МТС (SAS Enterprise Risk Management)

The Russian company Mobile TeleSystems uses solutions of SAS Telecommunications Intelligence Solutions for maintenance of growth and formation of the market share.

The MTS company stopped the choice on the solutions SAS Telecommunications Intelligence Solutions which should optimize the following fields of activity: business performance management, financial control, automation of a marketing activity, detection of cases of fraud, customer retention, segmentation of customers and cross/additional sales. "The SAS company provides the solutions providing effective monitoring and management of activity for upper managers, - Alexander Gorbunov, the director of strategic development of MTS company said. - MTS is the young, dynamically developing company, and during rapid growth for our company it is very important to be able to cope with difficult tasks and to react quickly to market changes. The SAS company delivers the best analytical solutions of the level, necessary for us".

The huge area of coverage of MTS network (11 time zones) and rapid growth of the company cause considerable commercial and technical difficulties. For example, terabytes of data are stored in a set of systems on different servers and in network architectures. "The MTS company already has work experience in conditions of rapid growth and the high requirements imposed to the company - Gorbunov continues. - We became the largest mobile operator in Eastern Europe thanks to several factors: use of the GSM standard, access to the capital, cooperation with the Russian and foreign investors and also acquisition of regional telephone operating companies". The high level of outflow and a low customer loyalty are characteristic of the Russian market of mobile services, at the same time such telecom operators as MTS should face the solution of different problems, since fight against the "grey" market of mobile phones and finishing with the fact that 80% of sales are performed through dealers. Most of subscribers use advance payment of services.

In addition to maintenance of growth rates and the occupied share in the market of mobile services - the MTS company became in 2004 the largest cellular operator in Russia and Ukraine, occupying respectively 35 and 52 percent of the market - a basic reason of investments into technologies of SAS there was an increase in attractiveness of MTS for investors. Investments should be directed to formation of effective culture of business in such spheres as attraction and customer retention, ensuring steady growth, reduction of cases of fraud, demand forecasting, increase in profitability of clients, development of tariff policy and optimization of the provided services. "Within the last five years in Russia increase in GDP and decrease of the inflation rate is observed, - Gorbunov said. - We improved our financial activities and with respect thereto attractiveness of our company for investors increased. Capital repayment at the expense of the direct and portfolio investments is noted".

Gorbunov also emphasized that the strategic interests of MTS were displaced from acquisition of regional operators towards their integration and creation of a basis for long growth outside the main markets of the company. Russia, Ukraine and Belarus with the total number of population of 200 million people treat the main markets of MTS, at the same time the CIS countries, including Uzbekistan, Kazakhstan and Georgia with the total number of population of 78 million are of the main interest to business development of the company now human.

"Due to the expansion of activity of the company in the regional markets we had to implement a new management structure to standardize and optimize the executed transactions, - Gorbunov said. - It requires implementation of management systems and control. The regional markets strongly differ from each other on the level of the development and existence of competitive companies Therefore it is necessary to develop the approach for each market". According to him, such approach assumes holding aggressive marketing campaigns and policy in the field of investments for the purpose of gaining 35% of a share in the market, its maintenance, development of network of partners in sale and providing high-quality services to avoid the subsequent reduction of a market share. The SAS company provides support of MTS in all these areas including a full support of activity of the CEO of Mobile TeleSystems company.

The purposes of MTS are clear. Having created 10 management structures in regions, the company aims to provide higher quality of communication and to apply more perfect "control methods" in more than 70 regional representative offices due to integration and harmonization of their activity. Besides, according to Gorbunov, distribution of responsibility between different levels of management "will guarantee higher quality of accomplishment of strategic and current tasks". The company aims to delegate powers on decision making on the current working questions and also control of this process to regions within the main development strategy of the company". In turn, standardization of business processes will lead to formation of standards of accomplishment of processes and procedures in the company. It will provide the sequence of decision making and also will increase transparency, efficiency and speed of execution of operations.

As the Russian representative office of SAS already showed compliance of the solutions to business requirements of MTS, the management of MTS, including the chief financial officer, the head of department of information technologies and the marketing director, selected SAS as the most appropriate solution for the company. "In view of our relations with SAS and experience of its work on the key directions, we addressed SAS company with the offer to develop and implement a system for management of activity of our enterprise, - Gorbunov reported. - In fact, we began to cooperate with SAS in 2001 in the field of solutions for a business intelligence". Implementation of data warehouses and architecture of a business intelligence, including the different reporting systems and means of the analysis integrated through the Internet portal was performed.

Since 2002 in MTS the set of projects with use of SAS is implemented. For example, marketing departments, new product developments, financial controlling, customer service (the VIP and corporate), information systems and services use a system for accounting, the analysis and the reporting under customer retention. This system allows to execute customer segmentation and the analysis of their behavior, to plan and perform cross and additional sales and also to estimate solvency. Heads can select the problems connected, for example, with the low level of customer retention now, to set its reasons and to take necessary measures for prevention of outflow of clients. Besides, the solution of SAS for management of marketing campaigns together with solutions for deduction, customer segmentation and also cross / additional sales supports also work of MTS sales department and department of service of subscribers.

Also the solutions SAS Financial Management and SAS® Activity Based Management which help chief financial officers and accounting with implementation of financial consolidation and a reporting preparation according to the Russian and international standards while the analysis system developed on SAS and prevention of cases of fraud supports work of departments of information systems and services and also financial controlling are unrolled.

"We use the solution SAS Strategic Performance Management in particular for creation of an optimal analysis system and the reporting on the basis of 200 key indicators of performance and we step by step passed to implementation of balanced scorecards", - Gorbunov continues. It means setting of strategic tasks, building of key indicators of performance and the purposes to one line with regional requirements and spheres of responsibility, providing identification of necessary data and providing an information access, necessary for successful business development.

The SPM system includes different parameters, all from which conform to requirements of MTS. "All key indicators of performance are traced at the regional level even if all powers are concentrated at the central office of the company, - sums up the result of Humpbacks. - And as on overall effectiveness there is a cumulative influence of different key indicators of performance of processes, we separated these indicators into three different levels: corporate, functional and at the level of department. Every time when priorities in connection with fast business development change, we monthly trace all key indicators of performance and we analyze them taking into account features of each region. And, at last, as very important that all heads of regional representative offices were aware of the tasks facing them, in our company the intranet system works easily accessible. Reports are published and - for us it is very important for external use that our shareholders could monitor activity of the company".

The MTS company continues to grow and develop, increasing a share of the presence out of the "traditional" main markets, and the opportunities given to SAS will help the company to enter other international markets, to perform the planned transition from the GSM standard to standard 3G and also to expand the existing network of sales associates.