Sample Telecommunications Business Model
Blog: Biz-Performance, David Brown
TELCOMMUNICATIONS BUSINESS MODEL
Lifestyle Trends Regulators New Entrants National/International Politics Customers Stockholders Suppliers Competitors Economy Technology Capital Markets
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Strategic Management Process
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Process Description
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Process Objectives
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Inputs
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Outputs
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Systems
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Classes of Transactions
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Routine
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Non-routine
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Accounting Estimates
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Risks Which Threaten Objectives
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Controls Linked to Risks
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Critical Success Factors (CSFs)
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KPIs Linked to CSFs
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CORE BUSINESS PROCESSES
core business process: customer care and billing
Process Description
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The customer care and billing process covers the end-to-end process associated with (1) handling an initial customer order, (2) fulfilling that order, (3) generating a bill and (4) collecting cash for the service provided. It is also concerned with:
It is important to view the above as one process rather than four separate processes, as inefficiencies or problems any where along the chain impacts the level of collection and customer satisfaction.
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Process Objectives
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Activities
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Systems
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Classes of Transactions
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Routine
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Non-routine
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Accounting Estimates
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Risks Which Threaten Objectives
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Controls Linked to Risks
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Critical Success Factors (CSFs)
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KPIs Linked to CSFs
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Other Symptoms of Poor Performance
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Performance Improvement Opportunities
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Key issues and considerations for the tele-
communications industry
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Resource Management Processes
Resource Management process: financial / treasury management
Process Objectives
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Inputs
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Activities
Outputs
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Systems
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Classes of Transactions
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Routine
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Non-routine
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Accounting Estimates
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Risks Which Threaten Objectives |
Controls Linked to Risks |
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Critical Success Factors (CSFs) |
KPIs Linked to CSFs |
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Other Symptoms of Poor Performance |
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Performance Improvement Opportunities |
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PROCESS ANALYSIS TEMPLATE
A process analysis template is used throughout this business model to document the strategic management, core business and resource management processes. The following three pages explain the components of the template.
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Process Analysis Template
Process Description |
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Process Objectives |
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Inputs |
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Activities |
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Outputs |
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Systems |
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Classes of Transactions |
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Risks Which Threaten Objectives |
Controls Linked to Risks |
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Critical Success Factors (CSFs) |
KPIs Linked to CSFs |
Critical success factors (CSFs) are the prerequisites and areas of dependency for a process to be successful. CSFs may be inputs, parallel or supporting activities or aspects of a business’s philosophy or infrastructure necessary to ensure the proper delivery of the process.
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Key performance indicators (KPIs) are the quantitative measurements, both financial and non-financial, of the process’s ability to meet its objectives through trend analyses within a company or bench-marking against a peer of the company or its industry. The KPIs listed are not all of the KPIs that exist relative to each process, but rather are examples that the company may or may not measure. While most KPIs can be linked to CSFs, this may not always be the case.
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Other Symptoms of Poor Performance |
Other symptoms of poor performance represent other evidence which may exist that indicates the process may not be operating to its most effective level. The items listed here should lead to performance improvement opportunities listed below.
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Performance Improvement Opportunities |
Performance improvement opportunities are areas for performance or process improvement. This improvement may be achieved internally by the client or through External Consultant or other third-party assistance.
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Key issues and considerations for the telecommunication industry |
For each core business process, common key issues and considerations specific to the telcommunications industry have been highlighted to assist audit teams in identifying potential issues that need to be monitored and followed up during the course of their audit. It should benoted that the issues identified are not intended to be an exhaustive list of all telecommunication issues that may exist for that process and audit staff must use their judgement in determining what issues are applicable to their clients.
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ENTITY-LEVEL BUSINESS MODEL
Entity–Level Business Model
As shown on the next page, the entity–level business model is used to describe the interlinking activities carried out within a business entity, the external forces that bear upon the entity, and the business relationships with persons outside the entity. The items included in the entity–level business model include the following components:
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External forces and agents are those factors, pressures and forces from outside the entity that often are threats to the attainment of the entity’s objectives.
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Markets/formats are the segments of an industry that are applicable to the entity. Formats identify the design and location of the facilities.
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The strategic management process is the process that:
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develops the entity’s mission;
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defines the entity’s business objectives;
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identifies the business risks that threaten attainment of the business objectives;
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manages the business risks by establishing business processes; and
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monitors progress toward meeting the business objectives.
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Core business processes are the processes that develop, produce, sell and distribute an entity’s products and services. These processes do not follow traditional organizational or functional lines, but reflect the grouping of related business activities.
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Resource management processes are business processes that provide appropriate resources to the other business processes.
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Alliances are established by an entity to attain business objectives;
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expand business opportunities; and
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reduce or transfer business risk.
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Core products and services are the entity’s products and services.
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Customers involve relationships that are usually the entity’s primary focus.
Core Business Processes
Strategic Management Process
Direct Sales, Agents, Company-owned, Stores, Telemarketers, Resellers, Bills/Bill Inserts, Direct Mail, Debit Cards, Advertising, Cellular, PCS, Cable, Long Distance, CLEC, ILEC, Energy Companies (Electric utilities, Gas utilities), Railroads, Content Providers, Vendors, Equipment Mfrs., International
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Resource Management Processes
Financial / Treasury Management, Legal & Regulatory Management, Information Management, Channels’ Alliances’ Core Products/ Services, Customers (Domestic & Int’l), Human Resources, Developing new services & products, Managing & operating the network
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EXTERNAL FORCES & AGENTS
TELCOMMUNICATIONS BUSINESS MODEL
Lifestye, Trends, Regulators, New Entrants, National/International, Politics, Customers, Stockholders, Suppliers, Competitors, Economy, Technology, Capital Markets,
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Strategic Management Process
Process Description |
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Process Objectives |
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Inputs |
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Outputs |
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Systems |
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Classes of Transactions |
Routine
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Non-routine
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Accounting Estimates
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Risks Which Threaten Objectives |
Controls Linked to Risks |
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Critical Success Factors (CSFs) |
KPIs Linked to CSFs |
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Other Symptoms of Poor Performance |
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Performance Improvement Opportunities |
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Key issues and considerations for the tel-communications industry |
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TELCO CORE BUSINESS PROCESSES
Core business process: Customer care and billing
Process Description |
It is important to view the above as one process rather than four separate processes, as inefficiencies or problems any where along the chain impacts the level of collection and customer satisfaction.
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Process Objectives |
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Activities
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Systems |
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Classes of Tansactions |
Routine
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Non-routine
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Accounting Estimates
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Risks Which Threaten Objectives |
Controls Linked to Risks |
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Critical Success Factors (CSFs) |
KPIs Linked to CSFs |
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Other Symptoms of Poor Performance |
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Performance Improvement Opportunities |
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Key issues and considerations for the tele- communications industry |
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RESOURCE MANAGEMENT PROCESSES
Resource Management Process: Financial / Treasury Management
Inputs |
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Activities
Outputs |
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Systems |
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Classes of Transactions |
Routine
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Non-routine
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Accounting Estimates
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Risks Which Threaten Objectives |
Controls Linked to Risks |
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Critical Success Factors (CSFs) |
KPIs Linked to CSFs |
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Other Symptoms of Poor Performance |
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Performance Improvement Opportunities |
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