Customer Service, Profit, and the Internet

Customer Service, Profit, and the Internet

Daniel Lemkow
Director, Product Management,SHL VISION* Solutions
50 O’Connor Street, Suite 501, Ottawa, Ontario KIP 6L2, Canada

Abstract
The goal of every organization today is improved customer service-but how? While telephoning or visiting a customer site used to suflice, today the Internet is leading the way in providing seemingly unlimited extra value to AM/FM implementations. This paper explores what kind of information can be provided via the Internet, what is feasible, and how organizations can profit from this exciting technological innovation.

Background
Before the utilities and telecommunications industries were deregulated, competition did not play a major role in defining customer service policy. In a competitive marke~ however, quality customer service is paramount and has a two-fold effect on profitability: first, in successfully retaining existing customers, which amounts to retaining an annuity, and second, in attracting new customers. Today the Internet is already an important medium for saving and communicating with customers. Tomorrow Internet-based applications and services will directly affect how utilities and telecommunications companies deliver competitive, profitable customer service. Let’s step back now and review the Intemet’s evolution as a market.

The Internet: An Emerging Mainstream Market
The Intemet is growing fast. As a consumer service, it is growing more rapidly than microwave ovens, cable TV, or VCRs. As a business tool, it is growing faster than fax machines or cellular phones. It is estimated that the Intemet has been growing at about 100% per year since 1988’. In 1996, an estimated 7.7% of US adults regularly used the World Wide Web (WWW)**.This figure is significant in that Web technology was limited to scattered university and experimental users just three years ago. To help understand this mrwke6we will examine its key forces of supply and demand.

Residential Internet Market
The residential Internet mmket is developing rapidly, and accessing the Intemet is a key motivation for purchasing home computers. High-speed modems are standard equipment on most new computers. Indeed, many computer retailers have begun bundling Intemet service with new computers. Further, the profde of Intemet users is broadening across age, sex, ethnic, and income lines. Even users without prior interest in

*Source Matrix Informationand DirectoryServices,Inc.
**Source:Boston Globe,6/30/96, p. 74, citing ForresterResearch

computer technology are entering the market driven by their pursuit of special-interest content on the Internet. The residential Intemet market represents a substantial target for deregulated utilities and telecommunications providers. The use of the Intemet in public schools, colleges, and universities also continues to entice new users.

Commercial Internet Market
The commercial Intemet market is growing possibly even more rapidly than the residential market. In addition to using the Intemet for external purposes, such as public relations and electronic commerce, large organizations are aggressively adopting Intemet standards to maximize their investment in information technology. Intemet-based email has largely replaced proprietary email. Intemet cammmication protocols are replacing proprietary local and wide area network operating systems. WWW standards implemented in internal networks (see “Intranets” in Table 1) are beginning to challenge traditional client/server applications and markets, fueled in part by the introduction of RDBMSS and application development tools based on Intemet standards. As of September 1996, more than 572,000 companies had registered domain names with INTERNIC Registration Services.

Electronic commerce, involving secure transactions over the Intemet, is widely predicted to explode within the next few years. All major credit card vendors, banks, retailers, and the computer industry are aggressively developing the technology to make commercial transactions over the Intemet as commonplace and secure as shopping by catalogs. Electronic Data Interchange (EDI), a major form of electronic commerce between large corporations since the mid 1980s, is being extended to operate over the Intemet as it has since the mid- 1980s over private networks. The estimated tQtalvolume of sales generated over the WWW in 1995 was US$436 million, and, with the widespread adoption of electronic commerce, this figure is projected to grow to US$46 billion in 1998.*

Internet Service Providers
Intemet service providers (ISPS) are reaching competitive market status. ISPS come in many flavors-small lorxilfirms, national fins, and, increasingly, large telecommunications companies. The Intemet access market is estimated at US$2.5 billion in 1997**.The number of ISPS worldwide as of July 1996 was 3,054.8”” Now we will briefly review the key technologies that are enabling this emerging market.

