From Waste to Wow. Marieke Snoep (Director Sales Operations & Process Management) T-Mobile the Netherlands, 22 February 2010

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1 From Waste to Wow Increase Customer Value, Reduce operating costs and improve customer satisfaction by shifting from a departmental focus to a customer output (e2e process) focus. Marieke Snoep (Director Sales Operations & Process Management) T-Mobile the Netherlands, 22 February

2 Company Context 2

3 Our mission As the most highly regarded service company, we mobilize personal, social and business networking. 3

4 Deutsche Telekom Worldwide presence One of the world s leading companies in mobile communications. One of Deutsche Telekom s three strategic business units. Worldwide more than 150 million mobile customers. 4

5 10 year T-Mobile in the Netherlands GSM 1800 auction UMTS MMS 1 e T-Shop HSDPA Flex W@P GPRS 5

6 Situation T-Mobile Netherlands Figures per 1 October million customers. Turnover: billion Euros in EBITDA: 128 million Euros (over Q3 2009). ARPU: 23 Euros. 83 T-Mobile Shops. Employees: 2062 FTE. 6

7 What do we see? 7

8 Our ambition - Number 1 in Customer Appreciation 8

9 Challenges 1/3: Bridging the gap between customer expectation (commercially) and customer delivery (operational). Risk = increasing complexity due to a larger no. and more complex products and services Tailor made world Customer expectation Low cost / standard Operations Reality Risk = not being able to meet customer expectations or to meet it only against excessive costs Products, services & care Operational customer processes 9

10 Challenges 2/3: Operating Costs a balance between preventive and corrective work. Costs & Labor Corrective : - Management of exceptions - Plan / Do culture - Can do people - Manual run activities - Rework & Incident costs Total operational costs Preventive: - Management of overall result - Pro-active - Monitoring (Plan / Do / Check / Act) Reliability Costs 10

11 Challenges 3/3 : Our processes require lots of cross-functional co-ordination as a result of shared systems, cross-functional projects etc.. Departments, projects, changes and systems mapped to (sub) processes Acquire Retain Cross-/ upsell Manage leads ILLUSTRATIVE Manage opportunities Offer & negotiate Register sales order Authorize order Deliver hardware Deliver service Bill custom -er Provide Care Complexities Large number of: handover moments between departments, systems, projects and large changes Limited reporting and transparency on end-to-end processes Possible sub optimisation of individual process steps and potential lack of identification of possible process improvements Implementation of projects and changes are complex and requires in-depth knowledge of end-to-end processes = Organisational units = Systems = Projects, changes and incidents 11

12 Our Reality today Our objectives Our opportunities Meet Customer Expectations Deliver Value Potential Increase Operational effectivity 12

13 What do we know? 13

14 To effectively manage process performance and customer appreciation, several indicators must be used. Leading KPI s give an indication for the customer experience in the process and for future customer appreciation Lagging KPI s give an indication for customer satisfaction, looking back at customer experience in the past Operational KPI s Sales process ICCA survey Customer feedback Process issues give an indication for potential customer complaints and lower customer appreciation Qualitative research gives an indication for customer appreciation, looking back at customer experience in the past 14

15 Performance reporting improves quality, speed and quantity of throughput and output of the sales funnel. Input Output Throughput TMNL Sales funnel Leads Opportunities Offers Orders Customers Paying customer Statuses within the various phases - t.b.d. - t.b.d. - Registered offers / quotations - Sent offers - Accepted offers - Registered orders (=submitted) - Evaluated orders (=Price Check + Eligibility Check + Credit Check) - Hardware orders (in SAP) - Backorders - Registered agreement (in ADB) - Activated agreement - Hardware in delivery - Delivered hardware order - Provisioned agreement - Hardware order paid - First invoice paid 15

16 KPI performance combined with customer feedback will get process management into action All processes consist of three types of activities: 1. Value adding: The product or its properties are changed. The activity is executed correctly the first time The customer is willing to pay for it Eliminate 3. NOT necessary and NOT adding value Waste Only increase costs Slow down the process Minimize 2. Necessary, but NOT adding value Value-enabling Required to operate our company Augustus 2008 Page 16 16

17 What do we do? 17

18 Purpose of TM-NL organization is to create value for the customer efficiently End the Silo thinking focus on Customer processes Activities at TMNL Customer experience Value Improve value for the customer Activities at TMNL Customer experience Value Reduce Waste Waste Activities Customer experience Value 18

19 Process integration management is a means to realise Operational Excellence in T-Mobile customer processes. A definition of process integration management ( ketenmanagement ): All management activities aimed at cooperation of all parties involved in a process in such a way that not the individual performance, but the collective performance to the customer is optimal and transparent For T-Mobile this is different from the current, more functional way management and control of customer lifecycle processes are organised. Process integration management is intended to help T-Mobile realise the ambition to become the zero defect company 19

20 Process integration management can be represented as a house consisting of three pillars, based on existing fundamentals and linked together by a shared roof. Zero defect culture (via behavioural change) Performance reporting Performance control Performance improvement roadmap Processes & system architecture 20

21 Building this house will be a change journey consisting of four subsequent phases. 4. Maximising customer value 1. Creating common ground Main areas of attention: - Defining the vision - Sharing the vision - Forming a guiding coalition for this journey - Shared language in ketenoverleg 2. Creating transparency Main areas of attention: - Designing and start implementing the elements of desired management control cycle - Designing and start using the performance roadmap - Shared language in CEB + affiliate meetings 3. Optimising process performance Main areas of attention: - Continuous performance improvement via management control cycle - Manage Sales process costs - Shared language in Sales organisation and other departments and suppliers with operational responsibility Main areas of attention: - Increasing effectiveness of cooperation between Marketing and Sales - Manage operational channel costs - Shared language with parties with commercial responsibility Q

22 Address Outside-in Customer Feedback Management in cross functional teams. Address immediately Opportunity to delight High Current customer profitability Buying but mad Ambivalent Target customer Target Low Unhappy & unprofitable Happy but thrifty Cross sell Detractor Passive Promotor Level of customer advocacy 22

23 A specific case Hardware delivery too many customer interactions in call center, too much conversion (revenue) loss Deep-dive: have a clear understanding why customer are complaining AND where the process is going wrong! (> 1000 customer interviewed out side in). Delivery Process: Understand end 2 end as-is process. Look existing customer interaction. Identify bottlenecks and make plan for implementation. Implement: A new transporter (AMP) was chosen to handle retention and business orders and all customer communications was redesigned. All telesales & e-sales customers can choose where and when they want to receive their handset. Besides a better customer experience this results in 7% extra committed sales due to better success rates customer interactions have decreased over 60 % 23

24 Back up 24

25 Improving processes requires learning to see waste 1. Overprocessing 2. Defects 3. Inventory 4. Overproduction 5. Waiting time 6. Motion 7. Transportation 8. Wasting human talent 25

26 Value analysis focuses activities on customer requirements Purpose of value analysis 1. To identify activities that are value adding 2. To bring down activities that are not adding value Before After Time Value Added Work Non-Value Added Work Page 26

27 The Enterprise Management Maturity Model (DataFlux / SAS) Rewards escalate as companies move from level to level People Who is involved and what contributions must they make? Process What activities must be performed? Technology What investments in technology must be made? Risk and Reward What risks does the organization face at the current stage and what could it gain from progressing forward? Page 27

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