R O I C a s e S t u d i e s

Transcription

1 HIGHLIGHTS Goal: For MegaFon-Moscow to deploy an integrated customer management strategy to improve customer service, increase customer loyalty, reduce customer churn, lower operational costs, increase efficiency, and transform MegaFon-Moscow into a customer-centered enterprise. Solution: Amdocs CRM Results: MegaFon-Moscow has transformed itself into a customercentric enterprise. Amdocs CRM is used throughout the organization, at all customer touchpoints, including customer service, marketing, advertising, network operations, product development, and platforms. The company has seen across-the-board improvements in customer service, including reductions in the average time customers spend waiting for calls to be answered, and in the average time spent resolving issues. Customer loyalty has improved, churn has been reduced, and customer retention has increased. Employee satisfaction has also improved, and personnel churn has fallen. MegaFon-Moscow will see a projected, cumulative five-year net benefit of $45.4 million, driven by improved efficiency and productivity, and call center cost savings. The project has a five-year ROI of 324% and a payback period of 19 months. CUSTOMER PROFILE Customer: MegaFon-Moscow Line of business: Wireless Services: Voice and data MegaFon-Moscow Makes Substantial Gains in Market Share with Customer-Centric Strategy, Supported by Amdocs CRM The Challenge: Turn MegaFon-Moscow into a Customer-Centric Enterprise MegaFon, the first pan-russian network, renders services for more than 35 million subscribers and operates in all seven districts of the Russian Federation. MegaFon-Moscow, a division of MegaFon operated by Sonic Duo, serves Moscow and the surrounding region, with more than 5.7 million subscribers at the end of In 2005, the Moscow communications market was nearing saturation, and competition was increasing, with several mobile companies vying for the same customers. Customer churn and decreasing average revenue per user threatened the profitability of mobile firms. MegaFon-Moscow s rapid success had been built by providing advanced, highquality services to its residential and business customers. However, delivering superior communication services was not enough to succeed in an increasingly competitive market. Like many providers today, Megafon-Moscow recognized the need to differentiate itself based on the customer experience, which is key to customer retention and growth through word of mouth among customers. To do this, they needed to become a customer-centric enterprise. Benefits Objective Improve call center metrics Improve call center efficiency Reduce call center costs Create a customercentric enterprise Benefits Achieved The Amdocs CRM implementation has helped MegaFon-Moscow reduce average call duration by 10%, decrease the total contact time per customer interaction by 21%, and decrease the time devoted to after-call handling by 62%. The efficiency of the MegaFon-Moscow contact center has increased by 30%. The satisfaction of contact center staff has improved, leading to a reduction of 15% in personnel churn. As a result of the Amdocs CRM implementation, MegaFon-Moscow will increase efficiency and improve productivity in its contact center, resulting in a projected, cumulative five-year net benefit of $45.4 million. With Amdocs CRM, MegaFon-Moscow has been able to transform its business into one in which the customer, rather than technology, is the primary focus. Website: Subscribers: 5.7 million Headquarters: Moscow

2 By helping us adopt an integrated customer management strategy, Amdocs CRM enables MegaFon- Moscow to maintain our focus on the customer experience. Amdocs CRM will help us build long-term customer loyalty, reduce operational costs, and increase efficiency. Dmitry Smirnov Head of CRM Department MegaFon MegaFon-Moscow was looking for a way to transform its business to optimize the customer experience across every interaction. It was looking for a solution that would accomplish the following: Provide a better customer experience whenever a customer interacts with MegaFon-Moscow. The company recognized that every customer contact is an opportunity to build customer loyalty. MegaFon-Moscow was looking for a solution that could help build loyalty and improve customer retention. Differentiate MegaFon-Moscow from its competitors. The company saw that technology alone could not give it the competitive advantage it was seeking. MegaFon-Moscow wanted a solution that would allow it to gain new customers, reduce customer churn, and increase its market share, by improving the customer experience. Improve contact center efficiency. MegaFon-Moscow had a substantial staff devoted to its call center and customer service. The company wanted to improve the productivity of its customer service representatives, increase the efficiency of the way it delivered customer service, and speed the delivery of information to its customer service representatives. Make customer information available throughout the enterprise. Key to transforming the company into a customer-centric enterprise was making customer information available to all staff at MegaFon-Moscow, not just the customer service representatives. Reduce operational costs. Customer service costs can cut into profitability. MegaFon-Moscow wanted to reduce its current operational costs, and costs well into the future. MegaFon-Moscow Chooses Amdocs CRM To reach its goals, MegaFon-Moscow chose Amdocs CRM, which integrated with the existing billing and operational infrastructure of the MegaFon-Moscow network. MegaFon-Moscow chose Amdocs CRM because it determined that Amdocs has the best CRM product, and that Amdocs CRM had the flexibility and agility that MegaFon-Moscow required. MegaFon-Moscow was looking to build all functions, decisions, and operational processes around the customer, and it saw that Amdocs shares and supports this vision. MegaFon-Moscow also recognized that Amdocs CRM is the best integrated, most comprehensive CRM solution, and offers scalability that can support limitless growth. In addition, MegaFon-Moscow was impressed with Amdocs proven track record of successful delivery and its experience in the local market and with the local culture. MegaFon realized that our corporate progress in the rapidly growing and increasingly competitive Russian market depends on a dramatic enhancement of our customer relationships, says Dmitry Smirnov, head of the CRM Department for Megafon. We regard the implementation of the Amdocs CRM system as a clear demonstration of our intent to prevail in this area. 2

