The term "smart telco" is taking on a whole new meaning. It is not about whether operators offer value-added services as opposed to "dumb" pipes, but about how intelligent a telco is at managing its customers' experience – and in doing so, driving its business more successfully and efficiently. A truly smart telco uses every available bit and byte of data to make its customers happier, stickier and yes, let's admit it, more economically worthwhile.

But telcos being telcos, customer experience management (CEM) is a game of two halves, as the new Heavy Reading Service Provider IT Insider, "Customer Experience Management Still Needs to Bridge the Chasm," points out. Plenty of operators are beginning to use intelligence from customer relationship management (CRM)/billing systems to make tailored offers to customers in near real time. A quick trawl through the many telecom recruitment sites advertising for customer experience executives finds that most of these positions are offshoots of the customer care/call center function. In other words, many telcos regard CEM as a subset of CRM.

While greater and faster use of analytics in the CRM function is to be welcomed – a recent Heavy Reading survey found that a dispiritedly high proportion of operators do not have even the most basic of customer-related metrics to help steer their customer relationships – this is only one part of the CEM story. The rest of it lies in other functions that equally benefit from an injection of customer intelligence. From a traditional telco operational point of view, if all the boxes in the network appear to be running normally, everything is fine – even if the customer is getting a lousy service experience. Understanding network performance from the customer point of view – as a user of an idiosyncratically configured device, in a specific location, trying to access a particular service, with an individual history of interaction with your organization and a certain value as a customer – is a very different ballgame. But one that is key to CEM.

The CEM tools to create a joined-up, cross-organizational, near-real-time view of customer interactions are out there – TM Forum World in Dublin had more CEM system exhibitors than ever. But the largest barriers to CEM success remains the same: no IT/network-neutral ownership of CEM projects, which still typically occur in IT or network silos, and resistance to sharing the raw data needed to produce a broad range of customer experience analytics across the divide. Operators are gaining quick wins from addressing CEM in a siloed fashion, but down the road, they may end up with fragmented and duplicated sets of instrumentation devices, analytics engines and dashboards that will ultimately reduce the effectiveness of CEM.

Operators that are succeeding in tackling CEM in a more holistic way are about to get a whole lot smarter. They are beginning to automate the link between the intelligence produced by a CEM system and the management actions/decisions that need to be implemented in the operations/business support system (OSS/BSS) stack. As "Customer Experience Management Still Needs to Bridge the Chasm" demonstrates, such automation is key to real-time CEM and it reduces the cost associated with individually managing the experience of millions of subscribers with different devices, services, price plans, profiles, social groups, access types, locations and preferred way of interacting with the operator.

OSS/BSS vendors – including Amdocs Ltd. (NYSE: DOX), Oracle Corp. (Nasdaq: ORCL), Nokia Networks and SAP AG (NYSE/Frankfurt: SAP) from a CRM-oriented perspective and IBM Corp. (NYSE: IBM) from a service assurance perspective – are leading the way here, embedding analytics capabilities within their suites, where they will automatically inform business processes and drive appropriate changes in systems. Vendors such as Tekelec and Tektronix Communications see an opportunity for analytics to automate network changes directly through the policy control function. Meanwhile, CEM vendors with standalone tools need to make a stronger case for a non-embedded, independent CEM function that can work with a range of third-party technologies, especially given the heterogeneous nature of most telcos' OSS/BSS and the fact that the OSS/BSS vendors' embedded analytics story will take a long time to fully evolve.

— Caroline Chappell, Analyst, Heavy Reading Service Provider IT Insider

Customer Experience Management Still Needs to Bridge the Chasm, a 30-page report in PDF format, is available as part of an annual subscription (6 bimonthly issues) to Heavy Reading Service Provider IT Insider, priced at $1,595. Individual reports are available for $900.