Is your company taking advantage of virtualization technologies? Has the company explored the advantages of communication virtualization for the contact center? This post summarizes how virtualization of resources via an intelligent, enterprise communication architecture can deliver eye-popping returns that even the boldest of system sales person would not claim.

Most telecom solutions providers tout savings such as reduced long distance and telco expenses in traditional tactical (OPEX-reduction) business cases. Most of my blog posts aim to elevate communication investment decision making to the strategic level.

One of our clients delivers broadband service to over one hundred cities, with most calls handled locally in small contact centers within the service areas. The customer care leadership recognized that customer service reps skilled at “saving” a cancellation request were rare. When each service center operated on its own, the likelihood was very low that a cancellation request would be matched up with a customer service representative (CSR) with the skill to turn the caller around. The net present value of each subscriber won or lost is nearly $4,000.

The virtualization concept, in this scenario, refers to unifying all of the small contact centers to appear as one set of resources. A short self-service menu picked out nearly 90% of intended cancellation requests. These calls were routed to those select CSRs proven to be capable of retaining subscribers. The save rate tripled from one out of four to three out of four. Put another way, retention rates improved from 25% to 75%. Based on a conservative rate of $3,500 value (NPV of net cash flows) per subscriber, the aggregate value of virtualizing routing calls based on skill set was greater than the entire capital cost of deploying a distributed (VoIP-networked) communication infrastructure.

Allowing customers, partners and even employees’ quick access to the right resources is applicable to nearly all businesses. While the client above is in a heavy customer service (“call center”) industry, all enterprises must improve the ability to communicate with the right resources quickly and on the first call. Being able to problem solve, using the best media, e.g. voice, text, email, IM, video as selected by the customer, is the business value proposition of unified communications.

The moral of this story is that the success described above is an obvious lesson in how communication technology investments aid in the retention of customers. Immediately matching the right resource to a valuable customer scenario was easily quantifiable … Businesses must be proactive in empowering high value customers, knowledge workers, and business partners to collaborate with them on their terms. That takes planning and forward thinking, moving beyond yesterday’s staid communication and information management tools. If your firm doesn’t, your competitor will.

What are your thoughts on telecom virtualization and skills based routing? If you found this post useful, please leave a comment, share with your peers, or subscribe to the news feed to have my future posts delivered to your news feed reader.

One of John Locke’s better known contributions to political theory of the 17^th century was the Social Contract. The concept is that of men willingly giving up some individual liberty in order to form a state that would act on behalf of the people for the common good, e.g. protection from within and outside the state.

There is a parallel social contract between telecommunication systems manufacturers and its customers. To understand the social contract for a technical (IT leader) or economic (CFO) buyer of telecommunication equipment consider the following:

• The manufacturer invests billions of dollars in software and hardware R & D and sells the systems below the true cost of developing, selling and installation. The general economics are that most new systems are sold at a loss in order to gain the longer term, more profitable relationship of an overpriced, manufacture -based maintenance contract.
• The break-even period is about three and a half years. In other words, it takes two and a half years AFTER the warranty period for the manufacturer to break-even on the equipment sale.
• Most technical and economic decision makers agree to continue paying for manufacturer-based maintenance because the maintenance contract pays for ongoing enhancements, typically in the form of tactical software service patches.
• The social contract is formed when you agree to over pay for high margin maintenance because your company might benefit from ongoing R & D performed by the manufacturer. The parallel is that you give up some personal liberty (how to more frugally obtain telecom maintenance) in return for protection of your telecom asset.

The parallel to Locke’s social contract is that your company can always invest in new technology from your current telecom solution provider, whether you continue to be a maintenance customer or not. Most manufacturers reward loyal customers with upgrade incentives. Often times you can do just as well, or better, through savvy procurement techniques.

SO WHAT?

The question for the reader is this: Are you 5+ years past the warranty period on your telecom platform? If so, this may or may not make economic sense. Below is a case for each:

1. Makes Economic Sense: Your telecom solutions partner continues to be delivering value-added enhancements on your current platform. You are unlikely to move to a different telecom solutions provider. Therefore, it makes sense to continue funding ongoing development into your current and future product set by voluntarily paying a premium for a manufacture-based maintenance Contract.

2. Does not make Economic Sense: Your current platform is dead-ended. The last service patch was installed 4 years ago. No further enhancements are being made. You are therefore funding the manufacturers’ R & D with no benefit likely to be realized by your firm, especially if your plans are to move to an entirely new platform. You may even be funding your competitor’s competitive edge, to take this line of reasoning another step.

