This is the second article in a series on Telefónica Global’s transformation to embrace end-to-end digitalization. The first article, which provides an overview of the full scope of the transformation, appeared on Inform and in our Case Study Handbook 2017 in December. This piece looks at how Telefónica is making the customer the center of its efforts and how it is evolving business processes to support digital customer experience.
Customers’ habits and expectations are changing, thanks in large part to services offered by digital natives like Google, Amazon, Airbnb and Uber. These companies bring businesses and consumers together, allowing them to almost effortlessly buy, sell and trade goods and services through many digital channels. Customers have come to expect this ease of use in all interactions, including with communications service providers.
In order to meet customers’ expectations and compete with digital natives, Telefónica is undertaking a massive business transformation effort that includes overhauling business processes using TM Forum Frameworx and replacing most business support systems (BSS) with solutions that are pre-integrated, best-of-suite and Frameworx-based.
The starting point for Telefónica’s push toward digitalization is the customer.
“We aim to change the way we interact with customers, providing a truly digital experience,” says Phil Jordan, Global CIO, Telefónica. “This means building a relationship with them that is based on trust, transparency, context, personalization and omnichannel.”
But beyond changing the way it interacts with customers, Telefónica itself must become digital by using data, removing back-office systems and adopting automation, so that interaction with customers, and changes to their services, happen in real time.
“This huge change involves people, organization, processes and technology,” Jordan says. “It is a change that must be led by business, and it requires IT as a key enabler.”
Telefónica is focusing on three important areas:
- customer experience – creating the kind of experience customers expect from a digital company;
- operations – boosting the efficiency of operations performance; and
- IT – providing capabilities and solutions to support customer experience and operations.
Overhauling business processes
Business processes provide the link between the customer experience a company wants to provide and the operational capabilities and architecture that enable it.
- Customer: Business rules must be defined around customers and the kind of experiences they expect – that is, digital and omnichannel.
- Processes: Processes provide a bridge between the customer and the IT/operations systems. Processes ensure that systems support each particular activity.
- Applications: Applications must support and ensure customer experience. Access to different locations must consider roles involved, communication among them and local needs.
A good example of the relationship among the three is when a customer reports a technical problem. Customer experience becomes very relevant, with the customer expecting to be able to make a service appointment based on their needs. Clear process rules must be defined in order to solve the problem quickly and keep the customer updated through any channel, and internal activities must be automated.
Traditionally these activities did not cover customers’ expectations because the process required several interactions with the customer to arrange an appointment. And once at the customer’s premises, the technician had to execute many manual activities, which had to be carried out by a support group or back office.
Applications that analyze in detail all the process activities needed to deliver good customer experience change this. Through automation between customer contact systems and workforce management systems, for example, Telefónica can provide more flexibility for the customer to select an appointment. In addition, end-to-end automated tools allow technicians to resolve problems and ensure the service is operating properly. This helps them complete their work autonomously, reducing resolution times and therefore improving customer satisfaction.
From customer journeys to applications
Telefónica has developed a step-by-step customer journey methodology that goes from designing the digital experience to business processes to IT architecture and applications. This approach ensures a comprehensive end-to-end view of the business.
- The first step is defining the customer experience, including touchpoints (when the company interacts with customers), pain points (where improvement is needed) and “moments of truth” (when the company can provide a truly differentiated experience).
- The customer experience is then translated into process flows, including the roles that execute each step required (internally and externally) to fulfill the customer journey.
- The processes provide the right support (or the baseline) to identify the set of function capabilities that describe how to execute the customer experience and how to make it digital.
- Finally, functional capabilities are mapped at an implementation level in terms of applications, integrations and recommendations.
To standardize the whole process, Telefónica has defined a comprehensive Transformation Framework that includes the Telefónica Business Process Blueprint and a Customer Journey Taxonomy.
