Mining the Centrex market

Mining the Centrex market

Daniel D. Briere

Centrex product managers are trimming the fat off their products and the provisioning and sales process to mine the market for additional revenues and make Centrex more competitive.

The provisioning and sales process needs to be taken up a notch to compete with premises-based equipment systems. Telcos are responding with wholesale improvements, according to an industry survey of Centrex product managers at the Bell regional holding companies, SNET, Sprint, GTE and Alltel.

“To compete against PBXs, the industry needs to make Centrex easier for both customer and the salesperson,” says Frank Perras, director of Centrex product management at Bell Atlantic.

“The telcos worked hard to develop sophisticated user-friendly systems for Centrex Management, but they often neglected their internal systems,” explains L. Thomas Walton, president of Walton and Walton Associates, a consulting firm in Richmond, Va.

Lynette Clinton, operations manager for SNET’s CentraLink product line, concurs: “It’s one of those things where you say, ‘We met the enemy and it was ourselves.'”

As a result, a quiet telco revolution is taking place. Product managers are improving internal operations support systems (OSSs). From initial order handling to station reviews, product flows are being consolidated and refined to better position the product against competitive PBX vendors. Many telcos already are reporting improved turnaround times.

One of the biggest problems is meeting customer’s demands for quick installations. PBXs allow instant reconfiguration, real-time reporting and speedy installation, and cost less than Centrex. And because PBXs are non-tariffed, price negotiations are simpler.

The complexity of the Centrex sale–including educating customers–has forced sales representatives to visit customers, which drives up costs considerably.

But Centrex personnel rarely can be as reactive to inquiries as PBX sales personnel. Centrex feature support on the switches, special pricing and internal approval processes slow them down. To compete, telco sales personnel need mechanized support services, and they need to improve the information flow to customers.

Retariffing

The ability to offer a customer a price for Centrex quickly is key to a sale, according to managers.

“Hit them with pricing at the same time as the PBX option so at least you’re |given equal consideration~,” says Ray Gillis, a member of New England Telephone’s Centrex product management staff.

The burden of tariff filing requirements also has caused more than one sale to be lost, says Perras. But it is not always the regulatory process that holds things up. Internal telco politics and procedures can be just as detrimental, say managers.

A custom tariff bid can take at least 60 days to prepare before it goes through internal approvals and gets presented to the customer. After the customer approves it, it gets filed as a mini-tariff at the state regulatory commission.

Managers have found that retariffing products cuts red tape, and they are redesigning Centrex products to make them easier to sell and maintain. Simple, per-line rated Centrex packages are being offered so 200- to 500-line sales can be priced easily.

Indeed, all 11 telco product managers agree that tariff realignment was a necessary first step before other service improvements.

“Custom contracts are expensive to administer,” says Perras, whose company is rolling out its CustoFlex offering, which repackages and reprices Centrex for a broader market. “We really had to simplify the product,” Perras says. “For $10 a month, you’ll now get a package of features–turn on what you want; leave what you don’t.”

U S West is replacing more than 12 products with a simple cross-region offering called Centrex Plus. Pacific Bell has Centrex FreeStyle, which takes eight popular tariffed features, bundles them with the basic Centrex lines and reduces the price.

The impact of tariff restructuring on telco OSSs has been immense. Because of tariff changes, BellSouth has created simple programs to support sales. Recently, BellSouth updated and relaunched its automatic price quotation system, dubbed Quick Quote, for its ESSX product. The menu-driven system is accessed via sales representatives’ electronic mail.

According to Johna Randa, ESSX product manager at BellSouth, the RHC also is working to incorporate deferred charges into Quick Quote. “If the customer wants to defer payments or prepay, there are either interest rates or discount rates involved,” she says. “In today’s environment, they have to go to a separate system for figures. That will change soon.”

Bill O’Neill, executive director of business systems marketing for Pacific Bell, says his telco has developed Advantage, an internet of local area network connections to Pacific Bell’s mainframe pricing programs. Representatives can input the customer location, exact features and other data to generate a price. O’Neill says the present system needs to be simpler so representatives can push a few buttons and produce a customized proposal. A two-hour proposal time could be reduced to 20 minutes or less, he says.

