Customer Life Cycle Solutions: Strategic Alliances, Challenges, & User Recommendations
Strategic Alliance with SAS
Communication enterprises are under intense competition to secure customer loyalty and build greater profitability. Amdocs, a global leader in billing systems, customer care, and support has shifted its strategy, creating a more integrated, customer-centric solution designed to give communication service providers (CSP) a greater competitive edge. Its reinvented portfolio is designed to create an "intentional customer experience," bringing a point of differentiation to the customer life cycle. Amdoc's new strategy involves consultancy services, a unified software platform, and partnerships with industry leaders and it has established a series of new relationships to provide billing and customer relationship management (CRM) solutions to telecommunication companies.
Part three of the Amdocs Overhauls Its Marketing series.
In addition to its new partnership with IBM, (See Part Two) in mid-February, Amdocs and SAS Institute, the world's leader in business intelligence (BI) software, announced that they have formed a global strategic alliance to deliver advanced marketing automation (MA) and decision-centric BI solutions to CSPs. Together, the two companies pledge to enable CSPs to better track and analyze valuable customer data and dynamically present the resulting intelligence via operational systems, such as billing, call center, and ordering.
User companies should thus benefit from advanced customer and market segmentation (a marketing strategy in which the total market is disaggregated into submarkets, or segments, sharing some measurable characteristic based on demographics, psychographics, lifestyle, geography, benefits, etc.), rapid deployment of one-to-one marketing campaigns (a marketing strategy for sending a particular message to a single customer, often assisted by a marketing database) and improved product lifecycle management (PLM) will possibly reduce operating costs, enhance customer loyalty and lifetime value, and increase profitability.
Through a suite of joint solutions, Amdocs' telecommunications industry expertise and established operational applications, coupled with SAS' predictive analytics and profitability software, customers should benefit from a combination of strong analytical software, business consulting, and implementation services, allowing them to unlock valuable intelligence from underlying operational systems.
This is Part Three of a three-part note.
Part One profiled the company.
Part Two discussed market strategy.
Benefits of Partnership
Available immediately, the first offering from Amdocs and SAS is the Customer Profitability and Segmentation solution, which should allow CSPs to understand the costs associated with doing business with their customers. It will enable them to gain vital insight into their customers' behavioral drivers, and to use that knowledge to make business decisions. Ultimately, this solutions aims to maximize customer profitability and create a highly personalized and differentiated customer experience. Other solutions, such as churn management and predictive modeling, will be rolled out in a foreseeable future.
The product marketing and development deal lets SAS take over the support of Amdocs' current marketing campaign management application, which is largely based on the technology acquired by Amdocs from its acquisition of Xchange. Consequently, Amdocs will encourage its few dozen campaign management customers to migrate to SAS' Marketing Automation 4 offering. Existing Amdocs customers of other modules that were built based on Xchange, including Amdocs Opportunity Advisor, will not benefit much from this partnership, although they will continue to be supported.
Bundled with that, these customers will also be offered access to the SAS Telecommunications Intelligence Solutions, the company's set of prepackaged applications tailored to meet the distinctive needs of carriers. Available since mid-2004, the latest suite release includes the ability to more accurately identify customer, product, channel, and tariff profitability. The application's functionality is based not only on SAS' vast implementation experience, but also on SAS' demonstrated activity-based management (ABM) technology, which is in a great part owing to the 2002 acquisition of the activity-based costing and management functionality of former ABC Technologies. These capabilities provide telecommunication companies with more granular views of cost and profitability throughout the organization, providing information that is essential to driving corporate revenue growth and profitability.
Telecommunications companies have historically allocated costs based on traditional accounting methods, which has often resulted in the inaccurate attribution of costs to products, customers, and channels. By using an activity based costing approach (ABC), carriers should be able to assign values to the actual drivers of these costs. ABC attempts to allocate overhead costs on a more realistic basis rather than focusing exclusively on direct labor or machine hours. It is a cost accounting system that accumulates costs based on activities performed. It then uses cost drivers to allocate the costs to products or other bases, such as customers, markets, or projects. SAS' implementation experience with carriers shows that 80 to 90 percent of profitability comes from 20 to 40 percent of customers. Building on this, the ABC strategy will provide CSPs with valuable information on customers, indicating who has the potential to turn into a revenue maker, who should be kept or let go. The solutions should also identify "who" and "what", and "when" they will be eligible for cross- and up-selling opportunities, of which this is a significant move towards near real-time data capture analysis and reaction.
