Alcatel-Lucent Managed Services Value Creation Model

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COPYRIGHT © 2015 ALCATEL-LUCENT. ALL RIGHTS RESERVED.

Alcatel-Lucent Managed Services

Customer Value Creation ModelJune, 2015

Customer ContextWhere Today’s Operator Needs To Be

The Managed Services Value Model confirms to Operators that

•Alcatel-Lucent Managed Services Product Offerings are the required enablers to get them to the right place.

•Alcatel-Lucent MS is delivering

RIGHT PLACE TO

BERevenue

growth and reduced OPEX

DEFENSIVE POSITIONRespond to

revenue decline by

OPEX reduction

OPEXREDUCTION

SERVICEEXPERIENCE

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•Alcatel-Lucent MS is delivering value to customers in the current contracts and committed to continue

•Alcatel-Lucent MS offerings are futuristic and aligned with Technology evolution towards NFV / Cloud based networks

WRONG PLACE TO

BERevenue

decline and OPEX growth

OFFENSIVE POSITION

Invest to increase

revenue, but OPEX increase

REVENUEGROWTH

* Different Carriers Positioning

Managed Services Value Model Process Flow

MS PRODUCT

PORTFOLIO

Map and Align Customer KBOs with relevant MS Selling Package and Product Offerings.

CUSTOMER

ENGAGEMENT

Understanding the Customer Context. Using a set of specific questions defined and targeted for Customer CXO profiles.

DELIVERY

CAPABILITY

Key Capability facts to demonstrate credibility and experience.

VALUE

CALCULATION

Based on the Customer KBO requirements, Value Calculation on 2 levels, generic value range and customer specific calculation from customer inputs

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VALUE CREATION

KBO TO MS PRODUCT

ALIGNMENT AND CUST

COMMS

ENGAGE AND CONFIRM

CUSTOMER KBO

VALUE DEMONSTRATION

DELIVERY CAPABILTY

GENERIC AND CUSTOMER

SPECIFIC VALUE CALCULATION

How Do Alcatel Lucent Create Value

What is the Value

Formulating the Customer’s KBOs

New Business &Asset Monetization

Customer Base &ARPU Growth

Time to Market &

Separate pricing of content, QoS, VAS

Develop content and advertising business

Develop innovative end customer services

Scale down and control unlimited offer

Target new markets and customers

Optimize service delivery quality

Improve customer experience

Up sell across network service domainsCXO Engagement

Output –Formulate

Possible Customer Objective Statements

ALIG

NM

EN

T W

ITH

MS P

ORTFO

LIO

AN

D V

ALU

E

PRO

PO

SITIO

N

ENGAGE AND CONFIRM

CUSTOMER KBO

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Network Simplification &Resource Optimization

Time to Market &Quality of Experience

Cost Reduction &Operational Excellence

Scale down and control unlimited offer

Selective QoS for premium offer

Develop traffic off-loading mechanism

Evolve network to all-IP / NPV

Consolidate & share infrastructure

Outsource operations

Optimize customer process / Introduce SM

Cut energy expenses

Optimize infrastructures and assets

€$£

Formulate and Validate

Customer KBO’s

ALIG

NM

EN

T W

ITH

MS P

ORTFO

LIO

AN

D V

ALU

E

PRO

PO

SITIO

N

The Managed Services Value Model

Create new revenue Streams

Increase ARPU

Alarm Filtering, Correlation and Auto-Ticketing

Higher NOC Resolution Rate, Pro-Active

End-to-End Ticket Management & Follow-up

Proactive Problem and Knowledge Management

Reduction of Incidents

Reduction of Problem Tickets

Service Impacting Events Restored Quicker


Customer Base &

EXPECTED CUSTOMER

BUSINESS BENEFITS

CUSTOMER FINANCIAL

/OPERATIONAL

BENEFITS

DELIVERY MODEL IMPACT DELIVERY MODEL ENABLERS

ENGAGE AND CONFIRM

CUSTOMER KBO

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Decrease Operating Cost

Optimize Traffic / Spectrum

Optimize Asset Deployment

Reduction in Customer Churn

High CSAT Score and NPS Score

Controlled Network Change Management

Higher NOC Resolution Rate, Pro-Active Communication

Productivity, Efficiency and Performance Reporting

Critical Trigger Analysis, Capacity, NW Utilization

Capacity Forecasting on the Actual Usage Trends

Translation of Business Plans to Operating Plans

Customer Satisfaction Surveys

Analytics and Pro-Active Customer Care Tickets

Restored Quicker

Elimination of Repeat Issues

Reduction in Time to View and Analyze Mgmt Report

Just In Time [JIT] Deployment & 1st Time Right

Effective Capacity Planning

Reduction of Customer Care Tickets

Sustain Key Capabilities





Value CreationEngagement

• Start with one same business

oriented question for all profiles

• Follow a common “Where-What-

How” logic around a challenge

STRUCTURED CUSTOMER CXO

LEVEL ENGAGEMENT

FORMULATE THE CUSTOMER

KBOs


Customer Base &

CONFIRM CUSTOMER

CHALLENGES

Common Customer Objectives:

• Reduce the Cost of Operations (TCO and OpEx)

• Improve the Quality of Services and End-

Customer Experience

ENGAGE AND CONFIRM

CUSTOMER KBO

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How” logic around a challenge solving lifecycle model

• Where does Telco/non-Telco want to be in X years from now vs. where they are now?