Bell Atlantic has PC-based pricing programs for representatives for the low-end of the market, says Perras, but they do not have the automation to construct a price on the screen, confirm it as an order and push a button to send it to service ordering. After the customer accepts, data is re-entered manually.

U S West offers the Automated Quoting Customer Billing system, says Sharon Gibson, manager of product planning and call processing for U S West’s Centrex products. And GTE is working on an Auto-Quote system for its CentraNet product. Until that system is ready later this year, representatives have to reference a printed matrix for rate information.

The Centrex Proposition

Quick pricing depends on valid information from sales forces, but often pricing requests come in from the field only to be returned for more data.

Southwestern Bell has been working on an internal proposal generation system for medium and large customers. “It’s an automated process that helps us organize information coming in from the sales force,” says Robin Straubinger, area manager of product management for Plexar. “This system includes a method for correcting all the pertinent data from our salespeople with a validity check to ensure all details are there for our technical staff to generate a proposal. There’s some manual work, but we’ve cut the process to 16 days for a customized package with a shorter turnaround possible on request,” she says.

Most carriers cannot generate proposals automatically from pricing programs and rely on brochures and stock letters along with custom quotes.

BellSouth’s Quick Quote system has added a contracting component. The program can print a letter of election along with a price quote so a customer can sign up right away. But information about the customer’s selected features and options still are left to a standardized brochure. No other telcos surveyed have linked the proposal and pricing systems in this way for low-end customers.

For high-end customers, pricing and network design programs can be more automated but still rely on “cutting and pasting” pricing into a proposal “template.” In fact, no telco has developed a combined pricing and proposal generation tool that would actually create a customized proposal.

What’s more, none had any sophisticated means to either track or deliver the different versions of bids that have to flow through internal channels and to the customers.

One of the biggest problems in the back office is smoothing the order entry process, whether for entering data for the initial installation or for ongoing service maintenance. In most cases, carriers have only achieved “semi-automation,” says Joe Ludwikowski, Ameritech’s Centrex product manager.

Installations are based on the station review process, an exhaustive process of sitting down with each user to determine feature and performance requirements on a station-by-station basis.

The current process typically consists of filling out preprinted forms on-site and entering data into service provisioning systems at the office. Information often is left out or is incompatible with the switch involved and another round of customer contact results.

The focus in redesigning the review process is on data validation, as Southwestern Bell has determined–making sure the information is correct so that it does not hold up provisioning.

Product managers say the solution is to outfit station review and other field personnel with laptop computers sporting sophisticated graphical user interfaces (GUIs) and interfaces to internal systems. Using these systems, a reviewer can demonstrate any feature to the station user at the desk; define features through the GUI, such as clicking on a speed dial button and entering the number to be dialed; interact with telco-based databases via wireless communications to ensure a correlation between features selected and features available at the serving switch; validate all data entered; and automate the service order provisioning process.

Using this process, a customer’s order could be well on the way to being processed by the time the salesperson/reviewer gets back to the office.

The potential to drive sales is a valued offshoot of these systems, although most managers say the impetus was as a data gathering tool first. Sales representatives can use these systems to demonstrate Centrex; what’s more, this tool could then be tied to contract generation, although none of the carriers interviewed seemed ready to move that far yet.

Laptop Leaders

Pacific Bell is working on a PC-based laptop system that contains seven programs that rapidly simulate the Centrex telephone set.

“The salesperson or station review tech would sit down with a user, show them the set they are going to get and figure out the features desired by showing them individually,” says O’Neill.

The challenge for any telco automating the review process is to cover the broad base of equipment on customer premises. Most telcos are looking at digital and integrated services digital network sets first as they are the easiest to simulate and configure in tandem with Centrex.

The system should be available for use in many of Pacific Bell’s areas in 1994. This interface is not automatic–representatives cut and paste from the application into the service order system. A direct service order provisioning (SOP) link is coming next year. “Wireless would be a nice enhancement that we are currently investigating,” says O’Neill.

Other telcos with such systems include GTE, New England Tel and BellSouth. GTE’s system is called Pac-Mod, and has been tested in California, according to Julie Doty, senior product manager for GTE’s CentraNet product.

