Claro IT leadership makes strategic investments to keep pace with Brazil’s sizzling economy.
by David Baum
It goes without saying that Brazil is hot. The South American economic powerhouse is growing at a scorching rate; according to the World Bank, the country’s gross domestic product has outpaced the global economy by almost a full percent over the past five years. The rate of per capita income more than doubled during the past decade. The Tupi oil field, discovered in the South Atlantic in 2006, brought Brazil the Western Hemisphere’s largest new oil reserve—expected to produce 100,000 barrels of crude per day. Add to that the 2016 summer Olympic games and the 2014 soccer World Cup, and there’s no denying that Brazil is a country on the move.
Keeping the hardworking, upwardly mobile Brazilian population connected is the primary job of Claro Brazil, one of the country’s largest mobile communications companies. Independent telecommunications research firm BuddeComm names Brazil as the fifth-largest mobile phone market in the world. And mobile broadband networks are expanding in parallel with the overall Brazilian economy: according to research firm Frost & Sullivan, mobile broadband penetration will reach up to 40 percent of the Brazilian population by 2015.
This boom in mobile communications in the region is compelling the leadership of wireless operators such as Claro to upgrade their infrastructure to support smartphones and premium service plans. “Brazil’s mobile telecom market is highly competitive, with four main brands fighting over customers with a series of very aggressive promotions,” says Ricardo Birtel, CIO at Claro in São Paulo, Brazil. “Having an IT infrastructure that can support our growth is critical for success.”
Active in thousands of cities and serving 58.4 million clients, Claro delivers broad wireless digital coverage and a global system for mobile communications technology with pervasive third-generation (3G) services and innovative new 4G services on the horizon. Claro has also entered into roaming agreements for voice services in 160 countries.
It falls on Birtel to find novel ways to use technology to fulfill Claro’s business objectives—increase revenue, expand market share, and develop innovative new products. This includes increasing average revenue per subscriber and improving time to market for new products and services. He is achieving these objectives by using Oracle’s PeopleSoft applications and Oracle Fusion Middleware technology to enable a “single view of the customer” among multiple channels—whether it’s the internet, a retail store, or the popular My Claro Website. Oracle technology is a fundamental component of Claro’s evolving IT architecture.
“Our network infrastructure has to grow quickly in order to accommodate a tremendous amount of new voice and data traffic, along with the associated accounts and equipment,” Birtel explains. “We accommodate more than 3 billion call data records each day. Scaling the company is hugely dependent on the underlying technology. By creating a more flexible middleware infrastructure, we knew we could reduce time to market for developing new telecommunications products and services.”
The foundation of Claro’s evolving middleware infrastructure rests on service-oriented architecture (SOA). Birtel and his team wanted to create standard interfaces between the back-end information systems that store, manage, and process transactions, and the front-end systems that customers and sales representatives use to access millions of mobile subscriber accounts. Such a universal middleware layer would combine fragmented and sometimes inconsistent information distributed across nearly a dozen internal systems and present it to the various channels in a cohesive way, including the retail channel, the interactive voice response system, a retail point-of-sale system, the customer-facing Website, and a PeopleSoft customer relationship management (CRM) system.
“If a client makes a complaint or orders a new service through the Website, then that information should be instantly visible through any other channel, so all systems always have current information on file about that customer,” explains Eduardo Barnetche, CRM director at Claro. “We knew that having a standardized architecture for systems integration would also improve corporate governance and make it easier to replace obsolete technologies,” he adds.
SOA lets developers design and create software in the form of interoperable services—discrete pieces of code and data structures that can be reused for different purposes. It also defines how consumers of services—both people and Web-based applications—can access, exchange, and update information in enterprise databases.
Claro’s SOA pilot automated a process that spans four information systems related to new-account activation. The services created in this pilot were easily reused for a revenue management project. In the ensuing two years, Claro developed 450 services supporting 2 million operations per day.
To get started, Claro worked with Oracle Consulting, the Oracle Solution Architecture team, and two Oracle partners based in Brazil: Stefanini IT Solutions and Resource Consultoria. Together they implemented a multichannel service solution that connects the retail stores, call centers, customer-facing Website, CRM system, and cellular automatic response system. It took six months to complete the first phase of the system.
