Page 105 - Performance Leadership

94 • Part II Operational and Analytical Dimensions

managed differently. It shows that there is some revenue coming from
inactive users but that the discounts given are higher than this revenue.
The business case of making inactive users active again, or finding out
how to minimize discounts to inactive users, becomes very clear. The
matrix serves as a risk management model as well. The higher the per-
centage of revenue is toward the bottom right part of the matrix, the
higher the risk, particularly if the amount of corrections increases.
With the matrix in mind, within the same context of the truth, we
can expand our insight. For instance, we could start aggregating users
to the “single customer” level. Or we can use the matrix to include
other relevant information, particularly contribution per user, by adding
direct cost categories, such as the interconnection fees that E-plus pays
to the other telecom operators and promotion categories, to understand
the cost of marketing and the impact on the user contribution.

Case Study 4: Retail Banking

Retail banks basically have two main sources of income: interest pay-
ments and fees. Banks attract short-term money by paying interest, such
as the money that customers place on savings accounts. On the other
side, banks supply loans, mortgages, life insurance, and other financial
services for the longer term, charging interest that is higher than what
they pay to attract short-term money. The difference is the margin for
the bank. Second, retail banks charge fees (provision) for services, such
as cashing a check, credit card fees, stock trading fees (as well as mar-
gin interest), mortgage fees, and so forth.
One of the most used terms in all parts of the operations of a retail
bank is transaction. In this example we will concentrate on one process
only: money transfer. People draw money from ATMs, use Internet
banking to transfer amounts, both national and international, shift
money between their current account and savings accounts or stock
accounts, and use a wide range of other financial services. Every retail
bank generates a vast array of reports about the number of these trans-
actions and their monetary value, broken down by business unit, prod-
uct, and most probably geography. But very few reports combine those
definitions to closely align the various steps in the money transfer
process.