Nortel Unifies Customer Experience With Integrated CRM System

When network hardware maker Nortel Networks Ltd. began a major CRM initiative in 2000, the goal was to connect all customer-facing processes and, in so doing, slash support costs and boost sales.

Because Nortel had many individual business units that catered to different market segments, there were more than 25 sales and 130 customer support systems in place, some overlapping. The system was clearly inefficient: For example, it took 50 seconds for customer service agents to answer calls at peak times, and the abandoned call rate was nearing 7%.

"Our customers were quickly becoming frustrated," says project leader and CIO Albert Hitchcock, who is based in Research Triangle Park, N.C.

The project's main goal was to have one integrated system that could handle the entire customer experience, from point of sale to product installation and support.

To do this, Nortel executives decided to consolidate the company's various legacy CRM systems into one built around Amdocs Ltd.'s Clarify software. This required a phased rollout, prioritized based on business needs and evaluated by a mixed business and IT review board. Each individual upgrade had to be financially justified based on its merits.

By breaking the project into parts, the IT team ultimately was able to put together a huge single instance of CRM software, says Beth Eisenfeld, an analyst at Gartner Inc. Nortel executives probably wouldn't have approved the project's final price tag, she adds, if it had been presented in one lump sum.

Ultimately, the project, which cost a total of $30 million, came in on time and on budget and has resulted in one of the largest CRM implementations in the high-tech industry, Nortel claims.

There are 19,200 internal users on the system, along with 200,000 customers and partners who can access the Nortel service applications.

Albert Hitchcock
Albert Hitchcock, CIO of Nortel Networks Ltd.

There is now one major call center, down from three, and the number of worldwide toll-free numbers has dropped from 500, to 20. Nortel has also saved $15 million by retiring some of its legacy systems.

The customer payback has been even bigger: Customers are now able to configure a switch, check an order, track a service ticket or access documentation online. The abandoned-call rate dropped from 7% to 2%, and the average time to answer a call dropped from 50 seconds to 14. The entire sales cycle has also shrunk, from 100 to 60 days.

The company did learn a few lessons along the way. In 2002, for example, Nortel found that it needed to create a reporting system to make sure the right people got the data appropriate for them. With business intelligence software from Business Objects SA, Nortel created a reporting system built around 14 individual data marts.

This has resulted in a rise in storage costs, up 15% annually, and the staff is now reviewing the system to ensure that only pertinent data is being extracted.

The company was moving fast to get people running on the system, but in hindsight, it should have spent more time doing some training, according to Mary Kay Wells, vice president of value chain solutions at Nortel.

"If we needed to do it again, we'd emphasize the training," Wells says.

Nortel Networks Ltd.

Business: A telecommunications equipment maker that produces core switching, wireless and optical systems for telephone carriers and data service providers worldwide.

Project champion: Albert Hitchcock

IT department: 1,450

Project payback: Nortel has saved $15 million by retiring some of its legacy systems and has reduced its abandoned-call rate from 7% to 2%.

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