E-commerce for Telcos: Weak Link or Competitive Advantage?
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1 E-commerce for Telcos: Weak Link or Competitive Advantage?
2 Executive Summary Telecommunications companies today operate in a hyper-competitive environment. Success means maximising the average revenue per user (ARPU) but maintaining let alone growing ARPU is increasingly difficult. Multiple factors are converging to put the squeeze on telcos worldwide. The rapid pace of technology change, which provides the opportunity to keep offerings fresh, creates operational challenges. Competition is expanding from new players and even from new sources such as Google. Increasing commoditisation amplifies these challenges. E-commerce is a must-have channel for today s telcos. Given the challenges and competitive climate, however, careful deployment with the right technologies is critical to deliver maximum value. A one-size-fits-all shopping experience will be viewed as one-size-fits-none from the customer perspective and will not foster the customer loyalty that is critical for creating business value. Without a holistic view of the customer relationship across all channels, you simply cannot offer the right information to the right customer at the right time. Lack of personalisation and customisation capabilities minimises your ability to offer targeted content and promotions to maximise ARPU. A rigid e-commerce platform that doesn t allow you to easily update content or evolve your offerings reduces the effectiveness of the online channel. Convoluted content management systems and processes make it difficult to keep content up to date, reducing the reliability of the information on those channels. Inflexible site structures can prevent you from quickly rolling out new types of offerings or even new business models to stay competitive. All of these issues create a sub-optimal shopping experience that can affect revenue and increase operational costs. Frustrated users will abandon the site and turn to competitors offering a better shopping experience, affecting revenue and market position. Shoppers who purchase based on information that is incomplete or, even worse, erroneous place higher demands on customer service and increase return rates. To prevent these problems and deliver competitive advantage regardless of whether the end customer is a consumer, business, or partner a telco e-commerce platform must address the challenges unique to the industry. This white paper examines the opportunities for telcos to leverage e-commerce to gain a competitive edge so they can: Attract more customers and increase ARPU Improve customer satisfaction and retain customer loyalty Streamline operations by reducing the cost to serve customers and integrating with back-end systems such as billing, inventory, etc., through open architectures Some hybris telco customers: 2
3 Addressing the Unique Complexity of the Telco Industry In order to create business value, e-commerce for the telco industry must meet a specific set of challenges and demands created by an environment of complex relationships and requirements. Maintaining Complex Product and Service Catalogues Telco product catalogues, which could run in the millions of stock items, are extremely complex. In addition to a wide range of product and service bundles, the near continuous cycle of adding new products and discontinuing old ones creates an enormous management challenge. This is compounded by the variety of sale types which include renewals, upgrades, add-ons, etc. Integrating product information management (PIM) technology is critical to ease the management of these complex product catalogues. details for when the customer goes to the retail store. As new touch points are continuously evolving, they become the potential weak links in the buy cycle unless they are wellintegrated into the e-commerce system. For example, mobile is increasingly becoming an important channel but it is not Maintaining Brand Consistency across Different Regions Providing local products and services across multiple languages, currencies, tariff plans, and other regional differences, while preserving global brands and standards, requires careful orchestration. You need to be able to enforce standards while managing regional differences from a single flexible system. a standalone touch point in the process; customers should be able to start the shopping experience on a mobile device and complete the transaction online, in store, or through the call centre. Another increasingly influential channel is social media. Integrating social media capabilities such as product reviews, wish lists, and tell a friend can help identify preferences and personalise messages. Creating Printed Materials Easily and Cost-Effectively Even in today s digital world, there is still a significant need for printed materials such as product catalogues and documentation. Cost-effective production and delivery across multiple channels requires the ability to manage product information and rich media across multiple systems. Supporting a Multi-Touch-Point Sales Process Multiple customer touch points require a consistent look and feel across channels such as point of sale, Web, mobile, etc. Even more importantly, however, each point needs to be aware of the others to provide a seamless shopping experience. For example, if a promotion is offered by a service representative over the telephone, there needs to be a record of the Supporting a Wide Range of Complex Business Models and Customer Relationships Even the broadest business-to-consumer (B2C) e-commerce operations must offer a high-quality shopping experience to attract and retain customers. Tailored B2C solutions can increase loyalty if they are properly deployed to add value to the customer and to perform as advertised. Many of the capabilities required for successful B2C e- commerce are also critical in the business-to-business (B2B) 3
4 Technology Trends Fuel Business and Buyer Behaviour realm but additional functionality is needed to address specific B2B requirements. These include sophisticated quoting and configuration tools to manage volume orders globally; customer-specific views of the product catalogue that incorporate contracted terms, prices, discounts, and rebates; and integration of purchasing workflows, cost centres, and budget management. Business-to-partner (B2P) offerings, such as white-label e-commerce solutions for business customers, can generate significant revenue opportunities but only when they can be quickly and cost-effectively deployed. Delivering advanced functionality for partners, including the ability to independently administer websites, can create a competitive edge. Supporting a Sophisticated and Demanding Customer Base Whether they are consumers, businesses or partners, today s telco customers are sophisticated and demand a high-quality experience across the entire lifecycle of the relationship. Attracting new customers means delivering a superior shopping experience, for example enabling easy navigation through large product catalogues, delivering clear descriptions of complex service bundles, and providing product comparison and configuration tools. Maintaining profitable customers