Conclusion:

The traditional default decision to play nice with the telecom manufacturer in terms of investing in a solid telecom solutions platform and remaining on manufacturer-based maintenance needs to be closely scrutinized, especially in today’s market. Maintenance contracts are the cash cows for telecom solutions providers. Your firm benefits in the long run if you have access to more economical future patch releases. But, if you are living on borrowed time in terms of extending the life of your PBX and call center platforms, a strong business case can be made that you should divert the premium maintenance fees being paid in to a savings account for the telecom platform in your future.

What are your thoughts on telecom manufacturers’ maintenance contracts? If you found this post useful, please leave a comment, share with your peers, or subscribe to the news feed to have my future posts delivered to your news feed reader.

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My neighbor works for a multi-billion dollar international conglomerate and he grumbles because his only choice for a mobile device is a BlackBerry and they require him to use Lotus Notes. In contrast, at Telizent Communications, our leadership team alone uses no less than 5 different mobile operating systems (iPhone, Windows Mobile, BlackBerry, Palm and Nextel) and they run on 3 different carriers (AT&T, Verizon and Sprint)! We have standardized on Microsoft Exchange and Skype in our organization because both applications run seamlessly on each of our mobile devices, as well as on our Windows and Mac OS PC platforms.

While standards help organizations leverage economies of scale and reduce overall usage costs, IT groups within large companies are realizing that the “one-size-fits-all” mentality is no longer acceptable.

It seems that every day a new article is published about which carriers have the best networks, which mobile devices have the best user interface, or what mobile applications have the most downloads. Of these three areas, which do you believe is most important?

Though I don’t use an iPhone personally, I have to take my hat off to Apple with regard to their now famous slogan “There’s an app for that”. I too believe that the mobile application is the most important piece to the mobility movement, especially if it runs on multiple mobile platforms. Network World’s Mitchell Ashley, refers to these mobile apps as “micro apps” – a narrow, targeted, mobile app that performs a specific task at the very moment you think of it or need it. Mitchell believes that users would rather download an app to perform a discrete tasks rather than searching for them in Google, navigating to the right website, and then having to use a website interface. I agree.

Do you support multiple mobile devices and/or applications within your organization? BlackBerry has been the dominant smart phone in corporations because of how well it has addressed security requirements; however they have limited apps for their users and are therefore at risk of losing market share. In fact, two highly regarded analysts think that Apple and Blackberry will be in the rearview mirror of both Android apps and Microsoft Mobile apps as early as 2012. Gartner believes that Android will grab the No. 2 position in market share in 2012 while iSuppi analyst Tina Teng predicts Windows Mobile will be the #2 OS in 2013.

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In a prior blog post I discussed some of the intangible benefits of a properly implemented communications architecture. This entry dives a little deeper with specific examples of intangible benefits realized by a $50 million broadband services division of a Fortune 500 enterprise.

The National Division was challenged to manage customer service centers distributed across 20 cities and three time zones as profitably as the other divisions. There was an expectation of leveraging economies of scale based on the contact center footprint. The original business case for a $2.5 million dollar capital investment was heavily based on an uptick in call center efficiencies and revenue generations. To the enterprise’s delight, the more strategic benefits were recognized by business acceleration. The capital investment replaced numerous standalone telephony and ACD platforms with a distributed architecture that centralized contact center applications at the firm’s headquarters. To maintain local customer service, most calls remained at each remote service center with routing, reporting and automated services offered through the headquarters site. The centralized communications center was networked with the distributed offices via private VoIP links. This is a typical configuration for implementing virtual contact centers.

The company knew its customer service traffic peaks were in the first couple of business hours and late afternoons. This left spare capacity for high quality video conferencing, which shared the same high quality private network, in the middle of the day. Rolling out video conferencing systems to all of the remote sites facilitated training of the remote management and customer service representatives (CSRs). Beyond the obvious travel cost savings, the company was able to train its field staff and CSRs on new service offerings and best practices significantly faster and more thoroughly than its previously used training model. The firm was able to add high quality programs and new revenue streams without having to add incremental CSRs. Video training enabled the firm to accelerate the number of new programs faster and with higher than anticipated customer satisfaction rates.

The National Division’s communications infrastructure plays a strategic role in assimilating acquisitions. Plug and Play is the catch phrase the firm uses in the business requirements phase of assimilation. This phrase refers to the ability to quickly and economically add any site into the virtual contact center including the flexibility to handle calls locally or centrally by a live CSR or via automated services. National Division added nearly 40 sites to the plug-and-play architecture in less than 60 days. The ability to plug-and-play accelerated business integration of a multi-billion dollar acquisition by three months, saving tens of millions of dollars in terms of customer retention and staff productivity.

Companies of all sizes need to be vigilant regarding their communications architecture. A big picture strategy across the entire enterprise enables a firm to leverage emerging technologies, in this case high quality video, to accelerate business processes.

My next blog will address how a sound communications architecture addresses the need to do more with less mantra of business in a challenging business environment.

