VSS India Vantage 2019

Vodafone Shared Services India Presents

Vantage 2019
A Strategy Case Study Challenge

About Vodafone Shared Services:

Vodafone Shared Services (VSS) is the global in-house centre for Vodafone Group Plc, for which it
creates value by enhancing quality, efficiency and customer experience. Established in 2006,
Vodafone Shared Services has evolved into a global, multi-functional organization that currently
covers centres across India, Hungary, Egypt and Romania with over 21,000 professionals.
Vodafone Group Plc is one of the world's leading telecommunications groups, with a significant
presence in Europe, Middle East, Africa and Asia Pacific through the company's subsidiary
undertakings, joint ventures, associated undertakings and investments. These entities operate in over
26 countries as our Operating Companies or “OpCos”, in local as well as partner markets.
Vodafone Shared Services has matured over the past 13 years, delivering value to our partners. In
recent years, it has transformed its approach from being a reliable service provider to becoming a
strategic partner with focus on value and business outcomes. Therefore, VSS is now a key lever for
Vodafone to drive optimization initiatives across the organization. It plays its part by effectively
enabling the Vodafone strategy and delivering cost optimization, innovation and higher levels of
profitability.
At Vodafone Shared Services, our Value Drivers are:
1. Maximize Cost Arbitrage: Continue to optimize footprint, increase VSS penetration and expand
its P&S portfolio.
2. Enhance Productivity: Do it better & smarter through leveraging business excellence and
automation technologies.
3. Capitalize Knowledge: Leverage VSS diverse experience and telecommunications know-how to
deliver innovative business solutions and services that identify new opportunities for Vodafone.

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Business Case:
Despite good FY 2018-19 performance, Vodafone Group Plc faced challenges in many markets. Spain and Italy
were particularly challenging, and so was South Africa during the second half of the year. Although the financial
guidance was met, revenue growth slowed during the year and 5G spectrum auction costs were high, thereby
reducing our financial headroom.

Statutory Figures 2019 2018 2017 2016

Group Revenue (€m) 43666 46571 47631 49810
Operating Profit / Loss (€m) -951 4299 3725 1320
Profit/ Loss for the financial Year (€m) -7644 2788 -6079 -5122
Closing Net debt (€m) -27033 -29631 -29338 -26993
Weighted average number of shares (millions) 27607 27770 27971 26692
Total dividend per share 9c 15.07c 14.77c 14.48c
Table 1: Key financials for the last four years- Vodafone Group Plc. c= Eurocents. Source: Vodafone Group Plc Annual Report 2019

Challenging times are predicted this year as well, owing to various market specific conditions, driven primarily
by the digital disruption in the industry. This digital disruption is responsible for a rethinking of the ways that
Vodafone Plc has been approaching its strategy and is helping its rapid ‘Telco to Techno’ transformation. This
becomes even more pertinent when one realizes the impact that technology is currently having on
consumer preferences, consumption patterns and, consequently, industry trends!
Therefore, Vodafone Group Plc is at a key point of transformation and, is focused on the following:
1. Deepening customer engagement
2. Accelerating digital transformation
3. Radically simplifying our operations
4. Generating better returns from our infrastructure assets
5. Continuing to optimize our portfolio
The chief aim of the Group is to rebuild financial headroom and support the transformational goals thus set out.
With 5G on the horizon, new possibilities are opening up. Vodafone being the innovation driven organization
that it has always been, is already deep into creating cutting-edge products/ offerings for its consumers based
on their preferences.
In such a scenario, the role of a Shared Service organization becomes more important than ever.
Vodafone’s local market partners trust VSS with many aspects of their business and expect them not
only to perform exceptionally well, but also to provide thought leadership and guidance, thus making
VSS their in-house consultants. VSS has been instrumental in generating value for the group over the
past few years.

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Statutory Figures VSS 2019 2018 2017 2016

Total Value Generated (€m) 220 208 134 100
Table 2: Trend of total value generated by VSS in the last four years. Figures are representative only.

Moreover, while close to 75% of the total value generated was through cost arbitrage, the remaining
was achieved through productivity enhancement interventions. Over 55% of the total efficiencies
delivered by VSS in FY 2018-19 came through digital interventions.

