|Issue:||North America 2005|
|Topic:||Redefining business communications and business|
|Author:||Donald K. Peterson|
|Title:||Chairman and CEO|
Donald K. Peterson is Chairman and Chief Executive Officer of Avaya, a leading global provider of communications networks and services for businesses. Mr Peterson was named President and Chief Executive Officer of Avaya when it was spun off from Lucent in 2000 and was later named Chairman. Mr Peterson began his career in telecommunications with Nortel Networks and advanced through a number of key financial, sales and general management positions in the United States and Canada. He served as Nortel’s Chief Financial Officer until appointed President of Nortel Communications Systems, Inc. Later, Mr Peterson served as the Chief Financial Officer of AT&T’s Communications Services Group until AT&T divested Lucent Technologies and he became its chief financial officer. Mr Peterson earned a BS degree in Mechanical Engineering from Worcester Polytechnic Institute and an MBA from Dartmouth College’s Amos Tuck School. Mr Peterson is a member of the board of trustees of Worcester Polytechnic Institute; a member of the board of overseers of the Amos Tuck School of Business Administration; a member of the board of trustees of Teachers Insurance & Annuity Association of America (TIAA); a trustee for the Committee for Economic Development (CED); and on the board of directors of Reynolds & Reynolds Co., an information management company headquartered in Dayton, Ohio.
IP telephony is more than cheaper phone calls; it allows workers to work at home or anywhere else, with all the tools they have in the office. ‘Presence’, made possible by IP telephony, is a collection of technologies that changes the mobility concept from ‘any person, anytime, anywhere’, to ‘the right person, at the right time, in the right medium’. For instance, ‘find an expert’ software can rapidly connect a client to the employee who can help him most effectively.
In my three decades in the business world, I’ve seen only a couple of truly transformative, paradigm-shifting technological innovations: the personal computer, and the World Wide Web. Today, the business world is crossing the threshold of the next technology that rises to this level: IP telephony, often called Voice over IP (VoIP). And, as is so often the case when one crosses a threshold, only a little of what’s on the other side is visible. This much is clear: IP telephony is far more than a cheaper way to make phone calls. Even the companies that already have adopted IP telephony to reduce costs are discovering that there are far more compelling reasons to migrate to the new technology, which is one reason that IP telephony is growing at 17-times the rate of the US economy. With IP Telephony, enterprises can get more productivity out of their people, and their network assets alike, even while delighting customers with improved levels of service. With IP telephony, enterprises can: √ Reduce or even eliminate the human ‘latency’ in processes that often slow down transactions and irritate customers; √ Allow workers, even call-centre agents, to work in their own homes, hotel rooms, or nearly anywhere else, with literally all of the same tools they would have in the office; their companies can re-invest or ‘pocket’ the real-estate savings; √ Create new ways to integrate data with voice, giving workers greater, and faster, access to the information they need to make decisions and serve customers. That is all here today, and the best is yet to come–for example, an increased likelihood that personal voice calls will be instantly completed. For voice is, after all, the natural and spontaneous medium to use when people have a choice. Businesses and governmental agencies are transforming their operations from cost centres into profit centres, reducing costs, increasing revenues and improving customer satisfaction levels in ways unimagined only a few years ago. They’re redefining the very way they communicate, work, satisfy and serve their customers. Why this is important Enterprises exist in an accelerated, multi-channel, distributed world, where the competition is only a click away, and the battle for the customer turns on depth of relationships and superior execution. IP telephony addresses this world, giving enterprises consistency, personalization, productivity, speed and agility–making people more productive, processes more intelligent, and customers more satisfied. Companies at the forefront of the move to IP telephony are embedding voice communications into the very fabric of their enterprises. For instance, some are using intelligent customer-response software to initiate calls to customers, extracting information from databases to inform the customers in artificial speech that a bill is due, or an order has been completed. These solutions can even schedule appointments and take credit-card payments. In a more traditional effort, some businesses are using IP telephony to ensure that their employees are constantly connected. A common misperception in today’s business world is that a wireless phone equals constant connectedness, but in a recent survey of 600 office workers in six countries, 48 per cent of the respondents said that at least once a week they miss an important communication from someone because the originators don’t know the right medium to use at the time. This type of inefficiency exists despite–or perhaps because of–the huge variety of communications options available to people. The answer, though, isn’t as simple as designating the wireless phone as the worker’s primary device; that approach introduces other problems, including a lack of control for the employer. Over the next five to ten years, IP telephony will increasingly make its mark on businesses in many ways. Of these ways, three stand out: revenue growth; workforce quality; and productivity. IP telephony trend one: revenue growth Any business executive, from the corner store to the corner suite, knows that if the business could connect with more customers it would logically lead to revenue growth. Similarly, pleasing more customers, and pleasing existing customers more, creates loyalty–again leading to revenue growth. IP telephony gives businesses powerful new tools for both connecting with, and pleasing, customers. On an inbound basis, businesses can react to fluctuations in customer traffic much more quickly and effectively, reducing customer abandonment rates and capturing more revenue. IP-based software can improve routing of different types of customers to representatives who specialize in handling those customer types, maximizing up-selling and cross-selling opportunities. A retailer or bank can train back-office workers and others as contact-centre agents, then instantly pull them into service answering customer calls when traffic levels threaten to overwhelm the full-time agents. For