From Network to Customer-Centric Business Kris Tokarzewski SAP Africa

1. From Network toCustomer-Centric BusinessKris TokarzewskiSAP Africa

2. Challenging Times for the Telecommunications Industry From Network to Customer-Centric Business

3. Major Trends in the Telecommunications Industry • Huge investments • necessary to stay competitive: • network (e.g. 3G) • service development & introduction • information technology • More bandwidth to offer • new/additional services: • multimedia content • TV • mobile applications • Cooperation with • partners tooffer new services: • content providers • mobile applicationproviders New Technologies • Empowered customers: • strong competition by new players • increasing customer churn rate • decreasing prices & margins • cost reduction by improving operations efficiency is necessary • high investments in new/ • additional service offers to generate new/additional revenues • concentration on core • competencies/outsourcing/ • co-operations • market consolidation Deregu- lation Globali- zation • Global business • operations to be run: • coordination of global activities • realization of synergies • requires global internal co-operations/collaboration • legal consolidation of financial figures • increased competition in local/national markets

4. Convergence in the Telecommunications Industry Device Convergence Network Convergence Lap- top Fixed Networks PC Mobile Networks PDA TV Switch- based Packet- based Cell phone • Industry • Convergence • Telecommunication • Media & Entertainment • Information Technology • but also Banks .... Radio Paper • Content • Convergence • News • Information (Business/Consumer) • Learning • Entertainment • Advertising • Applications • Commerce • Media Type • Convergence • Voice • Data • Pictures • Multimedia • ...

5. Customer Information is Key for Business Success • Customer insight: • Profitability • Purchasing Behaviour • Credit Management • Churn Analysis Master data Customer Information • Business data: • Fixed Services • Mobile Services • Internet Services • Product Sales • ... • Marketing: • Data Mining • Segmentation • Target Group Selection • Financial data: • Creditworthiness • Revenue • Per Product/Service • Per Period • Per Sales Channel • Product Portfolio Planning: • Revenue Potential for New Products & Services • Product Profitability Analysis

6. Strategic Implications for Telecom‘s Business • Dealers • Suppliers • Equipment • Services • Goods • Content • Retail • Consumers • BusinessCustomers • Wholesale Partners Customers Telecom Company Efficective and efficient cooperation with customers and partnersand efficient business processes are key for doing successful telecom business

7. Online contract entry and service activation • e-Procurement, e-Vendor Managed Inventory, eBPP • Commission Info • Knowledge Access • Collaborative demand planning e-Collaboration: the Key to become an e-Telco Dealers Customers Suppliers Dealer Portal • Selling via Web shops • Present bills and offer settlement for customer accounts (eBPP) • Change Rate Plan • Update account details • Create a move note • Change configuration of services • Create trouble or complaint note • Offer personalized products and new services, e.g. - Multi-Media Content - Online Information Services (Push & Pull) - e-Learning/Mobile Learning • Chat with Customer Service • Send SMS messages via portal • Collaborative supply planning • e-Procurement - Non-production material - Production material - Equipment (e.g. switches) - Content • e-Marketplaces (e.g. RFPs, reverse auctioning) • Collaborative Engineering e-Collaboration In Telecommunications Supplier Portal Personalized Workplace • Seamless access to all needed knowledge / objects - internal IT-systems (SAP and non-SAP) - marketplaces - www • Employee Self Services (leave request, purchase order...) • Digital workflow Customer Portal Employee Portal Employees

8. From Network- to Customer-Centric Business Technical systems Fixed voice services Mobile voice services Business Solutions Marketing Sales Fixed Services Physical Products Service Pro- visioning Business Analytics Mobile Applications Fixed dataservices Customer Mobile Services Customer solutions Ful- fillment Collections Content Mobile Internet Services Internet Service Receivables Management Fixed Internet Services Billing Cable services Invoicing Content Management

9. Challenging Times for the Telecommunications Industry From Network to Customer-Centric Business

10. Business in the New Economy Optimize Value Chain Understand Customers to Build Revenue & Profits Increasing Global Competition Profit Pressure Industry Deregulation Technological Innovation OptimizeMarketing, Distribution & Service IncreaseOperational Efficiency Better Informed Customers

11. Strategic Initiatives within Companies • Improving customer service • Creating new product lines • Creating new service offerings • Seeking greater understanding of customers • Creating customized product or service offering Information Week Global Research Survey, April 2002 Strategic Focus is now on Customer Value

12. Convenience • Familiarity • Trust Relationship Value • Quality • Innovation • Choice Product Value Channel Partner Customer Telecom company • Efficiency • Transparency • Timeliness Process Value • Revenues • Wallet Share • Endorsement Life Time Value Creating Customer Value

13. 1 2 Leverage customer assets Fully control the relation with your customers to minimize risk and maximize collected revenue 3 Improve order management and supply chain efficiency 5 Improve process integration and reduce Total Cost of Ownership 4 Plan and control network investments according to your business strategy Telco Business Needs – just to mention a few... Provisioning & fulfillment Product /Service Def. Customer Acquisition Billing&Collections Infrastructure Mgmt.