New England Tel also is outfitted with laptop station review systems that help compile site telephone set requirements and will interface directly with the service order system by the end of 1993.

As for advanced GUIs that allow users to click on telephone set images to define features, BellSouth’s Randa says, “We aspire to that type of greatness.”

Other telcos also are working on the idea. “We’re looking at the whole Centrex provisioning process,” says Mike Conaghan, senior product manager at Sprint Local Telecom Division. “Our customers expect to have Centrex service installed and working in three to five days on small- to medium-sized orders. Often, we’re in a competitive situation with a key system or PBX that can be installed the next day.”

Sprint will analyze the current Centrex service provisioning process in each of its eight operating companies and implement a “best in class” process. Sprint/United Telephone-Florida currently uses a process that reduces the various internal departments involved in processing orders, says Laurie Santulli, Centrex product manager at Sprint/United Telephone-Florida.

Conaghan says some Sprint companies intend to use laptop PCs for station reviews next year mostly as a validation tool for on-site reviews.

Bell Atlantic is evaluating what other telcos are doing. “It gets a little dicey trying to do it all with one system automatically,” says Perras. “You may need something special for Centrex from a DMS switch and then something for Centrex from the AT&T 5E switch or something else for the 1As.”

It is a problem because different Centrex switches offer different interactive features with the customer premises. A customer with multiple sites often is served by different vendor switches within a local area and scores of terminal devices in each of those sites, which makes an all-encompassing review tool a challenge.

“The terminal equipment with which Centrex must interface works if it is Centrex equipment sold by the telco,” says Walton. Otherwise it could be a problem. Walton noted that the real “barn burner” complicating automation of the configuration and station review process is the clash of Centrex features with those of existing key service units.

SNET’s Clinton says her telco is evaluating automated reviews and is even looking into bar coding applications with Centrex station reviews. “We’re in the beginning stages of mechanization, but nothing is considered too creative.”

Although station review process improvements will help with initial account configurations, ongoing service orders still flow through a variety of manual processes. Presently, many customers fax new orders into the service centers; smaller customers tend to deal with service representatives through 800 numbers. Today’s Centrex management systems do not allow for service ordering, although AT&T is moving in that direction.

AT&T has developed an automated order entry system to let customers construct orders and price services without contacting the local carrier. Dubbed the Paperless Remote Order Entry System, it deals with customer service negotiation, service order entry, order data validation, price quotation for private lines, proposal generation and tracking, requisition tracking and customer order tracking.

The key advantage over previous faxed or mailed forms is that a customer cannot send an order until the form is completely filled out.

“At least 75% of the battle to speed up provisioning is creating a clean requisition,” says New England Tel’s Gillis. The telco worked with AT&T to develop PROES for one of its largest Centrex clients. In the initial release, the service order is printed in standard telco format for manual entry into SOP systems. In 1994, the system will offer automated interfaces to telco SOP processes and will interface with AT&T’s Macstar Centrex management system.

Other telcos want to add service ordering as part of their service management systems lineups. Some are pressuring equipment providers for more creative equipment solutions such as touch-tone inputs to moves, adds and changes systems and the use of voice response technology.

Looking to the Future

Although it seems like each telco is taking a slightly different approach to the same problems, industry observers say that this may have to change.

Indeed, in the quest for OSS nirvana, local carriers say they are increasingly relying on outside developers. The carriers realized this first with Centrex service management systems, where AT&T’s Macstar, Bellcore’s CCRS, Northern Telecom’s CDC and American Telecorp’s CenPac are the major systems used. Only Ameritech uses its own system, called Centrex Mate.

The movement is toward using common platforms, and customers will definitely see a gradual migration of capabilities toward each other. And companies such as AT&T, Northern Telecom and Cincinnati Bell Information Systems are developing third-party answers for internal telco Centrex problems.

The pressure toward a more consistent national approach to many of these OSS issues is becoming prominent as the concept of National Centrex solidifies. Many product managers say that larger customers want to integrate Centrex across operating territories for consolidated management. And as competitive access providers (CAPs) enter the Centrex marketplace, the prospect of U.S. non-LEC Centrex services and the potential of national Centrex by a single carrier is a possibility.

