Delivering cost transparency to JSE listed Telecoms company

The successful implementation of the Gartner-recognised cost transparency platform into the telecoms company denotes the capabilities that MagicOrange has in the Information and Communication Technologies sector.

The customer, which employs more than 2500 people, sells innovative technology for mobile commerce to emerging markets in South Africa and abroad.  It is South Africa’s largest supplier of prepaid airtime, owns TicketPro and has a major shareholding in Cell C.

The company’s services are targeted at those without easy access to bank accounts, and it delivers the convenience of being able to transact where and when its customers prefer.

The challenge

The customer previously relied on an Excel model to allocate costs to its wide range of diverse subsidiaries in South Africa, the rest of Africa and other global territories. These businesses, however, were unable to fully understand what was driving the costs of these shared services.

In addition, the model was unable to calculate efficiently because of large file sizes, and the fact that calculations were time-consuming. The use of spreadsheets was also challenging from a data management point of view, as there were ongoing issues associated with unstructured and dirty data. The company experienced issues with reconciling spreadsheets as formulae did not always reference the correct cells.

The customer realised the necessity of tracking costs per product, segment, channel and device in order to understand which of these were most profitable. This proved challenging as the cost and usage data were contained in two separate, non-integrated systems.

This challenge was further complicated by large amounts of usage data, which made it near impossible to handle more than one month at a time using Excel.

The solution

The telecoms company selected MagicOrange for their intelligent, cloud-native platform to achieve full cost transparency.

MagicOrange assists their customers throughout their IT Financial Management (ITFM) and Cost Transparency journeys by helping to drive profitability and unlock value. Their solution helps customers to understand their profitability and costs, enables them to utilise assets efficiently, shows accurate profit margins and reduces manual effort.

Benefits

The major benefit of MagicOrange for the customer is that the company is now able to rapidly compare product costs month-on-month, up to transaction level, in one consolidated report. This is vital, as their cost base changes dramatically from month to month.

“Telecommunications is a high-paced, fast-changing industry where costs vary enormously month-on-month,” explains Customer Success Analyst at MagicOrange, Tiaan Janse van Rensburg. “Now our customer is able to see this in real-time and can be proactive by running special promotions to secure more business in a certain area, for example.”

Another significant benefit is time savings. In the past, the customer’s spreadsheet solution would take between two to three hours to finish calculations, and costs for each month had to be held in separate spreadsheets, which were recalculated each time they were opened. Pulling reports has been reduced to mere seconds using the MagicOrange solution. In addition, the company is secure in the knowledge that their data is safe and uncorrupted.

MagicOrange, unlike the customer’s spreadsheet model, is able to incorporate multiple drivers behind costs and the implementation has resulted in greatly improving the understanding of all the drivers behind technology spend.

Shared services cost allocations are now completed rapidly through MagicOrange, and the reasoning behind them can easily be explained to business units and subsidiaries.

“Our customer is also able to calculate the cost of every transaction, something they have never been able to do before,” notes Janse van Rensburg.

Finally, the telecoms company can now perform product profitability analysis, compare shared services budget numbers to actual numbers, and access income statement reporting within MagicOrange. Figures are pulled in from the general ledger so that users only have to work with one intuitive interface, resulting in a great user experience.

MagicOrange has now been successfully implemented in a number of different markets, from finance and mining to local government and health, and has expanded rapidly into a number of new global territories over the past few years.

“We are very proud to have now penetrated the telecoms market as well, and we hope to expand on capabilities and expertise gained through this implementation in all future projects in this vertical” notes CEO at MagicOrange, David Harding.