solution business as a growth area for post operators?

Solution Business As a Growth Area for Post Operators? Result of a global Focus Interviews Study - Dirk Palder, Capgemini

4th PIEF in Athens, Oct 24, 2011

§  Definition of the solution business

§  Strategic options

§  Examples of solutions

§  Market size and potential approach

§  Study - approach & strategic objectives

§  Study - overview of interviewed postal operators

§  Study - Postal insights & key learnings

§  Study - Overview of interviewed clients

§  Study - Client insights & key learnings

§  Summary & perspectives

Contents

Copyright © 2011 Capgemini Consulting. All rights reserved.

2 2011-10 PIEF ATHENS - SOLUTION BUSINESS AS GROWTH AREA FOR POSTAL OPERATORS V1 0 DIRK PALDER_EDIT.PPTX

Introduction

Before going into the results of the focus interviews, we should outline Capgemini’s definition of “solution business”



What do we mean by solution business?

In our understanding of “solution”, we assume that the objective is to establish a value-adding partnership



Capgemini’s definition of solution business

For us, the solution integrates products and services and, based on the knowledge of the future market development, addresses market and client specific challenges. Using the solution thereby delivers a measureable value-add to the customer. The key success factors are integrating the solution into the customer’s value chain and pro-actively adapting it to new market and customer requirements, following an industrialized approach to sales and service delivery as well as being able to take over selected business processes of the client.

Value added

Portfolio

Isolated

Coordinated

Collaborative “Customize”

“Industrialize”

“Offer”

Product Services Solutions

Value based

Relative price

Cost plus

Critical success factors and focus areas outline the path to transferring the existing capabilities towards solutions orientation



Critical success factors

§  Formulated strategy with senior management support/ directive §  Capabilities to respond/ manage a dynamic environment §  Process management and compliance §  Merged vertical (industry) and horizontal (functional/ product) expertise §  Tailored sales incentives §  End-to-end solutions management capabilities and process/ systems enablers

Strategy and market planning Understand the business model of target industries/ customers §  Monitor the market

trends and dynamics §  Map the solution

capabilities and business opportunities

Portfolio management §  Consolidate/ develop

solution offerings §  Review USP,

customer value propositions

§  Assign an Innovation Manager to the own portfolio (incl. MoB)

Marketing communications §  Align marketing

messages across the divisions

§  Ensure ongoing penetration/ positioning within the target customer segments

Sales management §  Tailor lead generation

and sales processes §  Monitor/ safeguard

the customer experience

§  Establish partner management capabilities

Focus areas

Source: ITSMA/ Capgemini











Contents



To get into a Value Partner the outsourced end-to-end process has to be critical and the solution has to be proven



Strategic Reasons for Solution Decision of a Client

Value- Partner

Solu

tion

stab

ility

New

Mission critical Non Critical

Importance for the core process

Out- Tasking

OS Lift & Shift

Slice & Dice

Commodity Services

Proven

PO = Postal Operators











Contents



Example positioning: CRM/ marketing communication solutions

CRM solutions in automotive require a more centralized support and governance of the customer dialogue – efficient, effective, holistic

“Expand competencies“ “Increase organization flexibility“

“Reduce costs“

Fulfillment and shipping

Response management and

customer activation

Data and address services

Target group selection

Governance of customer dialogue

§  Customer and dealer data management

§  Database management

§  Address - validation - enhancement - cleansing

§  Multi-channel campaign planning

§  Customer dialogue program design

§  Integrating NSC, distribution channels

§  Lettershop services §  Ordering, storage §  Print and shipment §  On- und offline §  National/

international §  CO2 neutral

§  Lead und response handling

§  Customer retention and reactivation

§  Contact centre §  Archiving §  Reporting

POS marketing management POS customer dialogue

Central steering of the customer dialogue, advisory and project handling

9

EXAMPLE

§  Customer approach advisory

§  Profiling and scoring (on-/ offline)

§  Retail and commercial clients

§  National/ international


2011-10 PIEF ATHENS - SOLUTION BUSINESS AS GROWTH AREA FOR POSTAL OPERATORS V1 0 DIRK PALDER_EDIT.PPTX

The solution provider is able to configure a customized solution framework from an existing set of services and finalize the solution



End-to-end solution example for a CRM Solution Factory

Set of services

In the first step the customer can chose between services from a set of available services (CRM solution factory). Then the selected services are bundled in a solution framework and will be slightly adapted to the customer’s specific business environment and requirements.