But CAP national Centrex is more smoke than fire right now, telco product managers say. Ameritech’s Ludwikowski believes that CAPs will provide competition only for customers whose operations are concentrated in downtown areas, not for customers with dispersed suburban operations. Still, downtown regions are more lucrative, making CAPs a viable threat to future Centrex revenue flows.

It is hoped that efforts to fine-tune office systems and movements toward greater on-site sales will make Centrex more user-friendly, not only within the telcos but between them as well. This would put traditional local providers in a better position against their new competitors.

Bell Atlantic’s Perras sums up the feelings of most product managers. “Step one has been to get my product standardized throughout the seven companies we do business with, which will take through the end of 1993. Then we can implement other improvements. In the meanwhile, retariffing is solving a lot of problems.”

Centrex OSS Improvements

There are several efforts to boost connectivity between the sales forces and field personnel and the back office systems that support them, including:

Automated price quote systems. Most price quotes today are generated from basic Lotus 1-2-3 style spreadsheets and simple personal computer-based programs. Several telcos still use paper charts to look up rates. BellSouth probably has the best system–its Quick Quote pricing module will spit out pricing and a contract in a matter of seconds. For high-end customers, most telcos have some automated pricing component modules, but substantial human intervention is required. Few predict total automation unless customer requirements get easier.

The next step is to incorporate the true equipment issues that come with Centrex and make automated links to service ordering and proposal systems. Many of these systems merely print out reports that then have to be re-entered manually into proposals and service order provisionings.

Automated proposal generation systems. Creating a proposal is closely linked to price quoting. For small customers, proposal generation systems are being linked to pricing programs where text in the proposal actually links to features selected.

For large customers, the process is more complex and can take weeks. While many of the underlying processes, such as engineering the network for the customer, are heavily automated, the actual proposal generation still relies on reusing old word processing files as templates. Customer-specific pricing information is usually cut-and-pasted into place. Telcos are retariffing products to allow simplified low-end approaches to apply to larger customers.

The next step is to keep track of bids that are getting increasingly complex. Document management systems that centralize bid proposals for remote access were non-existent, as were any sort of sophisticated tracking systems for different versions of the bids.

Contract generation systems. Most sales have to be put into writing, especially where equipment leasing comes into play. Telcos usually have standard contracts for customer premises equipment and services, and network design proposals that detail what the customer is getting usually serve as addenda to preprinted contracts. But the contracts are isolated in the field offices near the customer and not accessible across the computer networks by others who might need access. No one really has a system that automatically puts everything together and tracks it as a unit over the computer networks.

The next challenge is to create systems and track all the information automatically.

Station reviews. This manual process is now partly automated. At least four providers have laptop systems available or being developed: BellSouth, GTE, Nynex and Pacific Bell.

Now it’s time to add graphical user interfaces to these template-oriented systems so they can become sales tools and not just technician-oriented devices.

Continued threats

Although PBX alternatives are largely believed to be the biggest threat to Centrex, product managers say this is not the only thing thwarting Centrex. Other enemies include:

Consultants. They are still heavily biased toward PBX solutions because they can make more money from continued consulting after installation. They are the customer’s knowledge base, not the telco.

Customer timetables. Smaller customers tend to buy telephone service on a very short timetable, sometimes only a week or two before moving offices, for instance. Centrex can take longer to install, making it not a viable option. The solution is faster operations support systems and provisioning systems, and managing customer expectations.

Integrated systems. Systems need to talk with each other to service orders faster. Of particular concern is the synchronization of various internal databases with moves, adds and changes systems such as AT&T’s Macstar. Telcos need better and more direct systems interfaces and validation input fields on internal ordering systems.

Physical facilities. You can’t install it if it’s not there. Lack of facilities was named more often than one might expect as a problem with Centrex.

Customer knowledge. Not knowing what a customer is trying to accomplish is another big problem. Customers often call looking for a phone system when they need something much bigger–such as a telemarketing solution. Centrex loses out when these applications are not better defined. When a customer signs up for any telco service, sales representatives should ask a range of questions that better qualifies that customer for other telco services, including Centrex.

Daniel D. Briere is President of TeleChoice, Montclair, N.J.

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