Telecom New Zealand Chooses SumTotal to Help Boost Customer Service and Sales Readiness with Learning

Mobile telecom service deploys SumTotal’s TotalLMS to increase channel effectiveness, improve consistency and quality of training across New Zealand and Australia

MOUNTAIN VIEW, CA (November 4, 2004) – SumTotal Systems (NASDAQ: SUMT), the industry’s largest provider of learning and business performance technologies, services and processes, today announced that Telecom New Zealand has implemented SumTotal’s TotalLMS as part of an ongoing commitment to providing better customer service throughout Asia Pacific. The company’s innovative approach involves educating and training more than 4,000 Telecom staff, and another 3,000 front-line retail staff, on mobile products and services in advance of their launch to the public.

According to Bridgette Dalzell, training manager of Telecom New Zealand’s channel productivity division, SumTotal will help drive a new company-wide e-learning program, a three-week blended learning solution combining e-learning and on-the-job mentoring. Named Excelerate by Telecom staff, the new program will significantly improve channel effectiveness by delivering more consistent training across retail outlets so that front-line staff is better able to help customers with Telecom mobile packages and products. Telecom has replaced its original three-day induction program and one-month manager and employee shadow period with Excelerate.

“Excelerate has given Telecom the capability to effectively train staff and channel partners at lower costs and with much higher quality than was possible with instructor-led training,” said Dalzell. “The new system has also eliminated a significant number of human hours traditionally spent with on-site training, cutting time down by almost a week while getting our sales force ready faster. For example, our channel partners already have trained and passed knowledge assessments on our “3G Network” launch before the new service rolls out in November. Such a large rollout normally takes months of on-the-job training, but our channels are fully prepared to handle customer inquiries and greatly improve sales and productivity,” she said.

“The feedback from our dealers’ sales teams also has been incredible,” said Dalzell. “One of the greatest advantages of the new system that our channel partners have discovered is that managers can now spend less time shadowing new employees on a day-to-day basis – leaving more time to effectively carry out their own responsibilities.”

By improving channel effectiveness, Excelerate has helped Telecom:

• Drive performance by dramatically reducing the time and cost to communicate information, as well as generating greater channel collaboration
• Increase sales–per-dealership by improving knowledge transfer, sales skills and service techniques, with less time spent away from customers
Improve quality of service and customer satisfaction
• Create and deliver dealer accreditation programs to improve performance
• Train new dealers faster, while ensuring consistency and quality
• Solve inequity of access to learning in regional stores.

“Now that stores in remote locations can access the same standard of training as those in large cities such as Wellington or Auckland, we’ll be able to take better control of our brand and products,” said Dalzell. “And because TotalLMS can also track users’ progress, managers can use it as a tool for performance management by reporting instantly on which members of staff are skilled in a particular area.”

Telecom requires its channel partners to complete a course module and achieve a 75% rating or higher on their assessments before they are qualified to deliver Telecom products to the public. Using the TotalLMS tracking capability, partners can now be awarded different levels of accreditation – gold, silver or bronze – depending on the level of training completed.

In addition to its employees in New Zealand, Telecom has purchased a further 1,000 user licenses to deploy SumTotal for AAPT, its subsidiary in Australia. Over the next year, the company also will explore deploying online learning to its call centers and fixed-line and Internet services.

“Not only has e-Learning enabled Telecom to cost-effectively raise standards and consistency of training, it has improved salesforce readiness by cutting training time by up to a week for over 1,000 staff and channel partners,” said Dalzell.

“Customer demand and rapidly changing government regulations make it challenging for telecommunications companies like Telecom New Zealand to increase sales while maintaining a consistently high level of customer service,” said R. Andrew Eckert, SumTotal CEO. “To succeed, it is critical that these organizations be able to quickly deliver information, training and certification to their sales teams and distribution partners in order to decrease time-to-market for new products and services and to ensure the best possible customer experience. By using TotalLMS, Telecom can ready its channel partners to make shifts in anticipation of market changes and to drive business through increased customer satisfaction and loyalty.”

About Telecom New Zealand

Telecom Corporation of New Zealand Limited (Telecom) was formed in 1987 out of the telecommunications division of the New Zealand Post Office, a government department. In 1990 Telecom became one of the first telcos in the world to be fully privatized. Since privatization, Telecom's business has changed from simple telephony in New Zealand to complex communications throughout Australasia.

About SumTotal Systems, Inc.

SumTotal Systems Inc. (NASDAQ: SUMT) is the business performance and learning technology industry’s largest single provider of technologies, processes and services. Formed by the merger of industry pioneers Docent and Click2learn, the company is uniquely focused on helping organizations harness and manage mission-critical intellectual power to solve real-world business problems and produce significant bottom-line results. SumTotal has helped accelerate performance and profit for more than 600 of the world’s best-known companies and federal and local government agencies, including Microsoft, the US Army, Cingular Wireless, US Air Force, Vodafone, Lucent, USDA, DSHS, Accenture, Cendant, Harley-Davidson, Wyeth, Wachovia and D & B. SumTotal Systems is headquartered in Mountain View, CA, with offices throughout the US, as well as in London, Paris, Heidelberg, Sydney, Tokyo and Hyderabad, India.

Safe Harbor Statement/ Forward-Looking Statements
"Information in this press release contains forward-looking statements. These statements represent SumTotal Systems’ expectations or beliefs concerning future events and include statements, among others, regarding SumTotal Systems’ estimated development and shipment date for its new product, SumTotal 7.0. These statements are not historical facts or guarantees of future performance or events and are based on current expectations, estimates, beliefs, assumptions, goals and objectives, and involve known and unknown risks, uncertainties and other factors that may cause actual results to be materially different from the results expressed or implied by these statements. Readers of this press release are cautioned not to place undue reliance on any forward-looking statements. Additional factors that could cause actual results to differ include, but are not limited to (i) SumTotal Systems' limited operating history, and Docent's and Click2learn's history of losses; (ii) delay in development or shipment of our new product, SumTotal 7.0, anticipated to be released during the fourth quarter of 2004; (iii) customers or partners delaying purchasing or upgrade decisions until our new product, SumTotal 7.0, is released; (iv) acceptance of SumTotal Systems' current and future product offerings; (v) long sales cycles for closing software contracts and seasonality in purchasing decisions; (vi) an emerging and rapidly evolving market; (vii) adverse changes in general economic or market conditions; (viii) continued market uncertainty with respect to the merger and the challenges of integrating Docent and Click2learn into one company, and the ability to achieve anticipated synergies associated with the recent merger; (ix) dependence on the growth of SumTotal Systems' market and fluctuation in customer spending; (x) delays or reductions in information technology spending; (xi) the ability to attract and retain highly qualified employees, and the risk of losing employees, especially sales personnel, if the SumTotal 7.0 release date slips; (xii) intense competition in the marketplace causing, among other things, pricing pressure; (xiii) failure to continually implement requisite internal controls and procedures; (xiv) increase of litigation and their related costs; (xv) other market conditions that include risks and uncertainties such as risks associated with financial, economic, political, terrorist activity and other uncertainties; and (xvi) other events and other important factors disclosed previously and from time to time in SumTotal Systems' filings with the Securities and Exchange Commission, including the quarterly report filed on Form 10Q on August 12, 2004. SumTotal Systems assumes no obligation to update the information in this press release."