Vodafone – Putting Data to Work
How the telecom giant is using AI in its operations to deliver customer value
Context
Vodafone – one of the largest telecom providers in the world – is striving to stay ahead of the competition by putting its data and knowledge to work. With a strong commitment to machine learning and AI, the company has invested in solving for use-cases in customer service, network planning, purchasing, marketing and creating greater value for its customers.
Customer service in the telecom sector is notoriously known for long wait times, unsatisfactory resolutions and high churn. To alleviate these issues, Vodafone partnered with IBM Watson to create TOBi – a chatbot designed to handle basic customer queries and provide support. The bot is available on its website and Facebook Messenger. TOBi utilizes customer support knowledge-base and learnings from conversations everyday to improve its responses.
Vodafone has also realized the value of the traffic of data that flows through its physical and virtual networks. This data is used to generate insights for smarter network planning and predictive maintenance.
Value Creation
Through use of data and AI, Vodafone is creating value for multiple stakeholders:
- Presence of TOBi bot has allowed Vodafone to drastically reduce wait times and ensured faster resolution of customer requests. This is especially important today when millennials and Gen Z users demand faster services. If the bot is unable to complete a request, a human representative intervenes to solve the issue and that knowledge is captured to enhance the bot’s capability. This continuous and closed feedback loop has improved the bot and through this human intervention Vodafone ensures that biases in the system are not propagated. The data collected has also helped them surface frequently occurring issues within their services and make product improvements accordingly. Consequentially, Vodafone’s Net Promoter Score has improved from -35% in some markets in 2015 to 25% in 2017.
- Vodafone works with partners to utilize their AI capabilities. For example, it has developed Amazon Alexa skills that allow users to quickly check their account, billing information etc. through a voice interface. This has again enhanced customer experience, differentiated Vodafone from peers and increased stickiness.
- Through the volumes of data Vodafone has collected over the years, it is better able to predict system failures/downtime and is able to preemptively act to avoid them. This has resulted in better and consistent network availability and allowed Vodafone to optimally manage its resources. It also gives them insights into planning for future network expansions to provide even better connectivity to its customers.
- Vodafone creates value for its customer service employees as well. Since menial tasks are handled by the bot, Vodafone has helped free up their time to focus on high-skilled and high-impact tasks, boosting employee morale and creating a highly skilled workforce.
- Vodafone also provides its network data and analytics capabilities to its B2B partners for better decision making. For example, Vodafone provides insights to AWS about network usage and data consumption, enabling AWS to plan its infrastructure better and automate tasks.
Value Capture
While creating immense value for its customers and employees, Vodafone’s AI strategy has also helped it capture some.
- As menial and common questions are resolved by bots, the company is reducing customer support HR costs. As of 2019, 70% of the issues were resolved by TOBi and is expected to increase as the bot gets smarter.
- In analyzing its network data and preventing outages, it is reducing loss of revenue that occurs due to downtimes. This analytical mindset within the company has also helped in improving the procurement processes by identifying potential bottlenecks through AI. By creating automated solutions, the company has reduced its time to market by 20% and cut procurement costs by 11%.
- By collecting data on customers, Vodafone gets better ROI by targeting promotions to its customers strategically.
Recommendations
While Vodafone has successfully reinvented itself through the use of data, competition is catching up quickly. In order to stay ahead, I would recommend that it invest heavily in IoT and 5G technologies which have immense potential to utilize the power of AI and benefit from the flywheel. To increase its speed of development, it might consider acquiring/partnering with companies that have the required skills/products. Vodafone has realized value by identifying trends in the data, but it also has the opportunity to utilize customer data to provide custom plans based on their preferences. However, due to privacy concerns and regulation uncertainty, I would recommend using this as an ‘opt-in’ offering and A/B testing it in certain low-risk areas before a large-scale roll-out.
Sources:
https://www.ibm.com/blogs/industries/vodafone-call-center-ai/
https://www.vodafone.com/what-we-do/services/vodafone-shared-services
https://procureconmarketing.wbresearch.com/blog/vodafone-data-ai-cost-procurement-transparency
https://www.wsj.com/articles/vodafone-supercharges-its-procurement-with-automation-ai-11561714201
Great article trishim11! I agree with your recommendation that Vodafone should double down on this strategy and invest in AI/ML tools and partner with other technology companies. I also think that applying their expertise outside of their immediate customers (like helping AWS) will expand Vodafones addressable market and the scale over which Vodafone can leverage its technology – more value through greater network effects!