Calling on KM to keep telecoms prosperous

"We wanted to take a horizontal view of all [elements] of profit and loss so that we could match all costs to revenues and create products and services that were profitable," Mote says, referring to the initial implementation of KM solutions at MCI and then again at the merged company.

While the deployment of KM was successful at MCI, Mote needed to prove the concept again in her new role at the merged
organization. Executives quickly saw the value and have employed the concept throughout the business segment of the company.

Reducing turnover

"We use [KM] to look for areas of duplication so that we can streamline them, to help determine pricing decisions, to hold people accountable—it runs the whole gamut," Mote says.

Additionally, the wireless side of the business (a separate division from Mote’s) uses KM to help provide better customer service, says Ken King, senior marketing manager for business intelligence vendor SAS.

"Telecom companies have used statistical modeling from the operational side, but historically haven’t understood the customer side," King says. "They had a near monopoly and large economies of scale. Now that the industry is more competitive, they have to capture a lot of information and use that to improve customer service and reduce churn."

By digging deep into the customer data and analyzing the customers who have left, Verizon has aggressively targeted its preferred customers and has reduced turnover to one of the lowest rates in the industry, according to King.

He and others expect the telecom industry to delve deeper into uses of knowledge management, as the industry continues to evolve and companies continue to look for competitive advantages in terms of pricing, product and service bundles and customer service.

Cutting mobile communications costs

Mobile communications are essential to every business, especially as the work force spends more time out of the office working from remote locations. But as employees become more mobile, the cost of staying in touch rises because wireless tends to be more expensive than landline.

Joel Sorensen, associate VP and director of sourcing and procurement at HNTB, an architecture, engineering and planning firm, saw his telecom costs double between the end of 2003 and the end of 2005, increasing to more than $1 million. "We look at our spending every year," Sorensen says. "Our phone expenses were growing a lot faster than our revenue or our head count."

While mobile phones, personal digital assistants and similar devices are essential to operating a business that has more than 60 offices, the company had to rein in its telecom spending without hurting its growth, Sorensen says. To do that, the firm needed to have better corporatewide knowledge about all of its telecom spending. "We needed to see the whole forest," he explains.

So HNTB put out a request for proposal to find a firm that could help manage the expense on a corporatewide basis. The main issue, according to Sorensen, was the fast rising expense for mobile phone calls, because every time a new employee was added to the company’s 3,000-plus work force, he or she tended to get a work phone with a new calling plan, rather than being part of a corporatewide plan. An enterprisewide telecom procurement would mean more purchasing power, and, therefore, higher discounts and lower costs.

HNTB selected a telecom expense management application from Avotus that audits bills, handles procurement, manages calling plans from the corporate level and provides other expense management benefits.

While telecom usage and mobile communications are continuing to grow along with HNTB’s business, the expense is growing about 10 percent per year now, rather than doubling every two years as it was before, according to Sorensen.