Configuration of the solution framework Finalizing the solution

1 2 3

Customer dialog

Social media marketing

Lead management

POS marketing mgmt.

POS customer dialog mgmt.

POS print solutions

Dispatch optimization

Consulting dialog marketing

Optimization customer dialog

Customer contact center mgmt.

Complaint mgmt. Mobile

customer service

Address solutions & analytics

Predictive targeting Customer/

vehicle/ retail data mgmt.

Customer dialog


Lead management





Complaint mgmt.

Mobile customer service

Customer dialog


Lead management





Complaint mgmt.

Mobile customer service

Example positioning: mobility solutions

Emerging or changing business models usually trigger a demand for solution capabilities and innovation

11

Registration (identification and office branch)

Application processing

Reservation

Routing/ geo-location

Booking

Pickup/ delivery

Invoice handling

Receivables management

Archiving

Customer history

Customer service/ support

Damage regulation

Customer management/ operative handling

Customer retention/ reactivation

Login Booking & back- office

Logis- tics

Acco-unting

Repor- ting/ analytics

Retail and commercial customers

National/ international

Customer approach advisory

Communication (online/ offline)

Customer acquisition

Target group selection

Target group appr-oach

AnschriftAnschrift Central customer steering

Customer relationship management

Communication/ (re-)activation

Customer card/ chip mgmt.

Battery & fleet management

EXAMPLE













Contents



Trends & topics (examples) BPO market, global 2009/101 (in billion $) Market

13

CRM and document management make up around 50% of the market volume

Overall CAAGR CRM/Docu.

Telco 27 +7% 22,9 §  Increase in customer acquisition costs §  Increase in marketing costs at lower response rates §  Improvement of service quality §  Retention management

Banking 111 +6% 10,6 §  Retention management §  Improvement of cross-selling §  Improvement of service quality §  Identification of suitable service partners for global expansion

Energy 3 +7% 1,4 §  Smart meter/ new business areas §  Maintenance/ improvement of the service quality §  Cost reductions (service/ product provision, serving new markets)

Retail 12 +7% 4,4 §  Cross-/ up-selling to the installed base §  Increase in the use of new channels §  Optimization of retail space §  Customer retention

Insurance 22 +8% 5,7 §  Flexibilization of the business model/ simplification of products §  Simplification/ automation of business processes §  Generation of a higher service level at lower costs §  Improvement of the customer experience/ satisfaction through high quality

Health-care/ Pharma

13 +8% 2,6 §  Cost reduction and control, especially in administration §  Quality improvement of services and administrative tasks §  Lowering of service costs §  Improvement of marketing effectiveness

Total 199 54 1 2010: Insurances and banks; 2009: all other industries

Utilities 11 +9% 6,0 §  Improvement of the customer experience §  Enhancement of e-billing §  Quality, efficiency, productivity §  Management of volume fluctuations

Modular setup of PCS Solution Factory

Starting with a “kernel” the business opportunity for a postal operator should be close to €1B in Europe over a period of 3 to 5 years

