leveraging sap to innovate in telco’s

Leveraging SAP to Innovate in Telco’s

Andrew Strachan : Industry Principal SAP Africa

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A TEASER..

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Declining Revenues

Downward Margin

Pressure

Intense Focus on

Customer Loyalty

Deregulation Number Portability UNE-P (Unbundled

Network Elements Platform)

Do-not-call Registration Sarbanes Oxley

Culture Changing emphasis

towards customer satisfaction

Legacy of “best of breed” solutions

Severe threat to internally developed systems and IT personnel

Economic Environment Telecom’s share of GDP relatively stable at about 2% Communications services rates continue to drop as

technology enables higher bandwidth and services become universally available

Intense Competition Increased competition enabled by deregulation Cannibalization between Services Threat of VoIP (Voice over Internet Protocol) Continued industry restructuring

Fight for Customer Wallet Share Focus on broadband

internet services

Focus on bundling and long term pricing plans

Blurring lines between local and long-distance carriers

Continued focus on customer loyalty, and quality of service

A Telco’s Challenges are tough !

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The convergent digital economy is here – today! Telco 2.0

Service Provider

Application Developers Content Providers Merchants

Airlines, Merchants

Info Providers

Cinema, Theater..

Merchants Music

Game Video

M-commerce

Small Payments

Micro-payments

Bonus Points

Stocks

Ticket Services

Loyalty Prog

Merchants Sponsoring Advertisment

SaaS SW Vendor

Home/ SoHo

SMEs

Enterprise

Public Sector

Personal

Connectivity Google buying wireless spectrum Delivery channels for SaaS (Telenor, BT) Sales channels for digital content, devices and

consumer electronics Build & own content Clearing house for micro-payments Utilities become telcos

ANY

CONTENT

ANY

WHERE

ANY

DEVICE

Community “Fabless” manufacturers (Nokia = music

and maps business) MSFT and News Corp investing in face

book and myspace Creating communities from single

services (Nintendo Online) Ad aggregators and widget brokers Advertising-based business models

(radio, TV, publishing, voice, devices, connectivity, downloads, software)

Content μ- payments suppliers (ngpay) IP management & settlement (Apple,

Disney) SaaS & software vendors (SAP,

Salesforce, MSFT) Creators and distributors of software

and intellectual property (Nintendo, Lionsgate)

Specialist publishers (WSJ, Nexus)

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Business Requirements for an Adaptive Communications Service Provider

Few weeks Few hours Time to Market

Call center driven Self service via intelligent

edge device Service

My campaigns My partners’ campaigns Marketing

Service provider owned Partner enabled Eco-System

Connectivity Connectivity, Context,

Content & Community Revenue Models

Asynchronous & generic Synchronous & tailored Responsiveness

Today’s Telco The Adaptive CSP

The adaptive CSP needs to evolve the IT infrastructure to meet the

business requirements of tomorrow

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Key Business Drivers for Telco Companies Innovation is ESSENTIAL !

© SAP 2007 /

Improve competitive cost-level

Retain high profit customers & grow customer lifetime value

Innovation: Drive new business models

Improve level of operational excellence

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2

3

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Improve customer loyalty and retention Understand customers personally to identify / retain profitable

contracts and grow revenue Develop and market segment specific offerings

Innovative products and fast idea-to-cash Product bundling and innovative pricing schemes Conquer international markets and engage in partnerships

(wholesale)

Exploit cross business unit synergies Establish shared services Improve process flexibility (for new business models and M&A

scenarios) Leverage existing human capital to the best possible extend

Optimize CapEx (emphasis on network and IT infrastructure) Minimize OpEx (emphasis on core business processes) Decrease financial risk (reduction of DSO, bad debt losses etc.)

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THE FUTURE TELCO

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SAP Telco – Strategic Focus Areas

Get real-time insights

Unwire the enterprise

Rethink billing

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CRM FOR A TELCO

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Telco CRM Needs to be Holistic !

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BILLING AND CUSTOMER FINANCIAL CARE !

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SAP Solution and Features for Consume To Cash

Customer and Partner Financials Management

Convergent Charging

Convergent Billing

Account Receivables Payables Rating

Balance Management

Billing and Invoicing

Presentment Credit Management

Dispute Management

Pricing

Billing

Rating and Charging

Invoicing

Front Office Back Office

Product Marketing

Simulation

Pricing Modeling

Printshop

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Pricing, Rating,

Charging

Revenue & Expense

Management

Invoicing & Payment

Statements

Customer & Partner

Financial Care

Accounts Payable

Accounts Receivable

Pricing & Charging Model Design

Pricing Simulation Converged Prepaid,

Postpaid & Hybrid Charging

SAP Convergent

Charging

Convergent Invoicing

SAP Convergent

Invoicing

Revenue Management Credit Management Online Bill Presentment

SAP Customer Financials Management

Financial Customer Care Collections Management Dispute Management

Consume-to-Cash Analytics

mCommerce

Mobile 365

mBanking mPayment mRemittance

SAP Convergent Charging &

SAP Convergent Invoicing provide customers with a highly scalable and robust platform designed to address any of their multi-service packaging and delivery requirements.

