Saphety
27.6.2016

Communications cost for the B2B sector: from price to commodity

The purpose of this title is not to draw attention to this text. I really think telecommunication service prices will no longer be considered a differentiating factor being rather a commodity. It seems like a cliché but it really isn’t. In fact, this is a wakeup call.

We could talk about disruption and say telecommunication cost is no longer the main common thread when choosing a telecommunication supplier. So which tactical path should one follow? I think added value services are the answer and in that sense Electronic Bill Presentment (EBP) solutions are a critical success factor.

These are great news for Telco: There is no B2B sales teams that is not tired of being pressured by this market segment in order to reduce its costs (for example, in the Portuguese public sector there was a mandatory decrease of 10%).

Over this last year, I was given the opportunity of talking to a number of Telcos worldwide trying to understand how can they be helped in retaining corporate customers regardless of prices. The challenge lies in not only speaking to Telcos: it is crucial to speak to the corporate segment, mainly to large companies.

And one of the first concluding remarks is that this kind of market segment currently demands Telcos to go even further: climb the value chain and be closer to its core business while evidently supplying its telecommunication services.

It is obvious that the telecommunication market differs from region to region. This is clear. In more emerging markets, increasing scale profits is still the priority. However, in more mature markets where the B2B segment competition is fierce and provides increasingly small margins, the customers themselves have realized that price decrease is not the way. They are therefore focusing in additional added value services.

EBP solutions gain a critical relevance in the above context, mainly due to its contribution regarding three vectors:

  • Corporate customer retention/loyalty;
  • Guarantee of tangible improvements on corporate customer experience;
  • Telcos cash flow leveraging.

Addressing practical cases, let’s imagine we are a corporate customer, more precisely, a chief financial officer: treasury, accounts payable, etc. We receive a telecommunication service invoice and it doesn’t have one page, but tens of pages with hundreds of mobile phone numbers. The next task is to adapt this information in order to fit it into your company’s organizational structure and follow the respective internal approval flows. Segment it by department, cost centre, associate, compare with assigned plans, pay the expenses not covered by such plan, etc. It’s not easy, it’s not core and it’s expensive.

For sure, some Telcos are thinking they already sent electronic invoices to their clients (a current commodity), they have corporate portals to verify/manage its accounts (another commodity) and may even claim they are part of the above mentioned segmentation requested by their customers. The challenge is not being rigid about this procedure, is being dynamic. So, I’m sorry but the answer has not yet been given.

If we look to current M&A statistics, their unpredictability makes them scary. There is an organization changing every day: there is a new company in the holding company, a new R&D department is created, we are in a new region. And Telco is not capable keep up with this change per customer separately.

It’s therefore crucial that the corporate customer itself gains the ability to be autonomous when setting the ways in which he can receive telecommunication service billing information. It knows what changed or what is about to change and requires its telecommunication supplier to provide it with the tools that will allow it to adjust billing information to its specific reality.

It should also be mentioned that it is essential that billing processes currently implemented in a Telco should not be affected and that these are the outcome of an investment of thousands of euros. Instead, what should be used is the output of these processes. The same applies to existing corporate customer portal capitalization. EBP should exist as a way to capitalize its use, therefore increasing their user number and traffic.

We have the tendency to think in this kind of solutions as a tactic to decrease costs, but instead EBP focuses precisely on business generation and retention.

EBP is a concept that was born some years ago and sometimes faces implementation difficulties like everything ahead of its time. Today, this concept has developed and is a priority. It is no longer only the “Presentment” in order to include the “On Demand”. At least, this is the way I see it.

 

Translated into english from the original article published on Vida Económica, 23/06/2016.

Subject: 2016, SaphetyBill, Portugal, - Electronic Bill Presentment

Nuno Fernandes

Publicado por Nuno Fernandes

International Business Development Manager - EMEA & APAC at Saphety (Linkedin)