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Telcos Reap CRM Returns
Amid widely reported CRM failures, a Fujitsu Consulting study today found a bright spot in the telecommunications sector -- one of the fastest adopters of CRM technology.
Posted May 28, 2002
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Amid widely reported CRM failures, a Fujitsu Consulting study today found a bright spot in the telecommunications sector -- one of the fastest adopters of CRM technology. The IT consulting firm reported that several large communications companies achieved major improvements in the efficiency and effectiveness of their sales, marketing and service processes through skillful implementation of CRM. More importantly, CRM holds the keys to success for telecommunications companies, more so than most other industries. Soaring marketing and sales costs, infamous customer churn and rising competition in the telecommunications industry have driven companies to adopt CRM. "These forces are likely to increase as more and more wireline traffic moves to wireless and Internet networks," said David Yamashita, director at Fujitsu Consulting, in a statement. "Communications companies that can leverage CRM will have a significant advantage." Fujitsu Consulting surveyed 45 companies and researched case studies from eight major telecommunications firms, such as Sprint, WorldCom, BellSouth, Verizon and AT&T. In so doing, Fujitsu Consulting uncovered a few CRM usage trends and best practices. How widespread is CRM in telecommunications? Thirty eight percent of respondents have completed a CRM initiative, trailing only utilities (58 percent) and financial services (46 percent). "We've established that CRM is at the forefront of telecommunications' companies," says Deborah Czerna, associate director at Fujitsu Consulting. In the telecommunications industry, cutting costs is the mantra of the moment. Part of this means transitioning call-center calls handled by representatives to cheaper Web self-service, email and interactive responses -- a feat that falls in the lap of CRM. According to Fujitsu Consulting, the average telecommunications company plans to reduce the percentage of total customer interactions that it conducts through call centers from 45 percent last year to 31 percent in 2003. Another cost-cutting effort is in marketing, where mass-marketing budgets are being trimmed down in favor of precision-marketing programs that use CRM technology. Sprint, for instance, transitioned all of its marketing efforts to the latter and now claims marketing returns have improved dramtically.
Fujitsu Consulting also pointed to a bunch of best practices that lead directly to these high returns. For starters, employee input should be brought it at early design stages of a CRM system. Additionally, companies must take a cross-functional approach to CRM. "You have to have a concerted effort across your channels to have a significant financial return on Internet-based CRM initiatives," stated Carlos Morillo, director of e-services at BellSouth, a $26 billion communications company. Moreover, CRM should be viewed as an ongoing business-process evolution that requires continuous tweaking, says Czerna. And as early adopters, telecommunications companies are further along the technology's maturity curve. "There's been a little bit more trial and error," she says. To this end, industries struggling with CRM projects can look to the telecommunications sector and see a light at the end of the tunnel, says Czerna. They can also glimpse at what challenges lay ahead; Fujitsu Consulting found that telecommunications companies today are fronting change-management issues. Czerna says one company underestimated the difficulty in cross-training call center professionals to take advantage of selling opportunities. Certain individuals didn't have the skills necessary to sell. Another company didn't align sales compensation with its new CRM-based marketing strategy, and thus salespeople lacked incentive to push products to certain markets. All of this illustrates CRM's impact on multiple business processes. "CRM is not a software implementation but looks at all the important systems," says Czerna, adding, "Getting employee-reward systems aligned with CRM's strategic goals is the next big challenge." Tom Kaneshige also writes for Line56.com
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