Beyond the bottom line: Are there alternative ways to measure the value of customer service systems?

Common wisdom holds that the new generation of back office telecommunications software-tools for integrated customer care, automatic network monitoring, bandwidth management and convergent billing-are the keys to building a better, longer relationship with customers.

But for carriers trying to build efficient, customer-friendly networks, is there a way of measuring how these investments affect the bottom line, other than what the bottom line actually reveals? Analysts contend that evaluating the effect of improved systems will require service providers to apply a combination of real-world thinking and industry-based intuition. While metrics exist to measure everything from network performance to customer retention, no practical measurement exists to gauge the effect of carriers' behind-the-scenes efforts on their customer base.

"The idea that you could do that is a pipe dream," said Mark Winther, vice president for worldwide telecommunications at New York-based market research firm IDC/Link Research. "Not because this isn't a valid idea for a measurement, but because the pace of change today is so rapid and customer service has become so critical that networks are always in a state of flux."

The popular trends for customer service-such as marketing bundled services, integrating billing and managing customer networks-mean that every provider's network is dramatically different from month to month, Winther said.

"The result is that you have a lot of systems [working] together," he said. "It's really easy to determine their importance when these systems fail, but it's not so easy to appreciate their importance when they work as they should."

Ensuring that systems function properly is especially important for business customers, who are increasingly likely to switch carriers should systems disappoint them. "The issue of retention is critical with these customers," said Paul Piazza, a Mt. View, Calif.-based analyst for market researchers Frost & Sullivan. "The trend has been for carriers to add services for these customers just to keep them on board. But how many additional services can a carrier afford to offer and manage, and what does this do to the profit margins?"

The bottom line is that a customer's services will either work to their expectations or fail, said Piazza. "They don't really care as long as their services work and work well."

Integration will let carriers accomplish this in the complex environments they are creating within their operations. "If you're going to appear to work well as a carrier, your systems have to work well together behind the scenes," Piazza said.

While efforts to implement integrated solutions are becoming commonplace, the dynamic nature of the telecom industry means customer care, network management and billing systems are adapted and customized within each carrier, making it even harder to gauge their effectiveness.

Instead of approaching the issue from a return-on-investment point of view, "carriers should accept the fact that their customer care and management systems are likely to be outmoded fairly quickly," said Winther. "Don't try to make systems work for years but make them flexible, so they can evolve over a few years."

That flexibility will directly affect the only metric that ultimately matters: the bottom line. "The scary part of this is that it's really simple in the end," said Piazza. "The customers look at access, quality and price from a bottom-line standpoint, and the carriers have to do the same with the software that provides those services."

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