Editor’s Note: Welcome to our weekly Reality Check column. We’ve gathered a group of visionaries and veterans in the mobile industry to give their insights into the marketplace.
Has this happened to you? You order something in a restaurant, but your waiter flubs the order and your appetizers never come—and usually you say “forget it, just take it off the bill.” It’s called order fallout—and when it happens to communications service providers (CSPs), it’s a major headache. According to industry estimates, errors based on service orders total more than $50 billion a year.
So one key question for service providers across the Caribbean and Latin America (CALA) region (and elsewhere) is this: are unnecessary order fallouts, loss of revenue, overlooked inefficiencies and high costs inevitable? Or can a new solution fix the inherent errors in systems and processes?
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To answer that, we need to step back and take a hard look at what’s called business process operations (BPO) and why that model, which has worked so well for so long, needs to change.
The fact is that there’s a growing chasm between information technology (IT) and business operations that reaches across all business processes. The traditional BPO 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.
When it comes to the O2A (Order to Activation) process—one of the most critical and complex processes that service providers deal with and one that directly affects revenue generation—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 can be as high as 25% and service activation failure rates as high as 35%.
Looking ahead, there are three key industry drivers that are influencing how BPO will be addressed in the near future:
- A super-connected world—GSMA expects 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 processes.
- Changing service provider focus—With service providers increasingly focused on small and medium businesses (SMBs) and the growing complexity of the multi-play ordering process, there is a dire need for robust optimized order handling processes.
- 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.
What’s needed, in short, is a shift from a BPO orientation to a new concept we’ve developed called value process operations (VPO). And the best way to describe VPO is as an innovative managed services model designed to help service providers reduce their total cost of ownership (TCO) across specific business processes, regardless of systems landscape. Combining backend operations and IT technology, the VPO approach leverages technology to generate even higher efficiencies and reduce operational expenditures, while improving the business key performance indicators (KPIs).
What are the benefits of this approach? For service providers implementing a VPO-based solution, benefits will include reduced order fallouts and cancellations; lowered costs (day-one reduction of operation costs by up to 35%); and reduced cycle time and accelerated revenue. And for the end-user customer? Improved customer service, with up to a 10% reduction in activation complaint calls, and up to 12% reduction in missed customer appointments.
Sounds like a win-win.
