BSS (inc. billing, revenue assurance)

CEM Set for Center Stage

After years of talk about the importance of customer experience management (CEM) in service provider strategies, 2011 showed some signs that operators have started to walk the walk. (See Globe Gets Customer-Centric , Bharti's New Experience and Mgmt World: StarHub's Data Experience.)

Now 2012 looks set to be a year when a number of major Service Provider Information Technology (SPIT) players ramp up their CEM strategies in an effort to capitalize on the growing demand for products and services that can help service providers increase their average revenue per user (ARPU) levels, reduce customer churn and even turn customers into advocates of their brands.

Established SPIT vendors such as Amdocs Ltd. (NYSE: DOX), Convergys Corp. (NYSE: CVG), Tekelec and Tektronix Communications (Arantech), as well as specialists such as Aito Technologies , The Now Factory and Redknee Inc. (Toronto TSX: RKN), have standalone CEM systems that communications service providers (CSPs) can add to their back-office functions.

Now, though, it looks like those companies will face increasingly intense competition from some of the big hitters from the telecom and IT sectors. Oracle Corp. (Nasdaq: ORCL), SAP AG (NYSE/Frankfurt: SAP) and SAS Institute Inc. all have analytics systems that are suitable for the telecom services sector, but the particular names to watch in the coming months are Ericsson AB (Nasdaq: ERIC), IBM Corp. (NYSE: IBM) and Nokia Networks .

Ericsson is set to unveil a swath of new SPIT offers once it closes its acquisition of Telcordia Technologies Inc. , which, although delayed slightly, looks set to be completed in the very near future. (See Ericsson: Telcordia M&A Update, Ericsson + Telcordia: What the Analysts Say and Ericsson to Buy Telcordia.)

While the company isn't discussing its plans until the deal is done, it's almost certain that CEM will feature prominently in Ericsson's portfolio in the coming year.

As Heavy Reading research analyst Caroline Chappell noted in her recent SPIT Insider report, "Customer Experience Management Still Needs to Bridge the Chasm," Telcordia's Service Director product "is one of the brightest spots in Telcordia's portfolio. As Ericsson absorbs Telcordia, it will be interesting to see if Ericsson uses Service Director as the foundation for an embedded CEM strategy." (See Turf Wars Threaten Telco CEM Initiatives and Time for a New Experience.)

IBM, meanwhile, has a number of separate products and services that can be tailored to the specific needs of individual CSPs, but doesn't have a defined, specific CEM offering. That could soon change, though; Chappell points out in her report that IBM "is in the process of defining an extended set of software assets to support CEM for the telco industry." That proposition will likely involve the IT giant's Tivoli suite of OSS tools (which already underpins its cloud service enablement platform), its existing mediation product and input from its Business Analytics and Optimization practice. (See IBM Courts Telcos in the Cloud.)

For NSN, which already offers its CEM platform as a hosted service, it will be a case of building upon capabilities and of customer engagement (it claims to be working with more than 270 CSPs on CEM projects). The vendor identified CEM as one of the pillars of its new strategy and is already developing applications that could help CSPs utilize social media platforms as part of their customer engagement strategies. (See Analysts: NSN Focus Makes Sense, NSN Gives Facebook a New Status and Xtract, NSN Team on Social Analytics.)

But there should be plenty of opportunities for all of the vendors that have carrier-grade offerings, as CSPs are well aware of the importance of CEM to their future plans. Chappell notes that CSPs recognize that CEM "is becoming key to building brand loyalty, influencing customer sentiment, reducing churn, cross- and up-selling services to boost ARPU and cutting customer/device/service management costs. The ability to capture and understand the events that can affect the customer experience in time to be able to influence and optimize that experience is a major source of differentiation for telcos."

— Ray Le Maistre, International Managing Editor, Light Reading

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