At Your Self-Service

Do you derive pleasure from pressing innumerable buttons on your touch-tone keypad just to get an answer to a simple question? How about logging on to a Web site and clicking aimlessly around, deluged with pop-up ads, to learn more about your long-distance account? Do you get a real kick out of being a target of cross-promotion?

If all those things appeal to you and you happen to be an AT&T long-distance customer, you'll probably benefit from AT&T's announcement this week that it signed up with consulting firm Accenture to help it cut customer-care costs in its beleaguered long-distance division.

AT&T is hoping the $2.6 billion-over-5-year deal also buys it some more efficiency. As in, having more information on hand about customers as they are being served, so they can receive personalized service. And that means cross selling and bundling as in, "I see you are a loyal AT&T long-distance. Wouldn't you like to be a WorldNet customer as well?" All this bodes well for faster customer acquisition, the company asserts. Leaner, meaner, more-efficient customer-service and sales departments.

While industry analysts smile on the deal, saying it's an investment in infrastructure for the future, you've got to wonder: Why throw $2.6 billion into automating customer care in what is euphemistically called a shrinking market?

AT&T acknowledges declining long-distance revenues suffered by AT&T Consumer. This has been due not only to the commoditization of long-distance services, but the defection of telephone customers to other means of communication — namely wireless services, Internet telephony and e-mail. So, no doubt, the weakening division had to do something.

"The margins in long-distance won't support a high level of customer service," says Mike Harris, principal analyst at Gartner Dataquest. "So you can pay less per minute and deal with the menu."

AT&T executives say they are expecting the relationship with Accenture to result in cutting costs in half by the time the contract concludes. The cost, which includes the new technology that AT&T would have likely had to have spent anyway, is relatively reasonable when you look at the size of the long-distance unit, analysts add. And while execs were quick to shut down notions that this is a move to get AT&T Consumer ready for a merger, sale or acquisition, or that cost savings would come from personnel layoffs, well, never say never.

The program, which the executives called innovative, is actually similar to other models Accenture has developed, Accenture executives said. Under the "co-sourcing" agreement, both AT&T and Accenture will contribute talent and technology to the cost-cutting, revenue-building plans.

Still, the fine points of the co-sourcing agreement weren't made crystal clear on the call. What is AT&T actually getting here? What is known is that, of AT&T Consumer's 13,000 employees in the long-distance unit, 4,300 will work with Accenture on the plan, and that the venture will be headed by the current VP of AT&T Consumer's sales and customer care. Betsy Bernard, CEO at AT&T Consumer, said the deal will help with AT&T Consumer's imperative to manage the business for cash, as it explores new opportunities for growth while preparing to become a tracking stock next year.

So the big secret must be in how they will design new and innovative interactive voice response (IVR) systems that give the long-distance unit a big return on their $2.6 billion investment. Well, while the company says that some of the technology will come from AT&T Labs, the developments will be handled by other software vendors. But executives said it was premature to name those suppliers, even though the deal was effective immediately. So the clock starts ticking on the 5-year plan without the technology already in place?

What we do know is: $2.6 billion will mean a lot less talking to customer-service reps and a lot more exercising your fingers

"The self-serve rate will increase in a manner that consumers enjoy it more and more," said Betsy Bernard, CEO of AT&T Consumer, on the call.

Almost everywhere we shop-from the toy store at the mall to an online linen warehouse-we are asked to provide personal information. Some stores ask for a zip code or phone number at the checkout. Online sites may demand more,