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By eduardo griffa

CU PRincipal &

Lead transformation consultant

http://www.youtube.com/watch?v=i5AuzQXBsG4

Public | © Ericsson AB 2011 | 2011-01-25 | Page 3

Five technological revolutions in 240

years

1771The industrial revolution

1829Steam, coal, iron & railways

1875Steel & heavy engineering

1908Automobile, oil & mass production

1971IT & telecommunication

Source: Professor Carlota PerezUniversities of Cambridge, Tallinn and Sussex

Public | © Ericsson AB 2011 | 2011-01-25 | Page 4

Technological revolution Propagates in two different periods

Time

INSTALLATION DEPLOYMENT

Turningpoint

20-30 years 20-30 years

More efficiently solving old problems - winners

among old players

Applying paradigm to innovate across society –

new winners

Source: Professor Carlota PerezUniversities of Cambridge, Tallinn and Sussex

Broadband at turning point

Public | © Ericsson AB 2011 | 2011-01-25 | Page 5

INDUSTRY CHALLENGES

HOW MUCH INTEGRATED IS YOUR FACTORY ?

HOW IS IT REALLY LIKE TO BE YOUR CUSTOMER ?

Agenda

CONCLUSSIONS

Public | © Ericsson AB 2011 | 2011-01-25 | Page 6

INDUSTRY CHALLENGES

HOW MUCH INTEGRATED IS YOUR FACTORY ?

HOW IS IT REALLY LIKE TO BE YOUR CUSTOMER ?

Agenda

CONCLUSSIONS

Public | © Ericsson AB 2011 | 2011-01-25 | Page 7

Speed of change

Public | © Ericsson AB 2011 | 2011-01-25 | Page 8

Market trends 2011

MORE CONNECTED DEVICES & AFFORDABLE SMARTPHONES

GOING MOBILE: VIDEO, CLOUD SERVICES, INTERNET & M2M

TIERED PRICING & NEW BUSINESS MODELS FOR MOBILE BROADBAND

MODERNIZATION OF NETWORKS, OSS/BSS & OPERATIONS

FOCUS ON HIGH PERFORMANCE BROADBAND NETWORKS

Source: Hans W in Sales Summitt 2011 and Q4 10 result presentation

Public | © Ericsson AB 2011 | 2011-01-25 | Page 9

The new broadband world

Device Momentum

Power Consumption

Business Models

Content and apps storage

Resource Utlization

One size fits allIrrelevantShared Own device Dedicated

DifferentiatedLowPersonal CloudShared

Applications

Defined & tested

100s per day

Public | © Ericsson AB 2011 | 2011-01-25 | Page 10

Cost efficiency is not the only

challenge

What are the key driversof satisfaction of my customers ?

How efficient are my operations ? How do I benchmark ?

How to use the technology as an enabler of cost reduction in business processes ?

Do I need to invest to save ?

What are my customers’ pain points ?

Do I have to reduce Costs first and then increase the revenues ?

Do I have to Optimize or do I have to develop (enable) new things ?

Is the network a differentiator ?

Driving down cost is

important -

but far from enough

What does business innovation mean?

Where do you prioritize business innovation?

Public | © Ericsson AB 2011 | 2011-01-25 | Page 11

Two important dimensions

Level of customer centricityof organization and product portfolio

Low

Low

High

Leve

l of i

nte

gra

tio

n o

f "f

acto

ry"

High

Med.

Middle

Public | © Ericsson AB 2011 | 2011-01-25 | Page 12

INDUSTRY CHALLENGES

HOW MUCH INTEGRATED IS YOUR FACTORY ?

HOW IS IT REALLY LIKE TO BE YOUR CUSTOMER ?

Agenda

CONCLUSSIONS

Public | © Ericsson AB 2011 | 2011-01-25 | Page 13

Traffic and revenue decoupled…

Mobile Broadband Dominant

Revenues

Traffic

Time

Voice Dominant

Revenue & TrafficDe-Coupled

Source: Light Reading

Public | © Ericsson AB 2011 | 2011-01-25 | Page 14

adjusting the image…

Traffic

TimeSource: Light Reading

Cost/GB

Public | © Ericsson AB 2011 | 2011-01-25 | Page 15

INDUSTRY CHALLENGES

HOW MUCH INTEGRATED IS YOUR FACTORY ?

