Günter Dahm | Director Telco Solutions | Microsoft EMEA

Munich, GermanyJanuary 2006

Josmar Tuszik | Solution Sales Specialist | Microsoft Deutschland GmbH

Telco Business TrendsTelco Business TrendsTelco Business TrendsTelco Business Trends

• Cost Reduction • Price Erosion• Wireline Churn • Mobile Saturation• fixed-Mobile Substitution• Fixed-Mobile Convergence – Hybrid Offerings• VoIP Offerings – New Service Providers• Complete Replacement of Circuit Switched Networks by IP till 2015 • Highly Competitive / Low Margin Markets:

• The Critical Essentials here are:– Time2Market– Sales Execution / Winning Customers– Service &Brand Differentiation– Customer Experience & Customer Care – Customer Retention & Churn ReductionIt‘s about managing increasing complexity and adapting to change!

The Complex Challenge for Customer CareThe Complex Challenge for Customer Care

hybrid convergence services and „pick&pack“ offerings increase the complex challenge of customer care

– T-Mobile Web&Walk– BT Fusion (convergence handy: wireline @ home, Vodafone,

WLAN, Bluetooth ==> automatic search for best & cheapest connection)

– Freenet ip1 (VoIP phone @ home and mobile phone)– Sipgate F1000 (mobile internet phone on WLAN)– Skype RTX (mobile VoIP home phone)

O2 Surf@Home – fixed/mobile substitutionO2 Surf@Home – fixed/mobile substitution

Avoid White Elephants!Avoid White Elephants!Avoid White Elephants!Avoid White Elephants!

The logical answer sounds like massive investments into further complexity – New/additional billing systems/capabilities– Re-vamping of CRM systems– EAI– Multi-Channel Contact Centers– Portals (internal/external), Content Management– Business Process Management / Workflow Management– Customer Knowledge Management Systems– Implement a backend SOA – …

– But does that really help me to manage the increasing complexity and adapting to continuous change?

– What is really the impact of these investments to my business?– Does that really make a difference?– What is the risk to get it up & running?

Lessons from retailing: Lessons from retailing: What consumers expect?What consumers expect?Lessons from retailing: Lessons from retailing: What consumers expect?What consumers expect?

1. Convenience

2. To be treated as individuals

(4. Sometimes an affordable luxury)

3. Reasonable prices & good quality

Retailing example: New MVNOs with Retailing example: New MVNOs with strong brand and customer loyaltystrong brand and customer loyalty

In „high-speed“ competitive environments In „high-speed“ competitive environments you better start moving fast!you better start moving fast!In „high-speed“ competitive environments In „high-speed“ competitive environments you better start moving fast!you better start moving fast!

How to become a category killer How to become a category killer in Customer Carein Customer CareHow to become a category killer How to become a category killer in Customer Carein Customer Care

?

Part II: What is that mysterious Part II: What is that mysterious enabling technology?enabling technology?Part II: What is that mysterious Part II: What is that mysterious enabling technology?enabling technology?

CCF is about competitive advantage by providing a cool and consistent customer experience for all customer touch points.

CCF opportunities for competitive advantageCCF opportunities for competitive advantage

CCF

A new integration approach for managing the complextiy of customer care backend and multi-channel information integration. The only technology that combines all existing integration approaches using „Smart Client“ technology being designed for adapting to continuous change.

CCF Automates the delivery of customer information across multi-

channel environments, resulting in a vastly improved overall customer service experience.

CCF cost reduction and CCF cost reduction and new revenue generationnew revenue generation

IT OPEX & CAPEX reduction

Reduced training costs

Target Revenue

Additional new contacts

Current revenue

Current costs

Product bundling& Cross -Selling

Churn rateHigher ratio of

successfully closedcontacts

Decreased call handling

costs

Reduction in input errors

Target Costs

+ EUR x

+ EUR x

+ EUR x+ EUR x

- EUR x

- EUR x- EUR x

- EUR x

- EUR x

+ EUR x

Revenue Costs

3-step approach to proof3-step approach to proof

1. Vision Scope Workshop (5 days) – Status Quo roles in the call center / customer care – Status Quo use cases for the roles – Get the customer to define the vision for their customer care

operations and write it down – Future use cases – Target architecture – Risk matrix

2. CFO approach (5-10 days) – Interviews – Data collection – Assumptions and data validation – NPV calculation

3. PoV / PoI (Proof of Value / Proof of Impact) – Incl PoC

The impact of CCF on KPIsThe impact of CCF on KPIsThe impact of CCF on KPIsThe impact of CCF on KPIs

ExamplesExamples

Best channel utilization with regards to churn risks

Customer intimacy (360° view)

Target zonesTarget zones

Churn reduction

Cost reduction per customer

R&D cost reductions

Pricing improvement

New customer acquisitions

Using the best channels for customer interactions

Removing redundant tasks

Leveraging customers’ portfolio for each incoming channel

Enhancing customer satisfaction

Leveraging best channels for marketing campaigns

Bringing customer knowledge and campaigns to any available channels

Customer care cost reduction

Revenue increase per customer

Financial ImpactFinancial Impact

Developing new products through better customer knowledge

Launching new products with low IT investments

Tracking customer purchase lifecycle through multi-channel coordination

Leveraging incoming channels to roll-out new sales campaigns

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

1 2 3 4 5

Low Impact High Impact

Deliver strong additional cash flows due to an Deliver strong additional cash flows due to an increase in productivity and upselling potential (exincrease in productivity and upselling potential (ex..))