*Source: ActivMedia.
**Source: Maloff Co. report, cited in Web Week, 6/3/96, p. 50.
““ Source Mecldermedia

Key Internet Technologies

End-User Application
From an end-user perspective, by far the most pervasive and compelling Intemet applications are email and the World Wide Web (WWW or “the Web”). Intemet email provides for direct textual* communication on a one-to-one or one-to-many basis. The WWW provides for the display of rich tex~ graphic, even multimedia information. These two applications are driving the Intemet’s rapid market growth today. Together, and at their current state of technological evolution, these technologies are sufficiently mature for utilities and telecommunications companies to implement the potential customer service applications outlined in the Global Intemet column in Table 1.

World Wide Web-The Ultimate Client/Server Svstem
The most dominant of the standard Intemet applications is the World Wide Web. The WWW can be thought of as a clientlserver system that serves the world. The servers, called Web servers, provide information services to clients called browsers. Connecting the two is a universally accepted standard called the Hypeffext Transfer Protocol (H1’TP)across which information, encoded in the HyperText Markup Language (HTML), is moved. Numerous companies provide browsers**and Web server products. A key advantage of the Web is that client browsers are available for all major desktop computing platforms (Windows, Macintosh, and UNIX)---true open computing. Browsers and Web servers directly interpret HTML, which includes text and images, but not spatial information. Both browsers and Web servers can be extended, however, to provide specialized functionality.

Browsers are extended with ‘plug-ins,’ while Web servers can be extended with specialized servers and act as a conduit back to the browser. Web servers are connected to the specialized servers using a protocol called the Common Gateway Interface (CGI). Browser plug-ins are written in a programming language. A portable language such as Java makes it possible for the plug-into be used on any platform. If the browser detects the need for a plug-in that is not already on the user’s system it automatically downloads it (usually from the Web server). This capability significantly simplifies a utility’s work in providing Web services to its customers.

To illustrate how effectively the Web can be used, consider a simple service that a utility wants to provide: Call Befotc You Dig. Today the customer calls, giving name and address, and is then provided with a map, perhaps by fax. A utility with an AM/FM solution could provide this as an automated service on the Web. One of two architectures could be used standard HTML or plug-ins. In both cases the user navigates to the utility’s Web home page (equivalent to the main switchboard for routing incoming customer calls). There the customer chooses Call Before You Dig, enters the appropriate address, and receives the information. This concept can be demonstrated using a tie Web service. A popular search facility on the Web can be found at Mfp:hww.lycos.corn (Figure 1). On the home page is a button labeled Roud Maps. Clicking it tells the Lycos Web server to send the address tequest form to the browser (Figure 2). The user Ills in the address, which the browser sends back to the Web server. The Web server passes this on to a specialized map server application that Lycos manages. From a national road database of the United States, the application generates a map centered on the entered address. Because standard browsers do not understand

*Standardsare emerging that support rich text and eventually multimedia email.
**For the Whlows environment the two most popular products are NetsCape Navigator from Netscape and the Internet Explorer from Microsoft. spatial data, the map server converts the map into an image and sends it back to the Web server, which sends it on to the browser for display (Figure 3).

Figure 1 Lycos Home Page
The advantage of the Lycos example is that the browser is standard. The disadvantage is that to do even a simple spatial operation, such as panning the display, the request must be sent back to the map server (via the Web server), which generates the image, which is then routed back to the browser for display. No local processing occurs; the browser is acting as a very thin client.

The alternative approach is to have a spatial plug-in that supports the spatial operations needed within the browser. In this scenario the map server sends back spatial data (e.g., vectors) which can then be displayed, panned, and zoomed+wsuming that ‘suftlcient’ data is sent. Network trafllc is reduced, as well as the processing needs of both the Web and map servers. The design must trade off the amount of extra data sent (in anticipation of future requests) against the extra time required to retrieve and send the data from the database.

