Prone to Failure: Why CRM and Billing Systems Implementations Are High Risk

Finally, carriers need to carefully define their approach for retaining the services of a service integrator. First and foremost, retain a single service provider that assumes full accountability for delivering results. Do not fragment across multiple integrators, which results in the impossibility of designating a responsible party. Secondly, when selecting the integrator, make sure it is well versed in the product chosen and that it has a solid implementation track record. Third, when negotiating the contract, ensure that the integrator will staff the most experienced team in the engagement. Similarly, when determining the scope of services to be purchased, opt for assigning end-to-end responsibility and accountability, ranging from requirements gathering to conversion.

Raul Katz is an Adjunct Professor in the Division of Finance and Economics at Columbia Business School. His research interests focus on the strategic, operational and technology issues surrounding the management of telecommunications service providers.

Footnotes:

1. Data on these five case studies was collected through a series of multiple interviews of executives of the IT and business functions at each carrier. Given that our purpose was to focus on implementation risks and failures, our sample is biased toward carriers that have encountered problems in installing systems. Furthermore, since we are interested in understanding the influence of commercially available off-the-shelf solutions on implementation, all our cases entail the customization of packaged software. An appendix with detailed case study data is included in the on-line version of this article.

2. Both companies have been acquired by Oracle Corp.

3. To the carrier’s credit, this service interruption was managed through a highly effective communications strategy that surprisingly showed an increase in customer satisfaction during the cutover period.

4. This was largely due to the rating capability introduced in phase 1 of the project which offset the impact of inability to launch new services (the business was able to introduce new services only if they fitted the configuration models of the system. However, once the system was implemented the improved functionality has delivered significant benefits to the businesses with one of the subsidiaries gaining significant market share over its competitors.

5. As one of the CEOs stated in the course of his interview, “an ERP implementation has a potential risk level between 4 and 5 out of 10, while CRM and billing have a risk between 8 and 9”.

6. Vendor appears to have corrected this shortfall in a recent release.

7. The problems pointed here are not uncommon. See Gliedman, C. Oracle Siebel CRM leads in record-centric customer service management software (May, 2007): “...applications complexity, high cost, a clunky user interface, and lengthy implementation schedules are drawbacks”.

8. North American wireless carrier.

9. Asian subsidiaries of global wireless carrier.

10. See Katz, R. Assessing TCO for Best-of-Suite versus Best-of-Breed in the communications service industry (2007)

11. Part of the problem was based on the fact that the vendor assumed that it could apply to a telecommunications carrier the integration roadmap originally developed for a financial services company.

12. Of the 65 business processes, the middleware supported three to a useable level, and only one fully.

13. In many cases, the business people involved in project tasks were very junior or were not the top talent (in other words, only the staff considered being less critical to end user functions were the people made available to the project).

14. This added a minimum of six months to the original project schedule.

15. In the case of the North American wireless company there was not one but over 20 systems integrators involved in the project, while in the Asia/Pacific wireless carriers the systems integrator did not have end-to-end contractual responsibility including migration.

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