The advertising is so prevalent and the logo so recognizable?the little orange figure shaped like a child’s jack?it’s hard to believe that Cingular Wireless didn’t exist until two years ago.
A massive media campaign is one of the benefits when you’re the offspring of telco giants like SBC Communications and BellSouth, which knit their cellular operations together in 2000 to launch Atlanta-based Cingular. However, a single name does not a single company make. A customer moving from Sacramento to Wherever might find her interactions with customer service completely different?different agents following different scripts, an unfamiliar bill and so on. Cingular’s set of 60 call centers were cobbled together by years of mergers and acquisitions.
That’s par for the course in the wireless business, which started in the ’80s under heavy regulation, with each market served by only two local carriers. According to Cingular COO Mark Feidler, when the spectrum licensing rules changed in the ’90s, and customers started moving across markets with increasing frequency, the local providers were compelled to become regional, and then national. An M&A frenzy ensued. But the resulting morass of customer support facilities is no way to run a business when customer service is one of your main points of competition. “This is an industry with no intrinsic customer loyalty,” says Carl Pitasi, a senior consultant with Compass America, a consultancy in Oak Brook, Ill. “A big part of your [profit and loss statement] depends on how long customers stay with you, and the quality of call center support plays very strongly into that.”
Launching a national brand?that was the easy part. Behind the scenes, Cingular faced the task of rationalizing 60 call centers and 1,400 IT systems, including 11 major customer billing systems. Today?two years later?Cingular runs 20 brand-new multifunction call center facilities ranging in size from 600 to 1,200 agents. The 11 billing systems have been reduced to seven and will be down to two by the end of the year. The work isn’t finished yet, but already the efforts are beginning to pay off. Cingular’s centers handled 1 million more calls in 2001 than they did the previous year (as separate entities). Average call duration (a classic call center efficiency metric, since longer calls require more staff) was 30 percent lower in December 2001 than in December 2000. Internal quality measurements are also up, though Cingular won’t quantify the rise. Here’s a look at the challenges and lessons from the call center consolidation and the making of a single Cingular.
Experience Helps(and You Can Hire It)
Cingular didn’t come to call center consolidation cold: SBC’s wireless operations already had started efforts to consolidate some call centers, for example in the Great Lakes region after the 1999 acquisition of Ameritech. Kathy Dowling was president of SBC’s Northeast region for wireless, where similar efforts had begun following the acquisition of SNET. When Cingular was forming, Dowling?with operations experience?was installed as senior vice president of merger integration.
However, they still needed someone to head up the merger effort from the IT side. Shortly after the Cingular brand launch at the beginning of 2001, CEO Stephen Carter and COO Feidler decided to bring in a CIO from outside the company ranks. “It’s important to have people who have come up through your own business,” says Feidler, “and there’s also enormous value in bringing in people from outside who bring a wealth of other experience.”
The new CIO, Thaddeus Arroyo, had actually worked in telecom earlier in his career (at Southwestern Bell) but spent the past decade working on Sabre, the Dallas-based airline reservation system?most recently as senior vice president of product marketing and development, and before that he was senior vice president of IT services. Feidler says Arroyo’s experience with large-scale systems, infrastructure plans, sophisticated routing and mission-critical call centers made him the top choice. He became Cingular’s first CIO in February of 2001.
Create Systems Blueprint and Choose Your Weapons
Arroyo’s first action was to do an inventory of Cingular’s existing potpourri of IT systems, which numbered 1,400 at that time. The goal was to select target platforms and systems to which the company would work to consolidate, with the usual anticipated benefits: lower costs, easier maintenance.
Arroyo says the process of choosing those technology standards is not a simple matter, particularly in the area of software applications. Obvious considerations include functionality and cost of ownership; often there is a trade-off between those two. Then there are further questions to answer: Which ones have custom interfaces that will need rebuilding? Where are the applications (and hardware platforms) in their normal life cycle?
Arroyo’s group mapped its future requirements (based on information such as anticipated company growth, as well as desired additional functionality described by the business) and then created “decision matrices” to help weigh all the factors. Arroyo is willing to reveal some of the final decisions?for example, BEA Systems’ WebLogic is the corporate standard for application servers?but says some choices are still in process, and others have not yet been communicated to the existing vendor base.
Engage the Businessfolk
A vital note: These standardization decisions weren’t a case of “IT coming back to the business and saying, ’We’ve chosen this platform,’” says Arroyo. Instead, cross-functional teams composed of the affected businesses and lead by IT rated each option. The process has worked well; Arroyo says well over 90 percent of the initial system recommendations have been approved.
Business oversight of the call center migration undertaking went all the way to the top. Dowling’s merger office provided project leaders and project managers. Project teams?which also included personnel from the existing call centers?reported back to Cingular’s CEO, CIO, CFO and COO on a weekly and monthly basis.
The Billing Conversion Example: Make Haste Slowly
The most crucial pieces of software in the contact center arsenal are the customer care and billing applications. Mess up that migration effort and customers get messed up bills?a sure recipe for lost business.
