Telecoms Profit Analysis

Telecoms cost and profit analysis has advanced to a new level

Pilbara Group is a leading provider of advanced cost and profit analysis tools based on Activity Based Costing techniques.  The Pilbara Group ACE software has been used across a number of industries, including Defence, oil and gas, financial services, and higher education for cost and performance modeling, customer / product profitability analysis and planning / budgeting.

Pilbara Group has developed new leading-edge solutions that are tailored to the needs of the telecoms industry.  Most ABC solutions do not have the technical features that a complex business such as telecoms actually requires. This means that some compromises are required or manual interventions must be used.  This joint venture has identified how the ACE software can be used to deliver the detailed costing systems that a telco needs in a constantly changing telecommunications environment.

The new approach meets commercial and regulatory-driven needs for both fixed and mobile operators.  Next Generation Networks (NGN) and IP based services are central to the solution.

Benefits of the Telecommunications Solution

Reduced design and implementation timeframe and cost

• Deep Telco and cost modeling expertise

• Data driven models are possible – reduced requirements for excessive interviewing and manual allocations.  Product volumes and cost centre staff numbers or salaries can provide allocation drivers in multiple stages within a model

Reduced model maintenance

• New data loads automatically search out updated paths and driver values - new accounts and cost centres can be dealt with by parent data so often no manual changes needed

• Hyperlinked reports taking you directly to the source of model errors

• Routing table data and Cost Volume Relationship (CVR) data can be viewed using cross-tab style tables to facilitate easy data entry / data amendments

• Both Fully Allocated Costs (FAC) or Current Cost Accounts (CCA) can be flowed through the same model simultaneously and reported on independently

• Direct XML links to spread sheets allow for easy data uploads / downloads without the need to be a database expert – any business manager can use the system without IT expertise

Telco methods are already pre-designed and implemented. These have been used in multiple Telcos globally

We have designed and own the software

• Experts in the efficient use and maintenance of models built in ACE – there is no better model builder than the original designers.  We can also code an instant bespoke feature (should it ever be needed)

Model reflects actual business cost and revenue driver structures

• Makes it easier to manage and follow - so managers trust the results and take actions.  A model that brings about no change is money wasted

• “Black box” syndrome is avoided – model can be understood and used by more than a few specialists

• Scenarios and analysis enable management insights – this should lead to better business decisions and better profits

• Profit and full cost information is better that simpler revenue or volume KPIs.  Profit targets are better than potentially loss-making growth

Software available on-demand

• No need to install new hardware or software

• Available within 48 hours of signing up

• Purchase it using flexible OPEX and not rigid CAPEX

• Remote consulting support available without the requirement for time consuming and expensive travel

• High level of Physical and Data security independently tested by a  PCI DSS Qualified Security Assessing organisation with testing procedures compliant with MasterCard Site Data Protection Program and Open Web Application Security Project (OWASP) guidelines.

A flexible yet powerful system that is easy to implement

The new costing system has considered real telco needs:

• Fully allocated costing (FAC) using historic or current cost accounts (CCA), or both simultaneously.
• Identification of fixed and variable costs (incremental costs) so that full or marginal product analysis is possible.
• Costs can be varied with volumes to define future unit costs or the Long Run Incremental Costs (LRIC) that regulators demand and are equally useful for business decisions.
• Multi-stage processing that makes a system easy to manage as it allows cascades of discrete analysis stages.  A model may combine allocations into one layer (resolving circulating costs) if desired, or else it can separate the analysis processes to stages.  The results of any stage can be reported on in the final results.
• Easy addition of tags to model elements, allowing complex reports to be generated, for example, showing costs by markets or business units to enable the creation of regulatory account reports.
• Sophisticated reporting and processing to see the costs of basic products, or results by customer segments or by tariff plans where products are bundled.
• Product routing table data and complex cost drivers are easy to create and enter.