Advertisment

Winning the Race

author-image
VoicenData Bureau
New Update

“Now, here, you see, it takes all the running you can do, to keep in the same place. If you want to get somewhere else, you must run at least twice as fast as that!”

Advertisment

Red Queen to Alice,

'Through the Looking Glass'

by 'Lewis Carroll

The Red Queen might as well have been talking about the communications service provider (CSP) marketplace of today. Entry of non-traditional entities like cable and utility companies and resultant competition, dwindling of customer base and obsolescence of business models (eg, wireline voice) are making CSPs strive twice as hard to maintain their ARPUs (average revenue per user), let alone grow it. Getting ahead in this 'Red Queen's race' is possible only if CSPs are able to continuously exceed the expectations of their customers through the launch of new products and services.

Advertisment

Challenges in Keeping Customers 'Satisfied'

While launching new products and services will enable CSPs to meet customer expectations, ensuring that they remain satisfied is possible only if operational process metrics (fulfillment, assurance and billing metrics) are aligned to the customer experience drivers (ease of installation, quick and painless complaint resolution, single bill for multiple services etc). This is an area where most CSPs are facing challenges. The fact that most CSPs have retained their legacy systems and process frameworks for the fulfillment, assurance and billing of newer products and services have not helped their cause, either. Operational inefficiencies are resulting in revenue and cost leakages as well. If done right business process outsourcing can enable CSPs overcome such operational challenges.

Learnings from BPO

Advertisment

The Concept of Value Multipliers: The initial business process outsourcing value proposition was one of cost arbitrage. Over time BPO firms have built upon this value proposition and enhanced the value they provide to CSPs by undertaking process improvements through reengineering and six sigma techniques. However, today the question CSPs are posing to their BPO partners is whether they can move beyond process level improvements and create value at an end-to-end value chain level.

This calls for a deep business driver level understanding of the CSP's line of business, understanding of how the operational metrics affects these business drivers as well as the expertise to positively impact the identified business drivers. This can be achieved by eliminating systemic inefficiencies through utilization of a core organizational competency such as the ability to do customized technology interventions. A BPO will then be able to create a value multiplier for the CSP rather than merely provide a process level savings.

According to us, a value multiplier is a combination of 2 competencies:

Advertisment
  • A domain competency comprising of deep knowledge of client processes and CSP industry business drivers and,
  • An organizational competency enabling the BPO firm to utilize the industry domain level knowledge to impact the end-to-end value chain and business metrics of the client at least one level beyond what the CSP would have been able to do on its own
  • By this definition, six sigma type of process improvements falls short of being a value multiplier since it does not impact the business metrics of the CSP directly.

Obviously the prerequisites of domain competency, BPO capability and technology capability is a formidable task and few BPO firms have strived to develop capabilities in this regard. Innovations in this space have the potential to create exponential value to CSPs across the globe.

Technology as a Value Multiplier: Most of the technology interventions available in the market are aimed at process level improvements-automation of work, tools, applets, macros that simplify the process etc-which if done right, impacts the process SLAs positively. While the use of technology in such a manner does reduce system inefficiencies they still fall short of being a value multiplier since the technology merely improves the efficiency of a sub-process. A true value multiplier needs to impact the end-to-end process value chain and not just an individual sub-process.

Advertisment

Increasing ARPU through 'Voice of Customer' Analytics: Every customer interaction is a rich source of information on customer experience and behavior. Leveraging this 'Voice of Customer' information, through the use of analytics, can help positively impact ARPU. Unfortunately, the unstructured nature of this information makes it very difficult to mine it using ordinary analytical techniques; moreover, the distributed nature of the data makes it difficult to collect through ordinary techniques.

The Value Multiplier Approach: Analytic tools which can develop semantic insights from unstructured data by leveraging natural language processing capabilities are needed to provide real-time intelligent analytics about customer experience and usage. A natural language processing tool can be used to gather information about the customer from various sources such as operational data, Internet customer forums, blog sites etc, and a rich pool of information can be created which can be mined to get customer insights by a team of experienced BPO professionals.

The insights gained can be used in 2 ways by the operations team:

Advertisment
  • Target a customer segment, eg, fine-tune market offerings for a customer segment based on real-time customer feedback gained through this type of analytics tool
  • Target individual customer, eg, enhance upsell/cross-sell opportunities during interaction of the customer with a customer care representative, create just-in time (JIT) marketing campaigns, etc.

Here, the value multiplier effect is created by creating a technology intervention to pick up hitherto unidentifiable customer data points and interpreting them to develop critical insights which positively impact a key business driver-the ability to upsell/cross sell, creating a level of value which would not have been possible to create by the current way of operations within a CSP.

The Road Ahead

Advertisment

Business process outsourcing firms leveraging on their understanding of complex CSP operational and business drivers and technology capabilities can multiply the outsourcing value gain for CSPs without the need for substantial capex investments. Such an approach enables CSPs to optimize their operational costs and focus their capex investments on new product/service development and technology changes/network upgrades.

As the pace of global business continues to accelerate, the ability to align with a partner who has the deep—rooted understanding of industry business metrics and the capability to positively impact them will be a key to success. Only this will ensure that the CSP will win the Red Queen's race. CSPs need to include this capability as an important item on their checklist when they are evaluating outsourcing partners.

Gopal Devanahalli,

Vinay Peshwa and Harry Jose


The authors are working for communications media and entertainment (CME) practice, Infosys BPO

vadmail@cybermedia.co.in

Advertisment