IBM Corp. and Sprint Corp. Wednesday inked a five-year, multibillion-dollar deal that will see the telco’s customer care farmed out to White Plains, New York-based IBM Corp., a strategy that a Gartner
analyst said Canadian companies would shy away from.
“”We’ve decided to partner up because we can work quicker that way than working just by ourselves. When you look out over time and look at Sprint’s very aggressive plans for growth . . . we think we can handle that growth without adding the same incremental amount of resources,”” said Doug Elix, senior vice-president and group executive, IBM Global Services.
Sprint wants to improve customer satisfaction for its PCS and long-distance services by investing in technology that enhances call-centre agents’ desktop applications and revamping training and hiring practices, added Len Lauer, president and COO of Sprint.
Under the agreement, Sprint Corp., based in Overland Park, Kan., estimated it will save US$550 million in customer service costs over the next three years. Sprint, which will use IBM’s interactive voice response systems,Web-based services and consulting support, said the deal will also improve call routing, cut the average time handling calls and resolve more customer problems during the first call. IBM will also manage Sprint’s vendor-operated call centres and assume management of a Sprint-owned call centre in Nashville.
Several corporate functions, like human resources, are increasingly contracted out to third parties under a model called businss process outsourcing. But Elroy Jopling, principal analyst with Gartner Group Canada. of Toronto, said he is surprised Sprint outsourced customer service because “”customer care is so close”” and important to a company.
Although Sprint’s business will no doubt improve in the short term, “”in the long term who owns the client? Sprint becomes a hewer and cutter of wood type of thing and effectively is selling pipes, (whereas) IBM takes the higher road and effectively owns the customer.””
Canadian telcos have failed to go to these lengths, although they have outsourced some call centre work, notably Bell Canada, which at one time allowed a third-party firm to field calls relating to its residential high-speed service, Jopling said.
Ultimately the Canadian marketplace is unlikely to follow Sprint’s lead, Jopling said. “”I think the Canadian carriers want to keep the whole customer care as close to their vest as possible because they see it as one of their differentiators,”” said Jopling.
In Canadian telecommunications services, not much separates major players hawking their products (which are essentially commodities) except for price or customer service, said Jopling. And so it becomes a case of risk and reward, he said. “”If they’re happy with their customer care at this point in time,”” why make changes that could hurt the status quo?
But at the same time, Canadian carriers want to move beyond just selling bandwidth and get into managed services in areas like networks and applications, Jopling added. This is where companies like IBM enter the picture. It would help to reach this goal by partnering that in certain cases might expedite the process, he explained.
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