Case Study Executive

Summary
Transformational Outsourcing at Telstra

David Mallon
Principal Analyst
December 2008

© BERSIN & ASSOCIATES RESEARCH REPORT | V.1.0

Transformational Outsourcing at Telstra 

In This Case Study

• Telstra, a large, multinational telecommunications company needed to
reinvent its business and transform its staff if it was to survive in today’s
competitive environment.

• After self-examination, Telstra concluded that its operations training function

required as much transformation itself as did the changes it would be asked to
enable within the company.

• Telstra chose to seek external assistance in the form of an end-to-end

transformational learning services outsourcing provider.

• The company’s partner, Accenture, launched the new operations training

function at Telstra – the Telstra Learning Academy – only six months after
signing the contract.

• The Telstra Learning Academy is well on its way to being a high-impact

learning organization.

Company Overview
Telstra is a FORTUNE 500 telecommunications and information services company
based in Melbourne, Australia. The company is Australia’s leading provider of
phone and data services – providing fixed-line, mobile and Internet access services
for most businesses and homes in that country.

Figure 1: Telstra at a Glance2

• Headquarters: Melbourne, Australia

• Employees: Approximately 46,000
• FY’2008 Revenue: AUS dollars 24.7 billion
• FY’2008 Profit (after-tax): AUS dollars 3.7 billion
• Major Markets: Fixed-line and mobile telecommunications, Internet access, data and
information services, and pay television

Source: Telstra, 2008.

 Please Note: This document is an executive summary of a comprehensive case study being published
separately. For more information, please see the full report, entitled, Learning Outsourcing Solves Critical
Talent Challenges and Delivers Strategic Flexibility: Telstra Transforms Its Learning Function and Its Business
in Record Time, Bersin & Associates / David Mallon, November 2008. Available to research members at
www.bersin.com/library.
 Source: http://www.telstra.com.

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Transformational Outsourcing at Telstra 

Business Environment: Need for

Transformation
A new CEO and senior leadership team took control of Telstra in 2005. Shortly
thereafter, they initiated a formal review of Telstra’s overall business strategy and
operations, which revealed very significant business challenges. Telstra’s original
business – traditional fixed-line phone services (PSTN) – was in decline. New sources
of business (such as mobile) were growing much more slowly than desired. The
company was not innovating; few new products were on the way. To make matters
worse, Telstra’s costs were rising. Its infrastructure was old and antiquated, and it
was becoming increasing expensive to operate. There was too much complexity
in existing support systems (such as IT or billing) – leading to inefficiency and
expensive mistakes. The bottom-line effect of Telstra’s strategic problems was a
poor overall experience for its customers. Telstra needed to change if it expected
to compete against the increasing number of younger, faster telecommunications
companies, both in the home market of Australia and globally.

To that end, Telstra announced a five-year plan to radically transform the business.
The company’s business environment would not allow a slow, incremental approach
to meeting this challenge. Telstra needed to simultaneously reinvent its fixed
and wireless networks, its information technology support systems, and most
importantly – its customer experience. Telstra needed to be able to flex, innovate,
increase revenues, and cut costs. It needed new products that would bring the full
benefits of high-speed broadband information services to its customers. In addition,
the company needed to simplify its processes and systems, bringing all of Telstra’s
businesses under one common set of systems and services.

Telstra’s People: A Need for Talent Transformation

To succeed at its highly ambitious plan, Telstra realized it needed to reinvent its
staff, as well. Telstra committed to investing approximately $140 million (AUS
dollars 200 million) into employee development over the next five years to provide
the critical knowledge and skills needed.

After hard self-examination, Telstra concluded that its operations training function
was not (in its current form) ready to support the company’s transformation.
Telstra decided that the depth of its change needs, the challenges presented by the

 Packet-switched telephone network.

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Transformational Outsourcing at Telstra 

strategic plan and the speed required to implement those changes all pointed to
a transformational outsourcing model. Telstra believed that choosing an end-to-
end outsourcing model offered the best chance to achieve world-class results in the
afforded time.

