Published on 02 Dec 2010
"“We recognized that without the ability to cut through the clutter with timely, compelling offerings, we wouldn’t get the traction we needed to grow our share of the market." - Mario Domingo, Head of Product Design and Creation, Globe Telecom
Business Integration (US), Business Process Management (BPM), Industry Framework , Openness, Service Management, Smart Work, Smarter Planet, Systems & Network Management (US), Web Services (US)
Leadership Series, Smarter Communications
As Head of Product Design and Creation for Globe Telecom—the #2 mobile operator in the Philippines— it’s up to Mario Domingo to translate marketing insights into real-world services and promotions that can be delivered to Globe customers.
Under Domingo’s leadership, Globe streamlined and simplified its service creation process, cutting cost and time required to design and deliver new service promotions by 95%. Globe is now able to drive revenue improvement from hundreds of targeted promotions that run simultaneously, enabled by the integration of customer intelligence, behavior segmentation, profit simulation and promotion execution—all delivered through an integrated and automated solution.
Building deep support for change Domingo realized that the scope of change the Toolbox would bring required support from the top as well as buyin at the operating level. “I couldn’t afford to simply work with the CxO’s. I had to bring the case for change to the trenches for acceptance to take root.” — Mario Domingo, Head of Product Design and Creation, Globe Telecom
Expect resistance to change…and come prepared Several camps were threatened by Mario Domino’s proposition, including Globe’s product and network organizations, which feared a loss of control over their domains. His prescription: “You need someone who will be empowered, but also impervious to the many roadblocks that will be thrown in front of them.”
Synchronizing process change with technology Domingo recognized the need to implement change at the process level in order to fully leverage the Toolbox’s capabilities. The result: Some roles (such as development) were redefined, some were created and some were eliminated. “If you don’t change processes in sync with the technology, you’ll be left with incremental improvement, but not transformation—and that won’t be good enough.”
• Expected one-year payback period • 112% increase in promotion related sales • 95% reduction in the time and cost of development new promotions • Improved uptake of services through the smart delivery of promotional offers • Improved ability to offer “longtail” promotions and services • Increased market share and revenue through improved customer experience and more effective promotional campaigns
At Globe Telecom, the number two mobile operator in the Philippines, Head of Product Design and Creation Mario Domingo serves as a kind of “minister of armaments” in the company’s battle for market supremacy. In the name of increasing all-important ARPU (average revenue per user), Domingo’s job is to gather insights from Globe sales and marketing leaders and translate them into the technical nuts and bolts of a service that can be delivered to the customer. Part visionary and part project manager, Domingo is a consummate man in the middle, comfortable collaborating with and across Globe lines of business, network and IT domains.
To Domingo, this perspective also provided a perfect vantage point for exposing weaknesses in the service delivery architecture that business needs. Though current market
position is strong, Domingo recognized that in the not so distant future, competition was certain to intensify. A brief look at the evolution of the Philippine market shows why.
From Hyper-Growth to Hyper-Competition
If you look at a plot of mobile penetration in the Philippines since the early 1990’s—when mobile telephony was first introduced there—you see a slow rise over the first 10 years, with penetration never breaking the single digits. Then, in 1999, something happened. From that point on the timeline, penetration in this developing nation of 92 million began an astounding climb to 80 percent, all in the span of a decade. That “something” was the introduction of prepaid pricing plans, which had a game-changing effect on market development. By offering more affordable and flexible alternatives to traditional fixed-term service contracts, Philippine operators were able—almost instantly—to bring mobile service within the reach of nearly everyone.
While prepaid pricing plans proved to be rocket fuel for growth, they were also laying the groundwork for the Philippine mobile market to become one of the most competitive markets on the planet. That’s because with prepaid customers, the window of opportunity for gaining or losing them—when their prepaid account balance reaches zero and needs replenishing—is open far more often than for those bound by service contracts. With 95 percent of customers now using prepaid plans, the Philippine mobile market has become a perpetually competitive battleground, with aggressive pricing and service promotions as weapons of choice among operators.
For Globe to succeed in its drive to be the most profitable player, the need to be more nimble in creating new offerings was essential—but not enough. It also had to make its promotions stand out from a growing cacophony of competing offers, whose sheer numbers threatened to overwhelm customers’ ability to makes sense of them. “We recognized that without the ability to cut through the clutter with timely, compelling offerings, we wouldn’t get the traction we needed to grow our share of the market,” Domingo explains. So he raised the red flag.
What Domingo pushed for was a mechanism that would dramatically streamline, simplify, and speed up the creation of promotions, and, just as importantly, give Globe marketers the means to optimize those promotions “on-the-fly” by targeting them at specific customer segments. Its current promotional capabilities were disadvantageous on two levels. First, it relied on old media (such as newspapers, magazines and bill inserts) to communicate promotional offers that was not only costly, but also relatively ineffective, mainly because they were drowned out by a flood of comparable offers. A second and more systemic problem was that when it came to technically enabling its service offerings, the company was fighting tomorrow’s war with yesterday’s weapons. Inflexibility at both the process and technology levels forced Globe to spend an average of 5x as much as its competitor and six months—an eternity in the dynamic mobile market—to enable a promotion.