Many vendors are starting to provide client-side spatial support. These take two forms: for direct end users, the plug-in is used ‘out-of-the-box’ with customization restricted to controlling data types and extents being transmitted. A more flexible approach is to provide the services as programmatic libraries from which developers can create specialized plug-ins in a language such as Java.

Figure 2. Address Request Form

Figure 3 The Map Result
Content and Web Application Development
Commercial database vendors are aggressively pursuing the Internet as a new market for their products. Databases provide the architectural foundation for maintaining dynamic Web content supporting Web-based data transactions, and providing the robustness and scalability necessary for high-volume Web servers, as well as the tools for system maintenance. Similarly, application development tQOlvendors are extending client/semer tools to support the development of Web applications with increasingly sophisticated capabilities. Finally, encryption technology is feverishly being developed and integrated into database and application development tools to provide the required security for widespread commercial transactions.

Deployment Options
In the beginning there was the global lnternet, a network of networks designed to provide redundancy and ubiquitous access to electronic data. In 1995 organizations began to experiment with what have become known as intranets, private information systems developed and deployed using Intemet-derived technologies and communications protocols, but separated from the global Internet. Most recently, we have seen the emergence of extranets, an extension of intranets to trusted external users, such as customers and suppliers, allowing them access to protected applications, data, and services. What clearly is unfolding is a critical mass of end-user application standards, enabling technologies, and implementation choices that is paving the way for pragmatic corporate use of Intemet-based systems today. Now let’s explore how utilities and telecommunications providers can capitalize on the Intemet’s maturing markets and tools for customer service and profitability.

The Internet's Impact on customer service and profitablity
To remain profitable in deregulating markets, utilities and telecommunications providers must retain existing customers while attracting new ones. These companies can differentiate and lead their marketplace by leveraging the Intemet with Intemet-based services. Ultimately, such services will be widespread markets, at which time they will have become a competitive requirement. Companies that establish and implement their Intemet strategies now will have the competitive edge over those who wait. Companies can realize substantial process cost reductions by automating customer service with Intemet-based systems. Customers who can “help themselves” reduce labor costs. Another key advantage of such systems is that the cost of developing, training, deploying, and maintaining Intemet-based systems can be dramatically lower than that of traditional clientherver alternatives. How do customers benefit from a utility’s Intemet services? Their benefits can be categorized as follows: convenience, information, flexibility, cost, and faster resolution of customer needs. In a competitive m~ketplace, these customer benefits can make the difference between a customer won, a customer retained, and a customer lost. A wide variety of potential utility and telecommunications applications that deliver these benefits are outlined in Table 1.

Planning Considerations
Investments in any information system should be based on the company’s strategic goals and objectives. Intemet initiatives should also be fully integrated with the company’s marketing plan. Products, services, positioning, promotional messages, and image should be consistent across all media. It is vital that resources be adequately planned and budgeted. Marshall McLuhan is famous for his quote “The medium is the message.” Companies must be prepared to invest in developing and maintaining Intemet content and services that are timely, accurate, interesting, responsive, and of high quality. Those that do not risk sending a stronger, unintentionally negative, message to their customers. Customer input, for example, through the use of focus groups, will be very uset%lin determining the applications, content and presentation suited to your target markets. Editorial procedures involving appropriate subject matter experts must be established, imposing strict control on information posted on Intemet information systems. Policies governing employee Internet use must also be established and well communicated throughout the organization. Companies without extensive in-house expertise in this field should consider working with consultants and systems integrators who specialize in planning, designing, and developing Intemet-based information systems. Similarly, companies should consider outsourcing ongoing Web site creation, hosting, and maintenance to vendors who focus on these services as their core business.

Conclusion
The Intemet represents a fertile opportunity for utilities and telecommunications organizations to differentiate themselves in the marketplace and expand their real and perceived levels of customer service. Organizations should begin now to design and implement Intemet-based information systems. Those who do will benefit from increased customer loyalty and profitability now and in the fhture.