OSS Firms: Are You Experienced?

Looking for a new experience? Then check out the telecom software sector, where a new category of product is making waves with vendors and is set to attract increasing levels of carrier cash in the next few years.

The emerging market is for OSS (operations support software) tools labeled Customer Experience Management (CEM), a term that, on the face of it, looks flexible enough to include just about anything that fits into a network operations center.

But it's more than just a woolly acronym -- just ask Tektronix Inc. . It recently acquired CEM specialist Arantech , which has a roster of Tier 1 carrier customers and annual revenues of around $35 million (very respectable for a niche telecom software supplier). (See OSS News: Tektronix Strikes Again!)

Arantech developed software that, it says, can "monitor and manage, in real time, the lifecycle experience of every customer that comes into contact with the business or infrastructure of a communications provider... monitoring customers at every point where they touch the business."

Other companies banging the CEM drum include Aito Technologies , Amdocs Ltd. (NYSE: DOX), Chordiant Software Inc. , IBM Corp. (NYSE: IBM), and Oracle Corp. (Nasdaq: ORCL), and many more. (See Blyk Picks Aito and Orange Deploys Chordiant.)

Very basically, CEM involves combining traditional business and operations support functions, such as service assurance, billing, and customer care, for example, with business objectives. The trick, it seems, is to combine data from multiple different systems to create an ongoing profile of a customer.

Patrick Kelly, a research director at Analysys Mason , says that as operators introduce more personalized multimedia services, they are becoming more focused on ensuring that each customer has as positive an experience as possible at every point of interaction with the service provider, from the initial service order onward. If successful, the results should be lower customer churn rates and higher average revenue per customer (ARPU).

That increased need for an holistic and granular view of the customer has generated demand for CEM-related products, which provide service providers with the ability to track, manage, and analyze each customer interaction as part of a total view of that customer, rather than in uncoordinated isolation.

Kelly notes that, as part of their CEM strategies, service providers are investing in software that enables call center customer care, order management, real-time service and network analysis, application transaction monitoring, mobile device management, and targeted marketing.

He estimates that CEM-related investments by telecom service providers will increase from $1.7 billion in 2008 to $4.4 billion in 2013.

Customer retention is a key factor driving CEM deployments, according to Kelly, who notes that the "threat posed by new participants in the economy that offer premium services over a broadband network is accelerating [telecom service provider] investments in CEM."

Nancee Ruzicka, a senior research analyst at Stratecast , also believes operators need to revisit their back office strategies and adopt a CEM approach. She believes it's vital that service providers integrate their customer- and network-facing systems "to monitor and manage the full customer experience... To gain an edge in a hyper-competitive industry with razor-thin margins, communications service providers have to pay attention to every contact with the customer and focus their efforts on making the experience simple, quick, and productive."

CEM is going to be one of the hot topics at the forthcoming Management World 2009 event in Nice, France (May 4-8), where Kelly, Ruzicka, and Light Reading's international news editor Ray Le Maistre will discuss the topic during a panel debate entitled 'Achieving Excellence in Customer Experience' on Friday May 8.

— Ray Le Maistre, International News Editor, Light Reading

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