Cum NPV EUR Mio:

Payback (months):

IRR (%):

ROI (%):

6.8

8

231

151

Key financial indicators

0.5 1.0 1.5 2.0 2.5Years

2

6

8

4

0

Cumulative NPV for a medium-sized mobile operator

-2

Mio Euros

Example Range*

*for successful projects, otherwise negative values are possible too

Break-even

End of business case

period

Peak funding

N/A

6-12

0-500

16-1.000

17 Microsoft Confidential

Solution OverviewSolution Overview

CCF is a flexible and modular solution framework to accelerate the development, integration, and roll-out of customer care

CCF displays a unified view ofcustomer information (360°)

– User-friendly and customizable interface

CCF seamlessly integrates withunderlying business applications

– No changes to existing systems

– Web services-based service-oriented architecture (SOA)

CCF solutions are very competitive on price

– Windows – total cost of ownership (TCO)

– .NET – speed to market

– Extensible Markup Language (XML) Web services

CCF provides self-service portalframework

– Gives the customer options for obtaining service using mechanisms such as e-mail or smart devices

CCF provides real-time synchronization between self-service solutions (portals, speech/interactive voice response [IVR]) and contact centers by providing a complete vision and unified architecture for all customer care channels.

18 Microsoft Confidential

Solution ReviewCCS Solution OverviewSolution ReviewCCS Solution Overview

What is Microsoft Customer Care Framework?

– Client and server framework software

– Documentation and white papers• Architectural white paper• Design details• Developer guide• Pilot deployment guide

– Services experiences

1919

Solution GoalsSolution Goals

Dynamically share customer information among multiple LOB applications– Provide a single user interface

– Reduce training costs

– Reduce customer wait times

– Reduce requirements to transfer calls

– Expand customer care options

“One-touch” installation and transparent updates from a server– Reduce support cost for updating agent applications

20 Microsoft Confidential

Architecture OverviewArchitecture Overview

Client Components– Agent desktop module– CTI module– RTC module– AIF module

Middle-Tier Components– Microsoft Windows

Server™ 2003 – SQL Server– Active Directory®

directory services– BizTalk Server– Microsoft Host Integration

Server– Microsoft Content Management

Server– Microsoft Speech Server– Microsoft Office

2121

CCF Self-service Portal FrameworkCCF Self-service Portal Framework

Maintaining user account registration, authentication, and authorization

Presenting user account and service profile information

Generating targeted alerts and promotional information based on profile

Providing access to billing information

Offering service order, trouble-ticket generation, and status checking

2222

Web Services &Offline/Online

support

DeviceAdaptability

Tough toDeploy

HeavyFootprint

DLL Hell

NetworkDependency

Poor UserExperience

ComplexTo Develop

Rich UserExperience

DeveloperProductivity

Responsive

BroadReach

Easy ChangeManagement

Ease ofDeployment

Smart Client TechnologieSmart Client Technologie

2323

Component Overview CCF Agent DesktopComponent Overview CCF Agent Desktop

ContextManagement

Workflow

Call Management(CTI integration)

Existing ApplicationsIntegration

Active customer sessions with

navigation tracking

Microsoft Confidential

RTCIntegration

RTCIntegration

2424

Component Overview CCF Middle-Tier ComponentsComponent Overview CCF Middle-Tier Components

CCF Core Component or Reference Implementation Provided

CCF Custom Component

External Component

Web Services

Data Abstraction and Caching Layer

SOA-Based CCF Middle-Tier

Real Time Communication (RTC) and Skills-Based Routing for RTC

Active Directory and User Profile

ConfigurationService

Context and

Application Integration

Services

CTI Abstraction

Layer

Application Integration Framework (AIF)

Hosted Application 1

Hosted Application 2

Application Host

Third-Party Telephony API

(TAPI) Implementation

Third-Party Telephony Service

API (TSAPI) Implementation

Third-Party Telephony

Implementation

TAPI

TSAPI

Other

LOB Application 1

LOB Application 2

LOB Application 3

LOB Application 4

Microsoft Confidential

•Web-based •TN 3270 •X.11 / motif •ActiveX and legacy Windows Applications•.NET Framework (WinForm) Applications•Citrix Applications•Others

2525

Features and Benefits (1 of 2)Features and Benefits (1 of 2)

Comprehensive story building on desktop, server, and tools– Leadership in XML Web services

– Acceptance of Microsoft desktop and UI leadership

– Integrated innovation

Competitive pricing (Windows TCO) and speed to market (.NET)– Microsoft platform and XML Web services result in faster time to

market and less expensive customer solutions

Complete vision and unified architecture for all customer care channels – Agents, portals, integration capability, and so on

