AT&T Corp. will pay Accenture Ltd. US$2.6 billion over the next five years to transform AT&T's consumer long distance, sales and customer care operations.
Under the terms of the deal, AT&T will continue provide the majority of employees for these operations. "This is not an outsourcing deal," said Howard McNally, senior vice president of operations for the AT&T consumer division. "We are calling it co-sourcing. Part of the $2.6 billion is money and benefits that we are already paying to our sales and service employees."
Accenture's responsibility will be to provide new technology and to implement process change. McNally did not know what percentage of the total would actually go to Accenture for these services.
Jeff Kagan, independent telecommunications analyst in Atlanta, Ga., said the deal signals a sea change in the industry. "Customer service in telecommunications has been deteriorating for the last few years. So the question is: will that trend continue? This deal looks like a major new focus on customer experience, beyond just shortening wait times."
McNally said AT&T considered outsourcing its entire sales and customer service operations. "We put out an outsourcing RFP (Request for Proposal) a few years ago, but did not get the response we wanted," said McNally. "Then Accenture came forward with this co-sourcing proposal."
The number of Accenture consultants working with AT&T will fluctuate, but McNally said it will be a few hundred at the peak. Much of the effort will go into adding more self service. "The plan is to end this year with 35 percent of customer transactions completed with voice- or Web-based self service," said McNally.
AT&T also plans to reduce service and sales costs by half over the next five years.
McNally said it was too early to identify new hardware and software that would support the redesign of AT&T customer service.
He also said AT&T's other divisions could eventually take advantage of the new systems. "This is all easily transferable to our local phone and high speed data services," said McNally.
Kagan said the deal also has implications for other telecommunications providers. "There is nothing exclusive about this deal for Accenture. They can take this expertise and do similar work for the local Bells, other long distance providers, and ISPs," said Kagan.