January 11, 2001, 1:53 PM — AT&T deal to run Cendant's systems foreshadows trend
A SIGNAL PERHAPS that large companies are becoming more comfortable outsourcing the systems that underpin major customer service efforts, corporate conglomerate Cendant this week tapped AT&T to take over its CRM (customer relationship management) infrastructure operation.
Cendant, which owns entities such as Days Inn, Howard Johnson, Avis, and Century 21, is looking to sell more easily across its vast portfolio of business units and their customers. To do that, the New York-based company hired outsourcer AT&T Solutions in a $550 million deal.
Most industry watchers have maintained that it is smaller, often Internet-based companies that are more willing to farm out the precious systems that support crucial customer interaction.
|Deal at a glance|
Standard interface across diverse company brands Equipment and IT staffing for 32 call centers Maintenance of voice-related equipment Development of CRM toolset and strategic customer direction
Cendant's $550 million CRM package from AT&T Solutions offers several ways to increase efficiency.
Standard interface across diverse company brands
Equipment and IT staffing for 32 call centers
Maintenance of voice-related equipment
Development of CRM toolset and strategic customer direction
"Many more sophisticated CRM applications might be better [off] enterprise-based, given necessary integration with legacy systems in many cases," said Dana Serman, vice president of equity research at Lazard Freres, in New York. "Call-center apps will likely be baked into existing call centers, even if those call centers involve some outsourced management functions, or even if those entire call centers are third-party owned."
AT&T will give Cendant a way to transfer customers and their profiles among its different subsidiaries -- without having to revamp legacy systems. AT&T also will inject its 32 call centers with new technology to handle electronic interaction with customers.