What operational metrics should an MNO monitor and manage?

Posted: November 11th, 2010 | viewed: (2,998) | Comments: ( 0 ) | Topic: Blog Post, Profitability |

Before a mobile money service can turn a profit, it must first be operationally healthy. This may sound obvious (okay, it definitely sounds obvious), but today many mobile money practitioners are unable to report with clarity whether their service is operationally healthy along the dimensions that matter most.

In part, this problem is a function of our industry’s stage of development: for most operators, mobile money is a new (and unfamiliar) business, so it hasn’t been completely clear which metrics they should monitor and manage. But the other part of the problem, particularly for operators who do know the metrics they want to monitor and manage, is that technically it can be hard to get the necessary data. While most operational metrics that an operator would need to track can, in theory, be gleaned from the m-wallet transactional database, in practice we find that the data doesn’t always make its way onto the m-wallet reporting dashboard in an easily digestible way.

So today we’re pleased to present a solution to this problem: the GSMA Mobile Money Metrics Dashboard. This Dashboard presents practitioners with an easily digestible summary of their operational metrics that matter most.

And this tool is more than an excel spreadsheet: for existing customers of Comviva, Fundamo, Sybase 365, or Utiba, the Dashboard can be integrated as a reporting feature free of charge. Moreover, these vendors have agreed to include the Dashboard as a free, pre-installed reporting feature for every future m-wallet customer. Thus, all existing and future customers of Comviva, Fundamo, Sybase 365, and Utiba will be able to access this Dashboard at the click of a button. If you’re a customer of one of these vendors, send an email to mmu@gsm.org to get access to the Dashboard. Other stakeholders should feel free to request a copy as well.

So what, exactly, is in the Dashboard? That is, what are the operational metrics that an MNO should monitor and manage? After consultation with leading mobile money practitioners and industry experts, we have selected five key sections for inclusion in this tool:

1. Aggregate volume and value – These graphs present a practitioner with the bottom line in terms of aggregate growth. The Dashboard also presents the monthly growth for each individual service (i.e. money transfer, bill payments, airtime top-up) to help operators identify whether top-line aggregate growth is masking important product-level trends.

2. Customer base – In this section, the Dashboard presents the growth of active and inactive customers. Separating and comparing these two figures can help illuminate whether an operator has an issue with customer inactivity.

3. Customer engagement – Beyond growth in the number of active customers, a healthy mobile money service is one in which customers are adequately engaged with the service. This section of the Dashboard measures the number of transactions per customer, float held per customer and the distribution of transaction frequency across segments.

4. agent engagement – A healthy mobile money service doesn’t just have engaged customers, it will also have engaged agents. To this end, the Dashboard presents the number of cash-in and cash-out transactions per agent, as well as the average balance of e-money agents keep on hand (a good indicator of whether they’re seeing value in the service).

5. Customer and agent balance – This section of the Dashboard presents the number of active customers per agent, a ratio practitioners must closely manage, and the growth in total number of agents.