Openet 360 Degree View Personalisation WP May11

7/30/2019 Openet 360 Degree View Personalisation WP May11

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A 360 degree view of personalisation in communications

Telesperience analysis 2 April 2011

0 SUMMARY .....................................................................................................................................31 KEY GOALS AND HOW THEY MAP AGAINST THE EIGHT TYPES OF PERSONALISATION 4

Figure 1 Relative importance of operational, commercial and customer goals ............................................. 4Figure 2 How selected priorities affect relative importance placed on each type of personalisation............ 6

2 DELIVERING PERSONALISATION: ORGANISATIONAL GAPS ................................................7Figure 3 Staff involved in the rollout of new products or tariffs gap analysis ............................................ 7Figure 4 Ease of making changes: the view of marketing versus IT.............................................................. 8

3 CAPABILITIES ANALYSIS............................................................................................................9Figure 5 Supporting key types of personalisation: comparison of views of marketing and IT................... 10Figure 6 How far ahead are the most innovative companies in terms of rolling out different types of

personalisation? ........................................................ ................................................................. .................. 11

4 REGIONAL DIFFERENCES.........................................................................................................12Figure 7 Regional analysis: goals, personalisation targets and agility ......................................................... 13Figure 8 Regional approaches to funding personalisation initiatives........................................................... 14

5 INFORMATION ABOUT THE RESEARCH PROGRAMME........................................................15Figure 9 Demographics of respondents........................................................................................................ 15

6 ACKNOWLEDGEMENTS AND FURTHER INFORMATION.......................................................17


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0 Summary

Key findings

Personalisation is a key strategy for many service providers worldwide, and is frequently discussed at

conferences and in industry press. The aim of this research programme is to discover the status of

personalisation initiatives within the industry, the inhibiting factors, the benefits, and how

personalisation is helping communications service providers (CSPs) deliver against their core

commercial and customer goals. In the first part of this programme we spoke to product management

& marketing experts to discover their view. In the second part of the programme we spoke to IT

departments (such as BSS and OSS managers). We then compared the views of these two

stakeholders to see where there are differences and points of agreement, and to create a

comprehensive overview of views and key issues.

This gap analysis is presented in this paper. It should be noted that we use the term gap analysis

to denote the analysis of a number of types of difference in the research we have undertaken which

we present as:

a mapping of goals to personalisation targets (Section 1) an organisational analysis to discover the differences in view between product marketing &

management and IT departments (Section 2)

a capabilities analysis to understand whether CSPs are able to deliver against thepersonalisation strategies they have (Section 3)

a regional analysis to discover the differences between regions (Section 4).In the third and final part of this research programme we spoke to end customers to create a unique

three-dimensional perspective of this topic, and the findings from this part of the programme are

available in the fourth data sheet in the series1.

1 Copies of the other papers in this series can be downloaded for free from: www.openet.com/personalisation

Telesperience data sheet: A 360 degree view of

personalisation in communications


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1 Key goals and how they map against the eight types

of personalisation

Communications service providers we spoke to in this research programme reported their main goals

as being a combination of the three key Telesperience criteria:

operational key operational goals include reducing costs, better management of assets

(such as network capacity), and improved operational efficiency

commercial including goals such as enhancing commercial agility, better monetisation and

opening up new revenue streams, maintaining brand values and combating competitors

offers

customer with regards to customers CSPs seek to improve the customer experience overall,

acquire new customers and retain existing ones.

Both sets of stakeholders (IT and product management & marketing) regard meeting the needs of

customers better as their primary goal. This is extremely heartening as Telesperience believes thatcustomers and not technology should be the starting point for communications service provision.

Globally, IT staff said their primary goal was an improved customer experience and this was rated

more highly than operational goals such as reducing costs and improving operational efficiency.

Likewise, product managers and marketers rated customer issues as their top goals, but they were

split over whether acquiring or retaining customers was more important. Figure 1 shows how the two

key stakeholders rated these three sets of goals overall.

