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Since ancient times, the Japanese have used large straw ropes called shimenawa to adorn temples and shrines.
Even today you see these impressive ropes throughout Japan. Woven from hundreds of strands of straw, they appear at the entrance to places of spiritual power and strength. In the Japanese sport of sumo, too, the grand champion, during ceremonies, will wear a thick white rope around his waist as a sign of power and his mastery of the wrestling art.
Well, as mobile operators move to a greater reliance on digital services and web-based customer interaction, many are adopting a kind of new age shimenawa. It’s a central digital enabler platform whose job is to execute and weave together the business threads of charging, self-care, and marketing.
Joining us now to explain the power of digital enablers and why operators like Telstra and Vodafone New Zealand consider these platforms pivotal to their digital strategies is Jennifer Kyriakakis, Co-Founder and VP Marketing of MATRIXX Software.
|Dan Baker, Black Swan Editor: Welcome Jennifer. Can you first give us a quick backgrounder on MATRIXX how you got into the business of supplying these enabler platforms?|
Jennifer Kyriakalis: Happy to, Dan. Back in 2008, our founding team pretty much came out of Portal Software which today is the Oracle BRM product. The original Portal solution enjoyed quite a success as the first real-time billing product of the early internet days. Then around 2002 it started getting deployed at wireless carriers for mobile data charging though usage was pretty minimal at that point.
But when smart phones arrived, the old Portal solution ran out of gas because the data volumes really took off: it became impractical to put that on a real-time platform because of the high cost of hardware and other infrastructure needed to handle the volumes. For instance, if you are watching a video, that could involve thousands of sessions where you need to ping the charging/policy system to get more quota and to check the balance.
Now a couple of Portal customers, who were worried about the data volumes, actually pulled out their real time engines and stuck the data back into their batch systems. And when we heard that, it sprung the idea: “Hey! Data charging is really happening now, but there’s no solution out there built for massive transactions volumes and monetizing services in real time.”
So serving this real-time, high volume data services market is what MATRIXX is about.
|OK, great. So why are carriers eager to get these systems? What are the main functions it performs?|
In simplistic terms, it’s a real-time transaction engine that allows you to do smart marketing. It allows you to serve the customer at the same time you’re driving more business from them.
And if the system is real-time, that’s perfect, because out of the same system I can interact with the customer more and tailor offers for them so they buy more things and top up more often.
You also need to be efficient. How do I manage a huge number of transactions without requiring one hundred servers? So building a nimble, low-cost platform is something we’re known for.
|And I understand, you also get involved in self-care. But won’t a telco already have a self-care solution or two? So isn’t this somewhat redundant?|
Well, the trouble with self-care systems, particularly at large carriers, is they are often completely disconnected from any real-time charging engine or even billing system. Carriers often need massive orchestration to update and retrieve data from, say, 10 different systems in the background.
Several of our customers have a self-care application directly integrated to our online charging system. So, when the user accesses that self-care app, she gets an accurate balance from the backend database.
And when you want to buy more data, with one click it’s immediately available. There’s no need to go to an order management system or some middleware to get something provisioned and inform all the other systems that need to know. All of that happens in true real time through our system. In fact, we handle all the network traffic coming in from many different self-care portals and digital channels.
Now an integral part of this, of course, is an ability to repackage the way data services are sold via bundles and one-off offers.
Add it all up, it’s like having one central core engine between the network, self-care, and data products sides of the business.
|And what about billing and analytics? How are those functions managed?|
Since this is a core charging and policy engine, we replace either a real time or a batch rating engine. So, we don’t touch the billing part: we sit between the network and the backend billing system.
More and more, this is the model big operators with a heavy infrastructure want to have. And one reason for that is it’s a great way to support the launch of multiple digital brands or a new set of digital services.
To be honest, they don’t need a full-blown billing system. Sure, they want us to do some basic AR, GL, and light invoicing, but the model is more: charge the customer’s credit card, so they don’t need a full-blown billing/invoicing process.
Now as to analytics, our platform is a great enabler of that because we deliver a more complete commercial product catalog and self-care platform. Since we track and aggregate many types of information and integrate directly with the analytics engine, analytics has a path for triggering actions.
For example, we integrate to IBM’s data analytics solution. One use case might be to watch the consumption patterns of Netflix users over a 48 hour period, and then have the analytics suggest which video to offer the customer next. Of course, we also offer the capability to provision the add-on product and handle the purchase.
|What about prepaid versus postpaid, how much of your business do you estimate is the kind of coming from each of those types of delivery?|
About 70% postpaid and 30% prepaid I would say. And that’s about to change, we think, because larger prepaid operators in Asia are eager to get rid of their IN systems which are quite cumbersome if you intend to be a digital provider. So six months from now, I would expect these numbers to shift to 50/50.
But whether it’s prepaid or postpaid, what all these mobile providers want is the great customer interaction that a digital enabler like ours gives them.