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Telecommunications Business Trends

Minute Type of Video

Peak Hours

Size

SMS

Bandwidth

Ringtone

Age of Content

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SAP Convergent Charging Solution Innovative Technology: Decision Trees

Old: Code-Driven New: Business

Configuration

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Intuitive setup

SAP CC : The Decision Tree

Same interface for usage, recurring and non recurring

Real Time Alerts Table structures with CSV import Counters available to aggregate data

17 © SAP AG 2009. All rights reserved. /

SAP Customer Financial Management

SAP Credit Management

SAP Convergent Charging

SAP Convergent Invoicing (& Billable Items Billing)

Collections Management: SAP RM-CA Subledger Accounting

SAP Biller Direct (Electronic Bill Presentment and Payment)

Financial Customer Care & Dispute Management

Accounts Receivables Invoicing Billing Rating Mediation Dispute

Management

Customer Registration & Booking

SAP CI

Billable Items

Billing

SAP

Convergent

Invoicing

SAP

Revenue

Management

Contract

Accounting

SAP

Financial

Customer

Care

SAP

Electronic

Bill Presentment

and Payment

SAP

Credit

Management

SAP

Convergent

Charging

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The Convergent Convergent Invoicing Process

Recurring Charges

(e.g. from CRM)

One-time charges

(e.g from Sales)

Charging

Mobile

Rating 2

Internet

SAP Convergent

Charging

Flex

ible

Inte

rfac

e

Exception

3

4

Recurring Charges

One Time Charges

Rated CDR, EDR

Billed Items

Exceptions

Billing Documents

SAP Convergent

Invoicing

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Customer Financial Management Receivables Management & Payment Handling

■ Revenue realization from Billing to General Ledger, aligned with accounting principles and reconciliation needs

■ Adoption of changing

requirements for Industry specific processes

■ Reliable interaction with all payment channels

■ Compliance and transparency throughout external and internal accounting

■ Reduction of TCO associated with multiple billing, invoicing and back office systems

■ Fast, automated and accurate

payment handling, increased customer satisfaction, transparency of outstanding receivables

Objective:

Compliant and transparent receivables management

Best practice solution: Integrate and align all internal and external accounting parties

Issues Key business capabilities Benefits

■ Inaccurate accounting, controlling, and reporting, associated with difficult reconciliation

■ Need industry specific accounting process expertise

■ Complex and high-volume payment handling and unclear payment allocation associated with costly manual work

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Customer Financial Management Credit & Collections Management

■ Credit risk based customer segmentation

■ Collections based on Business Rules Framework, easy to adjust new requirements and considering the overall customer situation

■ Evaluation on collection success, Champion challenger analysis

■ Proper treatment of customers in collections, improve customer satisfaction

■ Reduction of DSO and collection time, less labour costs

■ Transparency and flexibility to

continuously improve collection processes

Objective:

Successful collections

Best practice solution: Segment customers according to credit risk, provide full flexibility regarding treatment of customers in collections, use all information and tools to take adequate measures

Issues Key business capabilities Benefits

■ No consideration of customers’ credit risk and thus treatment of all in the same way

■ Slow, fixed and non-transparent

processes ■ Legacy systems and thinking

limit improvement opportunities

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SAP AND BIG DATA

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Information is Exploding within and around Communications Service Providers

Subscriber Data

Social Media

Dev

elop

er

Costs

Spe

ed

App Store

Smart Phones

Loca

tion

Bas

ed S

ervi

ces

Custom

er S

ervice

4G

Margins

Innovation

Clo

ud C

ompu

ting

Facebook

M2M

Ecosystem

Tablets P

latform-as-a-S

ervice

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In-memory computing technology impacts velocity, volume, and value in Telecommunications

2 billion

Data records analyzed in seconds

80% Shorter Offer Optimization Cycle

50x Faster reporting speed

“ SAP HANA is the right tool at the right time to address

T-Mobile’s Big Data challenge “ Erez Yarkoni - T-Mobile US CIO

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SAP HANA for the Telecommunications Industry Value Proposition

Connect the dots between network performance and customer experience Gain real-time visibility and

granularity of network traffic to better plan for surges and related capacity issues in real time

Understand variances and optimize network experience decision-makers in seconds

Gain deep insight on customer profile and behavior

Real-time access to subscriber behavior and preferences for the location-based service

Accelerate the creation of a complete and accurate customer profile in a heterogeneous environment

