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Customer experience as a service: a double benefit

Analysys Mason helped a group CTO to create an industry-leading network outsourcing strategy that would deliver a significant improvement in the customer experience while also reducing costs – a double benefit.

Customer experience as a service

Customer experience and end-to-end performance management have been a popular topic at exhibitions and sales presentations over the past few years, but vendors have only just started to implement the first solutions that will provide operators an insight into their customer service offering.

Analysys Mason played an instrumental part in the first major outsourced network managed services contract between Ericsson and Hutchison 3G UK (3) back in 2005. Since then, managed services have developed greatly as they became widely adopted by operators worldwide. Ericsson, now one of the leading players, manages networks with more than 1 billion users. Recently, we supported an international operator in the development of a managed services contract that aims to not only reduce costs, but also significantly improve service quality and customer experience.

From cost reduction to network performance: the evolution of managed services

At first, the primary aim of network outsourcing was the reduction of operational expenditure, which was achieved through staff optimisation, process homogenisation and automation, and, eventually, economies of scale. Providers of managed services, such as Ericsson, Huawei and Nokia Siemens Networks, have invested in global network operations centres to help realise these potential savings.

As managed services matured, the focus shifted towards network performance, which is only one aspect of service quality, and the customer experience. In this second phase, the performance of each network element became a key performance indicator (KPI) and a contractual commitment between the outsourcing operator and the managed services provider.

KPI requirements became more stringent as managed services grew in popularity in Europe and Asia. Some providers have expanded their portfolio to offer capacity management, in a bid to provide 'end-to-end' managed services.

Bridging the gap between service perception and network performance

Each approach to managed services has yielded short-term benefits, but CTOs have raised concerns over:

  • the lack of visibility of their network after operations have been offshored
  • managed services becoming focused on the contract, not the services
  • the managed services partner reverting to being an application or hardware vendor.

A common observation in network operations (in-house and outsourced) is that service perception and network performance do not often align. Customers (and CEOs) complain about poor service quality, dropped calls or slow Internet access, while according to network operations (and the CTO) network KPI targets are being met.

This difference in performance perception is largely a result of the legacy of network performance and management. As the number of technologies required to deliver services has multiplied, specialised silos of expertise and management have been created. End-to-end service management was not possible because of the lack of cross-silo, co-ordinated resources, processes and tools.

Our client recognised these challenges and wanted to initiate a 'third phase' of outsourcing, where the network partner committed to deliver end-to-end customer experience and key quality indicators in order to deliver a real competitive advantage for the operator. We looked for creative ways for the provider to achieve its business objectives and to avoid recreating the poor service experiences of others.

Our client's corporate strategic targets included programmes to:

  • increase brand perception and value through service excellence
  • decrease time to market through harmonisation of services
  • manage operational expenditure efficiently
  • rectify challenges presented in local operations, such as shortage of skilled staff.

Analysys Mason helped create a value proposition outside the boundaries of the classic outsourcing model – balancing bottom-up customer experience aspects, such as the rapid deployment of temporary cell sites for special events, and top-down business targets, such as opex reduction.

The key success factors of 'customer experience as a service'

Managed service providers were invited to bid for the same services and contractual requirements, allowing direct comparison through a third-party tool. The approach allows for growth by defining performance targets based on cost and – most importantly – subscriber experience management, or 'customer experience as a service'.

A critical aspect in realising customer-experience-as-a-service is to establish and document a strategic partnership, using tools and processes effectively, and to establish transparent communication between the service provider and the operator. Getting these right enables both parties to turn the benefits of the service into commercial success.

Introducing experience management meant converging customer and network operations, and combining technical and commercial teams within the operator to agree the customer experience targets. This is a unique and industry-leading approach. While the project was technology-driven, one of its aims was to enable the operator to extend the reach of performance management beyond its traditional setup of graphs and numbers. As a result, it required in-house transformation across all customer services business units.

Customer experience must be seen as the natural evolution of performance measurement, utilising most of the existing infrastructure in order to be cost efficient (see Figure 1). From the start of performance monitoring on node level (Phase 1 on the left) to the aggregation of nodes and counters to form cluster performance statistics (Phase 2 in the middle), the target had always been to establish a real insight into the actual performance of the network. Customer experience is taking the next step in this evolution by looking beyond the network performance and into the actual customer service rendering (Phase 3 on the right).

Figure 1: The evolution of performance measurement [Source: Analysys Mason, 2013]

Figure 1: The evolution of performance measurement [Source: Analysys Mason, 2013]

Analysys Mason has helped to create an innovative network and customer experience managed services contract with the potential to not only reduce network opex, but also increase revenue by improving the customer experience and reducing churn.