Figure 1 Relative importance of operational, commercial and customer goals

Stakeholder IT department Type Product management & marketing Type

Rank 1 Improve customer experience Cust Customer acquisition Cust

Rank 2 Reduce costs Op Customer retention Cust

Rank 3 Improve operational efficiency Op Increase revenue from existingproducts

Com

Rank 4 Increase commercial agility Com Maintain brand values Com

Rank 5 Better monetisation Com Open up new revenue streams Com

Rank 6 Comply withregulation/legislation

Op/Com

Combat competitors offers Com

Rank 7 Network issues: upgrades &traffic management

Op Reduce costs Op

Source: Telesperience 2011Type: Cust = customer goal; Op = operational goal; Com = commercial goal


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Figure 1 indicates that although both key stakeholders agree that customer goals are the most

important, IT regards operational goals as being their next most important set of priorities, while

product management and marketing tends to prioritise commercial goals.

There is a tendency to view communications service providers (CSPs) as being either focused on

customer acquisition or customer retention, but it should be noted that most of the CSPs we spoke to

were focused on both goals simultaneously. In fact, 78% of CSPs in this programme who rated

customer retention as key also rated customer acquisition as being really important to them. This

validates Telesperiences view that instead of seeing CSPs as having an acquisition versus retention

mindset, a more accurate way of analysing CSP goals today is whether they are focused on

operational issues (such as networks or cost-reduction), commercial issues (such as new revenue

streams or competition), or customer issues.

In fact, most CSPs are focused on a combination of goals, creating a unique fingerprint of goals that

are important to them along with the relative weight placed upon them. Their primary focus then

influences other goals they think are important and the relative weight placed upon these. The

combination of these goals also affects how they value and utilise the eight key types of

personalisation2 we have researched in this programme, as shown in Figure 2.

While there are still regional differences depending on whether CSPs operate in so-called mature,

competitive markets, for example, or younger, high-growth markets, these differences are somewhat

less acute than they were a relatively short time ago. Many high-growth markets have now flipped

from pure customer acquisition strategies to more complex, hybrid strategies featuring a combination

of competitive positioning and customer retention. However, the relative importance of operational

goals is very interesting: they tend to be more important in markets where price pressure is acute or

downwards. Not all markets face this situation yet, and CSPs which do not face such pressures may

therefore emphasise other goals more highly.

However, it should be noted that mature markets are not necessarily highly competitive and it should

not be presumed that customer retention or operational efficiency are primarily characteristics of

mature markets. Where customers have little choice, then CSPs may place less emphasis on retaining

them, and therefore on meeting their needs better, since there is a relatively low risk they will churn.

Such CSPs may wish to increase revenues from their customer base though, and personalisation is a

way of achieving this goal. Thus their primary motivation or goal is to use personalisation to drive up

revenues, rather than to retain customers per se.

Markets that value operational efficiency tend to have certain characteristics. CSPs in these markets

are either trying to reduce the cost of operations in order to meet a price point that is required to

expand their operations to lower value customers (a good example of this would be India) or they are

trying to reduce operational cost because they need to offer lower priced services to remain

2The eight key types of personalisation we have researched in this programme are: personalised customer support,

personalised offers, personalised content or products, personalised tariffs and prices, personalised quality of service (QoS)and bandwidth, personalised advertising, personalised devices and personalised controls.


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competitive and profitable in the face of price competition from rivals or mandated lowering of prices

by a regulator (an example of this type of market is the UK).

Figure 2 How selected priorities affect relative importance placed on each type ofpersonalisation

Key goal Type Primary

personalisation goal

Secondary

personalisation goal

Tertiary personalisation

goal

Retaincustomers

Cust Offers Customer support Content and products

Acquirecustomers

Cust Offers Content and products Customer support

Maintainbrand values

Com Offers Content and products Customer support

Increaserevenuesfrom existingproducts

Com Content and products Devices Offers

Create new

revenuestreams

Com Customer support Tariffs and prices Offers

Source: Telesperience 2011

In Figure 2 we see that experts in our sample who said retaining customers was very important to

them (a customer-oriented goal), said personalised offers, customer support, and content & products

were their most important personalisation goals. In contrast, those who wanted to create new revenue

streams (a commercial-oriented goal) valued personalised customer support, tariffs & prices, and

offers.

