Today's telecommunications companies face a myriad of challenges as they expand and integrate multiple business activities. Robust subscription management is always important however, depending on each telco's particular business model, they may need sophisticated processes for building and/or leasing infrastructure, bundling in mobile devices or other equipment, licensing third-party content, and compliance reporting for complex revenue sharing scenarios.
Here's a brief overview of the key challenges telcos need to manage:
Building Out Infrastructure:
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- Cost and Complexity: Constructing and maintaining telecom infrastructure, including fiber optics, towers, and 5G/6G networks, requires significant capital investment and expertise.
- Regulatory Hurdles: Compliance with diverse regulatory requirements, spectrum allocation, and local zoning laws can slow down infrastructure expansion.
- Lessor and Lessee Accounting: Today's telecom ecosystem also involves opportunities for leasing out towers, fiber, etc. to other providers, as well as leasing infrastructure from them.
Delivering Consumer Services:
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- Customer Expectations: Meeting increasing consumer demands for high-speed internet, reliable mobile services, and seamless connectivity across devices is critical, as is providing single-billing options to minimize complexity for consumers.
- Service Differentiation: Telcos must compete with other providers on service quality, pricing, and innovative offerings like bundled packages, mobile device discounts, or personalized service plans.
Delivering Business Services:
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- Scalability and Reliability: It is important to provide robust solutions for enterprise customers, such as cloud services, cybersecurity, and IoT connectivity, while ensuring scalability and reliability.
- Customization: Telcos also need to offer solutions to meet the specific needs of businesses, which may vary significantly in size, industry, and operational requirements.
Selling or Leasing Mobile Devices, Routers, and Other Equipment:
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- Inventory Management: This requires balancing inventory levels to meet customer demand without overstocking or understocking critical devices. Telcos often have to also maintain inventory of older devices and parts to support their installed base.
- Device Lifecycles: Managing the rapid evolution of technology and consumer preferences for newer devices is a constant challenge, which impacts inventory turnover and pricing strategies. This includes both upselling and providing trade-ins for existing devices or discount offers for new devices.
Licensing and Bundling Third-Party Content and Services:
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- Content Acquisition Costs: Negotiating fair licensing deals for popular content (e.g., streaming services, sports channels) to attract and retain customers.
- Bundling Strategies: Developing attractive bundles that combine telecom services with third-party content or value-added services, while ensuring profitability and customer satisfaction.
In navigating these challenges, telco companies must also contend with intense competition, evolving technology standards, and the need for continuous innovation to stay relevant in a dynamic marketplace. Additionally, maintaining a strong focus on customer experience and operational efficiency is crucial for long-term success in this highly competitive industry.
How SAP Cloud ERP Solutions Optimize and Integrate Telco Business Processes
Transitioning to comprehensive cloud-based business software such as SAP S/4HANA Cloud ERP (Public or Private Edition) can significantly help telecom companies streamline and integrate their various business activities within a unified, scalable and maintainable, end-to-end system. The combination of SAP cloud ERP applications, SAP Business AI, and SAP Business Data Cloud come together to deliver exceptional business value—all powered by SAP Business Technology Platform.
SAP Business Data Cloud is a fully managed software-as-a-service (SaaS) solution that unifies and governs all SAP data and seamlessly connects with third-party data. SAP Business AI enables Joule AI agents to seamlessly access telco business data across the enterprise, so decision makers have both the visibility and insights to manage all aspects of their heterogeneous telco market landscape. SAP Business Data Cloud provides a fully managed SaaS solution that unifies and governs all SAP data and seamlessly connects with third-party data, thereby giving line-of-business leaders context to make even more impactful decisions. SAP Business Technology Platform (BTP) enables companies and SAP partners to quickly create, integrate and launch business applications, with accelerated time to value with prebuilt workflows and integrations.
In working with several mid-to-large size telco companies, Bramasol expert teams for SAP S/4HANACloud, Subscription Billing, Revenue Recognition, Lease Accounting, and more have seen excellent traction for leveraging the overall SAP S/4HANA Cloud ecosystem and SAP Cloud Business Suite to optimize and integrate these key line of business solutions.
Below are some specific examples of how SAP Cloud-based solutions can address each of the challenges mentioned above, while contributing to higher productivity, better accounting compliance, and improved customer happiness:
1. Building Out Infrastructure:
- Real-time Data Access & Collaboration: SAP Cloud ERP systems provide centralized, real-time access to data, enabling teams involved in infrastructure development, such as network engineers and project managers, to collaborate more effectively. SAP also helps track project progress, budgets, resource allocation, and timelines efficiently.
