Professional Documents
Culture Documents
Prepared by
Caroline Chappell
Senior Analyst, Heavy Reading
www.heavyreading.com
on behalf of
www.nsn.com
May 2014
Executive Summary
Customer experience management (CEM) can be defined as a management
discipline that uses the most relevant insights about the customer to drive the right
actions across appropriate domains of the business and measures the outcomes
of those actions to refine both insights and actions in the future.
Mobile operators increasingly need to extract insights and recommended actions
from their organizations in order to manage and enhance customer experience.
CEM represents a major opportunity for operators to differentiate themselves
competitively in crowded markets and to prioritize capital and operational
investment in the business according to customer value.
CEM depends on understanding multiple aspects of a customer's experience as
s/he interacts with the operator organization in many different ways. But in a telco
context, the network, the customer's primary touchpoint, is the most important
source of insights. Customer experience insights from the network should carry the
most weight when operators measure and aggregate key performance indicators
(KPIs) from multiple organizational domains to create a single, holistic customer
experience index (CEI) for each customer. Studies show that customer experience
of the network has the highest influence on decisions to churn.
Creating a CEI as a high-level, visual way of summing up the customer experience
for each subscriber has several benefits for the operator organization, including
simplifying operational processes and providing a neutral benchmark for the entire
organization to work with. To ensure the CEI reflects critical network impacts on
customer experience, such as service performance, operators will need a framework for collecting and analyzing network metrics. This framework links an operational perspective on the network with the customer view, supporting customer
experience assurance (CEA) functionality.
Operators need to augment traditional network management with CEA because
the network's view of its own behavior is not a reliable proxy for customer experience. Specifically, CEA provides a bridge between CEM and two further management disciplines: network management and service quality management
(SQM). The CEA framework supports a metrics hierarchy that culminates in a highlevel per customer, per service understanding of network performance. This highlevel view makes it easier for operators to monitor and troubleshoot their networks
southbound, as well as feeding into the CEI northbound to make operators aware of
any customer experience remediation actions they need to take.
This paper explores the relationships between CEM, the CEI and CEA, arguing that
each is essential to an operator's strategy for managing customer experience
successfully in the network.
Section II defines CEM and discusses why it is an important discipline for operators
to adopt. It points out the business benefits of CEM and the power of the CEI as a
key means of aligning the operator organization behind CEM.
Section III describes CEA with reference to traditional network management and
the emerging discipline of SQM.
Section IV presents a case study of Telecom Italia's Service Operations Center
(SOC), in which the operator is linking CEM with a service-level approach to managing its mobile network. It discusses the benefits Telecom Italia is seeing as a result.
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have made customer experience the touchstone for their brand. Incumbents in
markets under attack from new entrants have been able to use customer experience-based differentiation to retain customers and justify premium pricing.
Challengers entering markets with me-too networks have won market share by
offering a highly distinctive customer experience not available from competitors.
Support for benchmarking: A CEI can be the basis for benchmarking activities across all the operating companies in a telco group. It enables
both the parent company and each operating company to understand
the state of CEM in different countries and local differentiators that need
to be taken into account. It can be used to identify variations in customer
experience that need to be addressed, for example, differences in roaming experience between countries and roaming partners. The CEI can be
exposed to partners and suppliers to help them understand and correct
the impact of their services on customer experience.
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The customer's cost and billing relationship is the most important influencer
of customer experience, according to Nokia's most recent customer retention study. How much customers are charged for services, the accuracy of their bill, how quickly they have access to billing data, the efficiency
of the process for bill correction are contributors to the overall billing experience that need to be reflected within the CEI.
The network is the customer's main touchpoint with the operator. The network is the always-on conduit for service delivery, and Nokia's customer
retention studies show that customer experience of the network has the
second-highest influence on decisions to churn. The network index that
feeds into the CEI contains relevant metrics that influence customer experience, such as voice setup quality or average data throughput. Such metrics need to be collected on a per-customer basis within the CEM system
and taken into account within individual customer CEIs as appropriate.
