1. PROFITABILITY AND PERFORMANCE MANAGEMENT
Driving profitability in real time

2. 2
IBA Group
Customer and Project Overview
Project Background
Recognition
Summary
PaPM-Based Solution

3. Offices in 12 countries
27 years in IT industry
Customers in 40+ countries
2,800 employees
IBA Group

4. Background
Revenue growth management
Profitability management by branch
Profitability management by segment
Microsegment profitability management
Technologies Growth period Market
saturation
Search for new growth drivers
Volume ARPU AMPU IMPU

5. Customer. Customer Needs
Tele2, fourth largest mobile provider in
Russia
Telestar project
Gain comprehensive insight into
overall company output
Have predictive models that support
strategic decision-making.

6. Project Goals
Provide unified business process for margin management and business
efficiency management
Support managerial decisions using detailed margin analysis, broken
down by subscriber, client, tariff plan, network unit, sales point, or partner
Provide unified data source to manage and analyze different kinds of
revenues, enabling drill-down from high-level to very detailed results
Develop margin management system with clear indicators and regulatory
documents for executives responsible for control and execution.

7. Project Challenges
Failed attempts to implement multi-
level margin calculation scenarios
using various software products
Numerous heterogeneous data from
various sources
High volume and complexity,
involving 40 million measurement
units and resulting in billions of
allocated data records

8. Why SAP PaPM?
Multi-level margin calculation
scenarios
Built on in-memory SAP HANA
Agile financial and business
modeling capabilities
Seamless integration with
customer’s “DataHub” solution

9. Project Highlights
Profitability analysis involves business analysts
and key users from different departments
• Automated workflow to guide the end user
Scenario simulation is required to assist the user
in search for new options
• What would happen if I switch to an alternative
revenue driver?
• Can I motivate a group of subscribers to consume
more services and what cluster should I address?
• Does it make sense to increase infrastructure
capacity in a certain region?

10. Solution Architecture
SAP HANA DB
SAP NW AS
ERP or
S/4HANA or
BW
Profitability and Performance
Management
SAP BusinessObjects BI Suite
SAP Analytics Cloud
External data
sources
(SAP & non-
SAP)
BW Embedded
SDA/SDI
BW ETL
FI/CO
BW
Models
• In-memory platform SAP
HANA
• Integration tool set for SAP
& non-SAP
• Re-use of BW Models
• Embedded analytics
• Instant/direct? access to
external sources (SDA)
• Write back to SAP FI/CO

11. Solution Architecture -> Option 2 ?
SAP HANA DB
SAP NW AS
ERP or S/4HANA
Profitability and Performance
Management
SAP BusinessObjects BI Suite
SAP Analytics Cloud
External data
sources
BWEmbedded
SDA/SDI
BW ETL FI/CO
BW
Models

12. Microsegment. Data Analysis Results
Adjust retention strategy for
margin indicators
Churn management
Prioritize maintenance services,
capacity development, and
partner negotiations based on
margins
Network management
Adjust waiting time based on
margin indicators
Support services priority
Manage, develop, and modify
products based on their
profitability
Product
management
Search for key predictors to
increase Clusters’ results
Strategy development
for Clusters
Negotiate with our partners
conditions based on margin
of subscribers they attract
Partner negotiations
Margin

13. Margin Levels (СМ1-СМ5)
CM1 Direct costs Customers profitability analytics
CM2 Customer acquisition costs Sales channels efficiency analysis
CM3
Indirect costs, product-related
Marketing efficiency analysis
CM4
Technical costs + Depr. and Amort.
Product/subscriber profitability analysis
CM5
Other indirect costs
Makes final margin closer to Net Income
No additional analytical value
Level Type of Costs Applicability
DirectcostsIndirectcosts

14. Project Results
The only version of financial truth to analyze margins
World class analytical instrument
Monthly reporting verified with financial statements, EBIT-level
margin indicators broken down by microsegment
Business departments trained on how to build data
visualizations: Self-Service approach
Process of margin data analysis launched. Define losses and
analyze results with business departments
Margin control instruments embedded in business processes

15. Margin Analysis Benefits
 The only version of financial truth that
is clear and understandable, helping
different departments achieve their
KPIs
 Regular revenue analysis and
control of losses to support
managerial decisions and increase
efficiency

16. Results of Research by Margin Assurance
Phones
Phones
We analyzed
interconnected
costs of subscribers
and suggested
recommendations
on how to work with
contacts of the
client’s social graph
Using Margin by device type and its price range, we
developed a better understanding of
smartphonization
Using margin indicators, we increased value of
different business processes, made them clear, and
showed how to implement smart approach to
different activities

17. European IT & Software Excellence Awards
WINNER
IBA Group
Category:
Solution Providers 2019
Big Data, IoT or Analytics
Solution of the Year

18. Co-Creating a Smart Future
Thank you!
www.ibagroupit.com
Contact
2583/13 Petrzilkova St., Prague 5,
15800, Czech Republic
Tel.: (+420) 251 116 206
Fax: (+420) 251 116 211
Email: info@ibagroupit.com
www.ibagroupit.com
Contact
IBA South Africa
Tel.: +27 (0)10 020 3104
Email: denissiouk@ibagroupit.com
www.ibagroupit.com