Businessmodel of Amdocs

Customer Segments

Amdocs has a niche market business model, with a specialized customer segment. The company targets its offerings at service providers in the media, entertainment, and communications industries that need customer experience solutions. Its business has relied significantly on a small number of larger customers, with AT&T being the largest – the firm accounted for 34% of its revenues in 2015.

Value Proposition

Amdocs offers three primary value propositions: innovation, convenience, and brand/status.

The company places a high priority on ongoing innovation, as shown through the following:

• Innovation Centers – The company maintains these programs, which offer an open environment for customers and third-parties to explore creative solutions, from concept to commercialization. The centers feature a short time-to-market period, with the combined processes of discovery, scouting & evaluation, review & selection, final decision, and release lasting 4-6 months.
• Academic Collaboration – The company maintains a program called “Explore!” through which it partners with its customers to work with members of the worldwide academic community. The groups pool their R&D expertise to brainstorm innovations and solutions for difficult problems.
• Innovation Days – The company invites customers to schedule a day-long meeting with employees in which they host interactive sessions for the generation of creative ideas, participate in hands-on demonstrations and thought leadership exercises, and meet Amdocs startup partners. The company creates convenience by offering Amdocs CES, a selection of pre-integrated products based on an open architecture that provides scalability and adaptability. It is designed to enable modular expansion as a customer grows, facilitating inexpensive and low-risk implementations.

The company has established a strong brand as a result of its success. It serves clients in more than 90 countries, including prestigious names such as AT&T, BT, Comcast, Deutsche Telecom, and DIRECTV. It has also won many honors, including the Leading Lights Most Innovative NFV Product Strategy Award from Light Reading (2016), the Pipeline Innovation Award for The Most Innovative Technology Provider (2016), and the Marketing Excellence Gold award from ITSMA (2015).

Channels

Amdocs’ main channel is its direct sales force, which operates from sales offices in the U.S., Europe, Asia, and Latin America. It also maintains value-added reselling deals with certain database and hardware vendors. The company promotes its offerings through its website, social media pages, and attendance of conferences, summits, and road shows.

Customer Relationships

Amdocs’ customer relationship is primarily of a personal assistance nature. The company provides the following support, advisory, and training services:

Support Services – These include the following:

• Product Support – Consists of Preferred Support, a broad selection of support services to maintain business-critical applications; Premium Support, which offers a dedicated support account manager and committed service-level agreement restoration time; and Premium Onsite Support, which provides services onsite, including rapid service-level agreements.

• Extended Support – Consists of Ongoing Support Services, which are provided by Amdocs product experts and solve individual cases, and Proactive Professional Services, which are provided by its applications experts and solve problems across the entire system lifecycle. Advisory Services – These include the following:

• Strategic Business Consulting – Provides practical and strategic business consulting in the following areas: Experience & Engagement, Digital Business Strategy, and M&A and Synergy Planning
• Testing Services – Provides testing for products to ensure that they are at the highest level of quality; specific areas of study are Digital, Network, and Agile/DevOps Testing
• Managed Services – Offers Amdocs management of customers’ mission-critical business processes and systems, leaving clients time to focus on their main activities
• Program & Business Services – Utilizes Amdocs EDGE, a Cloud-based planning, management, and reporting tool, to ensure that clients are using a standardized approach for every program; specific areas of focus are Business Change and Optimization, Program Management, and Business & Systems Migration
• Gateway Services – Streamlines customers’ incoming orders across channels and systems
• Additional Services – These include Contact Center Services, Digital Services, Document Management-as-a-Service, Enterprise Integration Services, Field Service Management, Legacy Modernization Services, Media Services, Network Service Assurance, and Revenue Guard Services Training Services – Offers Amdocs Academy, a Cloud-based learning portal for customers’ employees that covers best practices and offers a personalized training experience

Key Activities

Amdcos’ business model entails designing and developing its software solutions for customers.

Key Partners

Amdocs maintains three key partnership programs:

Amdocs ONE Partner Program – Includes the following partner types:

• System Integrators and Consulting Organizations – Enhance ability of Amdocs‘ clients to deliver complex managed services and IT projects
• Network Equipment Manufacturers – Provide the communications network equipment used by clients
• Technology Suppliers – Provide the software or hardware technology components upon which the Amdocs solution operates Specific partners include Capgemini, EMC, IBM, Hewlett-Packard, T-Systems, Informatica, and Wipro.

Amdocs Enreach – A program through which Amdocs partners with startups whose offerings complement its core solutions, with the goal of helping customers introduce innovative products.

Amdocs Network Cloud Ecosystem – A program through which Amdocs works with other technology firms to integrate their offerings into its solutions to enhance them. Specific partners include Juniper Networks, Cisco, Fortinet, Radware, Microsoft Azure, and Amazon Web Services.

Key Resources

Amdocs’ main resource is its staff of engineering employees that conducts research and development for its solutions. Other important human resources include its customer support, consulting, and training staff. Lastly, the company maintains a global collection of development and support facilities, specifically in the United States, United Kingdom, Ireland, Brazil, Cyprus, Canada, India, Israel, the Philippines, and Mexico.

Cost Structure

Amdocs has a value-driven structure, aiming to provide a premium proposition through significant personal service. Its biggest cost driver is cost of revenue, a variable expense that includes cost of third-party products and compensation expenses. Other major drivers are in the areas of sales, administration, and research and development, all fixed costs.

Revenue Streams

Amdcos has three revenue streams:

Software Revenues – The company generates revenues from the sales of licenses for its products as well as associated services, including implementation, modification, integration, and customization

Service Revenues - The company generates revenues from managed services in its domain expertise and associated services

Recurring Fee Revenues – The company generates revenues from ongoing maintenance, support, and enhancements offered to customers, as well as incremental license fees charged due to increases in clients’ business volume