Customer care is often the most direct opportunity to interact with the
customer and influence perceptions. Nokia's most recent retention study
shows that customer disaffection with care is rising as a reason to churn in
more mature markets. Poor customer care can increase operator costs
and lead to antagonistic encounters with customers that create "detractors" rather than advocates for an operator's brand. Factors influencing
customer experience include average call wait time and first call resolution capability.
Source: Nokia
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Map services to customers and correlate the right metrics from the network and services to build a complete picture of the service experience
each customer is receiving.
Use customer insights to drive management actions at service and network management levels that maintain the contracted quality of the customer's service experience.
SQM, an emerging discipline that operators are locating in SOC(s), typically collocated with their NOCs. SQM focuses on the proactive monitoring and management of services that run across networks, including traditional and next-generation voice and messaging services, over-the-top
(OTT) applications and mobile broadband services (LTE, 3G).
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SQM correlates network events with service performance metrics to create insights
into service quality. This discipline works with service models which:
Map the dependencies between each service and the specific network
equipment that supports it.
As network events flow through their service models, SQM systems can detect
degradations in service quality and drill down into the underlying network component(s) causing performance issues. They gain early insight into problems with
service performance, enabling the SOC proactively to take remedial action to
avoid service disruption. The service model approach also allows SQM systems to
manage service-level agreements (SLAs) and differentiated quality of service
(QoS) for different types of applications.
Integrating SQM and CEM system adds the customer dimension to the service
assurance process (Figure 3). It enables operators to understand which customers
are affected by service quality issues and root causes in the network so that they
can prioritize remediation actions. SQM systems can send alerts to or trigger processes in network management systems to fix service performance issues based on
customer value, SLA, CEI index, location or any other customer insight and/or metric.
Source: Nokia
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Its customers experience the network through the quality with which services are delivered. A service-level view is a proxy for customer experience. When linked to knowledge of specific customers/customer segments, SQM can be used for a range of customer experience-driven activities, including the appropriate allocation of network investment.
Service alarms and KPIs are higher level than the network equipment
alarms Telecom Italia NOCs traditionally uses to monitor network health.
Telecom Italia estimates that the median network-to-service-alarm ratio is
around 80:1. Intelligent, automated correlation between network and service-level alarms helps the operator reduce management complexity
and identify root causes faster, increasing operational productivity.
Telecom Italia has implemented SQM within an SOC, which went live in June 2013.
"Legacy" mobile voice, messaging and data services including specialist versions
of these services, such as its Broadband on Board service for high speed trains,
and MVNO-specific service instances were the starting points for the SOC. This is
because mobile service delivery is both a key competitive battleground for the
company and the largest source of management complexity.
However, Telecom Italia intends the SOC to be the single location for assuring and
managing any type of service running across any network technology (mobile
and fixed) in the future.
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Both goals required Telecom Italia to create service models that are rich enough
to reflect the range of possible influences on service quality/customer experience
of the network (where service quality is a proxy for customer experience) yet that
can be characterized by a limited number of high-level KPIs that can costeffectively be refreshed in near real time (every 15 minutes).
Creating the 11 current service models and the supporting data collection
architecture was a significant effort that required Telecom Italia to assemble a multidisciplinary IT/network engineering team. The company implemented a layered
architecture, at the bottom of which is a big data collection layer responsible for
collecting 1.7 billion performance management counters, 1.1 billion call detail
records (CDRs), 1,000 network alarms and topology updates from 30,000 mobile
network elements every day. This data is collected through 20 interfaces and flows
through 30 parsing modules on its way to the analytics engine. The analytics
engine correlates all this data, using 700 rules to update the service models and
refresh their KPIs.
The service KPIs are presented in a graphical user interface (GUI) on the SOC's
screens and presentation wall for an instant global view of individual service
quality. The counters, alarms and topology data feed into the SOC's real-time
service monitoring and troubleshooting view while the CDRs add the customer
view into service alarm troubleshooting and are also used for service quality trend
analysis.
