A Tectonic Shift in Communications Customer Life Cycle Management

Three Tenets of Amdocs' New Go-to-Market Strategy

Amdocs (NASDAQ: DOX) recently unveiled a new marketing philosophy—one so significant that it is touted as the most important development since the company went public in 1998. Amdocs is an Israel-based company that provides billing systems, customer care, and support to communications companies throughout the world. Its corporate paradigm shift aims to give companies stronger, more profitable customer relationships through its comprehensive portfolio of software and services that span the customer life cycle. Boasting an "intentional customer experience", Amdocs claims to help companies cultivate their return on investment (ROI), lower total cost of ownership (TCO), and improve operational efficiencies.

Part two of the Amdocs Overhauls Its Marketing series.

Amdocs, whose revenue was approximately $1.8 billion (USD) in 2004, has created a customer-centric approach in its Integrated Customer Management (ICM) strategy. As communications companies are facing increased competition and price commoditization, ICM offers to further customer loyalty and increase profitability by offering a point of differentiation in the customer experience. To create this offering of expanded services and integration capabilities, the new strategy involves three elements.

1. Consultancy services
2. A unified software platform
3. A greater reliance on business with industry leaders

This is Part Two of a three-part note.

Part One profiled the company.

Part Three will cover alliances, challenges, and make user recommendations.

Consultancy Services

In mid-March, the vendor announced new business consulting services that should help accelerate the ICM-readiness for communications service providers (CSP). In addition to a current broad set of implementation, integration, and managed services that Amdocs provides to customers, the new consulting services include

• Amdocs ICM Blueprint Framework of Services. An overarching framework that includes the Amdocs ICM Benchmark Service and encompasses a wide range of offerings—from high-level strategy to business process integration, training, and testing. They are designed to help CSPs design, plan, and execute their transformation from a voice service utility to a customer-centric, multi-media retailer.
  
  
• Amdocs ICM Benchmark Service. Addresses critical business processes that impact the intentional customer experience: target, sell, deliver, bill, and support. The ICM Benchmark Service ensures a comprehensive cross-silo view of the organization, which is a business imperative for achieving true ICM. As a part of the ICM Blueprint Framework, the ICM Benchmark Service was designed to assess current state versus industry benchmarks and best practices toward achieving ICM. To that end, the ICM Benchmark Service will facilitate creation of an ICM strategy and vision based on the customer's unique situation, taking into account investments, goals, competitive environment, etc. It will define the unique ICM vision and strategy of an CSP; measure ICM maturity versus industry best practices across people, processes, and technology; identify and substantiate gaps; and define, size, justify, and prioritize initiatives that can be improved through the Amdocs ROI Methodology. The service leverages the Amdocs Telecom Maturity Tool developed based on a licensed methodology researched and designed by Gartner, Inc.
  
  
• Amdocs Contact Center Optimization Service. Focuses on improving the efficiency and effectiveness of contact center operations and self-service capabilities with the emphasis on designing and implementing a customer interaction strategy that delivers an intentional customer experience. The service considers both efficiency and effectiveness of operations and uses modeling and simulation tools to determine the appropriate cost-to-serve, helps elicit the right customer behavior, and maximizes both the perceived value of the interaction to the customer, as well as customer profitability.
  
  
• Amdocs Customer Profitability and Segmentation Service. Helps plan and execute an applied segmentation and customer profitability strategy delivering actionable intelligence at the point of decision, while rationalizing and leveraging past business intelligence and marketing automation (MA) investments. This should give CSPs the power to create better-targeted product offers, communications, bundled services, and support approaches.
  
  
• Amdocs Billing Operations Improvement Service. Applies Amdocs' decades of accumulated "best practices" so that CSPs can take steps to improve the effectiveness and efficiency of their existing operations in areas such as bill cycle time, hardware performance, error handling, service time-to-market, customer satisfaction, and quality.

Possibly the most important facet of Amdocs integration services is that the vendor will now also provide integration services to operators that have not purchased its billing or customer relationship management (CRM) system, including software management, checking and testing, and carrying out the changes necessary to prepare the operator's system to go live. The vendor plans to continue expanding consultancy and integration services, and develop them for integrated customer management.

At present, all users have several accounts with the same operator, such as a cable television account, a fixed-line telephone account, a cell phone account, and so on. The idea behind the new concept is that the operator should manage the system so that every user will have a single account. The new consultancy and integration services should also help operators manage the user's account for all types of services—landline communications, wireless, TV, etc. from one central point. Amdocs believes that consulting and integration services should give it an advantage over the competitors at a time when operators and systems are being consolidated, as these services should enable the vendor to advise the operator about the right approach for integrating networks and systems following the merger.