instance, a recruiter in the human-resources department can turn away from non-urgent work and log onto the company’s contact-centre software, taking orders from her desk, her home, or wherever she might be. Or, a teller in a quiet bank branch can answer customer questions on behalf of a swamped loan department. IP telephony is improving outbound connections, too. There’s nothing new about the predictive, proactive, dialler that can dial customers with recorded announcements or establish calls for agents. But IP is now allowing a truly disruptive development for businesses: the ability to integrate proactive dialling with customer data and speech-based software to initiate and handle an entire customer transaction without human intervention. For example, many businesses must deal with the headache of collecting payments so small that the traditional means of collection is a losing proposition–the cost of the transaction is more than the amount owed. Hospitals and other businesses are using the integrated IP platform to reach these customers, inform them of their balances, and take credit-card payments or transfer them to agents, who spend much less time closing the transaction than they would have in the past. These platforms can benefit service departments, or any enterprise that must handle many transactions with a small profit margin. Most important, these IP-based systems can pay for themselves in a matter of months, and then produce a steady stream of incremental revenue. IP telephony trend two: workforce quality Managers are always looking for ways to improve the quality and depth of their teams. At the same time, they’re under pressure to keep personnel and operational costs down. In some cases, they’re forced to hire under qualified people, or make other compromises, for various reasons–maybe the local labour pool is too small or their employees have been lured away by competitors. IP telephony will transform many enterprises with the ability to erase the boundaries of geography and provide unprecedented flexibility to workers, both expanding labour pools and improving work-life balance for employees. Of course, telecommuting existed before IP telephony came along. IP provides a far richer integration with enterprise platforms and software, including not just the softphone–a virtual representation of the office phone, resident on a PC or PDA–but contact-centre software that allows companies to reduce or eliminate real estate, or locate offices in regions with low costs and rich talent. Fairly typical is a story I’m familiar with in the US heartland. A highly skilled agent left her job with a customer-service company because she could no longer handle her commute. When the employer adopted IP telephony, it offered the agent the chance to rejoin, working from her home, and she accepted. In Asia, one US-based corporation with a global workforce of technicians uses similar IP telephony software–in part, for employee-retention purposes. There is no central location for these travelling technicians, who are outfitted with softphones on PDAs (Personal Digital Assistants), which also handle their administrative needs. The simplicity of this arrangement has raised job-satisfaction levels among the crew, resulting in lower turnover. IP telephony trend three: productivity Consider these scenarios: √ As a SARS outbreak occurs, a programmemed business process invokes communications software to analyse the nature of the event. It automatically mobilizes a multimedia conference of the appropriate authorities in real time, without human intervention or the associated latency; √ On a Saturday night, a desperate buyer for a retailer calls a saleswoman’s office number. The call goes through seamlessly to her mobile phone, which wakes up and rings when it recognizes the call as important; √ As an attorney walks out of his offices, his PDA access to secure client data automatically closes. When he returns, it automatically opens. Each of these scenarios is an example of the power of ‘presence’, an emerging collection of technologies that will eventually allow enterprises to redefine their idea of mobility. Presence takes the concept of ‘any person, anytime, anywhere’, and expands it to ‘the right person, at the right time, in the right medium’. It’s the difference between a relatively random system, and a controlled one. It’s the difference between simply being accessible, and being in control of who’s accessing you, how they’re accessing you, and what transactions can and cannot take place. The difference for management is the knowledge that every person and every platform in the enterprise is operating at peak productivity, with wasted time reduced to almost zero, increasing the time for selling and solving problems for customers. The first scenario above is largely possible today, and can be applied to any kind of enterprise that may have an occasional need to scramble key personnel quickly. If the time needed to assemble people and information can determine lives or dollars lost or gained, management doesn’t want to rely on phone chains and charged cellular batteries. The connections have to start with a single push of the button that engages the right people or their proxies, in the medium that works at that moment. IP telephony offers this capability. Presence builds on the processes involved in a business, incorporating communications as part of the necessary automated steps. It also builds on the instant-messaging/buddy-list concept of presence, giving people, via systems, the ability to ‘see’ others and their availability via nearly any communications mode. At the same time, these new capabilities can give people greater control over when they can, and can’t, be reached–and who can reach them. Basic forms of presence already are improving productivity in businesses. For instance, ‘find an expert’ software can ensure that a client rapidly reaches the employee who can fulfil the request in the least time and deliver the greatest satisfaction. Today, unified communication, a closely integrated capability, augments presence as a single channel to handle messaging that arrives from any communications channel, ensuring that important delays are minimized. Even this basic capability can give a heavy-communicating mobile worker 30 minutes a day in productivity gains. Forecasting the future The business-history books are full of stories of business innovations that didn’t pan out quite the way the experts of the time envisioned. Certainly, we will see great progress in driving revenue growth, workforce quality and productivity. What’s difficult to see is whether another great benefit will eclipse these three. I fully expect that IP telephony will have positive consequences that I can’t quite see–maybe in five years, maybe in 25 years. I can’t think of another industry as exciting to work in, or as important to the future of business.