awareX packaged app delivers dramatic ROI
The business case for a productized pay-as-you-go software as a service solution like awareX is very strong. The key driver for cost reduction is call deflection from the call center. This is combined with the following variables to produce the cost avoidance aspect of the business case.
- Cost per call
- Average calls per month to the call center
- Smartphone penetration rate
- % of Smartphone users with the App
- Fully loaded average call center head count cost
- Call deflection rate
- Total number of monthly average subscribers
These variables are combined with the initiation fees, pre-tax cost of capital, saving growth rate and the SaaS fees to produce outputs of: -
- NPV in local currency or $
- IRR %
- ROI %
- Payback time in months
The number of calls to the call center will reduce as end users utilize the self-service channel. It is faster, self-empowering, accurate, precise and timely. Operators see in the range 5% to 30% call deflection depending upon their product, customer, service, Smartphone, ARPU mix and their current digital maturity. As an example, Telenor Group announced that in 2017 it had observed a -26% reduction in average call center inbound call volumes across multiple operators as a result of implementation of digital Apps for customer self-service.
If you have high smartphone penetration and or growth then the number will be higher, conversely if you have a low smartphone penetration or limited smartphone growth then the number will be lower.
In our experience a normalized call reduction volume of -20% is achievable for a stable MAU population.
Typical Investments fees are shown in the table below:
| Subscription | |
|---|---|
| Base functionality | $150,000 |
| Feature additions, OS changes | included |
| Advanced analytics & marketing | included |
| Support & Maintenance | included |
| Managed services operations | included |
| SaaS RTU Licence fee's |
$100,000/annum minimum with a fee per active user |
| Average annual total | $250,000 |
Not just cost savings but revenue upside as well
Revenue increase
We strongly support context-aware consumer engagement, which we enable using built-in analytics to deliver the right offer to the right person at the right time in the right place. We know that this results in increased customer satisfaction and incremental revenues through up-sell of new products and services, bill payments, top-ups, promotions, bundles and passes.
The size of the incremental revenues depends upon the number of promotions and campaigns that you run and how simple it is to purchase the offering within the App, and the active use of the analytics and push messaging system combined with the content management system to deliver great campaigns.
Results achieved are tracked and reported by our analytics platform. Details of every campaign and the corresponding results achieved can be used to optimize subsequent campaigns.
According to North Stream Telecom Consulting, the quantum of the incremental revenues is potentially significantly larger than the amount of money to be saved through call deflection. Results of this research including a comparison of high and low digital maturity countries can be found in the white paper below:
All businesses appreciate growth and and strive for incremental revenues. Many however prefer to justify investments based upon hard savings. At this time we have not included any assumptions regarding revenue increase contribution into the business case calculation model. If you want to include upside revenues in your own business case, we recommend reading the white paper mentioned above so you can see how significant this revenue can be.
