Last week I happened to attend the Oracle Partner Advisory Council Meet @ Bangalore and got to know about latest developments in the Oracle's solution portfolio for the communication industry segment. But more than understanding the nuances of packages, I was happy as my observations and analysis on the Market Trends was validated yet again. Some of the key observations are:
It is becoming increasingly clear that the new game is being played with new rules and the old game had its own old rules. The old game where we dealt with high prices and high subscriber growth rates has fundamentally shifted to the new game of low prices and low growth rates. The drivers for this fundamental shift have primarily been the hyper competition in the developed / key developing markets and saturation of traditional services.
As a consequence the hyper competition and saturation have brought the prices (margins) down, pushing the service providers to Innovate and launch new Products & Services. (Mushrooming of Over the Top Players (OTT) can also be seen as new players trying to provide services other than the traditional telephony, voice or SMS services). Since the prices are moving downwards and also there is a need to innovate in a given budget, the Service providers are therefore forced to focus on operational efficiency in order to justify the large investments required for innovation.
In relation to this, 'How do we perceive and measure Service provider's growth' is also undergoing a gradual change across the globe. The business metrics for measuring the growth for a service provider are becoming much more granular and stringent because of multiple factors. Market Analysts though can always segregate the measures of growth uniquely for developed and developing markets however it would be safe to comment that dimensions of growth have shifted from 'No: of Added Subscribers per month' to 'monthly ARPU' and now even to 'Monthly Revenue/Cost per activity' as more and more products and services are being innovated and launched.
In this era of hyper completion and saturation, since the network, product, and devices no longer create competitive advantage as every operator offers more or less the same proposition; Innovation and Customer Experience are the only differentiating factors for a Service Provider to augment their relationship with the customers. Therefore CE and Innovation are now being considered as the potential keys to solve this conundrum.
One of the distinguished speakers of Oracle's PAC conference also stated an interesting fact that more and more service providers are now creating a position for CXO (Customer Experience Officer, the letter 'X' is no longer a substitute to letters 'E', 'O', 'I', 'F' and 'T' but now has a unique identity of itself, as 'X' stands for 'Experience') thereby further strengthening the argument that Customer Experience is being monitored by the top management and is also seen as a revenue enabler.
If we carefully observe and analyze, the theme (impact) of Customer Experience transcends to multiple areas, for instance Product Lifecycle Management, BSS and also to OSS. If in the PLM space we can comfortably say that correlation between the Product Experience and Customer Experience in increasingly becoming direct, the BSS/ OSS area is not too far as BSS and OSS vendors now have a greater need to justify and position their solutions as Revenue Enablers and not merely as solutions to reduce Service Provider's OPEX, increase efficiency and simplify the application landscape.
Customer Experience has also taken a firm positioning as one of the key domain in the business metric framework. The domain of CE and its associated value levers generally spans across the Acquisition, Retention and Efficiency subdomains. One of the key business metrics in Customer Experience domain is 'Increase in the Net Promoter Score' (NPS) which falls under the 'Retention' sub domain. NPS metric is becoming increasingly relevant at least in the developed markets. It can be as low as −100 (everybody is a detractor) or as high as +100 (everybody is a promoter). An NPS that is positive (i.e., higher than zero) is felt to be good, and an NPS of +50 is excellent. The CEOs and CXOs (Customer Experience Officer) are monitoring the increase in NPS every day and the target across the enterprise is to move the needle upwards.
In sync with this, additionally, TM Forum has also launched the business metric framework in which CE covers a large bit of attention. For details, refer to the link http://www.tmforum.org/browse.aspx?linkID=41856&docID=12759 .
Whatever said and done, old game or new game, the basics of economics and theory of evolution is still undisputed and will continue to be the same. That we need to 'adapt' and 'evolve' in order to survive.