Unified Communications: Part 2

And the shake out in Unified Communications (UC) continues!

In the early days of UC Siemens worked closely with Microsoft. This was in the days of LCS (live communications server), not the current Microsoft OCS.   As time went by Microsoft cozied up to Nortel (for those who don’t know, Nortel used to be Northern Telecom which was the Canadian AT&T in ancient times).  In the days before Cisco began to eat traditional telephony vendors’ lunch (Avaya, Nortel, Siemens aka Rolm) Nortel was one of the big two competitors to the AT&T equipment spin-off, Avaya.

So when the honeymoon between Siemens and Microsoft ended with the release of Microsoft OCS which was targeted as a competitor to Siemens’ highly acclaimed UC product, OpenScape, Microsoft tapped Nortel as its technology and channel partner in UC.

Musical chairs!  Fun to watch from the outside, but not only confusing to outsiders but job threatening to IT folks who hitched their career star to the wrong vendor!  There is a reason IBM has ruled in the IT space for about fifty years and it is FUD.

FUD = Fear, Uncertainty and Doubt.

FUD means no one got fired for buying IBM even if they didn’t have the best solution out there.  Sometimes if one is on the IT hot spot it makes more sense to buy the safe choice rather than the best and right choice for your company.

Well, the Nortel / Microsoft alliance didn’t turn out to be a life saver for Nortel.  Read the news lately?  Nortel is on the block — the sales block!  Just as Avaya went private and Siemens was (mostly) bought out now it is Nortel’s turn.  Nortel went into bankruptcy in January, 2009 and now Nortel Networks Limited is looking for a buyer.   Nortel’s Enterprise Solutions is its second largest revenue source  — and has a whopping 59% of the American market share (per Dell’Oro Group).

With Nortel on the block many of its partners are moving to Avaya.  Carol Giles Neslund, Avaya’s North American channels VP, claims that 19 of  Nortel partners (including 10 of their biggest partners)  have signed up to Avaya (17 in the U.S and 2 in Canada).

Also on the chopping block is Nortel’s wireless assets for $650 million to Nokia Siemens.

To add to Nortel’s woes (as if they needed more headaches) Microsoft just inked a four-year agreement with Hewlett-Packard (HP) worth $180 million in enhancements to their joint unified communications solutions. What does that mean for that much ballyhooed Nortel/Microsoft UC partnership?  You might ask Siemens who was Microsoft’s ballyhooed UC partner prior to Nortel.

Nortel isn’t going down without a fight.  No sooner did Nortel sell its wireless group to Siemens it turns around and announces Release 3.0 of its SCS unified communications solution!   Right on the heels of this Nortel announced that Telecom Liechtenstein (obviously in Liechtenstein!) had invested in Nortel’s UC offer – in its partnership with Microsoft — integrating Microsoft’s OCS with Nortel’s voice communication ifrastructure.

So what is my advice to potential unified communications buyers?   First, look at the ROI and value to your company.  Even if you choose a UC product whose vendor goes bankrupt or is acquired if the product meets your needs and has a fast enough “payback” I’d still consider it.  Technology is always changing and the good news is that these days most if not all are standards based.

Unlike the good folk in Liechtenstein I don’t know if I’d short list Nortel until it gets acquired or things get clearer, but Microsoft is in UC for the long haul.  OpenScape by Siemens has a user face interface which integrates with third-party unified messaging as well as instant messaging applications, such as Jabber.  OpenScape works with Microsoft’s OCS and IBM Lotus Sametime. Openscape partnered with IBM when Microsoft chose to embed part of Nortel’s UC offering into OCS.  Siemens OpenScape is embedded as part of IBM’s Lotus Sametime Unified Telephony UC solution.

If you have a Genesys(of Alcatel-Lucent) contact center, the good news is that Genesys has UCConnect connects their contact center software with UC offerings from their parent (Alcatel-Lucent) company’s MyInstant Communicator, IBM Lotus Sametime, Microsoft OCS and Siemens OpenScape.   So even if you choose a UC that goes away due to a merger or bankruptcy if you have a UC connect ability you can disconnect from one UC offer to another without disaster to the contact center.

Odds are that Nortel and its UC offer won’t disappear any time soon.  Most likely this part of Nortel will be bought by someone — maybe Avaya.  The latest rumor is that MatlinPatterson Global Advisors may buy them out compleely.

For now, if I were looking at UC offers, I would look at Nortel, but I’d do so with knowledge aforethought.

Happy 2009!

Times are tough.  Businesses large and small are shutting down or looking for government hand outs.   Will GM and the other auto manufacturers survive?   Are we facing a depression??  Job loss is rising and it seems that daily we see new layoffs reported.    It is even rumored that Microsoft may lay off up to 17% of its workforce.  Link.

I’m not picking on Microsoft, simply highlighting the situation that our economic down spiral is just that — when one thing goes bad it impacts another line of business. . . from the mom and pop restaurants who lose customers, and thus so do their suppliers to the big firms who are household names.

Yet I started this blog saying “Happy 2009″ and I really am optimistic.   As FDR said so many years ago “All we have to fear is fear itself.”

There have to be opportunities — and with the new Obama administration about to take over it seems there will be a number of attractive areas.   Obama has promised global Internet access — so the network providers have a golden opportunity to come out of this downturn quickly.  The new administration is also very pro “green” — so if look for environmentally friendly solutions in your field.   The other attractive markets?

Government itself as a customer (federal for now, as the local governments who rely heavily on property taxes are “hurting”) and health care.  Baby boomers are aging and putting more and more stress on health care.  Again, the new administration is very interested in universal health care.  Keep in mind that Hillary Clinton, slated to be our new Secretary of State, was in charge of the Clinton Administration’s health care vision about fifteen years ago.  Back then I was working closely with the Chairman and CFO at Adventist Health System Sunbelt, and the CFO was on Hillary’s committee.  A lot of the visions then (electronic patient records that are patient-centric, not owned by individual doctors) are part of the vision yet today.