requires superior service while keeping support costs low, which can be accomplished by offering effective self-service support capabilities and integrating complete customer relationship information across all support channels. Advances in telco industry technology and offerings provide opportunities to develop new business models and transform buyer behaviour. Operators are investing heavily in their networks, offering tremendous potential for opening up new channels and exposing new capabilities in multichannel e- commerce. With the advent of ultra-fast broadband, whether LTE in the mobile space or fast fixed broadband, networks are becoming smarter, offering more continuous access and more intuitive and intelligent operation. This provides an opportunity for operators and service providers to identify new business models faster and easier access encourages more online activity which, in turn, increases e-commerce potential. How will the classic B2C model evolve? What are the potential new B2B and B2B2C models? How do they all relate to each other? Mobile evolution to 4G creates the potential for creating rich experiences with mobile devices, which can dramatically expand the role of the mobile channel in e-commerce. The key to getting a first-mover advantage from these and other emerging opportunities is to have a flexible multichannel e-commerce platform that supports rapid extension and high scalability. 4
5 E-Commerce Technology Considerations for Telcos In order to provide telcos with a competitive edge, e-commerce platforms must deliver the features and capabilities needed to maximise ARPU and reduce costs. Maximising ARPU requires a broad range of features that not only deliver a high-quality shopping experience but also provide sophisticated marketing and targeting capabilities. At the same time, reducing costs while delivering a superior customer experience is the key to long-term profitability. Deliver a superior experience: Delivering a superior shopping experience requires providing customers with the tools and information they need to research offerings, compare options, and make an informed decision. This includes a broad range of features such as sophisticated search, guided selling, social media, quoting and configuration tools, and cross-channel fulfilment. Manage customer relationships across channels: Managing customer relationships across the entire customer lifecycle from sales to service requires true multichannel capabilities to maintain consistent branding and content and incorporate all channels such as mobile. This requires back-end integration for optimal effectiveness. Optimise cross-selling and up-selling opportunities: Optimising cross-selling and up-selling opportunities uncovers additional revenue potential and can even increase customer loyalty through effective marketing campaigns and targeted offers with well-executed personalisation. Reduce support costs while improving service: Reducing costs while delivering a superior customer experience maximises profitability. Automating service capabilities for example through self-service support and rulesbased tracking and updating for equipment returns and repair can reduce support costs and increase customer retention rates to improve overall lifetime value of customers. Streamline operations: Streamlining the ability to support multiple sites, brands, catalogues, currencies, languages, local conditions, etc. reduces operational costs. This requires a system that offers centralised management of product information content with support for regional conditions, currencies and taxes, as well as easy integration with back-end systems. Reduce the cost of printed materials: Integrating print capabilities to reduce the cost of producing and distributing materials across channels requires the ability to source content from multiple systems with product data rights management. Reduce reliance on IT: Reducing reliance on IT without sacrificing agility to respond to changing conditions can help control overhead costs. This requires an intuitive user interface so business users can maintain content and manage workflows as well as a flexible infrastructure for rapid deployment and on-going adaptability. 5
6 Conclusion The telecommunications industry is evolving more rapidly than ever across technology, competitive, business model, and regulatory dimensions. E-commerce can no longer be just a bolt-on solution for enabling an online sales channel this approach creates an ill-afforded weak link in a hyper-competitive market. The right multichannel commerce system can, in fact, be a transformative platform that delivers the capabilities required to address the unique challenges of the industry with the flexibility to quickly adapt in the rapidly evolving competitive landscape. True multichannel e-commerce is key to providing the tools needed to add new products, services, and sales channels; expand into new geographic markets; respond more quickly to market trends; and ultimately generate more revenue and profit. The solution needs to seamlessly integrate with all your sales and support systems, including business and operational systems, to provide a high-quality, holistic customer experience. It should have a flexible, modular architecture that allows you to add functionality as needed, simply and cost-effectively. It should provide full support for a broad range of marketing capabilities to enable you to attract and retain customers with rich up-sell and cross-sell opportunities. And finally, it should enable you to reduce operational costs to boost increased average profit per user. By adopting the right platform, you can not only provide a rich e-commerce experience, but you can create a compelling and lasting competitive advantage over the long term. About hybris, an SAP Company hybris helps businesses around the globe sell more goods, services and digital content through everytouchpoint, channel and device. hybris delivers OmniCommerce : state-of-the-art master data management for commerce and unified commerce processes that give a business a single view of its customers, products and orders, and its customers a single view of the business. hybris' omni-channel software is built on a single platform, based on open standards, that is agile to support limitless innovation, efficient to drive the best TCO, and scalable and extensible to be the last commerce platform companies will ever need. Both principal industry analyst firms rank hybris as a leader and list its commerce platform among the top two or three in the market. The same software is available on-premise, on-demand and managed hosted, giving merchants of all sizes maximum flexibility. Over 500 companies have chosen hybris, including global B2B sites W.W.Grainger, Rexel, General Electric, Thomson Reuters and 3M as well as consumer brands Toys R Us, Metro, Bridgestone, Levi's, Nikon, Galeries Lafayette, Migros, Nespresso and Lufthansa. hybris is the future of commerce. sales@hybris.com Version: October 2013 Subject to change without prior notice hybris hybris is a trademark of the hybris Group. Other brand names are trademarks and registered trademarks of the respective companies.
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