A Call to Arms

A Call to Arms

With the convergence of help desk, telesales and customer service operations, Telstra's call centre has taken on strategic importance.

In 1992, long before the phrase "customer-centric" had entered the vernacular, when the concept of the call centre was barely a twinkling in the market's eye, Telstra was preparing to face some challenging new commercial realities. After many years basking in the privileges of monopoly, the telco was meeting competition for the first time in its history and life was looking far from comfortable. Optus and Vodafone were just entering the market and there were three brand new mobile carriers vying for its business. Suddenly, Telstra started seeing its customers in an entirely new light. It desperately wanted to keep them.

Its first move was a defensive one: modifying its existing billing system to provide flexible and discount pricing plans to protect as many customers as possible from being poached by competitors. But as one of the most complex telcos in the world -- Telstra stands virtually alone in having long-distance and local carriage; satellite, international and Internet services, as well as affiliations with a cable company -- Telstra's board knew it needed to do much more. For one thing, its systems were as huge in breadth as they were in complexity. If a system could be developed to shield sales consultants from a host of legacy core systems, customers would be certain to benefit -- at a time when Telstra needed every competitive edge it could create for itself. For another, there was a strong business case for such a system reducing transaction-handling time by as much as 10 per cent, while giving sales staff an easier tool to use in dealing with the customer. So in 1992 Telstra set out to become a customer-driven organisation; to redevelop its core systems and to develop something that could tie those huge and vastly complex systems together. Although no one quite realised where that "something" was heading at the time, the telco's efforts resulted in one of the world's first major call centre developments.

These days, according to a recent article in the Australian Financial Review, Australia's call centre industry is reported to be worth $3 billion, growing at a rate of 25 per cent annually -- and accelerating. The article cited managing director of ACA Research, Martin Conboy, as saying the call centre industry was the fastest-growing industry in Australia since the gold rush, already employing as many as 50,000 people, and would be critical to the economy. But when Telstra started its development, call centres were all but unknown. With such a huge head start, Telstra's development remains arguably one of the largest call centre developments in the world. A recent study completed for Optus Communications shows that the average Australian call centre size today is 67 seats, with the communications industry slightly higher at 88 seats.

Telstra's call centre currently spans 27 customer sites nationally and 2700 seats. With more than a dozen system interfaces, the call centre currently offers 60 per cent of all business functions to Telstra's 6.5 million customers, and has a target of 80 per cent.

Although still evolving, Telstra's call centre technology is a key business enabler and has become an example to the rest of the world as to how call centre technology can work. Indeed, Telstra has proven so competitive with products and developments overseas that the telco has now sold and exported some of its call centre technology.

Dealing with Stove Pipes

According to Telstra Corporation national general manager Michael Slattery, Telstra in the early 90s had a "whole raft of very good individual systems" that allowed staff to satisfy customer enquiries, but failed to provide a "single view" of the customer. "The systems we had were probably at a very high level compared to anybody else in any other industry, but we looked at the overall systems architecture and started redevelopment on the basis of where we wanted to be in five years time," Slattery says. "The customer reference was originally built on the telephone number, and as part of the change, we redeveloped around that our whole billing and charging [systems], and behind that the activation and assurance systems, to try and orient them to the customer," Slattery says. "We actually created a 'need' that was geared to taking the customer back as the reference rather than the telephone number we gave them." The call centre system had a range of business objectives. It had to be a catalyst for increased sales. It needed to achieve improved system flow through. It had to support national access to customer data, have a user-friendly front end, reduce time taken to respond to a customer, and allow easy initiation of automatic service action. It also needed, if at all possible, to allow Telstra to reduce customer service representative (CSR) training costs.

With the overall business design in place, Telstra outsourced the underlying process design, incorporating the service through the call centre and the systems that supported it. NCR, which at the time was still a part of AT&T, took on development of the Phoenix front-end system to be used by CSRs in call centres. The company also developed middleware known as Top End, as part of the integrated solution. NCR subsequently purchased the three-tier client/server Phoenix architecture and is marketing it to its customers around the world.