“The initial services were designed to provide a unified view of the customer for both the call center and the store,” explains Birtel. “This is crucial to the business. When Claro launches a new platform, we must be able to rapidly provision services for customers in conjunction with promotional activities.”
Technically, this SOA project involved connecting two major front-office systems that Claro depends on to communicate with customers: the sales and CRM systems. The sales front end is a point-of-sale system used by attendants at Claro’s retail stores as well as by dealers and telemarketing personnel. It gives all three types of users a current snapshot of the customer, including account information, equipment purchases, plan details, spending history, complaints, and related information.
The PeopleSoft CRM system automates a variety of service activities for Claro’s 7,000 service personnel while empowering customers with a choice of communication methods including Web self-service, chat, phone, fax, and e-mail. The CRM software also increases cross-sell and up-sell opportunities with product recommendation and automatic-order generation and helps Claro to achieve a “360-degree customer view,” as Birtel puts it, guaranteeing that everyone in the organization has the information necessary to deliver effective and informed service. “It’s important that the service team has fresh information about the customer base in order to provide targeted and knowledgeable assistance to customers,” he notes.
The development team created seven portlets to display and enter information in the CRM system, fed by 10 different back-end systems. The team went on to create SOA interfaces to streamline data exchange among several other important systems: a billing system for prepaid and postpaid subscribers, a third-party enterprise resource planning system for corporate finance, a loyalty/rewards system that lets customers exchange points for new equipment, an equipment activation system, a credit check system, and a promotions system.
Other important back-end systems, now linked in via SOA and communicating over Oracle Service Bus, include an Unstructured Supplementary Service Data (USSD) system that presents handset options to customers, an SMS interface for short message services, and an order entry system that presents an electronic catalog to internal and external users.
“Our main goal was to speed up development and improve reuse of integration services,” explains Marcelo Galvão, systems development director at Claro, who oversaw the technical development initiative. “Previously developers had to maintain hundreds of point-to-point connections to exchange information among these various information systems, each of which had its own types of unique interfaces.”
Now these interfaces are much more straightforward, Galvão adds, and the fundamental bits of code can be reused to simplify each new connection. For example, if a developer creates a service to determine which promotions a customer participated in, another developer can reuse the same service to deliver the information to field technicians during a service call or to a point-of-sale system during a retail store visit.
“We depend on SOA to run the business,” emphasizes Birtel. “We have been able to reuse many services from system to system, increasing the agility of the IT department.”
Birtel defines agility as “degree of change over time” or “the number of times over a particular period that the business reinvents itself to adapt to a market.” He estimates that the Oracle technology-based SOA environment has reduced time to market for new services by 50 percent, increasing Claro’s competitiveness among mobile telephone operators. For example, Claro is now the only mobile telephone operator in Brazil that lets customers tailor custom mobile communications packages and account plans.
Galvão agrees. “The SOA environment has made it much easier to develop and deploy new products,” he notes. “Whether a project takes two days or two months to complete, we have a high level of reuse. Sometimes we have to make minor changes, but we can preserve the bulk of the effort and roll it forward. So far, Claro has developed 450 services and has a 60 percent rate of reuse.”
For example, when Claro management wanted to offer more flexibility in postpaid products such as the Plano Sob Medida, they created reusable services to make the necessary connections for all the front ends including the internet (self-service), point-of-sale systems, and CRM systems. It took only 40 days to create this new product and deploy it for all the customer contact channels. Galvão says it would have taken at least twice that long using Claro’s old point-to-point integration methods.
Cell phone adoption in Brazil is one of the highest in the industrialized world, but smartphone use is under 20 percent, according to RCR Wireless Americas. That leaves lots of room for growth. To seize the high ground in this emerging market, Claro’s leadership has unleashed a series of strategic campaigns to acquire new clients for premium services and to keep existing customers loyal to the Claro brand. The PeopleSoft CRM system has become the focal point for tracking these campaigns, on both the sales and service sides of the business.
“We can offer relevant products and services based on each client’s individual needs and purchase history,” Barnetche explains. “The service-oriented architecture was designed so we could bring in extra insight, enabling our sales team to offer targeted services based on our knowledge of each individual and the behavior patterns of similar customers in similar circumstances. For example, it helps us identify customers who are likely to adopt new equipment or upgrade their service plans. Having current information helps our call center reps know exactly what customers want.”