14

“CRM Solution Factory“

„Solution Factories“

Postal close offerings

Extended CRM portfolio

Automotive

Insurance

Banks

Telecommu-nications

Energy

Retail

Focu

s cu

stom

ers

and

indu

strie

s Phase I

~ € 45m

~ € 25m

Phase II

~ € 25m

~ € 10m

Extended solution portfolio

Support with §  Validation of market

potential §  Definition of relevant

domains §  Definition of depth of

value added and partner strategies

§  Setup of singular “solution factories“

§  Implementation of organizational struct-ure and processes

§  Internationalization

Revenue potential

Public Sector

Document handling factory

Mobility factory

Smart-X factory …

> € 700-900m ~ € 150-200m ~ € 100-150m … … …

Starting point

Extended customer and industry portfolio

…



High-level approach to defining a solution portfolio

Still no common sense: every solution portfolios needs to start with a sound understanding of the customer and industry requirements

15

Marketing Vertriebswege Service

§ Zentralisierung der CRM und Marketingfunktionen (international)

§ Ausbau der Direkt-, Online und Social Media Kompetenz

§ ProfessionalisierungKundensegmentierung + Ansprache

§ Professionalisierung der Leadbearbeitung

§ Aufbau Mobile / Online Sales

§ Orchestrierung der Vertriebswege (NSC, POS)

§ Optimierte Unterstützung (Shared Services)

§ Reaktivierung Kunde (Neukauf, Service)

§ Aufbau mobiler Service

§ Industrialisierung Kundendialog

§ Professionalisierung Customer Contact Center

Integration der Kunden-, Händler- und Fahrzeugdaten

Bedarf Kauf Besitz Wieder_kaufInteresse

Analyzing the customer and industry requirements

Combining to potential service bundles “solution factories“

Deriving relevant solution elements Matching with current solution portfolio and third-party providers

Definition of start and target portfolio 1 2

3 4

5

Reflecting:

§  Customer and industry requirements

§  Portfolio driven approach

§  Base/ advanced solutions

§  Cost/ complexity realization

§  Time-to-market

CRM SolutionFactory

Marketing und Kundendialoglösungen z.B.

Kundenkontakt und Customer Care Lösungen z.B.

Datenbank und Daten Management Lösungen z.B.

„Poinf-of-Sales“ Lösungen z.B.

Marketing und Kundendialogberatung

Kunden- / Fahrzeug- / HändlerDatenmanagement Adresslösungen & Analytics Integration, Betrieb & Hosting

Zentrale Kundendialogsteuerung Social Media Marketing

Kundenkontakt Center(Betrieb)

Professionalisierung Kundenkontakt & Beschwerde Mgmt.

Leadbearbeitung und Kundenaktivierung

POS Marketing Mgmt. POS Kundendialog Mgmt. POS Antrags- und Drucklösungen

Beratung Kundendialog(Segmentierung / Ansprache)

Optimierung Versand (z.B. Mail Merge)

Optimierung Marketing Spend

AnforderungenKunde und Branche

BranchenlösungAutomobil

Mobiler Kundenservice













Contents



The objective is to value the benefits of the solution business for the post sector through the help of focus interviews



Approach & objectives

General approach

§  Organization of interviews §  Focus on two target groups:

§  Experts, postal suppliers and post companies §  Clients of various industries (e.g.

automotive, assurance, banking) §  Preparation of two focus interview

questionnaires

§  Analysis of key learnings and definition of the market potential for the solution business in the postal sector

Objectives of the survey

Having selected the key interviewees, we conducted the focus interviews allowing us to use the learnings in an analysis that is to further support achieving the objectives.

§  Finding an answer to the lead question: §  Is the solution business a new must-have that postal companies should implement in their portfolio? §  If so, what is the actual market potential?

