By Johannes Hummer, principal partner manager, Middle East, Vodafone Partner Markets
Digitization: everyone is talking about it, very few people agree on what it means! At Vodafone, however, it is very clear. We want to create a fully digital operating model, systematically transforming every aspect of our operations to overhaul our customer experience – and reshape our cost-base at the same time.
This is a long-term project that will lead to long-term rewards. We started work on the foundations back in 2017, so that we can think ‘digital first’, establishing the tools, systems and processes to make digital our primary channel – for everything. Too many companies believe that digitalization begins and ends with their IT systems, while still interacting with customers, employees and their communities in the same old analogue ways. For us, this is a fundamental overhaul to ensure that we work in a way that takes advantage of new technologies and processes across our business.
There are three main aspects to our digital first model: digital customer management, digital technology management and digital operations.
Digital customer management is the one that most people get excited about: this is about using technology and big data to understand our customers better and thereby transform every part of their Vodafone experience. This stretches from acquisition, to base management, to our retail footprint. For example, we are moving away from a ‘one message fits all’ approach to customer acquisition, in favor of a highly agile, targeted personalized system. We are also extending this to our base management, creating an ‘always on’ model to deliver automated, relevant offers to customers on an ongoing basis. Not only are these more efficient ways of working, but they are also increasing customer satisfaction as well as ARPU.
We are also transforming our retail footprint. It’s not just about having fewer stores, but making sure we have the right type of store in the right places. Based on localized data, we expect to have more smaller ‘express’ and ‘flagship’ shops, but fewer standard stores, while also investing to make sure our ‘MyVodafone’ app becomes our customers’ primary channel for sales, self-service, rewards, and help. And the app is just part of the move to automate and digitize our customer service operations – our TOBi chatbot already handles almost 20% of our customer interactions in 14 different countries.
And yes, improving our digital technology systems is important too. We’re using advanced analytics and machine learning to improve network performance and prioritize capital expenditure, while also moving 65% of our IT applications to the cloud and driving more agile ways of working. Finally, we are leveraging our scale across the Group to improve our digital operations, creating best in class cost structures in a digital environment – for example, automating manual and repetitive back office processes as well.
It is important to realize that digitalization is not just another IT project that sits on top of existing business processes, adding another layer of complexity. It has to be a radical, systematic effort to digitize, automate and simplify every aspect of the business for it to deliver the benefits for an organization and its customers. It is not a quick fix, but it can deliver happier, more engaged customers, and a better, more efficient business.