Re-build your IT systems as a customer service delivery pyramid and you solve a key problem: how to link back-office systems to front-office systems without retiring your existing IT investment. The answer lies in a layered architecture. PA Consulting's Karl Boone explains how to link 'back' to 'front', using the telecommunications sector as an example.
The challenge
The ability to reduce costs, introduce new services or packages, and deal differently with customers, can often be constrained by an organization's existing billing and customer care system. These systems, which were probably originally selected on the basis of their core capabilities (rating, provision of service, or debt collection, etc) have grown with the business but in all likelihood may now be holding it back. It is not uncommon for there to be a perceived conflict between the requirement to satisfy customers and the desire to reduce costs and this can limit investment where it could often make the biggest impact.
The dilemma that today's large organizations face is how to facilitate the required evolution (which probably entails replacing or rewriting some of the older 'back-office' systems), whilst:
- Continuing to address business-as-usual issues and tactical system changes
- Dealing with millennium compliance, and at the same time
- Improving, or at the very least maintaining the status quo in, levels of customer service.
The fast-changing telecommunications sector provides a case in point. Life at the top for the 'traditional' telecommunications operator is hard. Competitive pressure from the increasing number of new entrants, resellers and service providers is relentless. Then, as always, there is pressure to reduce costs and increase margins. Time to market is crucial and customers are more demanding than ever. Although there is still money to be made in plain old telephony service offerings, tariffs are being driven to almost a commodity level. Many operators are beginning to reassess how they can better serve customers in this environment. Invariably this means:
- Introducing new value-added services; such as voice telephony over the Internet
- Innovative packaging and discounting; combining services and discounting on total usage to encourage increased use of high-margin services
- Focusing on improving every interaction with customers (from initial enquiry through to sales, bills, complaints and faults).
In a recent billing conference survey for the telecommunications' industry, more than half the operators represented claimed that they were likely to begin the process of implementing a new billing system within the next twelve months. Risks to these projects were cited as existing system complexity, flexibility and scalability of future solutions and data migration from old to new. Less than a quarter of those who had recently implemented a new system claimed that the result matched their expectations.
Life would be easier for the IT department if, during this transition or evolution, customers could be ignored. Instead, thanks to the choice customers have in today's market, customer service demands are increasing and are driving IT solutions away from the core capabilities offered by existing systems.
Layers of IT
Recent success stories involving forward-thinking IT initiatives have shown that by adopting a layered systems architecture, an organization can maximise its competitive advantage by gradually improving its support for new services and core billing capability, whilst shielding customer-facing users from the myriad changing 'back-office' systems. A layered architecture, as its name implies, distributes billing and customer care functionality across a number of logical (and physical) layers. Physically, the layers can be implemented in a number of ways, using distributed computing, intranet, gateway or data warehousing technologies. The right choice depends upon an organisation's existing system infrastructure, skill set and planned migration path.
The customer-facing users are at the top of the customer service delivery pyramid, whilst existing core functionality and systems are at the bottom. The layers in-between provide protection for customer facing users (and hence customers) from the real world constraints of the existing systems which hold the key data required. By separating users and 'back-office' systems in this way, each logical layer can be used to maximise advantage:
- The business data and systems layer (which represents an organization's existing systems infrastructure) allows the organization to maximize the potential of existing and planned investment in back-office infrastructure
- The business process layer (ie the customer-facing users' new desktop application), can be used to facilitate rapid improvements in levels of customer service.
Resilience to change is provided by the business logic layer (often described by the term 'middleware'), which insulates the business process layer from changes in the business data layer, and vice versa.
The business data and systems layer represents the organization's existing 'inherited' systems and the elegance of the layered solution is that minimal change to these systems is required in the shortterm. Over the years, millions of pounds and many person-years of effort may have been invested in the organization's core systems. Separately they may represent state-of-the-art systems, however it is how they come together to serve customers that is key to future prosperity, or even survival.
The disconnect between a large organisation's (in this case, a telecommunications' company) perception of a customer and the customer's perception of the organization. The customer probably doesn't even think about the telephone company (Telco) unless things go wrong, but uses telecommunication services every day and pays the bill once a month. The Telco's view of the customer however, comprises a vast wealth of historic data encompassing account numbers, bought services, discount schemes, payment record, mail shots, recorded faults and so on. This data is likely to be distributed across multiple back-office systems rather than being accessible from one place.
Start again?
