In just 12 months, mobile phone company VodaCall, a wholly owned subsidiary of Australia`s 3rd largest telecommunications company VodaFone, has risen from disaster to become a major player in the cut-throat telecommunications industry, all through the implementation of several ingenious new systems.
With an IT team of just six, and on a shoestring budget, VodaCall has delivered systems ahead of schedule that have helped to achieve debt reductions of more than 45%.
Using a combination of an Informix data warehouse, Seagate Crystal Info, Microsoft Visual Basic, and Microsoft Windows NT, VodaCall`s IT team kept under budget and delivered systems that greatly improved cash flow management and gathering of sales information. They then tied all these systems together in a data warehouse with user driven management reporting.
The pay-off has been substantial. VodaCall has reduced its debt from 50 per cent to 5 per cent in 12 months and this is steadily decreasing. VodaCall now has the largest number of subscribers and the largest retail presence of the VodaFone Group in Australia. It also has the lowest cost to connect and cost to manage per subscriber, and the fastest "payback period" for subscribers.
This is an abrupt turnaround for a company that less than 18 months ago was in liquidation.
The Problem: Over Subscribed, Underpaid
VodaCall started life as a company called DigiCall, which pioneered the $1 and $10 mobile phone promotion. It grew rapidly to 70 stores across Australia, in the highly competitive business of selling mobile phones and connections.
Rapid growth unsupported by proper IT infrastructure was its downfall. The company hit severe cash flow problems in 1996 because their computer systems couldn`t handle the volume or provide sufficient management reports. In addition, customers targeted by cheap promos were in the wrong demographic and unable to pay phone bills. "There was horrendous debt," said current managing director, Grahame Maher, who was brought in to turn the company around. "It was impossible to get accurate, timely financial reports for management. It was a company in a real disaster situation."
At the time, sales information faxed in by the stores was keyed directly into the billing system at head office. There was no integration with stock movement or other sales information, and no electronic data validation against correct stock numbers. The end result was a company in disarray. Data was so inaccurate that critical sales commission, stock reconciliation and financial management reports could not be extracted.
Lack of electronic validation led to financial delays. While steps were made to address this, it was too little too late. The company quickly moved into liquidation, where it was snapped up by VodaFone at the end of 1996.
Turning Things Around
Re-named VodaCall, the 450 person company was given a mandate to get back into the black. The first necessity was to concentrate on getting accurate data into its Account Information Management System (AIMS) or billing system, which covers credit control, connection information and customer service details.
"Accuracy of data and the ability to get appropriate reports out of the system were crucial," said Julian Warne, VodaCall`s IT Manager appointed to fix the situation. "To solve this, we developed a fast track method of recording data for billing purposes."
The IT team used Microsoft Visual Basic to develop a VodaCall Services Interface (VSI), providing a single input screen for sales data with drop-down menu validation of data against other systems. In addition to dramatically increasing accuracy, this multifunctional transaction interface reduced the number of input screens in AIMS from 10 to 1, reduced data entry time, increased staff productivity and allowed the system to be used on existing low-end hardware running Windows 3.11.
The VSI is used to enter data on connections sold, details of the connection plan, phones and accessories sold, and so on. Entries are automatically cross-referenced against dealer, finance and stock data to ensure accuracy. Developed in close consultation with various parts of the organisation, the system made a huge difference to data accuracy and analysis potential. Almost overnight, billing accuracy increased by 100 per cent.
According to Warne, the secret to delivering the systems on time and under budget was managing requirements and expectations. "The hardest part by far of this project was the face-to-face work," he says. "We had 200 staff in head office and 250 store employees. Finance, retail and stock departments had all been operating separately until we started. They all had their own standard way of doing things. We had to be the IT mediators. Working out requirements face-to-face was the largest overhead of the entire project."
Once the VSI was up and running, the first thing Warne and his IT team did was use Seagate Crystal Reports to extract critical commissions reports. "It was essential during that turbulent period in particular that sales people felt secure and continued to sell. The best way to do that is pay them."
Management Reporting and The Data Warehouse
With the immediate problem of the transaction-based billing system out of the way, VodaCall turned to the issue of broader management reporting. Warne said. "We needed to bring our systems together at a high level and enhance them to deliver the information managers need to run the business."
