customer services to the Internet could enable a company to handle 1/3 more volume at 40 percent less cost. At the same time, customer satisfaction for online transactions is higher than through traditional channels. Even with these statistics, telecom service providers seem to be in no rush to shove internal functions to the Internet, according to findings of a study on e-commerce in telecom released in late August by AMS.

Even so, researchers from AMS and GartnerGroup/Dataquest found several progressive telecom-related e-commerce examples. Cisco, in its business-to-technician applications, estimates $6 billion in annual e-commerce revenues in 1999, with 80 percent of its customer care Web-based. ICO Global Communications reports completely automated provisioning for inter-standard mobile roaming in its business-to-business applications, with a reduction of provisioning time from 5 days to 30 minutes and a 95 percent reduction in errors.

The study suggests that while 86 percent of U.S. carriers’ CSRs can bring up a customer payment history and 76 percent can summon a full customer profile while the customer is on the phone, only 62 percent can view a customer’s network trouble history. Furthermore, only 35 percent of service providers are satisfied with the capabilities of their current CRM process or solution for analyzing profitability.

Report findings indicate that most long-distance carriers currently offer product catalogs and basic online ordering capabilities for residential and small business products. Some also provide account management tools (such as the ability to edit contact information or payment methods, and modify service parameters), static bill image presentation, and e-mail customer inquiries for residential and small business customers. A few, such as Sprint via Sprint-in-Touch and IXC via IXC OnLine, provide service request and trouble ticket review capability. Even fewer provide capabilities for network statistics and analysis for some high-end commercial services, such as frame relay.

Incumbent local exchange carriers have initially focused on launching e-commerce services to the residential customer base. All of them describe their various product and service offerings; several allow online ordering for basic residential services. About 30 percent provide bill image review and a choice of payment options, but often only for selected customer sub-segments. Account management tools are available in less than half of these cases. For small business customers, online ordering and bill review are available on about 30 percent of the sites. However, no ILEC appears to provide trouble ticketing or service request review for residential or small business customers. Large business customers, on the other hand, appear to be offered very limited services beyond the basic product descriptions.

Other than CLECs that have chosen to immediately invest in the Internet as an important business channel, most competitive carriers have yet to implement advanced e-commerce capabilities, according to the study. At the report’s publication time, less than a third of the competitive carriers appeared to be providing online ordering for products other than dial-up Internet service. One-quarter of them offer account management capabilities, and roughly one-tenth provide tools for analyzing network traffic and usage. Approximately 20 percent provide electronic bill presentment, while a small minority offer tools for bill analysis. A few competitive carriers invite customers to provide them with their e-mail address for the purpose of targeted marketing on products and services in which the customer expresses an interest.

Perhaps the holdup for telecom e-commerce comes from an investment perspective, the report writers conclude. “E-commerce is difficult to justify through traditional, project-based business cases. However, AMS contends that this should not dissuade communications companies from taking their enterprises to the Web. The competitive advantage achieved through customer focus, increased customer loyalty, and enhanced customer relationship management is what will drive market share in the future.”