Telstra, for its part, developed an IP fabric as a means of isolating legacy systems from Phoenix and of providing a consistency of interface for the mainframe applications through the Phoenix front end. This technical interface standardises data and access from different machines. The Phoenix application uses HP Unix as its operating system. It is also highly scalable -- from 30 users in 1993 to almost 4000 today. It presents a 16-bit, Windows 3.1 user-defined GUI to CSRs and is developed around business function rather than dependent system functions.

Telstra national general manager, sales processes and systems Ian Fleet says at the time development began, Phoenix was seen as the opportunity to shield sales consultants from existing legacy core systems such as the DCRIS service activation system and CABS (customer account billing system). A major part of the work involved getting transactions to flow in such a way that they matched the way the customer wanted to have their call handled and the way the sales consultant wanted to work with the customer. "Phoenix gave sales consultants a pretty front end rather than having to deal with multiple core systems. But there was also a lot of functionality provided in Phoenix that was aimed at improving sales and improving the information that was available to sales consultants for dealing with the customers," Fleet says. Phoenix, along with new pricing plans, was also seen as an essential component of what was considered to be the suite of weapons Telstra planned to use to convince customers to vote to stay with Telstra, rather than going with Optus.

"Optus had quite a successful marketing strategy at that time with the Dial One campaign," Fleet says. "That was the first time to my knowledge that it had been used anywhere in the world. It was a very easy argument in front of customers: just dial one to use Optus. And that was to be followed up by the ballot where the customers could then make that a permanent choice. "In the end we achieved higher than 80 per cent in the ballot in some areas, and the overall figures were better than we expected."Benchmarking Slattery says that since the technology's initial rollout, Telstra has continually measured factors such as call wait time, average handling time and levels of customer satisfaction with the service. On all measures the system is doing well. According to Slattery, the telco is still constantly looking for ways to provide better service, not just in a reactive but a proactive way.

That, he says, not only means resolving customer queries but using Phoenix to help identify other opportunities that could prove mutually beneficial. "For example, if people are enquiring about a telephone bill and there's a call pattern with a lot of overseas calls there, [we ask] are they aware that there's a call plan that gives them a benefit for regular phone traffic with North America?" Telstra has also added specialised call centres to deal with a range of specialised products along with other call centres dispersed around Australia to operate different time zones. "The maximum number of time zones in Australia at any one time is eight," Slattery says. "Spread that over business hours from 8am through to 6pm and there are obviously whole ranges of customers that can be requiring service from us, peaking at various times.

"Therefore, you have the need for things like call switching, so people can get somebody to service them regardless of where the telephone is actually answered," he says. "So we could have somebody in Perth answering a query out of Melbourne in the late afternoon or evening. That means you've got to give not just the information to the person in Perth to be able to resolve the query, but also have a similar behaviour in the way the customer interface actually works. So there needs to be a standard process in the systems that support it." To that end, Telstra has created national databases to provide a customer view, and a customer database that is the foundation for the other systems used in servicing the customer interface. The telco has also built a product database of records to ensure there is a consistent product set. "The definition of what Phoenix is meant to achieve would be to quickly, on one call, satisfy the customer. The only problem we've got is that we've got something like three or four thousand products, many of which are highly complex," Slattery says. Moreover, there are geographic restrictions on some of the products Telstra can offer, he says. The system has gone a long way to helping CSRs manage the complexity.

Future Perfect

Slattery says much of the success of the call centre project could be credited to the initial decision to base the system around the customer, and the fact that Telstra took a long-term view of the project, with Phoenix built within the context of an overall architecture. "It was not a matter of building systems in isolation but of building systems supporting a business process," he says. And he says it was equally significant that Telstra recognised early on that the system was likely to remain in a continual state of evolution. The call centre concept was "one of those projects" the company would never actually finish, with new dimensions becoming apparent as the company progressed each step down the path. "For us that is simply the key area," Slattery says. "The sophistication of call centres has grown very much in terms of what people provide, and also in terms of what people expect. And the telephony alone that goes into providing it is very, very high." Slattery hopes Telstra continues to lead the way in call centre evolution and growth. The telco wants to continue to improve the service it offers through that area, by doing things efficiently and by doing things more effectively. "The reality is that this [call centre] work keeps going up a plane. It's really geared more and more to improved customer service. The business design for it involves continually looking at new ways of working, and then deciding how you develop the system support to support that process," he says.

