The challenge

Vodafone knew that to maintain their position as one of Europe’s leading telcos they needed to boost their ability to talk to customers in the right context, through the right channels, at the right time. Their challenge was twofold if they were to realise this ambition – new technical capabilities would need implementing, but arguably still more importantly Vodafone knew that their ways of working and operating model would also have to transform across all 21 of their operating companies globally, all of which worked in different ways.

The approach

Merkle was engaged to deliver Vodafone’s transformation to a state Vodafone termed ‘Always On Marketing’ – looking not simply at technology, but at revolutionising ways of working too.

One of the primary focuses of our target operating model was in defining the organization structure of marketing teams, and how these worked alongside the wider business. By restructuring the teams to become agile and cross-functional rather than siloed, and embedding the right forums for collaboration and governance, we have streamlined decision-making and shifted Vodafone’s culture to be more oriented around the customer.

Vodafone’s OpCos differ significantly in size and culture, and a one-size fits all model was not possible. Merkle initially worked with 4 nominated OpCos (Turkey, Germany, Spain & UK) to build a target operating model collaboratively that could be applied across all OpCos, while facilitating communication between markets and allowing them to share learnings and best practice. Our final model combined best-in-class elements that were applicable everywhere, frameworks that allowed markets to shape elements of their own solution within certain parameters, and options for outsourcing of elements to central centers of excellence or third-party managed services.

Such was the success of our four pilot OpCo projects that we were then asked to expand our collaboration to Netherlands, with VodafoneZiggo, where we evolved the model further to bring in the latest agile concepts. We have also gone into Vodafone Greece to help them to stand up their agile squads.

The outcome

The revolutionized operating model that Merkle created for Vodafone has been instrumental in transforming their business. Customers are now receiving a six times greater variety of different propositions, with these still able to be serviced by the same number of Vodafone staff. The impact on the bottom line is evident – Vodafone has seen a 7% boost in average revenue per user, and has reduced commission costs by a fifth. The initiative has delivered a return on investment over one-third higher than before.