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Managed Service Theory Versus Implementation

Managed Service:Concept & Implementation

At Telecommunication Industry

Background

It is becomes old paradigm when the telecommunication operator should control the end to end operational and business of the telecommunication industry, some key points why the telecommunication operators should managed service are:

• Improving customer experience• Expecting growing revenue significantly• Dramatically reducing operational cost

Refer to outsourcing index, the value of the managed service on 2013 are around US $ 2.59 Billion, It is becomes the third largest industry segment, after financial US $ 5,3 Billion and manufacture US $ 3,48.

Key Drivers

The composition of the managed service key drivers refer to the TM Forum, it is still dominated with the improving operational expense (88%), since the invention at the data service business have changed the customers behavior where it’s changed the operator revenue stream.

Follows by the reducing opex (55%), improving customer experience 48%.

This condition have been influenced the Indonesian market too, and the all of telecommunication at Indonesia will shifting becomes managed service company at the near future.

Managed Service in Indonesia

The figure of the managed service at Telecommunication industry in Indonesia :

Managed service Company:

1. Axis (Merged with XL Axiata)2. XL Axiata3. Three4. Smart Telcom

Non Managed service Company:

1. Telkom Indonesia2. Telkomsel3. Indosat

Operational cost, customer handling and revenue level expected improved significantly.

Managed Service Milestone

1980

PIC 10.x

2000

Offshoring MSAt Other Country

Efficiency & cost improvement

2000 - Now

Initial MS at IT Industry

1990

Manage Service 1.0 Manage Service 2.0 Manage Service 3.0

Overall customer experianceIn order to ptotect & grow revenue

Key Drivers Customer Experience Program

Managed Service 3.0 objective is to improve overall customer experience, the key drivers for the customer experiences:

88% to increased customer satisfaction68% to reduced operating cost and 62% to increase revenues.

Xl Axiata Practice - Opex

The lesson learned from the XL Axiata which have beem implementing the managed service several years ago, shows that:1. The operational cost expense

doesn’t reduce significantly2. The salary (wage) of the

employee decrease slightly

Xl Axiata Practice - Revenue

During 2010 up to 2013, XL Axiata have stable revenue growth, but the value of the revenue is not significantly increase as a targeted on managed service objective.

Xl Axiata Summary

The above data and highlight of the XL Axiata corporate profile before and after implementation of the managed service shows that:

The first objective implementing the MS is reducing the operational cost, but from the above comparative data, it doesn’t impacted significantly to the reducing opex, the employee salary (wage) could be decrease but not for other operational cost.

The revenue from the 2010 up to 2013, increased up to 4 billion rupiah, but 2012 vs 2013, the revenue relatively flat in term of revenue.

CSI (customer satisfaction index) claimed increased compared to other competitor, refer to award which received by their customer service from line.

On the managed service implementation, not the all of objective could be achieved well as mentioned on the target, since there are many parameter influencing the process, such as market profile & competitor attack.