§  Reveal the future challenges that postal companies will have to face











Contents



Postal companies, postal suppliers, solution experts

Interviews with a mix of postal operators have been done in order to receive knowledge and verification on the identified key topics



Company logo

Name of company

bpost

Canada Post

Liban Post

Poste Italiane

Swiss Post

Interview content/ topics

§  Understanding of the solution business/ strategic goals

§  Organization & processes in the solution business

§  Marketing/ communication as solution provider

§  Sales approach/ segmentation §  Development of new solutions §  Key success factors for the

solution business

Austrian Post

Swedish/ Danish Post

HongKong Post

Deutsche Post Company Logo

Name of company

arvato

Neopost

Pitney Bowes

Capgemini Deutschland

ITSMA

Solutions Insights

Not postal companies











Contents



Key statements

Starting with a surprise in terms of the market potential of the solution business in the postal sector, a bright understanding has been developed



“The postal business is based on mail delivery”

Go-to-market: “It is necessary to have joint customer teams and the

support of external providers“

“Digitalization supports the trend towards the solution business“

“The solution business is essential for establishing long-term customer loyalty“

“Individual services are mandatory, industrial delivery is the challenge“

“One face to the customer”

Key results for postal operators

The challenge for postal operators is to stay independent within the growing complexity of structures



 

Governance

Organization

Customer contact

Go-to-market

§  Organizational focus on long-term revenues §  Securing postal business is partly relevant §  Customer orientation §  Integration of product knowledge

§  Separated divisions §  Innovation department in charge of demand creation §  Mostly organized in joint customer teams

§  Website und internet advertisement for customers §  Personal customer contact at special executive events §  Diversification of communication channels (multi-channel approach) §  Change from push to pull

§  “One face to the customer“: KAM , sales manager §  Customer segmentation §  Separate experts (solution architects) §  Development of “lighthouse deals“

Solution delivery §  Multi-customer platforms §  Quality management along the entire process

Postal operators: segmentation of key success factors

The segmentation of key success factors reveals the importance of quality, pricing and multi-customer platforms in the solution business



Interviewed Operators: BPO Capgemini, BPO Expert ITSMA, Swiss Post International, Post italiane, Neopost, Solutions Insight , LibanPost

A B

Very important

C Important Less important

The quality of the solution delivery and multi-customer platforms appear to play a more significant role compared to skills and capabilities of employees.

A

B C

Key success indicators

§  Brand competence §  Quality of solution delivery §  Multi-customer platforms/ product portfolio §  Industrialization

§  Scope of monitoring processes for the

solution business §  Skills and capabilities of

employees* §  Trust* §  Pricing*

§  Internal service delivery/ internal process standards §  Flexibility §  Cost leadership §  IT capabilities/ IT security

* Is regarded as a matter of course

The organizational focus is based on securing long-term revenues as part of the core business strategy



Strategic intent

Securing long-term revenues

New customer relationships

Securing postal business

Strategic Aim

Interviewed companies: BPO Capgemini, BPO Expert ITSMA, Swiss Post International, Post italiane, Abstentions Neopost, Solutions Insight, LibanPost

§  Long-term revenues are the most important point considered in the companies‘ strategy

§  Securing the postal business is relevant only for some postal operators

§  Not all operators define establishing new customer relationships as their priority

Postal operators: segmentation of key success factors

Key learnings

Only 2 providers decided for a cross regional/ global solution strategy, while 50% of the interviewed companies are product/ service focused



Positioning of Solution providers

Org

aniz

atio

n fo

rm

Integrated national

Solutions Product

Portfolio

Integrated international

Independent national

Independent international

Value-added services

PO = Postal Operators

CL1 CL3

CL2 CL4











Contents



The clients reveal a strong mix between small, medium-sized and big companies of different industries in an international and national scope



Various industries

Interview content/ topics

§  Readiness to outsource products and/or services/ experiences made with outsourcing

§  Outsourcing readiness of significant business fields

§  Criteria selection in terms of their relevance for selecting a solution provider

§  Selection of communication channels for gaining visibility along the decision process

§  Experiences through collaboration with solution providers

§  Development of new business solutions

Interviewed clients of different industries

Automotive

Insurance

Banking











Contents



Key statements of customers

Starting with a surprise in terms of the market potential of the solution business in the postal sector, a bright understanding has been developed



“The postal business is based on mail delivery, not on the delivery of

solutions”