• What are the identifiable/identified gaps to get there (e.g. techno, timing, money)

• How and when to get from A to B in terms of timing ,steps, efforts and models

ENGAGE AND CONFIRM CUSTOMER CHALLENGES




Cost Reduction &Operational Excellence€$£

Customer Experience

• End-to-End Visibility and Accountability of the Services Performance

• Significant decrease in time to Market

• Consolidate Network and Systems

• De-complexification of Networks, Processes and Systems

• Future Proofing of the Customer Services Operations

• Optimal Utilization of the CapEx (Asset Utilization)

Value CreationPortfolio

Available new MS Portfolio designed to extend the benefits of traditional MS offerings, combined with the value based service offerings in operations transformation, customer experience, cloud

READILY AVAILABLE MS

PRODUCT MENU

MAPPING THE CUSTOMER

KBOs TO PRODUCTSHARE SOLUTION

ALTERNATIVES

Technology Lifecycle Services

Network Operations

Services

Managed Transformation

Services

• Propose the selected recommended MS Selling Packages or mix of Products relevant to the KBO and challenges analysed from Customer Engagement.

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transformation, customer experience, cloud and security services.

The new Managed Services portfolio is categorised into four major domains:

• Managed Network Services

• Innovative Technology Solution bundles

• Managed Care Services

• Managed Telco- IT, Cloud and Security Services

ALIGN THE SOLUTIONS VARIANTS AND SHARE WITH CUSTOMER

€$£

Services

Operations Assistance

• Share the generic Value Statements in association with the MS products proposed, aligned with the relevant KBO areas.

Value DemonstrationCalculation

4 Key Value Drivers that Drive the Change on KBO’s:• OPEX Reduction:

• Capability drivers to reduce effort to execute functions

DRIVERS AND LEVELS FOR

VALUE CALCULATION

GENERIC VALUE STATEMENTS SPECIFIC CALCULATED

VALUE FROM CUSTOMER

INPUTS

A set of value statements across the 4 Value Driver areas represented in a set of ranges.Sourced from:• Factual Data – direct historic project

output of the function impacting the Value

• Obtain specific inputs from Customer to calculate more targeted value proposals.

• Input information is then used



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to execute functions• Quality Improvement:

• Methodologies to remove cost of non quality.

• Speed Improvement:

• Capabilities to improve RFS and time to market.

• Revenue Generation:• Innovation to drive and augment

revenue streams.

A 2 STEP PROCESS – GENERIC TO GAIN INTEREST, SPECIFIC TO CREAT BUSINESS CASE

output of the function impacting the Value Driver.

• Derived Data – Indirect calculation of the change seen in the function impacting the Value Driver based on similar metrics.

• Assumed Data – Indirect calculation of the expected change seen in a function impacting the Value Driver based on a set of assumptions.

• Input information is then used with the generic range data to calculate a more absolute value in the specific value driver area for the Customer.

Value Demonstration – Generic Range CalculationValue Statements

OPEX REDUCTION REVENUE GENERATION

EFFORT REDUCTION – OSS ENABLEMENT

• 35% - 20%

Range reflecting level of CMO Delivery Model Maturity

OSS LICENCE SETUP COST REDUCTION

• 50% - 25%

Range reflecting purchasing power of ALU with OSS suppliers

INCREASED AVAILABILTY OF CALL AND DATA MINUTES

•1.3% - 1%

Range reflecting Wireless (1.3%) and Fixed (1%) Technology domains

PROACTIVE IDENTIFICATION OF CAPACITY UTILIZATION TRENDS

0.2% - 0.1%



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Range reflecting purchasing power of ALU with OSS suppliers

NETWORK INFRASTRUCTURE COST REDUCTION

• 25% - 15%

Range reflecting technology domain Transformation influence – PSTN and Transport Transformation

COST OF NON QUALITY REMOVAL

• 20% - 10%


0.2% - 0.1%

Range reflection possible additional revenue generated from identified special events

FASTER PROVISIONED TIME FOR ENTERPRISE

• 0.3% - 0.5%

Range reflecting level of additional Enterprise Business revenue within Fulfilment mix


