MCI Reduces Costs by Integrating Sales Software

Situation

MCI is a global communications company that provides an array of services to many of the Fortune 1000 companies as well as nearly 80 U.S. government agencies. The company provides Internet, data, and voice communication services in over 140 countries on six continents through 100,000 miles of network connections that link metropolitan centers and various regions throughout the world. The company also provides network services for organizations that outsource all or part of their communications and for information processing operations. Total revenues for the firm are US$18.9 billion.

As the company expands its services around the world, MCI senior management is pursuing a strategy with four main “pillars”: achieve Internet Protocol leadership; build next-generation systems; radically simplify business processes; and dramatically improve financial structure. Rob Moore, Director of Sales and Service System Development at MCI, is particularly focused on the last two goals. He and his team support MCI sales and service organizations, including the software, systems, and databases they need to do their jobs well.

“We had some obvious opportunities for cost reductions,” explains Moore. “Our sales people, for instance, were using a number of home-grown, contractor-developed applications that we had built over the years. These applications were each developed to handle a specific task; they didn’t talk to each other, and it was becoming harder to maintain these with data updates like new price lists or new client information. Yet we could see there was really no need for such inefficiency because they performed relatively simple as well as similar processes.”

Moore and his team also saw opportunities to improve basic business processes surrounding sales. “Our new hires had to learn several different database and applications processes. If we could reduce this to a single system to learn, it would improve their efficiency and reduce mistakes,” says Moore. “We realized that we could help even experienced sales people gain efficiency by eliminating their need to go back and forth between applications, duplicating their efforts.”

In sales-related operations, Moore and his team also saw a number of opportunities to improve. “For example, when we close a sale and draw up the contract, we could see that paralegals were rewriting similar, customized contract provisions over and over, rather than reusing them,” says Moore. “This represented a potentially major savings because 40 to 45 percent of our contracts contain customized language.” Similar opportunities existed in other areas like revenue operations teams and business development. He continues, “We had other data, such as customized pricing lists, that, like the contract language, could have been reused with slight tweaks rather than being re-created from scratch as we were doing.”

Perhaps most important was MCI’s need for better financial controls of sales reporting and revenue forecasting. “There were a lot of opportunities here to improve,” says Moore. “Our sales funnel management could be tightened to provide a more consistent view and to improve forecasts of what we needed to meet future demand. We also saw ways to get a better view of write-downs, attrition, billing credits, and other billing issues. Some of the information was on spreadsheets; some was on different systems that, as with the sales applications, didn’t talk to each other. And with the old system, we ran the risk of quoting one price and billing another. So we wanted to standardize revenue forecasting and sales funnel management across all sales channels and all services.”

Strategically, MCI wanted to employ better analytics to manage its high-potential businesses, such as hosting, security, and managed services. “We wanted to gain a much better idea of where we might be losing sales in these areas, what the competitor situation was, or other critical strategic data,” says Moore.

Solution

MCI decided to deploy a targeted Customer Relationship Management (CRM) solution and considered a number of alternatives, including Siebel, SAP, Oracle, and PeopleSoft. The company selected Siebel 7.5.3, running on Microsoft® software and HP servers because Siebel was the only solution provider that excelled in two dimensions: superior vision in the CRM industry as well as superior ability to execute deployments.

MCI’s solution included Microsoft BizTalk® Server 2004, SQL Server™ 2000, Windows® 2000 Server,the Windows Server™ 2003 operating system, and Operations Manager 2000—all part of Microsoft Windows Server System™ integrated server software. Internet Information Services (IIS) 6.0 was also included in the solution. HP hardware includes HP ProLiant DL380s, ProLiant DL560s, and ProLiant ML570s.

Moore and his team established three broad goals for the Siebel deployment:

Deploy CRM capabilities to all MCI sales segments in a series of releases spanning 18 months.

Focus on sales force automation (SFA), including opportunity management, contact management, sales funnel management, and executive pipeline reporting.

Capture order data—which includes general customer, contract, and pricing—and implement this data to related applications.

Fully aware that 50 percent of CRM deployments fail to deliver intended results, MCI executives proceeded carefully from the start. They engaged Accenture, Microsoft Services, Siebel Professional Services, and HP to develop a comprehensive test environment in order to demonstrate the functionality of the system and its ability to scale up to 8,000 MCI users. Accenture, a global consulting, technology services and outsourcing firm, designed the test environment, Microsoft Services and Siebel Professional Services designed and installed the software components, and HP provided hardware. The test they devised provided a realistic “day in the life” of an MCI sales person, multiplied 8,000 times. It included account creation, account activity, creating an opportunity, developing a quote, creating an agreement, and issuing an order. The test also included viewing account billing data, querying opportunities, changing contact information, and producing analytics, such as dynamic and generic reports.

The test environment was realistic and rigorous, with a 250 gigabyte (GB) database and Mercury Interactive’s respected LoadRunner testing software simulating 8,000 users. In addition, testers used manual users to determine end-to-end transaction times and to report on the subjective user experience. By the final user test, 220,000 transactions were performed in a four-hour testing interval. Seventy percent of the transactions took less than one second. Manual users confirmed the positive experience, reporting no significant delays during peak load times while actively using applications. The test results convinced MCI executives that the Siebel system would perform and scale to expectations, and they proceeded to a phased rollout.

