IT transformations - Capgemini Consulting Nederland

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Figure 1: Forecast of Mobile Service Revenue Growth in Western Europe (%), Global Telecom CAPEX Growth (%) and Volume of Network Traffic in Western Europe (Zettabyte per Month) Window of Opportunity for Sustainable Transformation 5.8% 4 % 661.2 Widening spread between costs and revenue will limit efficiency of lean measures 2.49 % 2.4% 356.2 69.9 % 168 1.04 % 0.69 % 2010 2011 2012 2013 -0.68 % Growth in CAPEX Revenue Growth Volume of Data Source: Informa, Mobile Europe Revenue Forecasts, 2009; Cisco, Cisco Visual Networking Index: Global Mobile Traffic Forecast Update, 2009-2014; 2009; Infonetics Report: Service Provider CAPEX to Bottom in 2010, Investments to Rise in 2011, November 2009 Threat from New Competitors Another challenge, which poses a potential threat to operators, is the infringement of online players in the traditional telco territory. The recently announced Facebook-Skype alliance 3 which will enable Skype users to call and send SMS to their Facebook friends directly on their mobile phones and landlines has the potential to cannibalize voice and SMS revenues of operators. While it is often easy to overstate the threat of these kinds of initiatives from non-traditional competitors, their global scale, all embracing nature, and network effect does represent a substantial threat if these kinds of services gain traction. These types of transformational challenges, on top of the more traditional competitive and operational challenges, do require a new set of responses. In the next section we will discuss these responses in detail. Digital Renewal: Key Priorities for TME Players When assessing the range of response measures being adopted by telecom operators, it is possible to group them into five broad priority areas (see Figure 2): ■■ ■■ ■■ ■■ ■■ Enhancing customer relationship Upgrading infrastructure Simplifying IT Streamlining operations Improving product lifecycle management. We have assessed these responses under the heading of Digital Renewal. In the subsequent subsections, we detail the five key elements of this approach. Customer Relationship Renewal Key Issues There are two broad themes under the heading of customer relationship renewal. The first of these is how to re-balance the acquisition and retention costs, and the associated 3 Company Website. 11
Figure 2: Digital Renewal Approach of TME Players Operations Renewal Sustainable efficiency and optimization of functional performance to raise profitability, ensuring operations efficiency of current activities and creating headroom to invest in expansion initiatives and customers IT Renewal Transformation of telecom operators’ IT to reduce complexity and cost in IT management, processes and platforms across fixed and mobile environments Source: Capgemini Analysis Customer Focus Customer Relationship Renewal Strategy and transformation of marketing, sales and service to revitalize the customer experience across online and traditional channels as the imperative shifts to retention rather than acquisition, enabling a true digital transformation Digital Renewal How to respond to the transformational challenges driven by the increasing data consumption, changes in consumer behavior, emergence of new technologies, and the resulting monetization conundrum Technology Focus Operations Focus Product Renewal Advanced life-cycle management to drive and accelerate innovation, improve launch capability and reduce complexity across the converged product, service and tariff portfolio Infrastructure Renewal Launch and monetization strategy of new fixed and mobile networks (4G, fiber) to support the launch of new products and services, and improve quality of service total US retail sales 4 . From a service perspective, the online channel is not only increasing in demand from consumers but also is a cost effective means of post-sales support. When compared to call center technical support, the approximate cost per contact is nearly 92% cheaper for a virtual agent 5 . TME players are, therefore, developing their online channel strategy to use Web 2.0 and social media tools for driving marketing campaigns, enhancing sales, and optimizing customer service and support. Moreover, they need to identify and target the right customer segments by making their online proposition attractive and less complicated. “ By 2013, online and onlineinfluenced sales are expected to account for 62% of total US retail sales ” approach in light of the shift towards retention and away from high volume customer acquisition. The second is to revitalize the customer experience (see Figure 3) through the improvement of the online experience in terms of both sales and service, and to improve the multi-channel