This diagram provides interesting insights into the relative weights placed upon the key types of

personalisation according to the goals of service providers.


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2 Delivering personalisation: organisational gaps

Product marketing and management experts told us that the main barriers they face in rolling out

personalisation initiatives are internal barriers, insufficient budget (for both software and marketing)

and lack of vision. The organisational gap they identified as their primary barrier was furthersupported by the finding that 60% of product managers and marketers felt that there was a gulf

between them and their IT department, in the sense that IT either did not support their goals or

understand them. Fortunately, 40% of marketing and product management experts said they either

lead IT (10%) or work in partnership with them (30%). As can be seen from Figure 3, however, when

rolling out new products, key IT staff are often not consulted. There is also a mismatch between who

IT thinks are consulted during such a process, and who product management and marketing thinks

are consulted.

Product marketing and management report being more likely to involve business managers and

senior management in new product rollouts than certain key IT staff. Only four out of ten reported

always consulting billing and CRM managers, for example. Only two out of ten always consult OSS

network or data staff.

Figure 3 Staff involved in the rollout of new products or tariffs gap analysis

90%

47%

37%

47%

47%

70%

60%

53%

7%

10%

83%

53%

30%

17%

13%

40%

40%

20%

3%

0%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

Product mgt & marketing

Senior mgt

CIO

Network

Data

Billing

CRM

OSS

Consultants

Partners

IT view Marketing view


This means that some marketing & product managers are making product rollout plans without

knowing if the existing infrastructure will support their initiatives. Failing to involve IT staff in the

planning and rollout of new products and tariffs would be acceptable if product management and

marketing were largely self-sufficient; but they are not. In our research programme, only 10% of

product management & marketing experts reported that they were able to easily make changes to

tariffs or offers, or could rollout new ones, without the involvement of IT. This corresponds very

closely to what we were told by IT experts, as only 10% of these reported that product marketing and

management could easily make changes without their involvement (see Figure 4).


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Figure 4 Ease of making changes: the view of marketing versus IT

10%

20%

37%

33%

10%

40%

50%

0%

0% 5% 10% 15% 20% 25% 30% 35% 40% 45% 50%

Can easily make changes

Some IT support required

IT support required and it takes

a lot of effort

Changes are very difficult

Marketing IT


Diagram shows a comparison of the percentage of each type of stakeholder that believes making changes is easy/difficult

Figure 4 clearly shows that product marketing and management feel that making changes is often far

from easy with 70% reporting that changes require a lot of IT effort or are very difficult. This

difficulty in making changes, and dependence on IT, is often a factor of a legacy IT infrastructure that

has not been designed to support change. However, this is a worrying indication when considered in

the context of personalisation, as true personalisation is a dynamic process that requires continual,

incremental change based on customer information, and is not just one-off, static offers or products

targeted at niche markets.


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3 Capabilities analysis

We asked the experts who participated in our research programme if they could deliver key types of

personalisation today, or whether they were planning to deliver them in future. While there were a

few areas where both product marketing & management and IT are aligned, in many areas they arenot. Sometimes product marketing & management believes they can already deliver or have plans to

deliver certain types of personalisation which IT managers tell us their current infrastructure cannot

support. In other cases, IT is planning support for types of personalisation capabilities that are not

currently high on the agenda for product management and marketing. There are a number of reasons

for this gap:

overestimating capabilities product management and marketing sometimes do not fullyappreciate the technical consequences of their plans

failure to communicate/understand key goals whereby for whatever reason IT does notfully understand the goals of product management and marketing, or is not involved in the

decision-making and planning until too late different definitions of personalised services which is where one of the stakeholders