Thanks to this high degree of automation on the back end, Claro’s customers receive more-consistent service and a more cohesive experience on the front end, whether they interact with Claro through the retail stores, the call center, the internet, or the interactive voice response system.
The new architecture has made the development team more productive, even as it has made customer service representatives more knowledgeable. According to internal metrics, the integration project has improved response time in the call center by 10 percent, and in the retail stores by 25 percent. Barnetche attributes the bulk of these gains to Claro’s ability to offer attendants a unified view of a customer’s history. In addition, using Oracle Service Bus to consolidate information from 11 systems into a single CRM screen makes the call center more efficient and reduces training time for new hires by 30 percent.
Steady growth in Claro’s subscriber base has a ripple effect on the data processing requirements of the entire operation. One of the biggest tasks involves reporting fiscal transactions to the Brazilian government. Brazil has strict rules for electronic filing of tax information. These requirements affect Claro’s dealings with both customers and employees.
“These tax requirements necessitate a lot of data storage and transfer,” explains Birtel. “Our network providers, for example, supply millions of different spare parts and installation services, and all this has to be conveyed via electronic records. The same applies to customers: every monetary transaction has to be recorded. Fulfilling the government’s filing requirements entails a tremendous amount of information and a great deal of processing.”
As the volume of these transactions increased, Claro’s IT team implemented an Oracle Exadata Database Machine for both online transaction processing (OLTP) and data warehouse activities. One of the company’s most resource-intensive OLTP applications extracts information from the postpaid system to calculate the tax due to the government. Another determines the taxes associated with procuring materials for production and nonproduction uses.
Once these OTLP systems are fully operational on the new Oracle Exadata platform, Birtel expects them to have a huge financial impact on the enterprise because they will enable Claro to report information to the government more quickly and accurately, avoiding fines for late or inaccurate reporting. “The impact could easily be tens of millions of reals per year,” he adds.
Galvão quantifies the impact in terms of processing speed: calculating these financial transactions and generating the associated reports previously took about 90 hours of processing time. According to Claro’s initial benchmarks, the Oracle Exadata Database Machine will do it nearly 10 times as fast. “We expect it will take about 10 hours instead of 90 hours to process this data with Oracle Exadata,” he confirms.
Claro management is also looking to its new Oracle Exadata systems to enhance its business intelligence (BI) capabilities. Currently the company has data marts associated with customers, revenue, equipment, finance, human resources, and other business domains. All of these data marts and the associated BI applications are being migrated to Oracle Exadata, enabling managers and business analysts to use Oracle Business Intelligence applications to obtain insight from their operational data.
Oracle engineered systems, in conjunction with Oracle Fusion Middleware and PeopleSoft applications, will continue to improve Claro’s ability to attract, retain, and reward its loyal customer base—now more than 50 million strong.
David Baum is a freelance writer specializing in business and technology.
Oracle SOA Suite and Oracle Service Bus
While Claro’s IT department built its own software architecture to construct and consume services, Claro depends on Oracle SOA Suite to deploy, manage, and orchestrate those services, along with Oracle Service Bus to make the associated connections among information systems.
Oracle SOA Suite 11g is an integrated suite of products that helps developers to rapidly design, assemble, deploy, and manage highly agile and adaptable business applications. As a standards-based infrastructure, it interoperates with Claro’s vast IT architecture, simplifying connections among both packaged and homegrown information systems.
Oracle Service Bus is designed to connect, mediate, and manage interactions between heterogeneous services, legacy systems, enterprise resource planning systems, and other information systems across the enterprise. In addition to serving as the fundamental messaging engine, it is the communications medium that connects IT assets and provides industry-standard interfaces, streamlining development and deployment of new applications and services.
As a core component of Oracle SOA Suite, Oracle Service Bus is the backbone for service-oriented architecture (SOA) messaging. For Claro, it handles the important role of mediation—translating and transforming message formats, integration technologies, and security schemes to achieve a loose coupling between systems. By mediating the interactions of disparate systems, Oracle Service Bus ensures flexibility and agility for Claro’s SOA.