Lower risk for customers– No “rip and replace” reliance on Microsoft

2626

Features and Benefits (2 of 2)Features and Benefits (2 of 2)

Microsoft Active Directory directory service– Integrated security — no need for separate logon– Hosted applications assigned to Active Directory groups– Integrated security to Web services tier

Windows XP shell– Optional replacement of Microsoft Internet Explorer

.NET Framework– Easier to deploy and maintain– .NET zero/transparent deployment– Configuration information accessed through Web services– Hosted application components and scripts centrally stored

Collaboration– Instant messaging– Call control features and address book– Access to external applications

2727

Proof Points and EvidenceProof Points and Evidence

Increased Efficiency = Decrease Costs

Customers prefer choice of channel

By offering multiple channels beyond in-person and telephone, companies can address customer needs less expensively

Cost of customer channels/per customer:

– In-person = $ 100– Phone = $ 50– Email = $ 5– Chat = $ .50– Web self-service = $ .05

Enhanced Revenues (Profits)

The time savings on a call can be used to create a targeted sales opportunity

– A 10 percent increase in up-sells for a 500 agent center = a 20 percent increase in profits

– When customers call with questions, they are an easy target for sales

Lower Costs

If a contact center can reduce average call duration by even one second, that would create a savings

– A contact center with 35,000 agents reducing the average call duration by one second, would create a savings equivalent to $1 million annually

– One second = $1 million

Speed to Market

Sample project to roll CCF out to 19 customer service centers

Eight-week proof of concept

Eight-week usability study

Five-month implementation

Three-month rollout

Return On IT InfrastructureReturn On IT Infrastructure

Flexible interoperability Lower total cost of

ownership

Support heterogeneous environment

Market leading manageability, performance, integrity

Client Services ServerClient Services Server

Business Value of CCFBusiness Value of CCF

Satisfied Customers willreduce Churn

Respond quickly and well First Call Resolution

Consistent customer treatment across all channels

Return OnReturn OnRelationships Relationships

Return OnReturn OnRelationships Relationships

Unlock data for better support and resolution

Drive productivity Enable and

empower Build on existing

skills, familiarity

Return OnReturn OnPeople People

Return OnReturn OnPeople People

Intrinsic integration,

open standards Faster time and

lower cost to benefit Brokered .NET

services Reinvigorate

existing systems, processes

Return OnReturn OnProcess Process

Return OnReturn OnProcess Process

CCF CustomersCCF CustomersCCF CustomersCCF Customers

CCF representative resultsCCF representative results

• CCF customer quotes:

“20% reduction on Average Call Handling times” “10% increase in upsell & crosssell opportunities” “10% cost per call reduction by steamlining order process” “Up to $10M/year reduction on hardware server costs (migration

of 100 unix servers)” “45% decreased training costs for CSRs” “CSR retention improved from 60% to almost 100%” “20% faster delivery of customer facing functionality in client’s

call center”

Customer Background• Decrease Costs – Improve call centre

efficiency by driving down call time.

• Improve Customer Satisfaction – Provide

reps with integrated customer data.

• 8,000 telephone sales agents

Internal and remote call centers

• Each agent uses 17 disparate applications

(out of 40)

- Green Screen 3270

- Web Applications

- Desktop Applications

- Telephony Integration Components

Results/Benefits

Benefits. +40% margin, 16x expected ROI-10% call duration, -45% training. Integrated view of the customer through Sales, CRM, Tech Support Tools.. Streamline order process.

Browser Migration to Windows Forms

.NET Service Oriented Architecture Provides access to data and applications used to serve customers.

Smart client Complements SOA to deliver new

Integrated Dell Desktop sales tool.

Solution

Dell: Integrated Dell DesktopDell: Integrated Dell DesktopDell: Integrated Dell DesktopDell: Integrated Dell Desktop

Dell: Integrated Dell DesktopDell: Integrated Dell Desktop

Integrated Customer DesktopIntegrated Customer Desktop

Integrated Dell DesktopIntegrated Dell Desktop

CSR DashboardCSR Dashboard

Real-Time Operational Real-Time Operational

DataData

Mood Chocies Mood Chocies

Unread MessagesUnread Messages

Team LogoTeam LogoDashboard Tabs Dashboard Tabs

(Dailyperformance,Qua(Dailyperformance,Quality,etc...)lity,etc...)

Dashboard Messenger Dashboard Messenger (Displays operational (Displays operational messages and notes)messages and notes)

Team Leader DashboardTeam Leader Dashboard

Team Mood and Team Mood and Dashboard Usage Dashboard Usage

StatisticsStatistics

Team Leader Team Leader Dashboard TabsDashboard Tabs

Real-Time Operational Real-Time Operational data by service or data by service or

segmentsegment

Team member details, Team member details, statistic,moods and Dashboard statistic,moods and Dashboard

connection statusconnection status

Customer Care Framework

• www.microsoft.com/ccf• www.microsoft.com/germany/telmed

Josmar Tuszik | JoSmart@microsoft.com |+49 2131 708 221

© 2006 Microsoft Corporation. All rights reserved.This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.