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What if you were told that you could talk (or chat) with over 400 million people for free? That is what companies that use phone systems based on the open source product, Asterisk, can now do (see “Skype for Asterisk Now Available“).

With no additional hardware, businesses can download the Skype for Asterisk module and enable their employees to direct dial Skype users right from their existing telephone! Combine this module with Skype’s existing ability to provide live text chat, video chat, and screen sharing with over 400 million Skype users around the world, you can now easily equip your organization with a robust communication platform for very little cost.

I’m not advocating that companies go out and buy an Asterisk phone system, but I am suggesting that you should be asking yourself if your infrastructure is flexible enough to effectively communicate with all of your constituents. As we know, our prospects, customers, partners and vendors want to communicate with us when and how they want. The more flexible we can be to communicate with those who have a need for our services, the more compelling our services will be to them. It is my conviction that unless you have this mindset, you will wake up one morning and realize the train has left the station and your company is not on it.

In March of this year I travelled to London to attend the 2009 UC Expo. Industry experts had indicated that Europe was about 12 months ahead of the US in the adoption and deployment of Unified Communications (UC) systems and I needed to get a sense of what was available and what was coming down the pipe. My primary focus was to understand the capabilities of Microsoft’s OCS (Office Communication Server) system because some of our customers and prospects were asking questions about OCS and how it might integrate with their existing Avaya, Nortel, and Siemens PBX systems. I’m pleased to say that one of our Microsoft partners became OCS certified ) shortly after I returned to the States, and I now have the Office Communicator client open on my desktop – right next to my Skype client.

I will spend some time in a future post talking about how impressed I am with Microsoft’s Office Communicator (MOC), especially with how it seamlessly integrates presence into my exiting Office applications (Word, Excel, Outlook, Live Meeting, etc). However MOC does not afford me the same type of convenient, cost effective access to our prospects, customers, partners and vendors that Skype currently does. For example, we just hired two sales people on the east coast and it was effortless to begin communicating with them via Skype – voice, chat, and now screen sharing – for no cost. Similarly, one of the modules we use on our Service Portal was developed by a company in Spain and I chat with their developers via Skype.

What is your experience with communicating with your customers, partners, vendors and prospects? Do you find chat clients like Skype valuable? Does your company allow 3^rd party chat clients on your network? What lessons have you learned? I’m all ears.

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Why should you have remote access connectivity into your business telephone system? Simply put, remote access to your phone system is the fastest way to fix problems and return communication services to your business. Most problems experienced by business phone systems can be fixed remotely, but even if there has been an electronics failure and a card or board has to be replaced, remote access allows the phone system service provider to better determine the cause of the problem and arrive with the correct part. This decreases the onsite repair time and the number of return visits.

While supporting our PBX maintenance clients around the country, we’re often asked if the client really needs to have remote access available for their phone system. What does this mean? Most PBX phone systems have the ability to install a modem, either internal to the phone system or an external unit connected to a serial port. Newer IP PBX systems can be connected to the company’s intranet and a VPN connection established to a trusted maintenance service provider.

Sometimes a modem for the phone system is an included option when the system is purchased. Modem access is the simplest to get working and once it is setup it just needs a working POTS (plain old telephone service) line connection to have dial-up access to the PBX phone system. VPN access is often faster to use (data rate) and more reliable than modem access, but is more involved to setup and get working.

Are there security concerns with providing remote access to your telephone system? The short answer is yes. Modem access is much more straightforward to setup and nearly all phone systems that support modem connectivity will prompt the modem caller for a username and password before allowing access to the phone system. There are even secure modems available (more costly then a regular modem) that add another layer of username and password security and hang up the phone line if an incorrect username or password are entered. There is also the option of leaving the phone line disconnected from the modem until there is a problem and connecting it after you’ve contacted you maintenance provider. However, as simple as this seems it means that when you have a problem (even after hours) someone from your business needs to travel to the phone system’s location to connect the phone line to the modem. Also, many phone systems can reactively call your maintenance provider to report a problem if the maintenance provider has a monitoring system (this topic is a future post) and that wouldn’t work if the phone line is left disconnected until needed.

Security is something all businesses must consider in today’s hacker happy computer society. However, there is much that can be done to protect your businesses data security and the security of your phone system. First, VPN access is designed to be secure; the way it works is a secure encrypted tunnel is established between two organizations over the Internet between firewalls. There are two caveats with VPN access. The first caveat is that it requires software and sometimes hardware to make it work. Second caveat is that VPNs are a bit complex to setup and it will require the involvement of an IT person who understands how to configure a VPN and how to make changes to your company firewall.

The benefits of enabling remote access to your phone system outweigh the risks. Remote access decreases the amount of time your phone system is down and improves reliability. Remote access also decreases the number of onsite service calls and the parts required to repair your system. Remote telephony access makes good business sense.

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