There is a renewed imperative for CSPs to maximize customer profitability and build win-win relationships that inspire customer loyalty and confound competitors. Amdocs' customers face the common challenge of building stronger, more profitable relationships with their customers, which requires the ability to identify, keep, and grow relationships with their most valuable (meaning, profitable) customers.
Thus, the SAS alliance might be crucial for upgrading and leveraging Amdocs' capabilities through the use of valuable business information accumulated within its still diverse systems. This vital information has rarely been extracted before, although many Amdocs' systems are the only business lifeblood for straddled and struggling customer service operators. Namely, a great deal of business information flows through Amdocs' billing, CRM, orders management, mediation, and other systems, but, without the connection between these disparate data, they cannot be accessed, and are therefore unusable. Cooperation between Amdocs and SAS should make it possible to collect this business information from all these systems, cross-reference it, analyze the cross-referencing, and deliver the resulting conclusions to the relevant decision makers within a fairly short time span.
This valuable information should then be almost immediately converted into monetary rewards for the customer service operator and the company. For instance, among many things, analyzing this information should enable operators to know which services are more profitable versus those which are less profitable; what is the mood among users with regard to demand for new services; whether and how existing services should be changed; which users are on the brink of abandoning their operator, and how they can be kept; and what additional services should be offered to each user.
Further, data collected from the orders management system, should, for example, tell the operator, in almost real time, how many orders are still in the system, how many orders arrive every day, which products were ordered, the speed of the response to the order, when payment will arrive, etc. Collaboration between Amdocs and SAS, if truly committed to by both, should make it possible to collect and analyze information stored in these Amdocs' systems, and deliver the conclusions and recommendations to the operator's decision-makers in the form of graphs and practical reports.
Meeting CSP Requirements
This partnership is yet another and likely the final attempt by Amdocs to address the campaign management and customer analytics requirements of its CSP customers. Previously, in early 2003, Amdocs acquired some of the assets of Xchange including about one hundred customers; however, it has been remiss with a viable strategy to revive the product line, which will now be officially retired after 2005. Initially, over twenty companies expressed interest in buying Xchange's assets at the auction, and in maintaining its products and supporting its customers. Among these were Xchange's direct competitors, including Chordiant Software, DoubleClick, SAS, and Unica. While Unica was initially marked as a very likely buyer, at the last moment the vendor elected not to make a bid for the Xchange's assets. Rather, Unica has since announced a migration plan from Xchange's solutions to its Affinium platform, and has migrated approximately 20 percent of Xchange's customer base to Affinium.
Amdocs has since incorporated Xchange's functionality into an enhanced marketing automation system in ClarifyCRM 12.5, and migrated about one-third of these customers onto the product. Yet, despite the combination of Amdocs' preexisting campaign management system and its ClarifyCRM and Xchange suites, the vendor has not been able to build on the traction it had from call center customers in the telecommunications market, and extend it into the marketing automation (MA) field. At the same time, Amdocs has struggled to win new campaign management customers and convert the remaining Xchange customers to the Amdocs product line. Yet, given Xchange's high-profile customers and technologically strong product, one would have expected Amdocs to gain support for the software for a considerable length of time, gain entrance into several attractive industries, and offer an MA product that would be more functional compared to what larger suite vendors can provide. However, that has not happened. Moreover, the fact that Unica lacked interest in acquiring its former foe further indicates how difficult it is for any acquirer to continue to enhance Xchange's platform.
Amdocs has long been a strong leader in customer care and billing applications. With the Xchange acquisition (following its acquisition of Clarify), it could have theoretically positioned itself as an almost complete CRM solution in the communications arena. However, Xchange has turned out to be inadequate within Amdocs to offer the sort of support that CSPs require. As a result, most CSPs have been experimenting with data warehouses from Oracle, SAS, or Teradata, or have been using MA solutions from niche vendors such as Unica.