Service model attributes that can be used for SOC drill-down and analysis include
location and customer/offer type. For example:
The assurance function can identify and visualize the geographical location of network elements contributing to service alarms.
The SOC can carry out trend analysis of service quality by customer/offer
type (e.g., consumer, enterprise, MVNO, high value, prepaid, postpaid,
public access point network [APN], corporate APN) and location (including individual high traffic areas, such as railways and airports, specific
buildings where high-value customers are located).
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Since the SOC has been operational for a relatively short time, it is just beginning to
measure the quantitative benefits of an SQM approach. Already, however, it is
seeing returns from segmenting and dealing proactively with high-value customers. The SOC detects when such customers experience poor service performance
and prioritizes their remediation processes in the NOC. This has led to a 75 percent
reduction in customer claims due to a major fault. Improved knowledge of
customer usage of the network has enabled Telecom Italia to increase network
availability by around 20 percent in individual cells.
Telecom Italia now intends to model OTT services so that it can monitor these from
the SOC and analyze OTT-related customer experience. The operator points out
that 15 minutes worth of poor Facebook experience can do more to damage its
customer relationships than 15 minutes of poor voice quality, so SQM and CEM for
OTT applications is a top priority for the coming year.
Telecom Italia will also extend SOC concepts to fixed network services and to roll
out SOC tools and views to its regional NOCs. As a result, it expects further benefits
in the areas of improved customer experience of bundled service offers, proactive
fault prevention and faster time to resolution, leading to operational cost reductions. The network will also be ready to contribute its customer experienceoriented KPIs to broader Telecom Italia CEM programs in the future.
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Conclusion
Although CEM is a holistic concept, since multiple factors contribute to a customer's end-to-end experience of doing business with an operator, customer experience of the network remains the most significant of these factors. As the conduit
for the services customers want to consume anytime, anywhere, the network is a
continuous customer touchpoint compared to transactional touchpoints, such as
billing, ordering and customer care. The network is therefore both a rich source of
customer experience insights, if these are extracted and analyzed in the right way,
and a key influencer of customer satisfaction with their service provider.
In a network context, CEM analytics are being used to drive service assurance
functions, giving rise to the term "customer experience assurance" (CEA). CEA links
CEM, SQM and network management in a customer-oriented assurance hierarchy
that ensures individual customers/customer segments receive the service experience they expect and have paid for.
As the case study of Telecom Italia's implementation of such a hierarchy shows,
there are many benefits to this approach. Telecom Italia now has end-to-end
service-level visibility of the network, helping the operator to reduce management
complexity and operational cost. Its improved understanding of the network
behavior on a per-customer, per-service basis is enabling it proactively to address
network issues leading to less customer dissatisfaction and better targeting of
network investment.
CEM's emphasis on the customer is timely in an industry that has traditionally been
poor at understanding or prioritizing the customer view. But it needs to be underpinned by a formal, analytics-driven understanding of a mobile operator's key
business asset its network if operators are to deliver and protect customer
experience effectively. By bringing together key CEA components, operators such
as Telecom Italia are making it easier to sustain strong customer relationships and
improve their brand value, despite tough market conditions and relentless
technology change.
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About Nokia
Nokia invests in technologies important in a world where billions of devices are
connected. We are focused on three businesses: network infrastructure software,
hardware and services, which we offer through Networks; location intelligence,
which we provide through HERE; and advanced technology development and
licensing, which we pursue through Technologies. Each of these businesses is a
leader in its respective field.
Through Networks, Nokia is the world's specialist in mobile broadband. From the
first ever call on GSM, to the first call on LTE, we operate at the forefront of each
generation of mobile technology. Our global experts invent the new capabilities
our customers need in their networks. We provide the world's most efficient mobile
networks, the intelligence to maximize the value of those networks, and the
services to make it all work seamlessly.
www.nsn.com // company.nokia.com
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