Avaya: Going It Alone

 
 
By Darrell Dunn  |  Posted 2008-08-27
 
 
 

Avaya's stability and product line are keeping customers happy.

Avaya believes the emergence of IP telephony and unified communications is the perfect fit for its traditional strengths in contact-center and other customer-facing applications. An ongoing industrywide change in the operation of contact centers-driven by the demand for improved customer service-is motivating enterprises to use IP technology like Avaya's to enhance the call experience for both the customer and call agent.

In an arena filled with firms struggling for profitability and stability, Basking Ridge, N.J.-based Avaya has consistently performed well. The company has recorded profits of $1.3 billion on revenue of nearly $14 billion in the past two years and three quarters. In June, private equity firms Silver Lake and TPG Capital agreed to acquire Avaya at about 30% higher than the existing stock value, a total of $8.2 billion.

One Avaya customer, the Visiting Nurse Service of New York, says the vendor's stability was a key selling point. "One thing that impressed us about Avaya was the stability of their finances, and that we could start this IP effort without having to wonder if they would suddenly disappear tomorrow," says Randy Cleghorne, director of I.T. and chief technology officer.

Cleghorne plans a multi-year effort to integrate IP technology into the company's TDM infrastructure, a strategy Avaya supports. "We looked at the finances of IP telephony and felt it was best if we could put our toe in the water rather than just jumping in to sink or swim," she says.

Unlike some of its competitors, Avaya has not struck a specific partnership with any other technology companies, but instead works with a number of alliance partners, including Google, IBM, Meru, Microsoft, Nokia and Juniper, according to Karyn Mashima, Avaya's senior vice president for strategy and technology.

Avaya has seen demand grow for disaster recovery strategies, enhanced productivity of mobile workers and help building customer relations, particularly in contact-center environments.

Until recently, large businesses would operate their customer call center in a single facility that housed large numbers of agents, or in several large call centers, depending on the size and geographic reach of the company. The business might also have centers dedicated to specific products or lines of business.

Businesses understand that customers are dissatisfied with typical phone-based services, and see unified communications in call centers as a method of differentiation, Mashima says. The ability to direct calls to appropriate personnel with the right skill sets to tackle a customer's problem can create a lot of good will. Agents who have customer histories available also impress customers.

IP-based systems also ease the use of home-based contact agents, as well as telecommuting. Agent turnover in the U.S. is about 25%, Mashima says, and higher in other regions. The use of home-based agents also enables new workers to enter the workforce, including mothers with small children, people with disabilities and retirees.

Andy Laychock, strategic communications director for Interval International, says the Avaya IP platform allowed Interval to begin meeting a directive from its parent company, InterActive Corp., to increase the use of home-based workers. IAC also operates businesses like Ticketmaster, LendingTree and Match.com. Interval, which manages time-share property exchanges, also will use the Avaya platform to create an IP-based disaster recovery site.

The Avaya platform includes a quality assurance feature that records conversations between agents and customers, does a voice analysis of the conversation that will alert managers if tension increases in the voices or certain keywords are heard and completes an automated survey.

"We can go out now and hire from a much wider base of people," Laychock says. "It really doesn't matter where the agent resides."

At A Glance

Avaya
211 MOUNT AIRY RD.
BASKING RIDGE, NJ 07920
(908) 953-6000
WWW.AVAYA.COM

TICKER: AV (NYSE)

EMPLOYEES: 18,525

LOUIS D'AMBROSIO President & CEO

KARYN MASHIMA SVP, Strategy & Technology

PRODUCTS: IP Telephony Solutions integrates applications and call-center capabilities with IP-based communications systems.

CUSTOMERS: Boston Celtics, Commerce Bank, Continental Airlines, Harrah's Entertainment, National City, San Francisco International Airport

FINANCIALS

2007FYTD* 2006FY 2005FY
Net Revenue $2.57B $5.15B $4.90M
Net income $128.00M $201.00M $921.00M
R&D spending $228.00M 428.00M $39.004M
*For first six months ended March 31, 2007. Fiscal year ends September 30. Avaya agreed in April to be bought out by Silver Lake Partners and TPG Capital.

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