The partnership between Amdocs and SAS, however, may go well beyond mere public relations (PR) rhetoric, as there should be apparent benefits for each vendor. Namely, SAS should fortify its position in the telecommunications sector (currently with over 200 customers) and extend its CRM analytics functional footprint. At the same time Amdocs should clear up any remaining confusion about its MA strategy and gain the income from extra professional services resulting from the customization and implementation of the new SAS tools. By incorporating SAS' notable analytical CRM capabilities, Amdocs should now convey a stronger message for existing and prospective customers.
Indeed, one of the biggest issues facing Amdocs has been that most of its customers have begun questioning the value of its existing relationship, repeatedly asking about the value that Amdocs has above being a mere billing engine. Consequently, SAS brings a much needed value proposition for existing and prospective Amdocs customers by providing advanced customer analytics and marketing automation to complement Amdocs' more operationally focused products and services.
The two vendors also plan to co-develop BI and CRM products for customers in specific industries with similar needs, such as financial services or insurance—two areas where SAS has been a leader, and where Amdocs aspires to intrude. In particular, Amdocs has recently been exploring new, long-term revenue opportunities in other vertical markets, such as financial services, where it can leverage its well-known strengths in billing and CRM.
Challenges
While this is indeed a major step forward and a mindset change for Amdocs, we are still talking here only in terms of strategy and not tangible deliverables—i.e., a technological platform that integrates all of its systems. Namely, up until now, Amdocs has been an IT project, service-based company, rather than a provider of off-the-shelf solutions, since a solution that suits one customer does not necessarily suit another. Given that Amdocs has to adapt every system to an operator's network, it is likely that its new strategy will include the integration of solutions, although the solutions will, to a large extent, continue to be services-based..
The partnership's key to success will be Amdocs' true commitment to its newly minted Integrated Customer Management (ICM) strategy, which promise to provide the integration of comprehensive products and solutions, including billing, order management, mediation, and services for CSPs). Also necessary to the partnership's success is Amdocs' ability to integrate SAS' products with its own.
SOURCE:
http://www.technologyevaluation.com/research/articles/customer-life-cycle-solutions-strategic-alliances-challenges-user-recommendations-18096/
Communication enterprises are under intense competition to secure customer loyalty and build greater profitability. Amdocs, a global leader in billing systems, customer care, and support has shifted its strategy, creating a more integrated, customer-centric solution designed to give communication service providers (CSP) a greater competitive edge. Its reinvented portfolio is designed to create an "intentional customer experience," bringing a point of differentiation to the customer life cycle. Amdoc's new strategy involves consultancy services, a unified software platform, and partnerships with industry leaders and it has established a series of new relationships to provide billing and customer relationship management (CRM) solutions to telecommunication companies.
Part three of the Amdocs Overhauls Its Marketing series.
In addition to its new partnership with IBM, (See Part Two) in mid-February, Amdocs and SAS Institute, the world's leader in business intelligence (BI) software, announced that they have formed a global strategic alliance to deliver advanced marketing automation (MA) and decision-centric BI solutions to CSPs. Together, the two companies pledge to enable CSPs to better track and analyze valuable customer data and dynamically present the resulting intelligence via operational systems, such as billing, call center, and ordering.
User companies should thus benefit from advanced customer and market segmentation (a marketing strategy in which the total market is disaggregated into submarkets, or segments, sharing some measurable characteristic based on demographics, psychographics, lifestyle, geography, benefits, etc.), rapid deployment of one-to-one marketing campaigns (a marketing strategy for sending a particular message to a single customer, often assisted by a marketing database) and improved product lifecycle management (PLM) will possibly reduce operating costs, enhance customer loyalty and lifetime value, and increase profitability.
Through a suite of joint solutions, Amdocs' telecommunications industry expertise and established operational applications, coupled with SAS' predictive analytics and profitability software, customers should benefit from a combination of strong analytical software, business consulting, and implementation services, allowing them to unlock valuable intelligence from underlying operational systems.
This is Part Three of a three-part note.
Part One profiled the company.
Part Two discussed market strategy.