Unified Software Platform

The launch of these new Amdocs consulting services comes on the heels of the second element of Amdocs' marketing overhaul: a first time offering of a unified software platform. In mid-February, Amdocs launched Amdocs 6, a pre-integrated portfolio of modular, billing, CRM, self-service, order management, mediation, and content revenue management software products aimed at easing and accelerating the adoption of the ICM strategy.

According to a recent Amdocs' study, almost 75 percent of surveyed consumers think their CSP only sometimes, seldom, or never understands their needs. Surprisingly, the survey also revealed that 34 percent of women and nearly 20 percent of men would rather give birth than interact with inexperienced or unhelpful customer service representatives. While consumers clearly identified short hold times and friendly staff as key determinants of good customer service, more than 64 percent felt that their providers only improved customer service when faced with the threat of either the loss of business or increased competitive pressure. Quite simply, when offered an ample choice of providers and services, consumers today feel the easiest and best way to express dissatisfaction is to take their business elsewhere.

Therefore, the products in the new Amdocs 6 portfolio are going to be pre-integrated to remove process barriers across the customer life cycle, from targeting, selling, and delivering, to billing and supporting each customer at all touch-points, including the Web, contact center or bill mailing. Technical platform integration aims at reducing implementation costs for service providers and driving a lower TCO. Key products within the Amdocs 6 portfolio include

• Amdocs Billing 6. A fully convergent billing product, designed to meet the evolving needs of the world's largest CSPs prepaid, postpaid, voice, and data billing operations.
  
  
• Amdocs CRM 6 . Delivers out-of-the-box solutions to optimize customer-centric business processes.
  
  
• Amdocs Order Management 6. A scalable order management product designed to meet the complex ordering requirements of CSPs.
  
  
• Amdocs Content Revenue Management 6. Manages the content supply chain from the partner's domain, through the operator's environment, to the end consumer.
  
  
• Amdocs Mediation 6. A single converged system that adapts to diverse requirements and executes large-scale service logic to address CSPs' most urgent objectives: reducing TCO and increasing business agility.

For instance, the self-service system that Amdocs will provide as part of the platform will purportedly enable telecommunications subscribers to self-manage their budgets via the Internet. They will be able to order and change services, change their account information, check the status of a service they have ordered, and so forth. This system provides subscribers with what amounts to an independent and automated customer service center, thereby relieving the operator's customer service center of a great burden.

Also, in order to provide customers with integration between systems, Amdocs has also developed an integrated catalogue, in contrast to the separate ones it has previously used for each system. The integrated catalogue is software that enables operators to define the systems and services that they want to order. At the same time, users can still order each Amdocs system separately, since the vendor has found that most of its customers prefer switching to an integrated system in stages.

Business with Industry Leaders

The third element of Amdocs' marketing revival ploy is a greater reliance on business with industry leaders, which should enable the vendor to better understanding its customers' business needs and provide proactive solutions. For example, in 2004, Amdocs established a new global business relationship with IBM to provide comprehensive, flexible billing, and CRM solutions with an emphasis on telecommunications customers. Under the terms of the agreement, Amdocs and IBM provide telecommunications companies with joint solutions and a range of managed services options based on IBM services expertise, including business process transformation, order management, information technology (IT) management, and additional business process support. The agreement also enables Amdocs and IBM to pursue joint sales opportunities, expand product and services offerings, and share technical expertise.

In addition, new partnerships with smaller niche players, particularly providers of middleware and video services, have helped Amdocs prepare telecommunications companies to sell video services over their IP networks. With these innovative products, Amdocs touts it is ready to help make the triple play (voice, data, and TV) or even a quadruple play (wire line, wireless, data, and TV) a reality for telecommunication companies as they seek to reclaim their leadership in communications. Amdocs believes these moves will help it fend off its chief competitor, Convergys, which in 2001 bought the UK-based billing provider Geneva. Geneva's product remains highly effective in carrying out billing on IP networks, making it one of the world's largest specialist billing companies. Geneva, along with the cable billing operator CSG Systems, are direct competitors of Amdocs. Moreover, many still believe that Convergys might have another edge over Amdocs due to its WIZARD system (which came from the acquisition of former Israeli company Wiztec Solutions). WIZARD does billing for video broadcasts and is aimed at the cable and satellite communications market.

This concludes Part Two of a three-part note.

Part One profiled the company.

Part Three will cover alliances, challenges, and make user recommendations.