experience so that customers are being offered a seamless experience across all channels. These twin challenges drive the key activities of operators in this area. As part of the customer relationship renewal, the online channel strategy, online performance improvement, and multi-channel strategy seem to be the key priorities for TME players. In the subsequent subsection we detail these key focus areas. Key Focus Areas Online Channel Strategy The online channel is emerging as the most efficient and cost effective customer touch point for TME players. In addition to affecting sales directly, the online channel also impacts offline retail sales. By 2013 online and online-influenced sales are expected to account for 62% of the For example, having realized the importance of the online channel, operators such as SFR have put the Internet at the core of customer relationships. The share of SFR’s online shop in the overall distribution increased threefold from 5% in Q1 2008 to 15% in Q1 2009 6 . Furthermore, the share of web in overall customer care doubled between Q1 2008 and Q1 2009 to reach nearly 42% at the end of Q1 2009 7 . Online Channel Performance Improvement To enhance the customer experience, drive their top line, and reduce selling and service costs, operators are also taking measures to enhance the performance of their existing online marketing, sales, and service initiatives. A focus needs to be on measures such as optimizing the online channel for improved crossand up-selling, achieving higher conversion rates, reducing post-order revenue losses through stringent credit checks, improving supply chain and inventory management, and analyzing online consumer behavior. 4 Forrester: US Online Retail Forecast, 2008 to 2013, xxxx 2009. 5 Forrester: It’s Time To Give Virtual Agents Another Look, March 2010. 6 Company Presentation. 7 Company Presentation. 12
Page 1: volume 9: Spring/Summer.11 Capgemin
Page 5 and 6: Editorial Welcome to the Spring/Sum
Page 7: Digital Renewal: Addressing Transfo
Page 11 and 12: “ Several operators are exploring
Page 13 and 14: Mobile network traffic in Western E
Page 15 and 16: help them save costs, but will also
Page 17 and 18: Cloud Computing: The Telco Opportun
Page 19 and 20: Figure 3: Stakeholders in the Cloud
Page 21 and 22: Figure 6: Categorization of Cloud O
Page 23 and 24: Hosting on Demand Telcos are alread
Page 25 and 26: Figure 9: Telco Strategies in the S
Page 27 and 28: Figure 11: Summary of Cloud Strateg
Page 29 and 30: Beyond Communications: Identifying
Page 31 and 32: Figure 3: Indicative Activity Chain
Page 33 and 34: Figure 5: Needs Served by Smart Gri
Page 35 and 36: “ An increased focus on safety an
Page 37 and 38: Figure 8: Strategic Options for Tel
Page 39 and 40: Figure 10: Telco Evolution as Servi
Page 41 and 42: Long Term Evolution LTE Opportuniti
Page 43 and 44: Figure 3: Commercial LTE Deployment
Page 45 and 46: “ LTE offers the most efficient,
Page 47 and 48: Figure 6: Key Technical Challenges
Page 49 and 50: Figure 8: Accumulated CAPEX and OPE
Page 51 and 52: Ubiquisys (femtocell), and Openwave
Page 53 and 54: IT Renewal: A Business Transformati
Page 55 and 56: to launch Web-based self-service ch
Page 57 and 58: Figure 4: High Level of Functionali
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and acceptance by all the different
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“ IT transformations, at their co
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Navigating the Content Quagmire: Pr
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Figure 3: Synopsis of Options for C
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Figure 4: Overview of Digital Conte
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Paid content may be subscription or
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“ Content providers need to focus
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Innovating the Telco Business Model
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Figure 2: Actions taken by Telcos o
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Figure 3: Trends Impacting Business
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Figure 4: Mobile Service Revenue Gr
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Strategy Bottlenecks by Michael G.
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are not active in are “contestabl
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Figure 3: Evolving Bottlenecks in t
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“ Companies should strive to make
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lite BYTES Some vignettes and trend
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“ Successful IT transformation en
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