Creating a blueprint
The Telefónica Business Processes Blueprint is a customer-centric process framework, created using the TM Forum Business Process Framework (eTOM) as a model. In 2015, TM Forum carried out an independent review of the blueprint and certified it as fully conformant to the Business Process Framework.
The blueprint is a set of 11 customer-centric processes that cover the whole lifecycle of customers from conceptualizing a service to ordering, billing, customer care and retention. Its main purpose is to provide a common language for Business and IT.
Customer-centric processes are grouped in four domains around the customer lifecycle: Marketing, Selling & Billing, Customer Care & Servicing, and Retention & Loyalty.
“End-to-end digitalization of the processes in each domain will provide the capabilities to support what the customer expects from a digital company,” says Marta Amo, Head of the Business Process Standards Office.
Telefónica Business Process Blueprint
- Marketing Processes Domain: conduct marketing activities so that sales will be effective
End-to-end digitalization of marketing processes makes developing and launching new products and services much easier, and consequently reduces time to market. It allows Telefónica to define focused marketing campaigns through analysis of various sources of information using technologies such as big data or real-time decisions (RTD). Digitalization also allows for campaign execution using different channels in a coordinated way, and obtains and analyzes the results in real time.
- Selling & Billing Processes Domain: manage sales opportunities, sales, activation and installation of services, and billing
End-to-end digitization of these processes helps Telefónica personalize offers to customers via any channel. It also provides visibility into the availability of services and devices before preparing offers and delivers real-time activation, ability to schedule appointments for installation and delivery, and traceability.
- Customer Service Processes Domain: manage queries, change requests, potential claims, and technical incidents, and in many cases anticipate customers’ requests
End-to-end digitization of customer service processes allows customers to report problems through any channel and resolve them during the first interaction. It also delivers real-time reports to the customer on the problem’s cause, status and resolution, and allows customers to schedule appointments in the event that action is required at their premises.
- Retention and Loyalty Processes Domain: manage customer satisfaction and look for loyalty and retention
End-to-end digitalization of these processes helps Telefónica construct customer knowledge databases using various sources and large volumes of information and technologies such as big data and business intelligence in order to personalize loyalty actions. For instance, if a customer with a bundle of voice, data and TV services listens to a lot of music but does not watch a lot of TV, Telefónica can use the customer’s consumption statistics to offer him or her a bundle of products that is more personalized.
Telefónica can customize loyalty actions using different channels, making cross-selling and upselling easier. The company also considers the relationship between customer-centric processes and other process domains such as enabling (network and IT) and support (logistics and human resources) domains.
Customer Journey Taxonomy
The Customer Journey Taxonomy covers key processes throughout the customer value chain and ensures consistency with other domains. They are broken down into macro-journeys and journeys, built around the Telefónica Business Process Blueprint.
This tool helps Telefónica understand which capabilities enable a desired customer journey and makes it easier to prioritize and plan deployment of those capabilities.
Digitalization is so complex that there is no way to measure it with a single key performance indicator (KPI), so Telefónica has developed a set of metrics around its processes and customer journeys that enable evaluation of the impact of digitalization on:
- customer experience, measuring use and customer satisfaction for each customer journey;
- operations, with operational KPIs for each process like time to market, average handling time, activity in auto-assisted channels, etc., which ultimately reflect improvement in performance and company efficiency; and
- IT enablement of digital capabilities in each process, which indicates the degree of automation within the activities.
Transformation of Telefónica’s business, customer experience and technology is driven by processes and is measurable.
“We have developed an end-to-end digitalization KPI that measures the enablement of digital capabilities, in customer-facing processes,” says Patricia Fernández-Trapiella, Head of Business Processes. “This is built upon the work done on the processes transformation and standardization, including the certification done with TM Forum, and tracks the digitalization of processes in different business lines and channels.”
This end-to-end digitalization KPI is now included in the strategic plans for all of Telefónica’s operating businesses. The next article in this series will look more closely at the new KPI, explaining how Telefónica measures capabilities, customer experience and business impact.