- Resource Management: Cloud-based ERP systems allow telcos to manage resources (e.g., labor, contractors, equipment, materials) across various capital build-out projects, improving operational efficiency and infrastructure development.
2. Delivering Consumer Services:
- Customer Data Centralization: With SAP cloud-based ERP, telcos can integrate customer data across all touchpoints (sales, service, billing), enabling a 360-degree view of each customer. This enhances personalization and responsiveness to customer needs, improving service delivery.
- Automation of Service Management: SAP Billing and Revenue Innovation Management (BRIM) unifies and automates routine tasks, such as provisioning, billing, and issue resolution to ensure that customers receive services faster, reducing errors, and improving overall satisfaction.
- Customer Support Integration: SAP Cloud ERP also seamlessly integrates customer service tools, allowing for better management of service tickets, support escalation, and troubleshooting. This reduces resolution times and boosts customer satisfaction.
3. Delivering Business Services:
- Improved Scalability: Cloud ERP platforms are highly scalable, making it easier for telcos to add new business services (like cloud solutions or IoT services) without the need for a complete infrastructure overhaul. SAP Contract and Lease Management (CLM) also streamlines the process of delivering customer-specific business services that involve equipment bundling, such as campus level telco business offerings.
- Integration with New Business Models: As telcos diversify into offering B2B services such as cloud computing, cybersecurity, or AI solutions, ERP systems provide the flexibility to integrate new products and services, manage complex pricing models, and track performance.
- Centralized Analytics: The ERP software can provide real-time data and analytics on business services, helping telcos understand profitability, customer demands, and market trends more effectively.
4. Selling or Leasing Mobile Devices, Routers, and Other Equipment:
- Inventory and Order Management: SAP Cloud ERP allows telcos to track inventory levels, optimize stock levels, and manage orders in real-time, ensuring that customers can easily access devices, routers, and other equipment without delays.
- Lifecycle Management: With the cloud ERP system, telcos can manage device lifecycle management, ensuring that devices are appropriately stocked, rotated, or phased out based on demand, which leads to more effective sales strategies.
- Integrated Procurement and Supplier Management: ERP systems streamline procurement processes, improving vendor relationships, and ensuring that the right devices and equipment are available for sale or lease.
- Revenue Recognition and Compliance: SAP RevRec solutions are key for success with complex offerings that include bundling of services contracts and devices, especially for determining Standalone Selling Price (SSP) and automating compliance disclosure reporting.
5. Licensing and Bundling Third-Party Content and Services:
- Efficient Content Management: With integrated solutions for managing third-party licensing and content distribution, SAP Cloud ERP helps telcos track licensing agreements, payments, and royalty calculations in a unified platform.
- Bundling Flexibility: ERP software allows telcos to bundle their services (like mobile, internet, and TV) with third-party content more effectively. Automated workflows and integration capabilities can provide customized bundles to meet customer preferences while ensuring profitability.
- Financial Compliance: ERPs help ensure that third-party licensing and content agreements are in compliance with accounting regulations, track royalty payments, and manage contracts, reducing the risk of legal or financial discrepancies.
Overall Benefits of SAP Cloud ERP for Telcos:
- Increased Productivity: Automation of routine processes, seamless integration across departments, and real-time data accessibility allow employees to focus on higher-value activities, improving overall productivity.
- Better Accounting Compliance: Cloud-based ERP systems ensure accurate financial reporting, adherence to tax laws, and audit readiness. Compliance with local and international standards (e.g., IFRS or GAAP) becomes easier, and financial data can be tracked and reported in real-time.
- Improved Customer Happiness: By providing a unified view of customer data, automating service management, ensuring faster delivery, and offering personalized experiences, telcos can enhance customer satisfaction and loyalty. The streamlined workflow across departments reduces response times and ensures a more cohesive and consistent customer experience.
- Scaling and Expanding Service Footprints: By establishing a comprehensive set of solutions for addressing these multi-faceted business objectives, telcos are able to optimize their existing service footprints while also creating an extensible paradigm to efficiently support expansion into new service areas and fast scaling to deliver additional revenue streams.
Conclusion:
For telcos, adopting cloud-based SAP S/4HANA ERP software can help break down silos between different business functions, improve transparency, and enable better decision-making. By providing a centralized, integrated platform, these systems boost productivity, improve financial compliance, and create a more seamless and satisfying experience for both business customers and consumers.
This integration not only supports current telco operations but also enables telecom companies to adapt more easily to new business models and emerging technologies, driving long-term success in a rapidly evolving and highly competitive industry.