No surprise, then, that the reduction from 11 billing systems to a single standard isn’t done yet. Arroyo describes the current state as an “intermediate convergence plan,” with all the new call centers running one of two systems by the end of this year. One is a packaged application from San Jose, Calif.-based Amdocs; the other is a home-cooked system.
Arroyo says the final jump to a single system is slated for 2003, but that last hurdle is the biggest, involving the most risk. Part of the holdup is the difficulty of defining billing system requirements three years out, as the wireless technology standard called 3G emerges. “Right now, as we look toward that end state, there are more unknowns than knowns,” Arroyo says.
Just whittling down to two systems was hard enough. Wireless companies have literally thousands of rate plans (varying by type of customer, geography, preferred calling patterns and discounts, and many other variables). To move customers from a given legacy system to the Amdocs application, for example, the IT group looked at every function point and every rate plan in the old system to ensure they were accurately represented in the target platform. Any functionality gaps were closed. Next, IT ran identical data through both systems in parallel, and examined the output discrepancies. All discrepancies were fixed or satisfactorily explained. Next came massive migrations of customer data and historical account data from the legacy system, which took place two weeks prior to the actual system conversion date. After a final “go/no go,” the changeover occurred when IT workers switched all agent desktop devices from the old system to the new. (Even then, Cingular kept its legacy systems running for a few months after conversion, as a backup.) In a few cases, Arroyo says, the changeover date was pushed back, for example when call center agents required additional training before going live with the new system. But delays were brief and generally Cingular’s billing system changeovers have gone according to schedule. Easing the consolidation challenge is the fact that all applications and servers are maintained centrally in Cingular’s two data centers (in Atlanta and Dallas) rather than in multiple call center locations.
No Flash Cuts
Just as Cingular followed a careful process for gradually moving from one billing system to the next, the company’s move from its old physical locations to the new ones was done gradually (rather than by “flash cut,” turning one center off and the other on at the same time). Cingular’s name for this gradual movement is a tumble.
The new centers are located in less cosmopolitan areas: Lubbock, Texas; Ashland, Ky.; Ocean Springs, Miss. Feidler notes that location decisions are critical. Staffing is the greatest ongoing cost in call centers, so minimizing turnover while controlling wages is vital for efficient operation. Cingular relied heavily on a third-party site selection outsourcer to choose its new locales. Cingular’s aim was to be an “employer of choice,” yielding higher job satisfaction for its agents and thus for its customers. The first supercenters were built from scratch, but for speed and cost reasons the later additions were frequently in abandoned Kmarts and similar facilities.
Old centers were kept online as the new ones came up, with calls sent to one or the other to keep the load balanced between the two while systems were tested, new employees were trained and the kinks were worked out in the newly opened facility.
That gave Arroyo some much needed flexibility when inevitable delays came up?sometimes over IT issues, sometimes not. He says telecommunications infrastructure proved the biggest headache. He attributes those challenges not to telecom provider problems but to the difficulty of anticipating Cingular’s requirements for things like phone circuits.
“What makes it complicated is all the variables?Do you have your power supplies? Have the HVAC requirements been met so I can get my servers in the room on time??many of them outside the control of the IT department,” Arroyo says. Again, the gradual tumbling plan provided some breathing room even as Cingular replaced all its call centers in less than a year.
Don’t Stop Thinking About Tomorrow
While Arroyo and company aren’t finished migrating and standardizing, they nevertheless are moving forward with other, brand-new IT initiatives as well. “Wireless is a large business that’s very complex at the customer level,” says COO Feidler. “IT in the long run is one of the fundamental opportunities to differentiate yourself.”
One key project on tap is a move to a global routing infrastructure, which will allow Cingular to route a service call to whichever call center is best equipped to handle the issue?even if the caller and agent are entirely across the country from each other.
Another project is the construction of knowledge bases, which will further improve the speed and accuracy with which call center agents answer service questions.
Cingular hired 10,000 call center employees in 2001. As Feidler puts it, “When you’re bringing together 10 or 11 companies, it’s impossible to train everyone on all the subtleties overnight.” So Cingular’s leadership team is excited about the construction of knowledge bases, which will give contact center reps more context for answering consumer inquiries than a simple script can provide. The knowledge bases will include neural network technology for intelligent sorting and searching of the information most likely to be relevant, as opposed to relying on simple keyword searches. The underlying technology is from ServiceWare of Oakmont, Pa. Twenty-five business analysts (not from the IT group) got underway early this year in capturing and analyzing Cingular’s customer interactions to start building the knowledge bases, which will also be accessible through the Web for customer self-service.
Cingular (which spent all that media blitz money advertising the tagline “Express yourself”) isn’t very expressive when it comes to revealing metrics and cost savings?for competitive reasons. But Compass America’s Pitasi offers an interesting cross-industry perspective on the importance of systems standardization: Studying a decade’s worth of banking mergers, Pitasi found that companies that “went like Sherman through Georgia” and forced acquired companies onto standard systems were usually able to continue to grow, while those that left disparate systems in place after an acquisition “were later acquired themselves, almost without exception.” Since Cingular’s biggest competitor, Verizon Wireless, has undergone a similar consolidation effort, competitive pressure alone would indicate Cingular has taken the right approach to forging its business.