Benefits of Partnership
Available immediately, the first offering from Amdocs and SAS is the Customer Profitability and Segmentation solution, which should allow CSPs to understand the costs associated with doing business with their customers. It will enable them to gain vital insight into their customers' behavioral drivers, and to use that knowledge to make business decisions. Ultimately, this solutions aims to maximize customer profitability and create a highly personalized and differentiated customer experience. Other solutions, such as churn management and predictive modeling, will be rolled out in a foreseeable future.
The product marketing and development deal lets SAS take over the support of Amdocs' current marketing campaign management application, which is largely based on the technology acquired by Amdocs from its acquisition of Xchange. Consequently, Amdocs will encourage its few dozen campaign management customers to migrate to SAS' Marketing Automation 4 offering. Existing Amdocs customers of other modules that were built based on Xchange, including Amdocs Opportunity Advisor, will not benefit much from this partnership, although they will continue to be supported.
Bundled with that, these customers will also be offered access to the SAS Telecommunications Intelligence Solutions, the company's set of prepackaged applications tailored to meet the distinctive needs of carriers. Available since mid-2004, the latest suite release includes the ability to more accurately identify customer, product, channel, and tariff profitability. The application's functionality is based not only on SAS' vast implementation experience, but also on SAS' demonstrated activity-based management (ABM) technology, which is in a great part owing to the 2002 acquisition of the activity-based costing and management functionality of former ABC Technologies. These capabilities provide telecommunication companies with more granular views of cost and profitability throughout the organization, providing information that is essential to driving corporate revenue growth and profitability.
Telecommunications companies have historically allocated costs based on traditional accounting methods, which has often resulted in the inaccurate attribution of costs to products, customers, and channels. By using an activity based costing approach (ABC), carriers should be able to assign values to the actual drivers of these costs. ABC attempts to allocate overhead costs on a more realistic basis rather than focusing exclusively on direct labor or machine hours. It is a cost accounting system that accumulates costs based on activities performed. It then uses cost drivers to allocate the costs to products or other bases, such as customers, markets, or projects. SAS' implementation experience with carriers shows that 80 to 90 percent of profitability comes from 20 to 40 percent of customers. Building on this, the ABC strategy will provide CSPs with valuable information on customers, indicating who has the potential to turn into a revenue maker, who should be kept or let go. The solutions should also identify "who" and "what", and "when" they will be eligible for cross- and up-selling opportunities, of which this is a significant move towards near real-time data capture analysis and reaction.
There is a renewed imperative for CSPs to maximize customer profitability and build win-win relationships that inspire customer loyalty and confound competitors. Amdocs' customers face the common challenge of building stronger, more profitable relationships with their customers, which requires the ability to identify, keep, and grow relationships with their most valuable (meaning, profitable) customers.
Thus, the SAS alliance might be crucial for upgrading and leveraging Amdocs' capabilities through the use of valuable business information accumulated within its still diverse systems. This vital information has rarely been extracted before, although many Amdocs' systems are the only business lifeblood for straddled and struggling customer service operators. Namely, a great deal of business information flows through Amdocs' billing, CRM, orders management, mediation, and other systems, but, without the connection between these disparate data, they cannot be accessed, and are therefore unusable. Cooperation between Amdocs and SAS should make it possible to collect this business information from all these systems, cross-reference it, analyze the cross-referencing, and deliver the resulting conclusions to the relevant decision makers within a fairly short time span.
This valuable information should then be almost immediately converted into monetary rewards for the customer service operator and the company. For instance, among many things, analyzing this information should enable operators to know which services are more profitable versus those which are less profitable; what is the mood among users with regard to demand for new services; whether and how existing services should be changed; which users are on the brink of abandoning their operator, and how they can be kept; and what additional services should be offered to each user.
Further, data collected from the orders management system, should, for example, tell the operator, in almost real time, how many orders are still in the system, how many orders arrive every day, which products were ordered, the speed of the response to the order, when payment will arrive, etc. Collaboration between Amdocs and SAS, if truly committed to by both, should make it possible to collect and analyze information stored in these Amdocs' systems, and deliver the conclusions and recommendations to the operator's decision-makers in the form of graphs and practical reports.
