Johannesburg, 28 Feb 2013
Are unnecessary order fallouts, loss of revenue, overlooked inefficiencies and high costs inevitable for communications service providers? Or can a new solution fix the inherent systems and processes?
There is a growing chasm between IT and business operations that reaches across all business processes. The traditional BPO (business process operations) model is no longer effective and cannot help bridge the IT and business gap when it comes to building end-to-end ownership of the business process.
Moreover, the core of BPO directly links costs with the volume of transactions required to fill service requests or address service transactions. This results in ever-rising BPO costs for service providers who subsequently have little ability to continuously fund innovation to improve their existing operations.
Significant challenges
IT's challenges include the need to constantly improve underlying systems and operations performance. But what is nearly always deficient are sufficient funding, attention and focus. In order to achieve its targets, the service provider's IT business traditionally reaches out to third-party IT services vendors to manage the software development life cycle, ongoing releases, and application development and management. Business operations, on the other hand, are focused on day-to-day service delivery challenges, customer satisfaction and reducing churn. In order to achieve their targets, business operations rely on BPO vendors to address their operational challenges while looking for ways to reduce headcount.
When it comes to O2A (Order to Activation) and O2C (Order to Cash) processes - two of the most critical and complex processes that service providers deal with - there is a lack of clear ownership and process visibility, resulting in misalignment of objectives, goals and priorities. The impact on the bottom line is dramatic :
* Order fallout rates as high as 25%
* Service activation failure rates as high as 35%
* Missing customer due dates as high 50%
* Revenue leakage of up to 40% attributed to the ordering process
* Revenue loss due to low customer satisfaction
Looking ahead, there are three main drivers that are influencing how business process operations will be addressed in the near future:
* A super-connected world - According to GSMA, it is expected that by 2016, there will be 24 billion network-connected devices, far exceeding the number of people on Earth! This exponential growth means service providers will need to manage ever-increasing volumes across their O2A and O2C processes.
* Changing service provider focus - With service providers increasingly focused on small and medium business (SMEs) and the growing complexity of the multi-play ordering process, there is a dire need for robust optimised order handling processes. More than ever, they will have to implement a structured methodology with the right technology in order to fulfil orders efficiently, cost-effectively, and on time, while complying with stringent service level agreements (SLAs).
* Cost pressures balanced by the need for customer experience improvements
According to the Yankee Group, service providers are under constant pressure to improve customer service levels, while reducing order processing costs and order cycle times. These are among the key factors driving the need for service providers' investment in a streamlined order management system with the expectation that such a solution will manage all aspects of the order to cash process from order capture to fulfilment and settlement.
Future demands: higher efficiencies; reduced opex
In order to efficiently address existing and future challenges, Amdocs is introducing a new approach to redefining how BPO is managed. We call it VPO, for Value Process Operation. VPO is characterised by an ecosystem that is driven by business KPIs (key performance indicators) and manages key processes with aligned interests and seamless operations. This new model achieves:
* A positive impact on customer experience
* Significantly reduced costs and revenue leakage
* A streamlined ordering process and reduced fallouts
* Improved reaction to unknowns and surprises of business changes via real-time monitoring
The Amdocs VPO business model helps service providers reduce TCO (total cost of ownership) across specific business processes by establishing an aligned operation for streamlining and driving ongoing optimization. The typical BPO model (Figure 1) inhibits service providers' business growth. The direct costs of BPO (eg, headcounts) are directly linked to transaction volumes (eg, services requests) while indirect costs and revenue loss (eg, bad customer experience, cancelled orders, goodwill adjustments) rise due to inefficient operations. To address these issues, the Amdocs VPO model (Figure 2) enables business growth through improved operations. The cost of operations is contained while indirect costs and revenue losses decrease - resulting in significant cost savings, added benefits and improved customer experience. So while service providers utilising existing BPO models focus on paying by volume, Amdocs offers value process operations based also on improving business KPIs.
Order-to-Activation VPO - The means to a better ending
The Amdocs Order-to-Activation VPO solution helps service providers streamline the disparate systems and automate manual processes that support all the steps required between the time a customer orders a new service, and the moment that service is available for use. Amdocs VPO is made possible through technology and business innovation, proactive analysis, real-time monitoring and alignment of interests.
The solution operates through an order management centre, which assumes end-to-end operational responsibility for the order to activation process through business and IT process reengineering and requirements management, using tools and automation. Driving year-over-year O2A ongoing business KPI improvements, the model is flexible and adaptable to the specific needs of any service provider. Unifying the operational services across ordering, provisioning and activation throughout all products, lines-of-business and customer segments, the Amdocs Order to Activation managed services solution allows service providers to rapidly and confidently deploy competitive cross-product bundled services, reduce costs, and create a seamless customer experience.
Focusing on the bottom line.
The Amdocs Order-to-Activation managed services solution ensures year-over-year improvements in end-to-end business KPIs:
* Improve order flow-through
* Reduce complaint calls
* Reduce order lead time
* Reduce order cancellations
To sum up: in today's always-on, always-connected communications landscape, service providers are evolving from a traditional BPO model that primarily reduces operational costs to innovative models such as Value Process Operations (VPO). The results: sustainable business results and an improved customer experience.
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