(often product management & marketing) has a less sophisticated or different view of what is

possible than the other. This results in the stakeholder reporting that they are able to deliver

that type of personalisation when they are only actually able to deliver a static or relatively

unsophisticated version

an ad hoc or labour-intensive effort by IT - which is often the result of IT having to acttactically in order to deliver against marketings goals. This frequently occurs when IT is not

consulted early enough in the cycle. This means that although from marketings point of view

its goals are met, this is only achieved because of considerable and possibly unsustainable

effort by IT. These IT fixes are usually not a long-term or scalable solution to the issue, and

often prevent a more sophisticated or dynamic level of personalisation in the mid-term.

Personalised customer support, for example, is the number one goal for marketers, and six out of ten

say they can support it now; with nine out of ten saying they will be able to support it by 2013.

However, as can be seen from Figure 5, IT departments are much less confident at being able to easily

deliver personalised customer care today. Having said that, by 2013 a similar level of IT experts to

product marketers (nine out of ten) believe they will be able to support it. Overall, though the good

news is that IT is set to meet or exceed the expectations of product management and marketing in

supporting all areas of personalisation, as it implements solutions that can easily and smartly meet

their needs.


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Figure 5 Supporting key types of personalisation: comparison of views of marketing and IT

Type of

personalisation

Rank by

marketing

Does marketing

think it can be

delivered now?

Does IT think it

can be

delivered now?

Gap analysis

(now)

Gap analysis

(planned

support by2013)

Customer support 1 6 out of 10 3 out of 10 Similar

Offers 2 3 out of 10 3 out of 10 Similar

Content =3 7 out of 10 3 out of 10 Similar

Tariffs/Prices

innovative

=3 5 out of 10 7 out of 10

Tariffs/Prices - casualusage or service

passes

=3 6 out of 10 5 out of 10

Tariffs/Prices

personalised

=3 3 out of 10 4 out of 10

QoS 4 2 out of 10 3 out of 10

Adverts 5 4 out of 10 1 out of 10

Controls - parental or

employee

=6 5 out of 10 3 out of 10

Controls - smart =6 4 out of 10 3 out of 10


= IT ahead in its plans to implement; =marketing ahead in its plans to rollout


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Figure 5 is very telling, as it reveals that marketing is often ahead of IT in terms of its thinking, and IT

often struggles to support these plans. This is not because of a lack of willingness or capability.

Product managers and marketers acknowledge that key barriers to delivering personalisation are lack

of software budget and inadequacies in the legacy software infrastructure.3

We also wanted to explore whether the most innovative companies in the sample (34% regarded

themselves as being innovative) were more advanced in their support for different types of

personalisation than the average for the research sample. As Figure 6 shows they were more advanced

in the rollout of every aspect, although they were further ahead in some areas than in other. What

was interesting though was this group of innovators did not report that making changes to existing

tariffs and products were any easier than the average overall indicating that even they could

improve their performance going forward by investing in solutions that support easier real-time and

dynamic personalisation.

Figure 6 How far ahead are the most innovative companies in terms of rolling out differenttypes of personalisation?

67%

33%

53%

33%

60%

40%

50%

23%

63%

40%

80%

50%

70%

40%

70%

60%

70%

50%

80%

40%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90%

Products or product bundles

Personalised tariffing, offers & bundles

Innovative tariffing options

Subsidised usage (eg ad-subsidised)

Casual usage packages

Personal sm art controls

Parental or employee controls

Differentiated QoS

Customer s ervice channel

Personalised advertising

Average Innovators


3 We asked product managers and marketers to rate the key barriers they faced in delivering personalisation on a scale of 1-5. The top barrier

they reported was organisational barriers (2.83), followed by insufficient budget for software (2.63). Legacy software infrastructure was

regarded as being the fourth most important barrier (2.57). See: Opportunities from personalisation the view of product management and

marketing for more details.