Selling Simplicity Isn’t Always Easy
Domingo’s plan was to create a service creation and delivery solution that would abstract away the complexity of its current platform into an easy-to-use tool for assembling new services rapidly. The challenge of selling and realizing this vision proved to be a mix of semantics, politics and technical pragmatism. Domingo notes that while the standard technical approach for addressing the company’s needs is a service delivery platform, or SDP, that approach was seen as a lessthan-perfect fit. “The fact that many [SDP] solutions are designed for mature markets would make it counterproductive in a developing market like [the Philippines],” he explains. “We don’t need a cookie-cutter approach, and we don’t need overkill.”
Domingo’s chosen approach also had to take into account the perspectives and priorities of his three main constituencies—the business, IT and network organizations—each of whom had their own take on the best course. Discussions went on for months, focusing on what value the proposed solution would bring to Globe and even more basic—what in fact should be considered (an SDP, or something else?). Ultimately, semantics would matter. That’s because in the end, Domingo reasoned, it was the needs of the business they were addressing—not the network people and not IT—and everything should flow from that premise. This reason in mind, Globe opted to call the solution “the Toolbox,” a basic name, he says, “that a sales guy can understand.”
Though Domingo received strong support from Globe President and CEO Ernest Cu from the start, he still faced a challenge in establishing a broader base of support—not least of which
was resistance to change. While the Toolbox would rely on technology, it was more about redrawing the organizational boundaries and rules around service creation. With certain parts of
the business reluctant to give up control, Domingo had to apply a mix of convincing, cajoling and confronting to get buy-in on the Toolbox. For Domingo, this wasn’t new turf. He faced a similar challenge working for the US Department of Defense in the Pentagon. There, for almost 20 years previously, he’d been responsible for keeping the development of new weapons systems—each with its own supporters and opponents—on track. “Dealing with big egos like generals, colonels, senators, and congressmen gives you very good training in change management,” Domingo says of the experience.
The Parameters of Globe’s smart sales promotion enablement :
Instrumented: Information delivered from the customer handset enables Globe to measure the success of promotional activity and ongoing behavior.
Interconnected: Using SOA to abstract connections between the network and IT systems enables Globe to dramatically simplify service creation.
Intelligent: By leveraging information gathered from handsets, Globe is able to identify the optimal service promotion for each customer— and the best time to deliver it.
A New Service Model Is Born
After developing the Toolbox solution in just three months, Globe was able to create and successfully launch the first of its many marketing promotions. To create promotions, developers draw from libraries of core service elements that are then assembled into composite service offerings. As part of service creation, developers are able to easily incorporate parameters that make promotions more compelling to customers. For instance, Globe marketers can configure triggers that automatically detect when, for example, a customer’s promotional use of three hours worth of high-speed data service is minutes from expiring. At that point, Globe can deliver a personalized, time-sensitive marketing promotion—the right offer, at the right time—thereby substantially improving uptake rates, and minimizing customers chances of letting their balance reach zero, staying with the service, and ultimately improving market share. By simplifying service creation, the Toolbox has enabled Globe to reduce the time and cost of its promotions by 95 percent. Its ability to develop more compelling promotions paid off in the form of a 112 percent increase in promotion-related sales.
The smart benefits of the Toolbox solution also extend to the way Globe provides cash incentives to its retail partners. Before, it took nearly 6 months from the time new subscribers were recorded at the point-of-sale to processing and payment. Now, new customers are recorded instantly at the point-of sale by the customer’s activation text message, which not only captures the identity of the retailer, but also automatically provisions the promotional service package for the customer. Most importantly for the retailer, receipt of incentive payments from Globe is nearly immediate, which is probably the biggest reason that the new retailer promotion model yielded a greater than 600 percent increase in sales, as compared with 15 percent under the older promotion model.
Shortening the Path to Long-Tail Services
Globe Telecom’s adoption of flexible service delivery is a powerful example of how “long-tail” promotions—those that are generally short-lived, highly targeted and able to be created cheaply and rapidly—are emerging as the primary engine of long-term revenue growth and profitability for telcos. The efficiency of its promotions capability enables Globe to offer several promotions per week and maximize their overall impact. Says Domingo: “We can react very quickly to promotional opportunities when they arise. Just as important, we can detect in near real-time whether the mechanics of our promotion are working—and if they’re not, we can change them rapidly.”
Domingo’s experience with the Toolbox project reaffirmed his belief in key maxims related to successful project delivery. The first is that when it comes to driving change, support from the
top—along with energetic advocacy—a key. “The CEO has to believe in it to become reality,” he says. “And once you get that support, you need a crusader—someone who knows the business model, knows the technology and is willing to knock things around a little to make it happen.”
In the wake of its successful service delivery shakeup, executives at Globe have come to see the Toolbox as an important element of its future growth strategy. “The best feedback my team has gotten has not been praise, but instead a sense of hunger on the part of the Board and executive leaders to do more,” says Domingo. “It signals that a new mindset has taken hold.”
Smart sales promotion enablement is-
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IBM products and services that were used in this case study.
Rational Functional Tester (US), Tivoli Access Manager for e-business (US), Rational Performance Tester (US), Rational Service Tester for SOA Quality (US), WebSphere Process Server (US), Tivoli Directory Server (US), WebSphere Enterprise Service Bus (US), WebSphere Dynamic Process Edition (US), WebSphere Application Server Network Deployment (US), WebSphere Service Registry and Repository (US), Rational Software Architect (US)
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