Tom Daschle has been named as Secretary of Health and Human Services in the new administration.   In his book Critical: What We Can Do About the Health-Care Crisis, he  discusses price controls (meaning health care providers need to find a way to improve quality to reduce costs).    Daschle is a big fan of Britain’s National Institute for Health and Clinical Excellence (NICE) which has a two tier approach — everyone has access to a base level of health care and you can pay for private access if you so desire.

Time will tell what the Obama administration will do, but the time to begin exploring how you can take advantage of the new opportunities is now.  Welcome to 2009!

Analyzing your customers is key to profits

It seems as if business is always undergoing  transformation.  We’ve gone from TQM (Total Quality Management) and BPR (Business Process Re-engineering) to Six Sigma and ISO.
We’re always trying to improve because quality = profits.  (This is a little like that old chestnut that time is money.  Time IS money and so is the channel and sales method you use in the time that you have).

In these times of a tight economy  — caused partly by our global economy where things can be made more cheaply in China, India and other countries,  this increased globalization means your competition is also gobal and may be able to produce products more cheaply than you can.  They are targetting our top customers.  Think of Toyota compared to General Motors and now translate that to ALL industries.  It is happening and to stay competitive you need to become more efficient.

Add to globalization the leveling of the playing field thanks to the internet.  Now small companies can compete with large and reach the same customers.  Mom and pops are as much your competition as the global firms.  Add to the internet and globalization the ideas of cost management/reduction, restructurings, mergers, etc.  Change, nothing but change!   This dynamic world has impacted the competitive landscape by:

• More cemptition for profitable customers,
• More demanding customers less likely to be loyal,
• Custoer sophistication requiring quick access to service via multiple channels.

All of the above makes it critical that companies understand their current and prospective customers from both an economic and behavioral perspective. Many medium and large sized companies think they have embraced customer relationship management (CRM) as an important element of their corporate strategy.  But have they?  CRM is not just a call center automation application or giving your sales reps a laptop with funnel tracking software.  If a company doesn’t know which products are selling and which aren’t they are losing money.  If a company is spending millions on automating the sales reps but don’t know what the cost is to keep that rep in the field compared to the margins and revenue that rep is generating it is about as useful as throwing money out of a window. 

To take advantage of CRM programs (Siebel, SAP, Microsoft CRM, ePiphany, Salesforce.com, Oracle (now owner of Siebel), etc.), companies have to do more than invest in customer-facing solutions such as sales force automation, customer service centers, marketing automation, business to consumer (B2C) Web sites and others.

While these applications help facilitate better service and more efficient interaction with customers through each respective channel they don’t add much to the bottom line if they have been implemented as independent, nonintegrated solutions. As a result, they have yet to achieve several important CRM objectives, including:

• One view of the customer in a vacuum (if that),
• No consistent and thus accurate customer information across the enterprise,
• Duplication of service and sales efforts (costly and possibly irritating to the customer),
• Islands and silos of information that is untapped.

If companies don’t have integrated customer information that they analyze to interpret which customers are profitable and then leverage that information they cannot apply the customer analytics (e.g., propensity to buy, channel preference, churn analyses, segmentation, target marketing, etc.) required to deliver real value from CRM.

Duplicate Customer information or one view of the customer?

Whereas CRM was the great hope of the late 1990s now the bloom is off the rose.  There have been many articles published about the high failure rate of CRM projects.   Many companies bought front office CRM applications (like sales force automation) but it is like buying a horse without a saddle — or a car and then neglecting to fill the tank with gasoline — they didn’t have an end to end CRM plan in place.

Far too many companies have implemented new CRM technologies without changing the basic processes for serving and interacting with their customers.   If you throw technology at a problem without doing basic TQM / BPR (or Six Sigma) to determine what is working and what is not you are doomed to failure.

 If you throw technology at sales and customer service but your customer still can’t get one answer about his or her account you are losing the battle for their loyalty. 

If you don’t know who is profitable and who is not you are losing money.

The companies who have failed with CRM have not truly understood what CRM is and can be.  They were sold point solutions rather than a continuous loop solution that manages the front end of sales and service and the back end of analyzing how well it was done, how profitably and what can be replicated for others.  

As a result nothing changes.

Well, something might change.  Your company may be less profitable. 

Using business analysis to track your sales results  will tell you what your sales force is doing right and wrong) turns into revenue- and cost-drivers of the business, thus a user will quickly see if the sales force is spending too much effort on low-value deals, or if the revenue stream has high exposure by being composed of just a few very high-value deals. In other examples, a user could see what percentage of target his district has reached compared with the same time last year, or determine the impact lapsed customers will have on this quarter’s revenues.

By the same token analyzing what your customers are buying (and aren’t buying) enables companies to understand and optimize the value of their customers throughout the customer lifecycle. Using business intelligence companies can track and analyze key customer segments and loyalty metrics and use this analysis to create an optimal customer acquisition, development, and retention process. Once you know who your customers are, who is profitable and who is not business managers can  see critical changes within the customer base and quickly take action to improve the status of those customers. For example, a user might identify high-value customers who are spending less over several months, and feed that group of customers into a campaign management system to run a retention program.

CRM business analytics measure customer value at both the individual and segment level, at the current customer and potential customer based on demographics, too.  In the end it enables users to understand the changing behavior of groups of customers over time. Users can even drill down to the profile of individual customers to discover their signature, that is, the pattern of their individual behavior, segment membership, and value.

 Analyzing your customers is the key to CRM and it is the key to profits.