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4 Regional differences

The types of personalisation that are regarded as being the most useful, and the way these are

implemented and budgeted for, reveal distinct regional differences. Some of these regional

differences are due to the maturity of the local market in the sense that markets focused largely onsubscriber growth tend to be interested in personalisation strategies that support this aim. That said,

the initial phase of rapid subscriber growth following service rollout is coming to an end now in

many high-growth markets. Growth may still be substantial in these markets, but the emphasis is

shifting towards a second phase of maturity where CSPs seek to stabilise their customer base and

differentiate themselves from competitors. In more mature markets, personalisation also has a role to

play in helping CSPs better meet the needs of customers whether the motivation for this is to

increase revenues or stabilise or increase the customer base.4

So what are the differences in terms of regional goals for CSPs implementing personalisation

strategies? As shown in Figures 7 and 8, each region has different goals, personalisation targets andapproaches to support these.

Figure 7 shows there is considerable commonality between regions in terms of key goals and the most

highly rated forms of personalisation. What differs is the relative value placed on each. However,

some regions have goals and strategies that are more closely aligned than others. It is interesting to

note, for example, that North America and CALA have virtually identical priorities with regards to

personalisation strategy; whereas in contrast, MEAs goals are a hybrid of those seen as important in

Europe and Asia.

From Figure 8 we can see that all world regions expect at least some of the IT support for innovation

to be funded out of OPEX and CAPEX savings. However, this pattern is most acute in Europe andCALA. If this strategy continues it will certainly slow down the ability of CSPs in these areas to get

quick access to the quantifiable benefits provided by personalisation.

4For more information about the maturation of personalisation strategies and how they address the needs of CSPs in

different types of markets, please see the free accompanying issues paper which is available fromwww.openet.com/personalisation.


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Figure 7 Regional analysis: goals, personalisation targets and agility

Region Primary goals in order ofimportance

Key personalisationstrategies

Agility ease of makingchanges

NorthAmerica

IT: improve customer

experience, reduce costs

Marketing: customer

acquisition, customer

retention & loyalty, open up

new revenue streams

1. Tariffs

2. Offers

3. Customer support

Can easily make changes(25%)

Requires some IT support(25%)

IT support required and ittakes a lot of effort (37%)

Very difficult (13%)

Europe

IT: reduce cost, improve

customer experience

Marketing: customer


retention & loyalty,

increase revenues from

existing products

1. Offers

=2. Customer support

=2. Content


Requires some IT support

(30%)



Middle East& Africa

IT: improve customer

experience, increase

commercial agility

Marketing: customer




existing products

1. QoS

=2. Offers





Very difficult (8%)

Asia

IT: reduce cost, improve

operational efficiency

Marketing: customer



maintain brand values

1. Customer support

2. Content

3. QoS





CALA

IT: improve operational

efficiency, improve

customer experience

Marketing: customer

acquisition, maintain brand

values, improve customer



existing products

1. Tariffs

=2. Offers








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Figure 8 Regional approaches to funding personalisation initiatives

50%

67%

33%

80%

50%

67%

25%

33%

33%

10%

33%

33%

10%

25%

25%

25%

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100%

North America

CALA

MEA

Europe

Asia

Multi

Fund from OPEX savings Sufficient budget Sufficient infrastructure Considering OPEX model eg SaaS Cannot innovate due to lack of budget


Telesperiences view

Telesperience believes that CSPs need to ensure that their key personalisation strategies are properly supported

and funded if their business is to benefit from the quantifiable and wide ranging benefits these strategies can

deliver. Expecting IT to fund support for personalisation out of CAPEX and OPEX savings from the existing

IT budget will certainly inhibit and constrain the companys ability to quickly and fully support these

initiatives. We believe that the benefits of personalisation measured in terms of key operational, commercial

and customer metrics far outweigh the cost of the IT budget needed to deliver them. The cost of not supporting

personalisation early include inflated costs elsewhere in the business (such as the cost of dealing with customer

complaints or churn), as well as enormous opportunity costs from slowing down the rollout of new product and

tariff offerings.