Timely launch new offers and bundles based on advanced analysis Create offer simulations to

optimize price and margin based on usage patterns and historical consumption

Tailor the right mix of services to the right subscriber segment based on a wide range of data sources

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SAP HANA, modern platform for real ‘real-time’

What is SAP HANA? SAP HANA ™ is a modern platform that

leverages the power of in-memory computing

Enables to drive businesses in real-time on an ever increasing massive volume of data

Can be deployed as an appliance or delivered via the cloud

Batch bulk uploads

SAP HANA

SAP Business

Suite

SAP Business Warehouse

Other data sources

Real-time copy

SAP HANA modeling

SAP Business Objects tools

(Other query tools)

SAP HANA information composer

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SAP HANA at T-Mobile US Offer Performance Management accelerated

Proliferation of targeted offers/micro-offers to 21M customers makes offer performance management increasingly strategic -

Offers / Micro-offers Channels Customers

Email

Call Center

Retail store

SMS

Self-Service

-

-

50x improvement in the performance of analytics: We can recalibrate offers in the market place in one day that took a week using our existing solutions.

— Erez Yarkoni, T-Mobile CIO

“

” Marketing operations team in need to quickly analyze offer uptake, discern patterns and refine offers

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SAP HANA Deployment Rapid insight with full detailed data for rich analysis -

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SAP HANA in Action – Sample Query Performance in Telecommunications

Before SAP HANA With SAP HANA

9 seconds

10 minutes

Please refer to the latest HANA Hardware sizing for the latest certified hardware sizes for maximum storage size on HANA 1.0. Above tests were done in the SAP Lab with customer data-sets.

Runs 67x

faster 2.8 seconds

analysis processing time

2000 stores

2 billion records

55 million dimensions

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Sample SAP HANA Use Cases for Telecommunications

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How SAP HANA helps Telecommunications Opportunities for your business

Corporate Operations

Network Management

Marketing & Sales

Customer Management

IT

Advanced insights to define, simulate and launch profitable new offers and bundles

Near real time information and analysis on new offer performances across all channels and geographies

Optimal up-selling and cross-selling results through access to latest usage & consumption in real time/ near-real time

Greater and faster insight into individual customer and customer segment behavior based on usage, charging. billing, payment data

Correctly/Better predict customer trends and improve revenue and retention

Enhanced capabilities to detect critical prepaid customer situations (near zero balance, refill frequency..)

overview overview overview overview

Enable timely and accurate reporting of financial and operational performance

Reduced cycle time for profitability analysis

In a flash General Ledger reporting

Provide insights on network availability / performance

Accurately measure and trend service performance and analyze impact on customer experience

Detect and act upon fraudulent activities as rapidly as possible

Integrate disparate customer, product and operational data sources into single version of the truth – in seconds

Reduce overall costs of information

Reduce IT staff support needs as user self-service for immediate information, rather than custom reports, increases

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MOBILITY

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Successful telecommunications companies…

continuously grow their customer base and revenue through reliable and top-notch services

They do it by… driving growth through timely market-relevant service

offerings improving subscriber retention and up-selling providing the right network infrastructure Result: Realize market opportunity and profitability targets Increase customer satisfaction and revenue Gain sustainable market share

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Mobility accelerates business

connect to enterprise data consume information control your business

Mobility enables you to anytime, anywhere

Partner

Service

Operations Sales

Customer

Executive

IT

Mobile Commerce

Real-time Analytics

Rating and Charging

Pre-paid Consume-to-Cash

Device Management

Field Service Management

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Conduct business wherever, whenever

Improve convenience

Reduce complexity

Harness the power of mobility in telecommunications companies

Next-generation user experience and improved customer satisfaction

Reduced total cost of ownership and increased

focus on relevant information

Result Result Result

Anytime access to information needed for more informed decisions

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Field and operations

Conduct business wherever, whenever

Mobility helps telecommunications companies maximize profits

Business-to-business and cloud services

Reduce complexity

Consumer services Improve convenience

Access business-critical analytics, anytime, anywhere

Have “desktop-to-go” access to relevant business transactions

Enable telecommunications business-to-business sales

Receive maintenance work orders in the field

Offer mobility as a service to your customers

Manage devices more easily

Manage applications more easily

Ensure security

Make any application mobile enabled

Perform near field communication (NFC)–enabled mobile payments on-the-go

Enable embedded on-device rating and charging

Let consumers manage accounts via a mobile device

Enable top-up prepaid consume-to-cash

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IN SUMMARY

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“It is not the strongest of

the species that survives,

nor the most intelligent,

but the one that is most

responsive to change”

Charles Darwin

“Insanity is doing the

same thing over and

over again

and expecting different

results…”

Albert Einstein

END Andrew Strachan Industry Principal: Service Industries SAP South Africa T +27-11-319-7439 F +27-11-235-6201 M +27-83-235-0152 E [email protected]