Avaya Innovation - Surprise, It's In Services

Last week it was a privilege to be invited to the Avaya Analyst Summit concurrent with the annual meeting of the International Avaya Users Group (IAUG). Over the two days, we heard from Kevin Kennedy, CEO, and from leaders in product management, sales and services.

You're certainly aware that Avaya has been emphasizing the theme of Innovations - they even have a magazine published with this title. The surprise for me was to find the highlights of Avaya innovation in the Services organization!

The Avaya Services is making one breakthrough after another under the leadership of Mike Runda, Sr. VP and President, Avaya Client Services, who joined Avaya just two years ago. Utilizing his background in services at Intuit, Symantec, and Oracle and his knowledge capture experience at KCS Academy, it seems that Mike is leading his team to transform the Avaya Services organization for the benefit of both customers (read "clients") and shareholders (well, equity holders). Here's what we saw and heard in his presentation:

• Avatar Assistance: The Avaya Virtual Assistant, AVA, is the customer's first point of contact when the customers log into the service portal. Avaya Services is building a comprehensive knowledge base of resolve problems, numbering into the tens of thousands of knowledge base entries.
  
  With AVA assistance customers are finding the solutions to their problems or answers to their questions much more quickly and effectively. Call volumes into the Avaya Maintenance Services contact center are down 28 percent due to the effectiveness of the AVA tool.
  
  
• No Problem Live Twice: The Avaya Services support center team has enrolled in the concept that no problem should be discussed live twice. In other words, the goal is that all the support engineers should only be talking to customers about a new, original problem which has not been seen before. They are reaching that goal by posting the solution to any new problem into their knowledge base (see above) within 90 minutes, so that AVA can catch almost all of the repeat instances of a problem or question.
  
  The customers are using these tools, too. Online chat sessions with the Services team lead to problem resolution in less than one hour 83 percent of the time. Customers have viewed instructional videos 179,000 times in the past year.
  
  
• Service Results Measured: Everything seemed visible and measured. For examples, the percentage of system outages restored in two hours has improved by 25 percent to about 93 percent. Open tickets are being resolved, on average, in 17 percent less time, down to 2.17 days. The backlog of unresolved tickets (you know, those which go on for weeks and months) is down 56 percent (yes, cut in half!).
  
  The customers sure like this, too, it seems. Customer sat is up 14 percent and net promoter score (a metric calculated by taking the percentage of people who are very likely to recommend Avaya minus the percentage who would likely not recommend) is up 38 percent!
  
  The Services team likes it, too, since they are now doing the "real" work of service - solving new problems, not just repeating the same problem time after time.
  
  And margins from the services team are up 4.3 points, which is significant in this business.
  
  
• Managed Services Growing: Revenue from Avaya Operational Services (AOS) which is Avaya's multi-vendor managed services program, was up 7 percent Q/Q, up 20 percent Y/Y. My impression is that this is a faster and more economical way for customers to move their communications "to the cloud" than to go shopping for and convert to a different provider or especially a different platform. With the new levels of service performance, this makes a lot of sense for an enterprise customer. This revenue increase is really a bright spot in the Avaya financial picture, it seems to me.
  
  
• New Pricing and Easy Quotes: Reflecting all of this improvement, Avaya Support Advantage was announced in early 2012 with a new, much simpler pricing model for Service Advantage (maintenance), Upgrade Advantage (software release upgrade entitlements), and even Global Advantage (a single global point of contact and billing which almost all multinational customers are eager to have). Personally, one of our UniComm Consulting clients just did an Avaya three-year maintenance contract renewal and this Service Advantage suite lived up to the billings. The new maintenance prices actually pass some of the internal efficiencies on to the customer and the pricing has really been simplified so that a customer can easily know what they are buying and what they will see on their annual invoice.
  
  
• Service Level Agreements: Given all the above, Avaya can actually now respond to a large customer with a Service Level Agreement (SLA) addendum to the Support Advantage contract which puts the system restoration times into print, with financial concessions if the SLA is not met a certain number of times in a certain period of time. For years, our Avaya clients would just get redirected when asking for SLAs. Now, they receive a well-done Avaya addendum which, in my experience, requires little adjustment to meet most customers' expectations for performance promises.

In addition to all of this, Avaya announced their new Avaya Collaboration Environment at the beginning of the week. Avaya CE is intended to accelerate the integration of communications into business workflows and business processes. Avaya CE builds on Avaya's assets including contact center integration experience, Avaya Application Enablement Server (AES), and Avaya Agile Communication Environment (ACE) which was acquired from Nortel.

This is a good move for Avaya, since growth in the communication industry depends on adding new value in addition to core telephony (see my point #1 in this recent post on industry financial results).

But, again, it is Avaya Services which is enhancing this Innovation. Ajay Kapoor, VP Avaya Professional Services, described the metrics-driven approach which his team can bring to Avaya customers and prospects to show them where the UC and CEBP opportunities exist, and how to design, implement and operate the technical solutions to capture the resulting business benefits.

Bottom line, my impression from this 2013 Avaya Analyst Summit is that perhaps the best reason to buy Avaya products is to have access to Avaya Services. The customers want results from their technology investments, and Avaya Services, in partnership with Avaya Business Partners, seems to be delivering just that! I wish them continued success, since both great service and the advancement of communications for transformation of business processes are key to the long term success of our industry.