3 n MegaFon-Moscow s bottom line for the project: a projected, cumulative five-year net benefit of $45.4 million, driven by improved efficiency and productivity and call center cost savings. The project has an five-year ROI of 324%, and a payback period of 19 months. Amdocs CRM consolidates all client data into a single, unified platform, and is fully integrated with Megafon s existing pre-paid and post-paid billing systems. All MegaFon-Moscow customer service employees have access to timely and up-to-date customer data, enabling them to respond quickly to customer requests and to provide a high level of customer service in line with global standards. As a result, MegaFon-Moscow has implemented an integrated customer management strategy that enables the company to realign corporate resources, increase operational agility, and place the customer at the center of its business, ultimately delivering a superior customer experience and creating stronger customer relationships. The Bottom Line for MegaFon-Moscow As a result of the implementation, MegaFon-Moscow has seen across-the-board improvements in customer service, including reductions in the average time customers spend waiting for calls to be answered, and in the average time spent resolving calls. Customer loyalty has improved, and churn has been reduced. Employee satisfaction has improved, and personnel churn has fallen. MegaFon-Moscow will see a projected, cumulative five-year net benefit of $45.4 million, driven by improved efficiency and productivity, and call center cost savings. The project has a five-year ROI of 324% and a payback period of 19 months. (Note: Financial calculations are based on 2005 cost data.) With the Amdocs CRM installation, MegaFon-Moscow was able to transform itself into a customer-centric enterprise. The entire company now sees customer information in one unified system, with client services managing order fulfillment to customers. Amdocs CRM is used throughout the organization, at all customer touchpoints, including customer service, marketing, advertising, network operations, product development, and platforms. $45,400,000 $30,150,000 $16,250,000 $3,700,000 Year 1 Year 2 Year 3 Year 4 Year 5 -$4,800,000 Cumulative Five-Year Net Benefit 3

4 As part of the transformation to a customer-centric business, Megafon-Moscow also worked on business process optimization with Amdocs, improving the company s efficiency. Major results of the transformation were significant improvements in customer satisfaction with service quality, company image, and customer loyalty. MegaFon-Moscow has seen significant, measurable success brought on by the Amdocs CRM implementation. Call-handling metrics, for example, show dramatic improvements, including the following: 10% decrease in average call duration. 21% decrease in the total contact time per customer interaction. 62% decrease in time devoted to after-call handling. In addition, the company has seen a 20% increase in the number of topics registered per call. Equipped with better customer insight, customer service agents are better able to cross-sell and up-sell for increased revenue per customer. Overall, MegaFon-Moscow has reduced unproductive call time, solved problems faster, and can up-sell and cross-sell more effectively. Amdocs CRM has also helped MegaFon-Moscow achieve a significant increase in quality management, due in large part to the company's closer relationship with its customers and improved customer feedback. As a result, MegaFon- Moscow has realized these benefits: 10% to 30% decrease in the number of main system problems per week. 30% to 35% reduction in the duration of main system problems. 60% to 80% reduction in the number of subscribers affected by main system problems. Customer churn has decreased and customer satisfaction has been improved, two of the many elements that can be expected to help MegaFon-Moscow see increasing revenue over the next several years. Amdocs CRM has also increased the efficiency of MegaFon-Moscow s customer service staff. Amdocs CRM screens are designed to help MegaFon-Moscow customer service representatives handle 80% of call-handling functionality in three clicks, providing direct access into the right systems and screens for efficient data retrieval. The system offers strong up-selling and cross-selling, and supports robust analytics and personalization capabilities. Times Roman MegaFon-Moscow has calculated that the efficiency of its call center has increased by 30%, and the satisfaction of call center staff has improved as well, leading to a reduction of 15% in personnel churn. As a result of these improvements, MegaFon-Moscow is able to handle an increasing number of calls, without having to dramatically add to its call center staff. As a result of this, and of reduced personnel churn, reduced hold times, and fewer call hand-offs, the company will see an overall cost savings of 30% in its call center, resulting in a projected net saving of $45.4 million over five years. 4

