Business Transformation

Mastering process transformation: a core competence for the winners of the future
Telecom operators are continuously worried about the efficiency of their business processes and their ability to cohesively tie together siloed organizational units. However, many operators further silo their businesses by developing business processes piecemeal as adjuncts to point projects. Well-designed business processes can be real differentiators, and as such, the discipline of designing, changing, managing and improving processes should be treated as a critical competence. In our view, most operators have here an opportunity for improvement.
1. The need for transformation is particularly acute in the communication industry Telecom operators have made bold moves by introducing new technologies, replacing legacy systems, and changing organizational structures and ways of doing business. However, this is just the beginning. While sound business has been fuelled across the board by the fast uptake of mobile telephony and broadband access for the last decade, market maturity and continuous deregulation are now putting incumbent businesses under pressure. As these companies attempt to protect their margins through improved efficiency, further consolidation, centralization, partnering, and outsourcing are unavoidable. Todays business processes will be radically changed for most of these operators not just once but on an ongoing basis. The ability to be nimble and make these changes will separate the winners and the losers over the next decade.

2. Telecom operators are challenged by their ability to transform their business processes effectively The communication industry is a magnet for innovative thinking. This is reflected in the comprehensiveness of corporate strategies and the track record of handling advanced technologies. However, our studies and experiences show that the ability of traditional operators to transform their businesses effectively is still an Achilles heel as they face greater challenges than other industries: The businesses of telecom operators are very complex Telecom operators have relatively complex businesses, ranging from managing extensive infrastructures, offering advanced applications, and running scores of high street retail chains and call centers. Operators have experienced more internal barriers to success than other industries Nokia Siemens Networks has recently conducted an in-depth study of communication service providers across the world. As part of this, 103 executives were interviewed. 65% of them noted failure to cooperate across their organization as being a critical internal barrier to meeting their business objectives. This is high compared to other industries.

There is some confusion in the industry about how to design future processes TM Forum has considerably helped the industry by formulating eTOM as the reference framework. The popularity has, however, reached a point where many have made its compliance the main objective of their process transformations rather than the original business objectives. We have conducted text analysis of press releases and public statements mentioning eTOM from 20 different telecom operators over the last three years. 40% of the analyzed operators described eTOM as something that they aspired to be compliant with rather than explaining the inherent concrete benefits. In most other industries, most players are working hard to find ways to differentiate themselves by implementing more efficient processes.

40% of the analyzed operators in our study described eTOM as something that they aspired to be compliant with rather than explaining the inherent concrete benefits. In most other industries, most players are working hard to find ways to differentiate themselves by implementing more efficient processes.

3. Operators can benefit by revisiting their basic principles for process transformations Traditionally, businesses conduct transformation by formulating a corporate strategy and then, based on this plan, develop redefined organizational structures and core processes. Finally, they implement the necessary changes in the operational processes and support systems. This model makes sense, but it puts too much emphasis on the separate steps of a transformation at the expense of a more holistic approach. Transformation is not a one-shot engagement but a permanent state. Large companies that have successfully transformed themselves are typically characterized by having tangible change methodologies that are rooted deeply in their corporate cultures. One such example is Nokia, which has built itself from being a highly diversified conglomerate to become a fast moving and fast changing mobile phone producer. Their line managers are today guided through a systematic approach with individual six-month plans. This has helped Nokia to execute a series of major new changes over the last decade. Another example is Toyota, a company that is widely known for its LEAN methodology, which is an inseparable part of their overall Kaizen philosophy of continuous improvement. We have not been able to identify any traditional telecom operator that has an equivalent approach to change that is embraced by their entire organization.

Customers are sensitive to a reduction in the quality of service. Customers do not fundamentally care about what is happening on the other side of the communication services that they are paying for. There are, however, many cases in the industry, where operators change efforts have resulted in not just temporary disruption but in a general decrease in the perceived quality of service. This has often happened unintentionally over time and has been recognized too late. It is critical that operators keep this in mind throughout the planning process as well as when they are meeting unforeseen challenges. The commercial, operational and technological aspects of transformation are interlocked. Operators must be careful not to narrow their focus too much on individual change efforts but instead ensure holistic thinking across commercial, operational and technical domains. It is impossible to plan or implement radical changes in any one domain without running into challenges and opportunities in the two others. As an example, the so-called next generation transformations in the OSS space are not just about introducing new technology but will require new operational processes and enable new ways of doing business. We recommend that operators simultaneously consider all of these aspects in the initial planning and get decision makers and in-house experts from the respective parts of the organization involved together from the very beginning. Conceptually speaking, we advocate an iterative approach to think through and plan change in phases that successively address each of the three aspects as illustrated in figure 1.

