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When the topic of Sharing Economy comes up, one needn’t go too far to unearth examples — AirBnB or Uber are two leading examples in this area. AirBnB has become the biggest provider of lodging without owning a single hotel room, and Uber is challenging the biggest taxi companies for public transport without owning a single car.
As these companies are disrupting their respective industries with a sharing business model, what do executives in the Communications or Media industry worry about? Do they consider the Communications industry as outside the bounds of Sharing Economy? Executives most likely will respond with a No. That is the easy part. But the challenge is how to introduce this new business model as they are already grappling with several disruptions — new entrants in the top layer (think of Over the Top (OTT) players from the likes of Apple or Facebook), emerging connected life services and industry consolidation.
This blog discusses possible disruptions from Sharing Economy that may soon challenge the business model within the Communications Industry. More importantly it highlights three key building blocks that would enable a Communications Service Provider (CSP) to embrace this emerging business model before being disrupted by an outsider.
The term Sharing Economy is often interpreted differently; for the purpose of this article, let’s use the definition from Wikipedia: Peer-to-peer based sharing of access to goods and services (coordinated through community-based online services), in which participants share access to products or services, rather than having individual ownership. The main premise of the Sharing Economy resides on the concept of sharing of some sort of resource and/or expertise.
The practice of sharing expertise is also not foreign within the Communications industry. Many service providers have deployed customer communities so that members can help one another with any service related issues. In fact some enterprises use it as their Tier 1 support channel. In other words, while Uber and AirBnB have deployed concepts of Sharing Economy for the buying (customer acquisition) journey, many CSPs are already using the concepts of sharing and collaboration within the service journeys that they have defined for their customers.
So one may wonder — if the Communications industry is so well versed with the concepts Sharing Economy, where is the threat? The main challenge here is that CSPs are still struggling (in a market with increasingly shrinking margin) for their business models to evolve embrace the changing behaviors of their customer who are going directly to the OTT service providers. So let’s revisit the definition of Sharing Economy and how it may play a role within the Communications industry.
The success from the Uber economy tells us that users now prefer an option for sharing a resource versus buying it. There could be several reasons – convenience, price to cite a couple. So the million dollar question that begs an answer – what are the resources that can be shared by users and monetized by the service provider? Sites such as Amazon, eBay and Craigslist have already established a peer to peer marketplace for trading handsets or any other physical device. Can we think of any other resources?
How about airtime or data buckets for wireless carriers? As a teaser, think of a scenario where a customer gets an option to lend some of their airtime minutes with another friend – almost like a mobile wallet. Or maybe a user puts the unused airtime back to the “grid” for a value/credit back to their account. The CSP could facilitate this transaction and maybe charge a nominal fee as well. It’s possible that you may think these thoughts or suggestions as way too radical, or maybe you know of some carrier, maybe even a Mobile Virtual Network Operator (MVNO), who is actually deploying these options as a possible business model. For a moment let’s not debate whether this is a great idea or the worst idea, but look at it as a purely academic case study. If this were the problem at hand, what is stopping a CSP from doing this today?
Data Model for customer and other business entities plays the most critical role in enabling/inhibiting new business processes for any enterprise. The Customer (a.k.a. Account in some applications) is pivotal in any CRM application. Most applications allow the different categories of accounts – Service, Billing etc. Those familiar with Salesforce know that the feature can be enabled through Record Types. Many CSPs have also deployed an MDM (Master Data Management) strategy to build a customer information model that encompasses data in multiple systems – CRM, Billing and other ERP systems such as Financials.
The Sharing Economy, however, requires one to model relationships as well. In our examples provided above, we may have one college student paying the bill one time for his classmate or perhaps one person loaning one hour of her airtime bucket with her roommate. These relationships can be temporary/ad-hoc, permanent or duration based. This can pose a challenge, since most CSPs have usage, billing and payment relationships tightly coupled within the account structure within the data model. Irrespective of the use case, the new Sharing Economy would require a change to this approach – wherein a CSP can define and remove different relationships on the fly.
Salesforce models relationships through the use of Contacts and Contact Roles. A Contact Role can simply be a user of service or say payment responsible party or both. A new feature of Shared Contacts (capability to link a single contact to multiple accounts) is currently under development (as of this writing). Once this feature is generally made available, enterprises will have more tools in modeling relationships between contacts who may not reside under one account. In addition, many of our ISV partners have taken advantage of the platform’s flexible data model to further extend it to provide business benefits to our CSPs.
Customer Behavior and their engagement model are key tenets to define Customer Journey. With the priority changing to access over ownership for a new wave of customers, service providers now have to consider alternate ways of on-boarding customers and how to maintain a relationship with them. This new trend is different from group buying models. Journey of one customer would be associated with that of another customer (in multiple ways) – and it could change over time!! In addition, customers will want to engage with one another, as in a peer to peer marketplace for specific transactions.
What does this imply for a CSP? A service provider would need to re-define the Opportunity to Cash flow – customers may toggle between a sharing and buying relationship. The classical MACD (Move, Add, Change and Delete) processes need to include a sharing option – MASCD. More than anything this would also impact the mindset of a traditional Telco where customers are locked down in multi-year service contracts. History tells us that CSPs are not averse to introducing new customer journeys. When FCC introduced Local Number Portability in 2003, carriers changed their business processes to include Port-In as the primary customer acquisition mechanism.
Carriers would need a platform like Salesforce that can provide an agile, customer-centric omni channel platform of engagement that can work with their existing systems of records. If 2015 was the year to define customer journeys, 2016 will be the year that will require customer journeys embrace a Sharing Business Model.
The term Peer to Business to Peer reflects the true essence of Collaborative Economy. A Service provider can help establish that marketplace between its customers by playing a central role that would help peers to share resources amongst themselves. Of course this is not something that a service provider can do alone – it needs partners that reside on the same engagement platform. With Salesforce App Exchange, the world’s leading Business App Marketplace that turned 10 this year, a service provider can distribute third party apps as well as build their own marketplace to distribute apps to customers. With over 2800 apps in Salesforce App Exchange (and growing), we hope to see more apps that would be useful in a Collaborative Economy.
The article discussed few options for a service provider on how to enable their engagement platform for supporting use cases within a Sharing Economy. However, in order to get to that point, communication providers have to be a willing participant in the “peer-enterprise-peer” economy. The Sharing Economy works well when there are willing participants on both ends of the trade that are willing to reach an agreement for products or services and there is a natural supply and demand that will set its own point of equilibrium. This would require a change from the current model of business processes.
There is some truth to the overused saying – Change is the only constant feature in technology. However, the reality is that “only a baby with wet diaper likes change,” as coined by Mike Ullman (Executive Chairperson, JC Penny) in the Fortune Global Form 2015. Having been involved in complex multi year BSS Transformation programs for CSPs, I do empathize with executives who are reluctant, if not resistant, to change. However, with investment in a platform of engagement such as Salesforce, we are already seeing many CSPs implementing solutions to become a better Customer Company and ready to embrace the new wave of Collaborative Economy.
Abhi Sur is currently a Practice Director at Salesforce.com. Sur is an accomplished Communications Industry Technologist with over twenty years of experience in Technology Strategy, Enterprise Architecture and Design, driving large-scale Telecom BSS/OSS implementation projects. He is currently engaged in leading customer centric transformation for enterprises using Salesforce Customer Success Platform.