5 In addition, because customer service agents have access to information from a single application, they are able to focus on the customer relationship instead of searching for information. Employees are more motivated, because they are given more responsibility and asked to represent the brand and deliver a positive customer experience. The Amdocs solution has also helped reduce resolution time, reduced the number of employees involved in resolution, improved customer satisfaction, and led to a higher satisfaction grade overall for MegaFon-Moscow. Says Smirnov, Amdocs CRM has helped turn MegaFon-Moscow into a customercentric company, one that is well-positioned to face future competition. The following chart provides a five-year analysis. Business Summary (Financial)* Total Investment and Costs $14,000,000 Total Benefits $59,400,000 Cumulative Net Value $45,400,000 Net Present Value $30,144,004 ROI 324% Payback Period (in months) 19 Return on Investment (ROI) is the percentage return expected over a specified period of time. ROI is the total benefit divided by the total costs. This ROI metric is good for assessing the multiplier provided by the benefits relative to the total investment and costs. Net Present Value (NPV) represents the cumulative present value of the expected return of a project over a specified period of time minus the initial costs of the project. This dollar figure provides visibility on the actual value of a project, taking into consideration the time value of money the ongoing benefit of a project in today s dollars. NPV tells you the magnitude of the project and if the project generates a profit. Payback Period (or breakeven) is the timeframe it takes for the project to yield a positive cumulative cash flow. Payback period is a key measurement of risk but does not take into account cash flows after the payback period. ROI, NPV and Payback should be used in conjunction to understand the rate, size and timing of the return. Cumulative Net Value (or Net Benefit) is the benefit delivered to the organization for the investment made in the project. Net Value is calculated by taking the total benefit minus the project costs. *The projected benefits in this case study include improved margins and profitability for a span of five years, Calculations are based on 2005 cost estimates, and of similar product implementations and resulting measurable ROI at comparable service providers worldwide. Calculations exclude additional factors that may affect revenues such as product promotions or other business initiatives at Megafon-Moscow, and do not guarantee future business performance. 5

6 About MegaFon-Moscow Founded in May, 2002, OJSC MegaFon was the first pan-russian GSM 900/1800 mobile operator. It provides services for both individual and corporate subscribers. The license area of OJSC MegaFon, as well as that of 100 percent of its subsidiaries, covers the entire territory of the Russian Federation, with a population of over 145 million. The MegaFon client base in Russia is estimated at more than 35 million subscribers. The MegaFon network in Moscow provides its subscribers with access to the most up-to-date mobile technologies including mobile positioning, MMS, GPRS and EDGE services. The number of MegaFon subscribers in Moscow and its vicinity was 5.7 million as of December, About Amdocs Amdocs is the market leader in customer experience systems innovation, enabling world-leading service providers to deliver an integrated, innovative and intentional customer experience at every point of service. Amdocs provides solutions that deliver customer experience excellence, combining the software, service and expertise to help its customers execute their strategies and achieve service, operational and financial excellence. A global company with revenue of $2.84 billion in fiscal 2007, Amdocs has more than 16,000 employees and serves customers in more than 50 countries around the world. For more information, visit Amdocs at About Case Study Forum Case Study Forum is the leader in the writing and production of ROI-focused Case Studies. In addition to a customer success story, each ROI Case Study provides insight into the business impact the revenue, productivity and cost savings the customer achieved as a result of the investment made in the solution or service. For more information, please contact Case Study Forum at , or visit The information contained herein is subject to change without notice. The only warranties for products and services are set forth in the express warranty statements accompanying such products and services. Nothing herein should be construed as constituting an additional warranty. Case Study Forum and Amdocs shall not be liable for technical or editorial errors or omissions contained herein. 6