More Related Content Similar to Ensure Revenues, Ensure Margins (20) More from SAP Customer Experience (20) Ensure Revenues, Ensure Margins2. 2PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
MAKING
THE
WORLD
SMALL
3. 3PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
360° PERFORMANCE
4. 4PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
ARPU
Average Revenue per User
5. 5PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Profitability is under pressure…
OTT players gaining market share and customer
interface
Pressure to diversify remains high to avoid risk of
dumb pipe (e.g. IoT, content, B2B services)
Regulation, commoditization and market saturation
in traditional services
Next CAPEX cycle coming up – now it is time to
optimize customer experience, harvest and prepare
Stock market expects stable returns, even in case
ARPUs are declining
ARPU in decline, while costs and investments remain high
Increasing pressure on profitability
Profitability is under pressure… …and hence moving into focus
Example: Verizon wireless revenue and operating income
[USD/month]; Source: Verizon
50
70
90
110
130
150
170
2015 Q1 2016 Q1 2017 Q1
Operating income / retail subscriber Retail postpaid ARPA
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Measuring Growth
Average Revenue per User (ARPU)
€
7. 7PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Measuring Profitable Growth
Average Margin per User (AMPU)
€
Margin
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AMPU
Average Marg in per User
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Transformation
Evolving from an average revenue to an individual margin per user view
ARPU TO IMPUCustomerbase
Growth Saturation ExplorationInitiation
Volumes AMPU
Average Margin Per User
IMPU
Individual Margin Per User
ARPU
Average Revenue Per User
10. 10PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
BDMA
SAP Big Data Margin Assurance
11. 11PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
Anchoring profitability-based steering along the value chain
Finance function becoming the corporate enabler in a profitability-driven organization
Network Wholesale
Product dev.
& Marketing
Sales Billing
Customer
Service
Roaming reconciliationRegional profitability Discount stacking
Transparency
(esp. for B2B)
End-to-end margin drivers
Margin by
channel, dealer, PoS
Underperforming clientsSales mixBase station profitability Tariff cannibalization SOC marginsThird party margins
Commission control
Trend monitoring
& alarming
Mis-use or fraudDevice profitabilityNetwork congestion Third party service usage
Contract renewal, up- &
cross-selling
ChurnInvoice controlOther asset profitability Product lifecycle
Third party service invoice
control
CLTV, Amortization times,
Survival time
Bundle discounts Retention offer efficiencyProposition simulation
Wholesale sales margin
optimization
Network expansion
Decisions across the value chain are taken based on profitability information
12. 12PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
From executive-level dashboards
to individual account level profitability
13. 13PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
1
2
3
Take a Deep Dive
Build your roadmap
Get a Test Drive
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“The ability to understand
granular customer profitability,
specifically which customers
are profitable or unprofitable and why,
is a game-changer for our industry.”
Thomas Holtmanns
Vodafone Group Head of Finance Operations & Margin Assurance
18. 19PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
9
Margin analysis on a granular level can become a game-
changer in a saturated market
Growth Saturation Exploration of new growth opportunities
Customerbase
IMPUVolumes ARPU AMPU
Initiation
Maximize revenue growth
Manage overall profitability
Manage profitability per product, customer, channel
Steer micro segments
21. 22PUBLIC© 2017 SAP SE or an SAP affiliate company. All rights reserved. ǀ
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