VodaCall set out to develop a data warehouse that brought the other systems - billings, connections, stock and finance - together in one integrated environment. Running on an Informix database, today it also incorporates a Point of Sales system that was rolled out to all stores in December 1997. The data warehouse contains fields such as types of stores, retail details, product groups and product types, recommended retail prices, actual sales price and so on.
"We included categories in the data warehouse that allow us to cross-reference data such as sale price compared to list price," Warne said. "This set the scene for better reporting on a wider range of categories, such as how much product is being sold, by whom, how much stock is available, whether they are selling it too cheaply, and where our best profit margins are."
Next VodaCall assessed reporting systems that allowed both scheduled production reporting and ad hoc reporting as required. "This was driven both financially and functionally," Warne said. "We wanted to devolve all the reporting out of IT, so it had to be something the users could work with. And we wanted to reduce costs. Previously we had developed reporting in ACE reports or SQL, which either cost us a lot to outsource or created a backlog waiting for one of our internal developers."
Chris Cavallo, VodaCall`s report system manager, agrees. "It took me a minimum of 2 days to develop a complex report internally and cost us around $1,000 per report to outsource. That adds up when you have hundreds of reports to develop and maintain." Using a more flexible graphical reporting tool would also improve maintenance and usability of reports. "Hard-coded reports were a maintenance nightmare," Cavallo adds. "They`re also unwieldy. It`s time consuming and inefficient to analyse a 250 page report on paper. Users can`t jump back and forth between pages on a screen, or input parameters on the fly."
VodaCall wanted a system that allows end users to automatically receive a standard set of reports on their desktop, set different parameters, schedule the reports to run regularly and also create and run ad hoc reports as required.
"We had been exposed to Seagate Crystal Reports through Visual Basic and liked what we saw," Warne said. "We thought it was great to have a reporting tool inside the development language - it made it so easy to access reporting functionality. Then we found out about Seagate Crystal Info which allows us to schedule reports and distribute them to users in a secure system. We bought a 50 user licence and plan to increase this to add more users in the future."
Currently the finance team are up and running on Seagate Crystal Info and using it against the data warehouse. "It`s an ease off the finance manager`s mind that she can just come in and press a button and get the information she needs, without having to manually reconcile for errors," Cavallo says. "Crystal Info saves me a lot of time in formatting reports - I`d say its 75 per cent faster and that means I can develop more new, usable reports demanded by end users." Other staff are reporting directly off the stock, billing or point of sales transactional systems for lower-level numbers.
VodaCall now generates many reports from its data warehouse, and also uses the product separately for queries against the billing and finance systems. Essential reports allow managers to answer business questions such as "which channels are most profitable to connect?". VodaCall has a secure folder for each department organised in Seagate Crystal Info, with varying levels of end user access and security. [use screen shot of folders with report objects: CAPTION or pull-out box on reporting- VodaCall now runs commission reports, dealer sales reports, inventory and promotional activity reports, connection rates and cost of connection reports, deviation and variance reports, and so on, allowing managers at a glance to answer questions such as "which channels are the most profitable to connect?"]
Warne says: "Seagate Crystal Info has been great to work with in that it can handle even our most complex reports. Its flexible and open, while at the same time being secure. It can handle the dynamic changes to the business."
"We`re now working on an Intranet, and plan to distribute reports to store managers using Seagate Crystal Info," he said.
Keeping Costs Down
"All of our systems are really inexpensive," Warne says, when quizzed on the Windows NT network. Starting with a low budget, it was clear that wherever possible existing hardware needed to be maintained, and any new hardware needed to cost as little as possible.
"We chose a Microsoft networking infrastructure because it allows you to deploy on `no name` machines," Warne said. "Our Compucon servers cost one third of equivalent name brand machines, and we`ve had absolutely no problems. Seagate Crystal allows us to output to formats that will run on different machines, and we planned our VSI application to allow entry to all systems from any machine. It allows us to do more with less."
Profitable Handling Of Spikes
Grahame Maher underscores that profitability in the mobile industry is all about market share. Cost to connect comes down to people. "The more people you can connect with less resources; the more productive your staff are during spikes; the more quickly you reduce your cost to connect."
"With our new systems in place by Christmas last year, we were able to double the connections rate without adding additional staff," Maher said. "Because people can work on any system from any desktop, we were able to give people incentives to log on and do more work over lunchtimes, without having an IT resource issue."
"Combined with the touch of a button management reporting, it makes us more flexible. The systems help us to plan for and manage spikes in the business like special promotions and holiday periods - and managing these well is fundamental to winning in this market."
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