1. A question of survival:How postal and CEP companies aretransforming their business models to adaptFebruary 14, 2012Martin Barnreiter Marco Vatteronim.barnreiter@pac-online.com marco.vatteroni@sap.com+49-(0)89-232368-19 +39-06-51073-300 PAC 2. Q&A Your questions are welcome!A question of survival: How postal and logistics companies are transforming their business models to adapt 14.02.2012 PAC 2 3. Agenda About PAC Major Business Challenges Changing Buying Behavior through Technological Change Business Diversification in the P&L Industry Logistics Segment / Parcel Services Diversification Examples Communications Market Diversification Examples IT Challenges Use Case: DPD Geopost GmbH Diversification: Yes or No? Interview with Marco Vatteroni (SAP) Conclusions Questions and AnswersA question of survival: How postal and logistics companies are transforming their business models to adapt 14.02.2012 PAC 3 4. Who is PAC? Years our offices opened: Pierre Audoin Consultants (PAC) was established Paris 1976 Munich 1992 by our founder Pierre Audoin in 1976 (Paris). Bucharest 1999 New York 2000 London 2002 The only European group with global coverage: So Paulo 2009 Strong local competences and global response. Berlin (takeover of Berlecon) 2011 The specialist for the software & IT services industry: IT services and software suppliers, IT users, influencers and public bodies. With the takeover of Berlecon Research: enhancing our expertise on software and IT services in the Communication, Collaboration, and Mobility areas. An integrated approach covering the whole value chain of our customers: off-the-shelf reports, marketing & consulting services. PAC supports IT decision makers & suppliers in the development and implementation of a successful strategy by providing them with a better understanding of the market, the competition and end-user behavior.A question of survival: How postal and logistics companies are transforming their business models to adapt 14.02.2012 PAC 4 5. Major Business ChallengesA question of survival: How postal and logistics companies are transforming their business models to adapt 14.02.2012 PAC 5 6. Major Business Challenges How strongly are the following challenges influencing your current business?A question of survival: How postal and logistics companies are transforming their business models to adapt 14.02.2012 PAC 6 7. Changing Buying Behavior Source: La PosteA question of survival: How postal and logistics companies are transforming their business models to adapt 14.02.2012 PAC 7 8. Business Diversification in the P&L IndustryA question of survival: How postal and logistics companies are transforming their business models to adapt 14.02.2012 PAC 8 9. Logistics Segment / Parcel ServicesDiversification ExamplesClinical Express (TNT) Blood samples shipped nationally and internationally Conditions: certain temperature level (through special parcel kit); strict and highly secure timeframe Can be booked online, via e-mail or SMS Traceable at any time Add-on business, in a high-value segment that can thus help finance other service developments. Integration into the whole pricing/billing structure.On-site repair service for computers (TNT) A partner engineer is instructed by TNT and goes to the customers site. Engineer repairs the computer, brings and returns spare parts, e.g. the hard disk. The partners share of service revenue needs to be calculated in the pricing/charging. These highly complex processes require a flexible pricing/rating and charging model in order to fulfill all kinds of customer needs.A question of survival: How postal and logistics companies are transforming their business models to adapt 14.02.2012 PAC 9 10. Communications MarketDiversification ExamplesE-Postbrief (Deutsche Post) Online postal service to send secured letters via e-mail Customer needs to register online and identify themselves User can send letters online, also registered letters Letters can also be transferred to the recipient in a printed version This new service leads to further integration of services to the pricing model, especially for the bigger B2B customers.PosteMobile (Poste Italiane) The PosteMobile solution is a new mobile access channel to Poste Italianes services, such as bill payments, telegrams or micropayments. Services like pre-paid and post-paid voice, Internet, M-banking (mobile banking) or gaming and M-commerce (mobile commerce) solutions The new sales channels will increase the volume of transactions handled in the pricing, billing and financial management systems.A question of survival: How postal and logistics companies are transforming their business models to adapt 14.02.2012 PAC 10 11. IT Challenges Highly heterogeneous, often decentralized IT landscape Multiple solutions from different IT suppliers Home-grown legacy IT solutions Compliance regulations IT needs to support all kinds of customer-oriented processes CRM solutions need to integrate all marketing/sales channels Effective billing/charging and revenue and expense management solutions as well as partner financial management Integration into ERP systems Integrated end-to-end solution is required Many in-house solutions require modifications or even replacementA question of survival: How postal and logistics companies are transforming their business models to adapt 14.02.2012 PAC 11 12. Use Case: DPD Geopost GmbH (1/2)Starting position Decentralized: 45 subsidiaries Inefficient and cost-intensive business processes Difficult to set up and keep common compliance regulations Customer data were redundantProject Project plan for implementation, testing, and roll-out Restructuring of staff change management Replacement of home-grown billing application Automation of the order-to-cash processes Centralizing 45 software instances and databases Accounting team to execute any task from any subsidiaryA question of survival: How postal and logistics companies are transforming their business models to adapt 14.02.2012 PAC 12 13. Use Case: DPD Geopost GmbH (2/2)Benefits Increase of revenue approximately 0.25%-0.5% Higher data quality and transparency Improved business analytics Better service to customers higher customer satisfaction Save about 0.2% in terms of total revenue Reduction of the IT infrastructure costsA question of survival: How postal and logistics companies are transforming their business models to adapt 14.02.2012 PAC 13 14. Diversification: Yes or No?4 dimensions to be considered when thinking about expanding the business:1. Market size: How large is the market for e.g. value-added services?2. Market growth: What are the expected growth rates in this market in the next 5 to 10 years?3. Market penetration: How many other players are already active in this market?4. Capability: Does the company have the capacity, such as market knowledge, personnel, technological know-how and, finally, the financial stability to enter a new market?A question of survival: How postal and logistics companies are transforming their business models to adapt 14.02.2012 PAC 14 15. Interview with Marco Vatteroni (SAP)A question of survival: How postal and logistics companies are transforming their business models to adapt 14.02.2012 PAC 15 16. Conclusion Ongoing transformation in the P&L industry Further technological change / market liberalization Increase in the use of internet technology Success factors 1. Development of new services / change in business models 2. Support through modern IT solutions: Technological support of new online/mobile services IT modernization: ERP, end-to-end processesA question of survival: How postal and logistics companies are transforming their business models to adapt 14.02.2012 PAC 16