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5 Information about the research programme

Scope of the researchThis research programme uses a technique which is sometimes called the expert panel or expert

sample. In other words we sought to locate a relatively small number of highly qualified experts

who had the knowledge and experience to answer the questions we were researching, and who could

represent the views of their peers.

This expert panel was focused on understanding the role of personalisation strategies from the point

of view of IT experts such as those working in BSS and OSS departments versus product

management and marketing experts. This panel comprised experts from a range of different types of

CSP, and of a variety of sizes. The research was conducted between January and March 2011 and the

report prepared for publication in March 2011.

Demographics of the expert panel

In this programme we spoke to 63 operators worldwide. Figure 9 provides a demographical

breakdown of these operators by size of subscriber base, region of operation, network technology,

and how innovative they consider themselves to be.

Figure 9 Demographics of respondents

North America

14%

CALA

11%

MEA

19%Europe

33%

Asia

13%

Multi-region

10%

Up to 5 million

37%

5-20 million30%

20 million+

33%



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Figure 9 Demographics of respondents (cont)

Multiplay

29%

MVNO

3%

Fixed inc fibre,cable, broadband

16%

Mobile or

wireless

52%

We're innovators

34%

We're proactive

33%

We're reactive

30%

We're trailers

3%



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6 Acknowledgements and further information

Author

Teresa Cottam is the Research Director and Founder of Telesperience. She has more than 17 years industry

experience and was previously an Associate Principal Analyst with UK-based telecoms consultancy Analysys

Mason, covering the billing, CRM and service delivery sectors. Before that she was Research and Publications

Director at Chorleywood Consulting, a specialist BSS/OSS consultancy which was acquired by Informa Telecoms

& Media. Prior to this she was Managing Editor at industry analysts Ovum.

Teresa has authored numerous influential reports and trends papers during her career, is a regular speaker at

telecoms industry events, and is a judge at various industry awards including the GSMA awards 2011 (presented

at MWC11). Teresa is passionate about helping CSPs optimise the value of their software, and strongly believes

that software will play an increasingly important role in helping CSPs differentiate their offering, operate

profitably, and attract & retain customers.

Acknowledgements

The author would like to thank all those companies and individuals who helped with our research and

generously gave their time and expertise. In particular, we would like to thank Openet, who provided

sponsorship to fund this research programme. It should be noted that in keeping with our usual methodology

the sponsors involvement has comprised scoping the extent of the project and supporting the project with

funding: they have not sought to influence the findings or recommendations made.

About Telesperience

Telesperience is a UK-based telecoms analyst firm focused on how software and data helps communications

service providers improve their operational efficiency, commercial agility and the customer experience they

deliver. We consider where the problems lie with legacy technology, and how companies can transition to

provide a more positive telesperience for their customers and a more profitable business for themselves.

Telesperiences open source research programme relies on the goodwill of companies who fund research in order

to make it free at the point of delivery. We endeavour to ensure that our research remains objective and

independent: the steps we take to do this are outlined on our website, but the most significant is using

experienced and respected analysts who have a track record within our industry. Report sponsors are always

acknowledged, so readers are aware who is funding the research programme. For more information about

Telesperience see www.telesperience.com, check out our blog at www.microsperience.com or visit our B2B wiki

at www.wikisperience.com.

About Openet

Openet is the most innovative provider of Subscriber Optimization Software (SOS) to tier one communications

and media service providers. To succeed, todays operators must know their subscribers, deploy innovative

business models and control the allocation of network resources. Openet's offerings are engineered to attract

subscribers and provide an optimal experience, minimize the cost to serve them and maximize revenuemaking

the most of every subscriber. With customers across the globe, Openet is meeting the needs of operators

worldwide such as Vodafone, Orange, AT&T and Verizon. For more information, please visit www.openet.com.

Documents

Openet 360 Degree View Personalisation WP May11