Learning Outsourcing

Our High-Impact Learning Organization research shows that organizations

outsource training functions for one of the following three reasons:

1. Lack of internal skills and expertise;

2. Demand for rapid turnaround or high volumes; or,

3. Need to reduce costs.

High-impact learning organizations regularly outsource many elements of their

learning – strategic programs, e-learning content development, competency-based
learning programs and many elements of leadership development. The success of
such outsourcing strategies is driven largely by finding a supplier that has:

• Deep levels of expertise in the program area or functional area of need;

• A cost and pricing model consistent with your desired spending level;

• An engagement model that fits your needs;

• The right level of scale to meet your needs; and,

• A cultural fit with your organization.

 For more information, please see the following reports: (1) Training Outsourcing: WhatWorks® –
The Economics of Outsourcing Training Technology and Operations, Bersin & Associates, August 2004;
and, (2) Learning Solution Providers: Selecting and Benchmarking an Outsourced Learning Solution,
Bersin & Associates / Josh Bersin, May 5, 2008. Both reports are available to research members at www.
bersin.com/library.
 For more information, The High-Impact Learning Organization: WhatWorks® in the
Management, Governance and Operations of Modern Corporate Training, Bersin & Associates / Josh
Bersin, May 2008. Available to research members at www.bersin.com/library or for purchase at www.
bersin.com/highimpact.

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Transformational Outsourcing at Telstra 

The Outsourcing Process at Telstra

Telstra focused its selection process on companies that were world leaders in the
learning field. These vendors had to have demonstrated experience working with
companies of Telstra’s size and geography, as well as the expertise and scale to
quickly provide the learning support Telstra required.

After a short but extremely intense selection process, Telstra chose Accenture as
its strategic partner, agreeing to a five-year arrangement. As part this partnership,
Accenture provides:

• Learning plans aligned to business requirements;

• Curriculum planning;

• Content development;

• Classroom and online course delivery;

• Support operations;

• Technology services; and,

• Governance structures.

The Telstra Learning Academy

The result of the Accenture partnership is the Telstra Learning Academy (TLA).
The TLA acts and operates as part of Telstra operations, even though its staff and
processes belong to and are managed by Accenture. The TLA is structured like a
training business, which is accountable to Telstra for meeting business objectives related
to business impact, learning outcomes and budget.

The goals of the TLA are to:

• Support Telstra’s strategic priorities;

• Look to the future performance needs of Telstra operations’ workforce, while

building the skills required today;

• Empower all Telstra operations employees (no matter how remote their
locations) through a mix of learning media;

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Transformational Outsourcing at Telstra 

• Deliver learning that helps build a platform for organizational change; and,

• Prepare Telstra for growth by making its people the basis of the company’s
competitive differentiation.

Through the TLA, Accenture provides Telstra with four key benefits: business
outcome-focused learning, flexibility, scalability and best-practice training delivery.

The TLA has the following four service units.

• Business Interlock – Ensures alignment between desired business outcomes

and TLA programs.

• Learning Design and Development – Leverages the production capacity and

learning expertise of Accenture’s global content development network to develop
TLA courseware.

• Learning Delivery – Schedules and conducts live classroom and virtual instructor
sessions, and is comprised of full-time master instructors and instructors (who
select and train a large pool of specialist instructors, in key subject matter areas,
who then deliver classroom sessions).

• Learning Administration – Provides administrative support for

the learning operation via Accenture’s support and help-desk call
center infrastructure.

Business Impact
The company’s goal is to make its customer experience a competitive differentiator
in the marketplace for Telstra. The knowledge that its people bring to customer
interactions, the high quality of work they perform and the speed at which they
perform services should be so much better than Telstra’s competitors that new
customers choose Telstra for these reasons.

The first two years of the TLA have shown the following very positive results.

• So far, the TLA has trained 21,500 personnel in 70 training centers across
Australia and has conducted 7,800 instructor-led training days for Telstra’s
operations business unit.

