IT vendors battle for CEM supremacy

OvumIn today’s highly competitive telecom industry, customer satisfaction has become the key to success. Operators must focus on the quality of their customers’ overall experience, rather than the quality of service of separate applications.
Accordingly, they are turning toward customer experience management (CEM) solutions to manage subscribers’ experience at each touch point. The CEM market is at a very nascent stage; vendors are launching products, forging partnerships, and developing advanced analytics tools to analyze network performance along with customer behavior, preferences, and sentiments.
Vendors have ample opportunity to develop technologies such as social media analytics, speech analytics, and behavioral analytics to become integral parts of CEM solutions. One of the most critical capabilities that CEM solutions must have, in order to analyze the customer experience in its totality, is the ability to bridge the gap between IT and network data.
As competition for customers intensifies, it becomes increasingly important for telecom service providers to retain the customers they already have. This task becomes more challenging as their product and service offerings expand and grow more complex. Compounding the problem is the fact that customers are demanding immediate answers to their questions and want to interact with their providers using a broader range of channels.
Traditionally, operators have been perceived as offering poor customer service, but now they are addressing this issue to improve the subscriber experience. Operators now consider customer experience optimization to be a key differentiator, central to their strategies to improve retention and efficiency, and drive new revenue streams.
Gradually, CEM is evolving into a source of business intelligence functions which deliver performance and service delivery analytics to all management levels.
The market for CEM solutions is gaining momentum and investments in this area are likely to pick up in the next 12-18 months. According to the Ovum survey Telco Business and Investment Trends for IT, conducted in 2011, improving customer experience was a high priority for 68% of respondents.
Vendors can increasingly cash in on telcos’ growing need to automate business processes to enhance the customer experience, improve retention, and boost the bottom line. Such initiatives require investments in subscriber data management, advanced analytics, decision automation, identity management, social media platforms, and knowledge management, which will create further vendor opportunities.
Intense competition among vendors
CEM vendors come from different starting points in the network and IT domains. The market includes vendors ranging from large global network equipment providers to small analytics start-ups.
Nokia Siemens Networks has unveiled its Insight & Experience Framework, HP has positioned its CEM portfolio as its Actionable Customer Intelligence (ACI) solution, Redknee has teamed up with Microsoft to develop enhanced CEM solutions, and Amdocs, IBM, and Alcatel-Lucent, among others, are investing substantially in their CEM solutions.
The biggest challenge for all of these vendors, however, is to demonstrate the clear business benefits of their solutions. Suppliers are still struggling to articulate their CEM strategies, but market dynamics should become clearer as vendors develop their CEM frameworks and as the vendor ecosystem becomes more defined. Technology suppliers that can best capture and harness the growing volumes of structured and unstructured data will become leaders in this space.
Given that CEM solutions must efficiently manage and analyze telcos’ massive data stores, the race to…analytics has already commenced, and will only intensify.
Vendors see immense potential in this domain, and are increasing their focus on advanced analytics capabilities to differentiate their offerings. Vendors are integrating various elements of data stored in the networks and IT databases.
Many CEM vendors are making analytics (predictive, real-time, behavioral, social media, and so on) a critical focal point, highlighting the positive impact on overall business processes and telcos’ bottom lines.
In 2011, HP acquired Autonomy and Vertica to enhance its analytical capabilities. Many other vendors, such as IBM and Huawei, are making huge investments to enhance their analytics capabilities. Telcos can expect the rapid evolution of customer-experience-centric platforms to continue.
Shagun Bali is a telecoms technology analyst at Ovum. For more information visit