Later this year the company plans to introduce a new interactive voice response (IVR) system interface to improve efficiency even further. Slattery says the IVR interface, developed over the last 12 months, would deliver a "very powerful competitive weapon" for Telstra, when coupled with the other package of changes coming through Phoenix later this year.

Calling the Shots

If your company is like most, it needs to do a better job of equipping and training its call centre agents. That's according to a recent study, based on phone polling of 55 executives overseeing 62 call centres, conducted by OmniTech Consulting Group in the US.

Among the survey results from which the company drew that conclusion: High employee turnover is a chronic problem. The average turnover rate for call centres is 24 per cent. Customer-centric operations are still rare. Most call centres gauge performance using easy-to-measure metrics such as average speed of answers and length of calls, but fewer measure call centre agents' soft skills. This, according to the study's authors, suggests that call centre managers are just beginning to recognise the impact of agents' soft skills on customer loyalty and competitive advantage. Call centres are in a state of flux. Sixty-four per cent have undergone at least three structural changes in the last six months; fewer than 10 per cent have undergone no structural changes. Massive internal restructuring is the norm. Seventy-eight per cent of the companies represented have established new workflow processes and 75 per cent report new systems installations within the past six months.

Reorganisations and consolidations are also common.

Rapid change in the industry will continue. Sixty-seven per cent of call centres plan new workflow processes in the next six months, while 62 per cent are planning new system installations. "All these dynamics ultimately affect the day-to-day work of call centre agents, who represent the voice and face of the company to many customers," write the study's authors. "Their performance is crucial because escalating competition necessitates not just high quality, but perfection." The study primarily targeted large call centres -- averaging 262 agents -- that process complex transactions. Respondents were the most senior person in the company responsible for the operations of the call centre.

Typical titles included vice president of customer service, director of member services, director of corporate call centre and senior vice president. The study points to increased agent training and adoption of telephony technologies as key to stabilising call centres and transforming them into competitive differentiators. At the same time, it notes that call centre agent training among survey respondents was often inefficient and expensive -- respondents spend $US1.7 million a year on that activity -- the bulk of which (84.5 per cent, on average) consists of various hidden costs not typically included in the training budget.

For more on the study, visit -- David PearsonKeeping Customers and Keeping Them Happy For Telstra, says national general manager, sales processes and systems Ian Fleet, the future will be all about growing the company's revenue from its existing customers, and that will mean improving service all along the line.

"We have a 4 per cent underlying services growth in the country, so our growth will come from improving the value of our existing customers, and that's about offering products, services and so on that meet their particular needs. That's where Phoenix will help us later this year," he says. But the call centre setup has already delivered significant benefit, even apart from the successful ballot, he says. Telstra has been subjected to enormous cost pressures over recent times, having an impact predominantly on staff numbers. Phoenix has allowed the company to reduce the number of staff required in the customer service side of the business while maintaining customer service standards.

"That has been a particularly tough assignment for us," Fleet says. "It's difficult for us to control the number of calls that we get from customers. If you look at the evidence, the number of calls has grown at something in the order of 30 per cent per year -- that's extraordinary growth. At the same time, there has been an underlying growth in the number of services of about 4 per cent per year, while customer numbers were lower -- despite some churn from Telstra to other carriers and back again. So there has been a rising number of calls from essentially fewer customers. This reflects the fact that there is more competitive activity out there in the marketplace."According to Fleet, Telstra is determined to enhance call centre system development even further by achieving much closer involvement between those who use the system, those who design the system, and those who determine what the business cases should look like. "It may sound crazy that we didn't do it before, but the tendency was to write a specification, and then that was interpreted by the design people, and several months later the system appeared which didn't always match the expectations," he says. "Now there's a great spirit of cooperation, and we're using a lot more prototyping to achieve a quick turnaround. People can actually see and feel what the system will actually look like, and we get sales consultants actually to use the prototype and give us feedback on it. This means we're far, far more confident that when we commit to build, what we're actually producing is something that is going to meet the expectations of those stakeholders," he says. "We have a business solutions centre in place where this is being done in cooperation with business people, business process people, our front line people, our IT people. And we will make that part of our ongoing systems development," Fleet says.

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