Release 1 began in April 2003 with replacement of existing sales software for MCI Global and Mid-Market sales groups, covering about 2,500 users. The initial Siebel deployment included revenue forecasting and analytics modules, which were activated a few months later in mid-August.

Meanwhile, Release 2 began in December 2003 to commercial sales in the Eastern and Midwestern United States, covering another 2,000 users. In May 2004, MCI began deploying Release 3, which covered the remaining commercial sales group in the Western and Southern United States. Release 3 included quotes, proposals, agreements, and ordering. In October of that year, they deployed Release 4 to government sales. “By this time, we were making improvements to what we’d already done in earlier deployments, including better integration with improved prospecting databases,” says Moore. “Each release was a valuable learning experience.”

In December 2004, MCI deployed Release 5 to conferencing. “For the rest of 2005, we are doing regular monthly releases, each one having a six-week development cycle with a two-week overlap,” says Moore. “We deployed Siebel Partner Relationship Management (PRM) to about 500 of our agents in March, and we’ll release Siebel Customer Service in July. So far, we’re up to 6,800 named users working with a transaction processing database of about 400 GB and an online analytical processing (OLAP) database of about 275 GB.”

Benefits

The Siebel deployment is reducing costs, increasing productivity, and improving sales and financial management throughout MCI.

Reduced Costs

Moore explains some of the specific cost savings. “So far, we’ve decommissioned 27 systems that we were using for sales and support tools, and we’ll eventually decommission another 3 to 5. All these systems are being replaced by one Siebel platform with a common look and feel to all its modules,” says Moore. “I’ll no longer need to have programmers who know C+, or Visual Cobol, or Java Script, and so forth. We’ll cut system maintenance costs, such as updates, price changes, and customer updates. We anticipate savings of 20 to 25 percent in maintenance costs as a result of the Siebel deployment.”

Expected Boost in Sales Productivity

Moore can’t precisely quantify improvements in sales productivity, but he provides a compelling common-sense argument that they will happen. “Sales and support people will no longer be looking at a couple of dozen or more different applications,” Moore says. “They’ll no longer have to re-key or otherwise move information from one application to another. Every Siebel module they’ll use has a common look and feel and common navigation, whether they’re initiating a contact, providing pricing, submitting a proposal, transmitting a contract, or submitting an order. There is no need now to re-key customer contacts, phone numbers, business data, or other customer information. Previously, we saw instances where sales people had to manually copy 50 to 75 fields from one system to another. That will no longer happen.”

For new sales hires, additional savings result from lower training costs. “Some of our experienced sales people have adapted to the patchwork systems we had in place,” says Moore. “But new hires will need much less training because they’ll have to learn only one system.”

Improved Sales and Financial Management

At the touch of a button, senior managers can now get clear pictures of revenue forecasting, the sales funnel, and billing across all sales channels and services offerings. “They’ll know exactly what revenues are coming in the door and where they came from,” says Moore. “For example, they can generate reports by business type to see how our security business, managed services, or other high-growth businesses are doing. They can generate reports by segment to see how sales to the government are going. They can view by cross segment to see how sales to enterprise customers are doing. They can see which products are losing sales and what the competitor situation is. And they’ll have a single, consistent view of the business that just wasn’t there before.”

Moore points to how MCI executives now have the tools to make better decisions. “When making business decisions, you get a lot of insight with the new system,” says Moore. “Again, it's hard to quantify, but it allows our marketing teams to really dig in. We now have visibility into who at MCI is having the conversations with customers, whether conversations are about a strategic line of business, whether the MCI sales people are qualified—and if not, we can assign a specialist. It’s that kind of insight that we’ve never had before. We’ve done very well in our residential marketing, but we've done terrible in target marketing and prospecting to business customers—everything from just simple profiling of what they spend to how many employees they have to lead generation and territory management, and those sorts of things. We’ve never done that right. Now we have the tools to do it right.”

Moore also points to a particularly critical financial management problem that is typical of communications firms providing a complex array of services to customers. “One of the primary challenges we had to address as a corporation was to reduce the amount of billing credits caused by inaccurate price quote translation into billing,” he says. “Our sales people used to quote one price, and billing would invoice something different. This billing problem was happening partly because under the old system, we copied promotions and price point information from one system to another. Now all quote and pricing information is pulled into Siebel for price quote generation, which solves the problem.”

Reduced Costs by Improving Information Management

The Siebel system is also helping MCI make better use of customized but repeatable knowledge in its organization. “The Siebel system provides ways to store and access reusable information like custom contract clauses or custom pricing,” says Moore. “Instead of having a paralegal write a custom clause in its entirety, he or she can locate a similar clause from an earlier contract and make simple tweaks. That saves employee time in two ways. It saves the paralegal time, and it saves the lawyer time because they only have to review the changes rather than the whole clause.”

That’s a significant productivity improvement because, as Moore observes, more than 40 to 45 percent of MCI contracts contain custom pricing and clauses.

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