You need to have that two-way conversation going on to really harvest the customer’s value and gently nudge them toward products and services that make sense.
|OK, Jennifer, you prepared a couple diagrams to compare the traditional method of interacting with customers with the modern method needed in the digital services age. Let’s discuss that now.|
Sure, Dan. Let’s start with the Traditional Customer Lifecycle that so many mobile operators are using today.
Typically, this is a low touch, high cost model where the idea is to:
The other issue with the traditional approach is that if you are not constantly engaging with the customer, you leave money on the table. Compared to other operators who have an organized means of enticing customers to use more network services, the traditional approach earns a lower return on their network investment.
OK, let’s now compare the traditional with the Digital Customer Lifecycle approach.
And the first advantage we gain by having a digital enabler is we are no longer limited to retail store interactions. By going digital we open many more ordering and interaction channels. People can order a phone online, and when the phone shows up, they get on-boarded directly from the device, so everything happens through a mobile app versus costly calls to customer support.
Now as an example, two of our customers, Telstra and Vodafone New Zealand, were eager to sell more data to get full value from the LTE networks they were deploying.
And what they did was to create a nice portal through a mobile app.
The benefit is they created a cycle of constant customer engagement. It has absolutely helped them sell more data, and enables any DSP to use more of its network, and drives things like the Net Promoter Score.
And a key reason it’s effective is the customer gets to take action or get issues resolved right away through the digital channels.
Another key benefit — and we’re seeing this in prepaid markets of Asia — is that the digital enabler allows us to fine tune offers to meet the needs of the market. For instance, a prepaid customer doesn’t want to commit to buying a large chunk of data, say 5 GB. They may not even want to spend a dollar to buy 500 megabytes because they are not really sure what that represents in terms of usage, and therefore whether they are getting their money’s worth. But what you can do is offer then a 2-hour pass, a day pass, or weekend passes for specific types of content or services.
So serving those offers up, pushing them out into the digital marketplace, and one-touch provisioning them is what the digital enabler is all about.
|It’s a beautiful explanation of where mobile operators need to be. Incidentally who does MATRIXX compete with in this digital enabler business?|
Dan, mostly we go up against the bigger guys who have dominated the space for a long time.
We just finished a market trial in Southeast Asia. The trail was run simultaneously among all vendors, which is kind of unusual, but they had a fairly central IT organization which allowed that to happen.
At MATRIXX, we brought one guy on-site who configured all their use cases and had the system up and running in six weeks with a footprint of eight small servers.
Two traditional B/OSS vendors, meanwhile, brought in 40 people and by the time three months were up, they still hadn’t configured all the use cases. And they trialed the solution with 128 large servers.
|Gee, that’s an astounding difference in hardware requirements.|
And the main reason MATRIXX can achieve that, Dan, is our heritage as a company. Back in 2008 we built everything based on new technology, equipment, and databases. Others are running Oracle underneath, but we are not. We run our own in-memory database. Now Oracle guys can add that capability through Java, scripting languages, etc. However, the older technology just doesn’t scale efficiently. You really need to start from scratch, and that’s what we did.
The older technology limits what you do to the number of clicks, 6-second increments, and other hard-coded constraints.
But with a modern charging and policy engine such as ours, it’s easy to develop a package, for one hour or 5 gigabytes. It’s as simple as a configuration in our system, whereas the older approach requires quite a bit of coding.
|What results are customers seeing with the platform?|
Well, look at Telstra. By number of subscribers, they are no way near as large as an AT&T, but their operation is still highly complex and Telstra recognized that as they transition to becoming more digital, they simply had to be more nimble and to lower their cost-to-serve.
They went with MATRIXX because it allowed them to deliver smaller packages to their digital channels at a much cheaper price point. They took our charging and policy platform, did no customization on it at all, and then integrated it with 50 different systems. They use our out-of-the box functionality and configuration for everything and that serves all their needs.
|What are you spending R&D on now?|
We spend a lot of our R&D time these days figuring how to deploy stuff quickly.
People involved in large-scale IT transformations know how painful that process is, so we don’t want to be in that bucket. And one way you improve time-to-market is you provide tools to manage everything from a single control point.
When you can speed things up, it allows the operator to try stuff out, see what works, and adjust on-the-fly accordingly. So instead of a two- to three-year digital transition program, you can accomplish it all in just a two-month pilot.
At Telstra they were able to put in true real-time notification for all of their postpaid customers. But perhaps the happiest surprise was that their call center traffic — people calling in to ask questions and complain — dropped by 40%.
|Wow, lowering customer care calls by 40% — that’s great.|
It is great, but of course it didn’t happen overnight. Telstra has been pushing forward their digital transition since 2011, and early in 2015 they hit a benchmark where 50% of all of their customer transactions are now through the digital channel. So, it’s not just huge savings in the customer care area. The greater real-time engagement with customers via the digital channel is driving big revenue gains as well.
Copyright 2016 Black Swan Telecom Journal