HOW IS IT REALLY LIKE TO BE YOUR CUSTOMER ?

Agenda

CONCLUSSIONS

Public | © Ericsson AB 2011 | 2011-01-25 | Page 16

Customer experience in telecom

trailing other industries

60

Wireless tel. service

7170 69

Cable TV

100

64

Airlines

75

Banks

75

Supermarkets

76

Life Insurance

79

Motion Pictures

82

Internet search engines

83

Electronics

83

Credit Unions

84

Automot.

84

72

Postal Service

0

807474

Indexed customer satisfaction

Internet News

74

Fixed tel. service

Utilities

74

90

HotelsExpress Delivery

Note: maximum rating is 100Source: ACSI 2009

Public | © Ericsson AB 2011 | 2011-01-25 | Page 17

SIX KEY drivers of customer

experience

Source: BCG

Note: Share of respondents mentioning as top three pain-point or satisfaction driverSource: BCG

CUSTOMER EXPERIENCE SATISFACTION DRIVERS

RELATIVEWEIGHT1

It is easy to join us

› Purchase process

› Service installation

Dealing with us is a pleasure

› Response to an enquiry

› Problems (e.g. “I cannot access internet")

› Invoice (e.g. “The amount is different than in the agreement")

Recognition - we value our loyal customers

› Agreement prolongation (e.g. “I have worse contractual terms than new customers")

~50

~70

~60

~501

3

4

5

6

2

Public | © Ericsson AB 2011 | 2011-01-25 | Page 18

INDUSTRY CHALLENGES

HOW MUCH INTEGRATED IS YOUR FACTORY ?

HOW IS IT REALLY LIKE TO BE YOUR CUSTOMER ?

Agenda

CONCLUSSIONS

Public | © Ericsson AB 2011 | 2011-01-25 | Page 19

Two important dimensions

Level of customer centricityof organization and product portfolio

Low

Low

High

Leve

l of i

nte

gra

tio

n o

f "f

acto

ry"

High

Med.

Middle

Public | © Ericsson AB 2011 | 2011-01-25 | Page 20

The result of transformation

Operators can gain 30-40% OPEX savings

...and be prepared for future growth

Operators can reduce cost ...and increase

Customer experience. They can also

decrease unit costs for voice by up to 75%

…and for broadband by up to 95%

Operators can grow their traffic 100

times ...and still keep control of the CAPEX

Public | © Ericsson AB 2011 | 2011-01-25 | Page 21

What are the big guys doing ?

Public | © Ericsson AB 2011 | 2011-01-25 | Page 22

What is your

Transformation approach?

Level of customer centricityof organization and product portfolio

Low

Low

High

Leve

l of i

nte

gra

tio

n o

f "f

acto

ry"

High

Med.

Middle

1 Front runners

2 Selective transformers

3Integration

skeptics

2 Selective transformers

3Integration

skeptics

1 Front runners

2 Selective transformers

1 Front runners

Public | © Ericsson AB 2011 | 2011-01-25 | Page 23

Public | © Ericsson AB 2011 | 2011-01-25 | Page 24

Financial result of Telstra’s

Transformation

Source: Telstra’s Investor Day presentations, October 2009

FINANCIAL BENEFITS CAME AFTER 5 YEARSFINANCIAL BENEFITS CAME AFTER 5 YEARSFINANCIAL BENEFITS CAME AFTER 5 YEARSFINANCIAL BENEFITS CAME AFTER 5 YEARS

$5B SALES GROWTH

6666----8% LOWER CAPEX/SALES RATIO8% LOWER CAPEX/SALES RATIO8% LOWER CAPEX/SALES RATIO8% LOWER CAPEX/SALES RATIO

Reduced cost ...and increased customer experience

Unit costs are decreased for voice serviceby 75% …and for broadband by 95%

CAPEX/Sales Ratio (%)

Public | © Ericsson AB 2011 | 2011-01-25 | Page 25

DT transformation

Source: Deutsche Telekom Investor Day. On Our Way To A New DT – “Fix – Transform – Innovate, March 17, 2010 René Obermann”

Public | © Ericsson AB 2011 | 2011-01-25 | Page 26

Source: 7th investor Conference October 2009, JM A Pallete

TRANSFORMATION FOR

SUSTAINABLE GROWTH