Maybe it would be nice to be able to throw all these systems away and start from scratch again. From a customer service perspective this might certainly have attractions, but no established large organization can afford this luxury. How long would it take, how much would it cost and what about migrating all that historical information to the new system? Besides, the rest of the business is too dependent on core processing to allow this to happen:
- There are other business-critical activities that the organization cannot afford to disrupt (eg billing, collections, inter-admin. accounting)
- The time and cost required to achieve significant change, even through a gradual programme of replacement and enhancement, will be prohibitive for most companies
- The write-off implications of existing investment may be unpalatable
- There are many IT-related 'obstacles' to implementing new systems - existing system complexity, data migration etc.
A layered architecture allows an organization to build on top of all its existing systems and deliver relevant customer information to a single new customer service application. This maximizes past investment by 'leaving the mainframes to do what they are best at' (eg call processing) and allows a program of 'business as usual' back-office tactical enhancement work to be carried out in parallel. The business process layer can then rapidly deliver improved levels of customer service. The business process layer can be developed separately from the constraints of the back-office environment, though obviously all layers need to be in place for the end-to-end information flow to work. The benefits of access to information via a business process layer, rather than forcing users to access back-office systems directly are:
- A single, easy to use customer-facing application can be developed; to all intents and purposes this will be a 'new' system which ensures that the service a customer experiences is delivered seamlessly, consistently and efficiently
- An application that can be tailored to the business process, or can be used to facilitate process change
- The customer rather than the organisation's view can be delivered to those in contact with the customers
- Application delivery in months rather than years because of the distribution of development effort, potential for reuse of bits of functionality in back-office systems, and the fact that the development resource delivering the customer service application needs little knowledge of the back-office systems
- The customer service application can be available even when the back-office systems are 'down'
- The new application can measure customer service levels and can even begin to build up new customer information based on each interaction; this repository of contact experience can provide valuable insights into individual customer requirements and even allow tailoring of the contact experience for some key customers.
Logic
The successful customer service application is one which is easy to use, fits nicely with the business process and delivers uncluttered and complete customer information to users when and in the order that they want it. The key is to bridge the physical and informational gaps between the various back-office systems. The business logic layer works by converting service, account, operational and financial data (regardless of how it is formatted and in which system it resides) into information that users can work with. Once customer service is being delivered across the layers, the business logic layer separates business process from data and therefore shields either layer from changes in the other. Customer-facing users do not have to know what 'back-office' system to access for a particular customer, account, product or type of query. Therefore a user can request information (eg payment history) relating to a particular customer, without knowing the system or data base in which this information is stored.
Both the business logic layer (which comprises the data acquisition and conversion intelligence) and business process layer (which organizes and delivers information to the users' desktop) are outside the constraints of existing back-office systems. This displacement means that only the physical data retrieval mechanism locks the customer service application into the other systems. This retrieval mechanism can be readily adapted to point to alternate sources and this means that it is much easier to replace back-office systems without affecting the status quo in your customer service centres.
This inherent resilience delivers many benefits during the ongoing evolution of the organization:
- Customer service training and production outage is minimized following major back-office system infrastructure work
- Segmentation of customers or packaging of services is made easier due to the separation of data and function
- Alignment to ongoing business process change (which can be derived from the wealth of information the system provides) is made easier
- Through the separation of business transactions and the data which supports them sub-system replacement or enhancement becomes easier and less risky.
The benefits
With a layered architecture in place, replacement of large chunks of functionality in back-office systems is possible with only minutes of production outage of the customer service application. Not only is 'down time' minimized, but change can be introduced with little or no impact on the business process and therefore no retraining necessary. As well as being flexible, the layers can be made scalable to support more users and additional locations. The maze of back-office systems and complexity and duplication of data can be hidden from customer-facing users whilst improvements take place. New customer information can be captured and exploited to maximize the benefits from future relationships.
A layered customer care and billing architecture offers many benefits; an organization can protect investment and keep the back-office systems that work, whilst gradually improving or replacing the others; users and therefore customers are protected from these continual and essential system improvements; the resultant customer service application delivers the right information at the right time to the point of contact with the customer. This approach will help to support the organization's drive to continually improve the levels of service it offers to its most important asset - its customers.
Learning points
Customers are more demanding and switching allegiance is easier, therefore good customer service is a key differentiator. For large organisations such as traditional telecommunications operators, customer expectations are often at odds with business drivers to reduce costs and rationalise operation. A 'layered' customer care and billing system architecture can help address this paradox. A layered architecture enables an organization to approach change positively and effectively, by:
- Maximising the potential of existing and planned investment in back-office infrastructure
- Facilitating rapid improvements in business process and levels of customer service
- Insulating customer-facing users from changes in back-office systems.