INFLUENCED

KBO‘S

Network Simplification &

Resource Optimization


INFLUENCED

KBO‘SNew Business &

Asset Monetization Customer Base &

ARPU Growth

Value Demonstration – Generic Range CalculationValue Statements



QUALITY IMPROVEMENT SPEED IMPROVEMENT

CUSTOMER SATISFACTION IMPROVEMENT

• 15% - 5%

Range reflecting best and worst case % movement

ELIMINATION OF HUMAN ERROR INCIDENTS

• 25% - 5%


SERVICE ASSURANCE SPEED IMPROVEMENT

• 25% - 5%


SERVICE FULFILMENT SPEED IMPROVEMENT

• 15% - 5%


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REDUCTION OF REPEAT INCIDENTS

• 70% - 30%



NETWORK MIGRATION SPEED IMPROVEMENT

• 50% - 30%

Range reflecting risk profile of customer defined rate of migration


INFLUENCED

KBO‘S


INFLUENCED

KBO‘STime to Market &

Quality of Experience

Value Demonstration – Customer Specific CalculationCustomer Input and Absolute Calculation



COST BASED INPUTS:

•HC per function

•Cost of HC per function

•Number of Trouble Tickets & Work Orders

•Average TT Processing Time

•Average Work Order Processing Time

OPEX REDUCTION

QUALITY BASED INPUTS:

•CSAT Score

•NPS Score

•Number of Customer Complaints per 1000 End Users

•Number of RCA’s attributed to Human Error

•Number of Repeat Incidents /

QUALITY IMPROVEMENT

SPEED/TIME BASED INPUTS:

•Number of Trouble Tickets

•Number of Work Orders

•Average TT Processing Time

•Average Work Order Processing Time

•Network Migration Cycle Time (for planned Transformations)

SPEED IMPROVEMENT

REVENUE INPUTS:

•Wireless Network Availability

•Fixed Network Availability

•Revenue generated from additional Capacity Provisioned for Special Events (proactively identified)

•Revenue generated for

REVENUE GENERATION

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Time

•Number of Site Visits

•Cost per Site Visit

•Number of OSS / NBI & Cost

•Number of Sites (Core, Transport and Access)

•Site Energy Costs & Site Real Estate Costs

•Connectivity / DCN Costs

•Number of Repeat Incidents / Outages

(for planned Transformations) •Revenue generated for Fulfilment of Enterprise solutions with current Service Fulfilment processing time

>20% Savings Achieved >30% Quality Score Imp >30% Speed Improvement >0.6% Increase Revenue

* Assumes maximum possible improvement gained for each… final % subject to customer CMO inputs

Value Creation Calculator is available for use with customer engagements on the Operations and Network Transformation Opportunities

Value Demonstration Use Case

CUSTOMER CHALLENGES

[OPEX, Churn, Legacy Network]

TRANSLATE INTO KBO

[Through Customer Engagement]

CLEAR KBO

ESTABLISHED

VALUE QUANTIFICATION

[Through Open Consultation]

RELEVENT OFFERING

FROM MS PORTFOLIO

[Offering Aligned with KBOs]

GENERIC VALUE STATEMENT

BECOMES COMPELLING EVENT FOR DETAILED BUSINESS CASE

IDENTIFY & SHARE RELEVANT

GENERIC VALUE STATEMENTS

[Aligned with KBO & Portfolio]

COMPELLING BUSINESS

CASE - [Path for Solution

proposal]

CMO INPUTS REQUEST

[Specific value benefits for business case]

PROACTIVE

OFFER

CXO Questionnaire MS Portfolio MS Value Model MS Value Model

SITU

ATIO

NRESP

ON

SE

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EXAM

PLE

MS CARE SERVICES

MANAGED NETWORK

SERVICES

[E2E Network & Operations

Transformation

Management]


• 35% - 10%


• 25% - 15%


• 20% - 5%


• 17%


• 23%


• 15%

Standard Tendering Templates

Prioritised Clear KBO’s

Business Pressure Being Experienced

Resulting Alcatel-Lucent Managed Services Profile

EXPERTISE

TECHNOLOGY

Advance Service Delivery Model- 64%

Improvement in >25%OPEX

UBB Platform and Optical / Routing and technology E2E

Operations Ownership

Market-leading Technology profile-Unmatched innovation

NW and Operations

Transformation

25% Decrease in

tickets

INNOVATE

CARETRANSFORM

PSTN Transformation

Multi-Vendor, Technology and Services Expertise

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EXPERTISE

EXPERIENCE

Delivery Model-Proven tools & processes

Improvement in MTBF

OPEX Optimisation16-24%

TCO Optimisation

Real-world experience in Operations and Managed Transformation

+20 yrsof experience in Managed

Services

+10 yrsof experience in

transformation projects

+300Kmulti-vendor network elements managed

INNOVATE

CARETRANSFORM

INNOVATE

CARETRANSFORM

50%Reduction in MTTR

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