14. Business Need: Leverage customer assets Yesterday Today • The Dilemma • Leverage Customer Assets • while Reducing Operating Costs • Distinct Strategies & Spending for Customer Segments based on ROI, e.g. • Reduce Churn Rate & increase Customer Spending in High Valuable Segment • Automate Processes & keep Churn Rate consistent in Low Value Segments $ $ 5% High Value customers 30% $ 20% Flexible and comprehensive platform to support segment-driven strategies Low Value customers

15. CRM and Telecommunications Marketing & Engangement Service know your customers, prospects and markets target specific customers with personalised offers develop relationships, build loyalty, retain & grow customers Search Change Enquire service customers handle their queries and exceed expectations engage with customers communicating for mutual value Request Decide Buy Pay transact by delivering to and collecting payment from customers sellto new & existing customers Sales & Fulfillment

16. Key Capabilities of a Complete CRM Solution Who Marketing Sales Service Executives Service What Engage Customer Interaction Cycle Fulfill Transact Workplace Which way Internet Mobile Telephony How Operational Analytical Collaborative

17. Analytical CRM Capability

18. Business Need:Fully control the financial relation with your customers Today’s product-centric business model Areas of pain today: • No consistent view of customer • Credit Risk • Poor customer service • No integrated support of complete customer financial lifecycle • Redundant interfaces to many applications • Costly to build and maintain • Non-auditable interfaces into G/L accounting • Lack of flexibility, automation and functionality in receivables management processes due to nature of billing systems Consumer Billing (Mobile)) Customer Care / CRM Mediation Rating Invoicing Receivables Management General Ledger Accoun-ting / Controlling Consumer Billing (IP) Customer Care / CRM Mediation Rating Invoicing Receivables Management Hardware Sales (Mobile) Sales Invoicing Receivables Management EBPP Banks, Credit Card Agencies Collections (internal, exteral) Customer

19. Interaction Center Web Solution:Customer Financials Management Customer Using the functionalities of Customer Financials Management you can: • Get a consistent view of your customers and their financial obligations with you • Reduce outstanding receivables • Automate receivables processing to reduce cost and increase efficiency • Control risk exposure • Reduce invoice cost • Resolve dispute cases quickly to increase customer satisfaction and avoid delays in cash flow • Offer customer self-service to take load off the call center CRM • Bill Inquiries • Payments • Complaints • Change of Payment Terms • Credit Check • ... • Customer • Orders • Contracts • Services Financials Electronic Bill Presentment & Payment Dispute Management Mediation & Rating Convergent Invoicing Credit Management Receivables & Collections Manage- ment

20. Bottom Line: Customer Financials Management Benefits include • Reduction in manual work and subsequent cost savings in head count • Increase in actually collected revenue due to • Streamlined business processes (e.g. in payment and dunning) • Increased flexibility (deferrals, installment plans) • Integrated credit management • Savings related to reduced Days Sales Outstanding • Improved customer service • Reduced number of complaints due to customer-segment specific procedures (e.g. dunning, payment methods) • Flexibility to resolve customer complaints (e.g. disputes) • Flexibility to define content and number of invoices • High-performance applications result in • More frequent batch runs reducing time to collect money • Drastic reduction in required hardware

21. e-Business Platform Support of e-Collaboration Portals for Customers Partners Suppliers Employees Solution for Marketplaces Telecommunications Company’s IT Solution have to be … Comprehensive, Flexible Functionality • Support of all types of telecommunication services • Covering the whole value chain • Easy to adapt to new business requirements • Open Integration • Within the IT solution • With Third-Party /Legacy Solutions via Open Interfaces Low Total Cost of Ownership • Implementation • Maintenance • Future Enhancements End-to-end Integration • Intra-enterprise • Business processes • Front-office processes • Back-office processes • Technical solutions • Inter-enterprise • Reliabilíty and Scalability

22. Customers are in control • In the past, customers received info on need to know basis • Today, customers want to know everything – prices, inventory levels, new product development • Value drives loyalty • In the past, satisfied customers were loyal customers • Today, value – as defined by the customer – is the primary driver of customer loyalty Why Should We Care About Customer Centricity • Customer relationships count • How much is your company worth? • Market value of your company is directly proportional to your customer relationships