Meeting CSP Requirements
This partnership is yet another and likely the final attempt by Amdocs to address the campaign management and customer analytics requirements of its CSP customers. Previously, in early 2003, Amdocs acquired some of the assets of Xchange including about one hundred customers; however, it has been remiss with a viable strategy to revive the product line, which will now be officially retired after 2005. Initially, over twenty companies expressed interest in buying Xchange's assets at the auction, and in maintaining its products and supporting its customers. Among these were Xchange's direct competitors, including Chordiant Software, DoubleClick, SAS, and Unica. While Unica was initially marked as a very likely buyer, at the last moment the vendor elected not to make a bid for the Xchange's assets. Rather, Unica has since announced a migration plan from Xchange's solutions to its Affinium platform, and has migrated approximately 20 percent of Xchange's customer base to Affinium.
Amdocs has since incorporated Xchange's functionality into an enhanced marketing automation system in ClarifyCRM 12.5, and migrated about one-third of these customers onto the product. Yet, despite the combination of Amdocs' preexisting campaign management system and its ClarifyCRM and Xchange suites, the vendor has not been able to build on the traction it had from call center customers in the telecommunications market, and extend it into the marketing automation (MA) field. At the same time, Amdocs has struggled to win new campaign management customers and convert the remaining Xchange customers to the Amdocs product line. Yet, given Xchange's high-profile customers and technologically strong product, one would have expected Amdocs to gain support for the software for a considerable length of time, gain entrance into several attractive industries, and offer an MA product that would be more functional compared to what larger suite vendors can provide. However, that has not happened. Moreover, the fact that Unica lacked interest in acquiring its former foe further indicates how difficult it is for any acquirer to continue to enhance Xchange's platform.
Amdocs has long been a strong leader in customer care and billing applications. With the Xchange acquisition (following its acquisition of Clarify), it could have theoretically positioned itself as an almost complete CRM solution in the communications arena. However, Xchange has turned out to be inadequate within Amdocs to offer the sort of support that CSPs require. As a result, most CSPs have been experimenting with data warehouses from Oracle, SAS, or Teradata, or have been using MA solutions from niche vendors such as Unica.
The partnership between Amdocs and SAS, however, may go well beyond mere public relations (PR) rhetoric, as there should be apparent benefits for each vendor. Namely, SAS should fortify its position in the telecommunications sector (currently with over 200 customers) and extend its CRM analytics functional footprint. At the same time Amdocs should clear up any remaining confusion about its MA strategy and gain the income from extra professional services resulting from the customization and implementation of the new SAS tools. By incorporating SAS' notable analytical CRM capabilities, Amdocs should now convey a stronger message for existing and prospective customers.
Indeed, one of the biggest issues facing Amdocs has been that most of its customers have begun questioning the value of its existing relationship, repeatedly asking about the value that Amdocs has above being a mere billing engine. Consequently, SAS brings a much needed value proposition for existing and prospective Amdocs customers by providing advanced customer analytics and marketing automation to complement Amdocs' more operationally focused products and services.
The two vendors also plan to co-develop BI and CRM products for customers in specific industries with similar needs, such as financial services or insurance—two areas where SAS has been a leader, and where Amdocs aspires to intrude. In particular, Amdocs has recently been exploring new, long-term revenue opportunities in other vertical markets, such as financial services, where it can leverage its well-known strengths in billing and CRM.
Challenges
While this is indeed a major step forward and a mindset change for Amdocs, we are still talking here only in terms of strategy and not tangible deliverables—i.e., a technological platform that integrates all of its systems. Namely, up until now, Amdocs has been an IT project, service-based company, rather than a provider of off-the-shelf solutions, since a solution that suits one customer does not necessarily suit another. Given that Amdocs has to adapt every system to an operator's network, it is likely that its new strategy will include the integration of solutions, although the solutions will, to a large extent, continue to be services-based..
The partnership's key to success will be Amdocs' true commitment to its newly minted Integrated Customer Management (ICM) strategy, which promise to provide the integration of comprehensive products and solutions, including billing, order management, mediation, and services for CSPs). Also necessary to the partnership's success is Amdocs' ability to integrate SAS' products with its own.
SOURCE:
http://www.technologyevaluation.com/research/articles/customer-life-cycle-solutions-strategic-alliances-challenges-user-recommendations-18096/
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