• Accenture has worked with Telstra to develop and deliver 350 new training
courses aligned to business priorities.

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Transformational Outsourcing at Telstra 

• With the help of the TLA, Telstra is seeing it larger organizational

transformation succeed. In 10 months, Telstra deployed a 3G mobile network
and an accompanying IP infrastructure over a physical area equivalent to the
continental U.S.

• On the latest employee engagement survey, 60 percent of respondents in Telstra

operations agree that there are sufficient opportunities for job-specific learning
and development, up 11 percent from 2007 and 15 percent from before the
advent of the TLA.

• Telstra’s most recent customer value analysis study of business customers shows
that customers increasingly prefer the value Telstra provides as compared with
its competitors.

• Customers indicate rising satisfaction with fault repair. To the question, “Was
the work worth what was paid?” Telstra’s scores now exceed those of its
competitors for the first time.

• The TLA and its work have helped to achieve a 20 percent increase in field
workforce productivity since November 2005. Telstra has demonstrated strong
top-line revenue growth and accelerating bottom-line earnings since beginning
this transformation project.

Highlighted Programs
The following are examples of some of the courses and programs implemented by
the Telstra Learning Academy.

• Project Green – An effort by Telstra to restructure its field-work dispatch

business, the first major program supported by the TLA is “Project Green” –
which resulted in an increase in workforce productivity of more than 15 percent.

• ”Assess-First” Health and Safety Program – A new way to deliver required

health and safety training for communications technicians (CTs) in which those
technicians are assessed for learning needs prior to training. Each technician
who passes the assessment saves Telstra 2.5 days of work-time, thus reducing the
percent of the learning budget devoted to this training from 90 percent to less
than five percent.

• Jumpering on the Network – This is a course designed to improve jumpering

quality. A TLA study pilot reported a 60 percent reduction in network jumpering
fault rates for work done by technicians who completed the training, which
resulted in an estimated AUS dollars 1.2 million in cost-savings.

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Transformational Outsourcing at Telstra 

• Communication Technicians of the Future (CToF) Program – Telstra has created

a suite of new software tools designed to assist CTs in their work. The TLA
supported this program by providing program analysis services, content
development and delivery, and planning and scheduling. The CToF training
involves two days of training in the field with mobile computing software,
including hands-on scenarios and simulated practice sessions. Field workforce
productivity has risen by more than 20 percent since the CToF program began.

• Service Advantage Onboarding – In support of significant business restructuring

in Telstra’s service advantage (SA) line of business, the TLA developed a three-
week transition program for the existing workforce. The original project was
completed in January 2008. At that point, the program was converted into a
new-hire program for future additions to the Service advantage group.

Conclusion
The decision to establish a relationship with Accenture and to create the Telstra
Learning Academy has had tremendous positive impact on Telstra’s business, as
many of the program examples covered in this report illustrate. If Telstra had
decided to renovate its own learning function internally, the company may have
been able to create a similar organization and may have generated similar results.
However, the cost to establish an equivalent infrastructure, hire an equivalent team
of experienced and knowledgeable staff, and accomplish it all in the same rapid
window of time would have been prohibitive, even for a company with the size and
resources of Telstra. Six months after contract signature, the TLA was launched in
August 2006. Only by engaging the help of an outsourced solution provider could
such extensive change happen so quickly.

Telstra believes that the TLA represents a strategic investment in its people
and its business. The success of the TLA, so far, has been an extraordinary
accomplishment for Telstra – and that success is positioning the company to meet its
transformational business objectives.

For more information, please see the full report, Learning Outsourcing Solves
Critical Talent Challenges and Delivers Strategic Flexibility: Telstra Transforms Its
Learning Function and Its Business in Record Time, Bersin & Associates / David
Mallon, November 2008. Available to research members at www.bersin.com/library.

Bersin & Associates © December 2008 • Not for Distribution • Licensed Material
Transformational Outsourcing at Telstra 

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About This Research

Copyright© 2008 Bersin & Associates. All rights reserved. WhatWorks®
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