Road Ahead:
The changing strategic priorities of Vodafone Group calls for VSS to regroup and rethink how it can
enable this next generation of priorities for the Group, to ensure maximum value creation even in the
face of this transformation.
VSS realises that the operating companies have certain expectations from it. First, for VSS to be able
to understand market specific challenges and recommend customised solutions to operating
companies; second, for VSS to use its expertise and capability to enhance process efficiencies for
these operating companies; and third, for VSS to help operating companies positively influence &
impact the customer.
Additionally, VSS leadership needs to keep in mind the following market realities that directly
influence delivery:
 The extent of cost arbitrage across its operating locations is quite different from each other
 Not all VSS centres derive equivalent benefits of cost arbitrage which is heavily dependent
upon the cost of operations (talent, forex, infrastructure, location and others) at their
respective locations.
The VSS senior leadership agrees that sustained success of VSS is dependent on three parameters:
1. A people first approach is indispensable.
2. Digital capability will define success.
3. Solutions need to be customer oriented.
With these three parameters guiding the future course of VSS, the next step is to leverage on the in-
house capability, which exists in VSS in the form of various service lines. These teams collectively act
as the strategic powerhouse for the Group and Local Markets, offering services and creating solutions
that help to grow, excel and achieve their targets.
Understanding the Service Lines
Digital Business Solutions: In order to achieve the goal of ‘Digital First’, optimizing the existing
processes becomes important. This team aids VSS and Group in analysing and benchmarking
processes and mapping it to digital frameworks. After analysis, it further helps in simplifying and
automating the identified opportunities. This service line is the main engine powering efficiencies
across verticals, having RPA, cognitive and advisory as its core areas of expertise.

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Enterprise Operations: In order to achieve the business efficiencies in the 26 local markets, this
team offers high-level capability by providing marketing, digital sales, product, service transition, bid
management, pre-sales & commercial operations solutions.
Customer Operations: This team provides customized support and outreach capability to Vodafone
local markets by offering web chat, voice support, e-mail support, credit & collection, fraud & research
and back office solutions. This team has been integral in providing multi-lingual services, managing
transactions that run into millions each year.
Finance: This team helps in achieving the synergies for group markets by offering consolidated
financial solutions in terms of working capital, accounting, tax and advanced finance services for
Vodafone operating companies across the globe.
Supply Chain: The SCM capability centre provides support globally with centralized processes and
focusses on efficiency through dedication and innovation. The service line leverages its expertise &
global outlook in managing end-to-end sourcing, contract management, purchasing operations &
supplier evaluation, among others.
Information Technology & Networks: Information Technology & Networks forms the backbone of
telecom operations. This team provides expertise in application development & operations, UI/UX,
ERP, data security, infrastructure management, laying of fibre cables and transitioning to newer
technologies. Ensuring network operations continuity is another responsibility that this service line
delivers.
Analytics & Insights: In the era where data is the new oil, the Analytics and Insights team
recommends customized solutions to make the business more efficient. This team helps in turning
insights into opportunities, predict business outcome and prescribe actions. It further helps
businesses to measure and improve KPIs. The team specialises in using sentiment analysis as a tool
as well.
Human Resources: There has been a significant shift in the world of human resources and how
employees interact with an organization, and this teams helps in keeping pace with the changes. It
provides a digital HR experience to employees across most operating entities of Vodafone. It further
aids in implementing the next generation HR systems and enhancing employee experience overall.

Moving forward, you act as advisors to the CEO - Vodafone Shared Services, and strategize how all
these Service Lines can come together and support Vodafone operating companies achieve further
efficiencies and reduced costs.

We look forward to your recommendations in response to the challenges given below.

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Challenges:
1. How should VSS (through its service lines) re-align its suite of products/service offerings to
the Group and Operating Companies, to enable their success in light of the new priorities
during transformation? Please provide details of the products/services that you recommend.

2. Further to your inputs for question 1 above, critically evaluate the feasibility of this solution in
light of growing concerns around data privacy, and resultant legal provisions. Also, call out the
change management complexities that this will generate in transition of work from operating
companies to VSS centres.

3. How can VSS use digital solutions (Automation, RPA, Cognitive, AI etc.) to reduce operating
costs, thereby creating better value proposition for its partners, i.e. the operating companies?

4. In the face of digitally driven efficiencies, how should Vodafone Shared Services manage skill
upgrade and deployment agenda? Clearly outline the roles of various teams in your proposed
solution.

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Annexure

Important Links:

 Important Websites:
o VSS Website
o VSS Careers Site
o VSS India Careers Site

 Annual Reports:
o Vodafone Website
o Vodafone Annual Report 2019
o Vodafone Annual Report 2018
o Vodafone Annual Report 2017
o Vodafone Annual Report 2016
o Vodafone Annual Report 2015

 Social Media Pages:

o VSS India Facebook
o VSS India LinkedIn

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