Swisscom (Schweiz) AG: Managing Risk with Predictive Analytics
Recently, we sat down with Tugba Eryilmaz and Mathias Mohler from Swisscom to chat about their successful deployment of SAP Predictive Analytics into their carrier billing services. In this blog, you’ll learn about their customer story, including why they chose SAP Predictive Analytics software, how they implemented it, and the business outcomes.
Swisscom (Schweiz) AG is Switzerland’s largest ICT company, with telecommunication services holding 67% market share for broadband, 60% for mobile, and 33% for TV in the country. A company with a vision of shaping the future, Swisscom is also one of the most sustainable and innovative companies in Switzerland. As such, they must continuously adapt in their markets to follow their vision and maintain their competitive edge.
Swisscom’s carrier billing service is just one example of their continuous innovation—offering new services and convenience for their customers. To better manage this service, the carrier billing team has recently implemented SAP Predictive Analytics into their operations.
Swisscom Direct Carrier Billing
Swisscom’s carrier billing service, NATEL® Pay, allows customers to pay for their digital purchases (apps, music, eBooks) on all mobile devices through their mobile phone bill. When making an online purchase, Swisscom customers simply select NATEL® Pay as their payment method instead of credit card or PayPal, and the amount is automatically calculated into their monthly mobile bill. Swisscom offers their carrier billing services to over six million mobile phone customers.
It’s proven to be a win-win deal for end customers and stores. Customers have shown their satisfaction for the feature because of the ease, convenience, and security. Online stores love the feature because of the higher conversion rates compared to credit card sales (due to less cancellations). The frictionless technology and state-of-the-art API are what allow Swisscom’s mobile payment solution to compete with all other payment methods in the market.
However, with these new opportunities for customers, the possibility for risk increases. One of the risks experienced is lost revenue due to non-payments. Swisscom wanted to find out how to mitigate this, and that’s why the carrier billing team decided to start using predictive analytics within their operations.
The Need for Innovation
Tugba Eryilmaz, Senior Product Manager for Carrier Billing Services at Swisscom (Schweiz) AG, explains that initially her department was rarely doing any predictive analytics work. It was a black box—simply relying on the “numbers thrown at them” and manually trying to make sense of their data. It was difficult to obtain the data they needed in the first place, but then to professionally analyze it as well presented an even larger challenge.
Being able to analyze data is important for businesses as it allows for better understanding of customers and can open up new opportunities that otherwise would go unnoticed. Swisscom saw the need for predictive analytics capabilities, and as an SAP customer and partner, it was an easy choice to choose SAP Predictive Analytics for their carrier billing services operations.
Before starting this project, the carrier billing team established three main objectives they wanted to achieve:
- Use predictive analytics to establish a deeper level of reporting on the demographics of their customer base, and use this to understand the customer needs
- Determine how to further grow their customer base, find new marketing strategies, and how to effectively target channels via social media
- Better risk management
Implementing SAP Predictive Analytics
The project consisted of two phases. First, a pilot was conducted which consisted of a proof of concept (PoC). Here, the analytics team analysed a sample size of data and determined what they wanted to obtain from it. The predictive analytics software then calculated a model and made predictions based on relationships and trends it found in the datasets. Once the team figured out how the software worked, they were able to create an algorithm from the carrier billing data and entirely implement it as part of a system functionality on SAP HANA Automated Predictive Library (APL).
Swisscom didn’t want to replace their reporting systems. They wanted to become more efficient in evaluating and reading data. With SAP Predictive Analytics, what normally would take days or weeks to analyze data and gather new information about customers, could now be done more accurately in a matter of hours (or less).
When summing up the project, Mathias Mohler, Head of Analytics Consulting at Swisscom AG, stated:
“The real character of innovation was putting this on scale, making it part of our SAP ecosystem to automate it, and to eventually provide an API to the application which manages the payment transactions […]. It’s giving the application the capability to utilize another source of information to make informed decisions on whether a payment should be approved or not, and therefore reduce losses.”
With SAP Predictive Analytics running on the already existing SAP HANA® business data platform, the carrier billing team at Swisscom was able to achieve the goals they set at the beginning of the project.
The predictive analytics software is able to interpret thousands of data sets to determine trends and anticipate future behaviours of customers. The software then transforms these findings into easy to understand models that can be shared business-wide.
With this, the carrier billing team is now able to collect deeper insights about their subscriber base and thus personalize their carrier billing services to meet the unique needs of each individual customer. This helps drive sales while increasing customer loyalty and satisfaction.
An example of these personalized services is if the software detects a particular user spent a certain amount in an online app store. Swisscom can offer them a rebate back if they sign-up for a music subscription service (like cross-selling of other products in the portfolio).
In addition, Swisscom can now customize the payment solution for each customer, so that the customer can make their payments on time. This innovation has led to a reduction of losses from non-payments by more than 50%. Therefore, Swisscom is protecting itself from risk of lost revenue, and protecting the customers by providing cost control.
In summary, these benefits protect and optimize the customer experience, all while helping Swisscom maintain its position as Switzerland’s leading ICT company.
- Interested in other use cases? See how Swisscom uses predictive analytics to optimize their cash flows!
- Check out Swisscom’s three-part series on how to build and use predictive models with SAP Predictive Analytics: Part One, Part Two, and Part Three
- Read recent blog from Swisscom, “Predictive Analytics in OTT Services”