“We prefer a one-to-one executive communication and to talk to

executives who are in the same situation as we are”

“For me arvato is the leader in the area of solution business in Europe, good to know that posts are planning to enter this market

as well“

“Solutions should be developed together with the solution provider”

Key results clients

The way the customer is addressed by the solution provider determines the solution provider’s success level



Readiness/ experiences

Success factors

Marketing

Collaboration

§  Higher “full“ outsourcing readiness by medium-sized companies §  Outsourcing of general services high (e.g. document management, print services, etc.) §  Outsourcing of several services required but not necessarily to postal operators (e.g. HR/

payroll solutions) §  Outsourcing of sensible services (sales planning) not required by clients

§  Rather customized and not individualized solutions are promoted to the clients §  A clear 1-to-1 communication is required §  Mostly informed about solutions through cases, advertisement in search engines, online publicity (e.g. website) and top executive events

§  Clients look especially on the pricing, the quality of the solution delivery but as well on skills of the employees, trust, industry know-how and IT security §  Customer orientation, time to react, flexibility and references play a subordinate role §  The market position of the provider seems to play no relevant role (à but could become

K.O. criterion concerning long list)

§  Direct contact between solution provider and customer is highly required by the customer §  Personal and communication of reference projects §  KAM or joint customer team lead §  In part development of common pilot projects

A greater readiness for outsourcing is noticeable in the less sensible business fields



Yes

No

Abstention

Print/ fulfillment services

Customer data management

Call center processing

PoS communication/ optimization of

processes at the PoS

Media planning/ media selection/ direct

marketing

A B A B A B A B

A B A B A B A B

A

B

Outsourcing readiness in general

Outsourcing readiness to postal companies

Customers: outsourcing readiness in general vs. to postal companies

HR/ payroll solutions

Sales planning and steering

Document management











Contents



Talking about the solution business, relevant key learnings have to be kept in mind highlighting the opportunities and the market potential



Summary & perspectives

Postal operators

§  Most operators are looking ahead to developing solution business/ digitalization and tailor-made solutions

§  Their strategic intent is focused mostly on securing long-term revenues

§  One face to the customer: nearly similar organization in the go-to-market process through responsible parties as the KAM, R&D and the marketing department

§  Media selection depends on target clients (c.f. government and industry clients)

§  A top-down approach is needed for a global understanding of the solution business

Perspectives §  There is a clear trend towards a tailored solution business although

there might still be huge differences in the level of implementation §  Clients are generally willing to outsource even when the decision is also affected by the industry and size of the client

Clients

§  2nd tier companies seems to be more open for full outsourcing than big companies

§  Clients would outsource general services but sensible fields would not necessarily be outsourced to postal companies

§  Customers require close contact to the solution provider

§  Perception of the solution provider, especially online

ü

Thanks!



Dirk Palder Capgemini Deutschland GmbH Germany Phone: +49 221 912644100

+49 151 4025 2222 E-mail: [email protected] Twitter: www.twitter.com/#!/dirkpalder Website: www.capgemini-postalservices.com Address: Konrad-Adenauer Ufer 7

50668 Cologne

Contact

Back-Up

Another adequate definition of “solution business” is provided by ITSMA

36

“Solution” is one of those slippery words that can mean anything and everything. Working with some of the world's top technology companies, ITSMA has developed a

useful definition:

"A solution is a combination of products and/ or services with intellectual capital, focused on a particular customer problem

and driving measurable business value."

It's a bit dense, and doesn't exactly roll off the tongue. Nevertheless, ITSMA has found that it clicks with both buyers and sellers, given its emphasis on solving specific

business problems with measurable business value. Understood as such, the "S" word transcends the hype and provides important direction to business strategy and

operations.

Source: ITSMA

ITSMA definition

solution business as a growth area for post operators?

Business

solution manager

understanding of solution

capgemini consulting

growth area

selected business processes

market propositions

itsma capgemini copyright

key success factors