The benefits of PPMS can essentially be found in two areas: in the support of the decision-making process through performance transparency (strategic and operational) and in performance-related control and continuous improvement.

Focus on support of the decision-making process and incentivization

The intense competitive pressure on developed telecommunications markets drastically narrows the field of action in management. Decisions concerning markets, products, partnerships, or infrastructure are reflected today in the companies’ success with very little delay. Owing to the high-investment structure of the industry, the impact of company decisions lasts for a very long time in comparison. This is especially the case for the product and operations divisions. Decisions concerning IT, employees, and partnerships – suppliers, insourcing and outsourcing, make or buy – determine to a high degree the weal or woe of a company in its competitive environment. PPMS acts as a compass in this situation. Performance-related cost data such as process costs, service costs, and product costs enable telcos to recognize quickly the potential for cutting costs in the product and process portfolio. Detailed data concerning customer satisfaction create transparency about weaknesses and potential in the performance portfolio (product) and in the performance execution (process). Just as important here as the identification of ­improvement ­potential is the avoidance of unnecessary investments.

Moreover, detailed performance data about processes create transparency so that short-term optimization potential can be recognized and exploited. In particular, the identification and exploitation of cross-functional potential should be mentioned, along with the optimization of capacities and the discovery and elimination of process weaknesses. Errors in a process or area of responsibility often lead to massive expenditures and ­subsequently to costs in other areas. In a company, for ­example, the shortening of the call times for acceptance of customer ­orders led to a very high frequency of events in the complaint processes. These and other cross-functional impact relationships can be quickly identified and subsequently remedied by the use of PPMS data.

Another key benefit building block of PPMS is the use of the collected data for incentive systems in the company. The ­budget – not only in virtually all telecommunications companies an ­established control factor – has the great disadvantage of ­focusing solely on volume. Managers will occasionally accept overproportional cutbacks in performance to achieve budget targets. This can have grave consequences because control by means of budgets is a mixed blessing in support of business ­activities. Budgets do not reward the one who produces the best quality at the best costs. Instead, they reward the one who is best capable of filling out a specified framework of resources. But for telcos, particularly owing to the increased intensity of the competition, it is becoming more and more important to reduce continuously the unit costs for processes such as product provision or defect remedies while at the same time constantly improving the quality of the processes. Continuous improvement in the efficiency of company processes is a key goal for almost all telcos, at least in Europe. The most promising way to achieve this goal is by activating the will to change and the ­motivation of the employees who know best the pertinent processes and, above all, their potential.