Large companies that have successfully transformed themselves are typically characterized by having tangible change methodologies that are rooted deeply in their corporate cultures. We have not been able to identify any traditional telecom operator that has an equivalent approach to change that is embraced by their entire organization.

Figure 1

4. Operators should get five things right when planning and executing a process-led transformation effort Process-led transformation programs are quite complex in all dimensions of change, and present enormous challenges. Hence, operators need a thorough understanding of key critical aspects of process transformations ahead of any planning. We find five key critical success factors that operators should get right to execute the individual programs effectively, as well as to build long term competence: I) Co-create enriched customer experience with the customers: Operators should be conscious of their technical nature and the associated risk of getting bogged down in technological aspects of the transformation and completely ignoring the value that could be created or destroyed for their customers. Ideally, each transformational effort should help improve the overall customer experience. We recommend a continuous dialog throughout the transformation to understand the customers pain points and ensure that their concerns are addressed as the solution is developed. II) Assess the general process maturity and guide the planning based on this: The success of a business process has as much to do with the organization within which it is implemented, as the actual process itself. We recommend that operators assess their general maturity around business processes and thereby help plan and execute changes. A Process Maturity assessment can help operators understand inefficiencies of current processes, set the ambition level for new ones, and decide whether and when to take further actions to enable the desired change. The degree of management alignment is an example of a dimension in Process Maturity. If executives are not supporting, or are even disagreeing about, a new or existing approach, then this will sooner or later shine through to their respective organizations and jeopardize otherwise good intentions. III) Institute a central process excellence organization: The complexity of a transformation can easily be a root of misunderstandings, even in organizations with a high level of Process Maturity. Consequentially, there are several process aspects that need to be centralized and standardized across an organization. Key among them is the choice of frameworks, notations, training techniques, and tools. IV) Interplay between business processes and system architecture: Many operators formulate and document their future processes but fail to work iteratively with the system design. With increased automation, most of the operational processes are actually realized through system implementations and hence it is paramount that the design of specific processes and the system architecture are completely aligned. V) Employee engagement and accountability: As new or revised business processes are introduced, new skills may be required and new jobs and organizational structures created. Introducing a company-wide process, for example some aspect of customer service, can create substantial risks if employees are not prepared for the new environment or if they are unwilling to adopt the new ways of working. Hence, the success of a transformation program will largely depend on the extent to which employees are engaged and prepared for it. Operators should engage their top talent in the transformation programs and give them clear and hands-on responsibility for making the actual change happen. It should be a mandatory element in the career path for top talent at major operators.

Practically, a comprehensive transformation framework should be applied to ensure that processes, key performance indicators, enterprise architecture and systems are transformed effectively, while ensuring that the aspects mentioned above are addressed carefully. All these points are addressed in the framework below, which provides a holistic strategyto-implementation approach ensuring that operators remain committed to business benefits.

5. Our consultancy capability This Insight memo shares some of our many thoughts about process transformation. Historically, Nokia Siemens Networks Consulting has advised a range of communication service providers on many aspects of their business processes. Over the last year, our practice has invested significantly in improving our capabilities in process transformation. For more information on how we can help your business please visit our web site www.nokiasiemensnetworks. com/consulting.

Pre-modeled Level 4 Operator Process Map

Business Review & Strategic Assessment
As Is Process Inventory Process Gap Analysis & Maturity Assessment Transformation Strategy Define scope Voice of customer

Iterative driven by transformation roadmap

Requirements / Voice of customer

Design & Build

Iterative driven by transformation roadmap

Implement & Control

Industry Standards Business Case Opportunity Identification & Agree Initiatives Transformation Roadmap Data Model & E2E systems solution design SID, SOA Based Design Process Design

Modeling suites Process Modeling Business Scenarios & Test Processes Operational Design Operational KPIs Training

Test with Voice of Customer Operations Readiness Testing & Launch Business Activity Monitoring

Operations / Systems Assessment Pragmatic considerations

System Build & Test

E2E Systems Testing

Systems Deployment

In-Life Improvement Projects Lean Six Sigma based

Lead and Manage Transformation

Inputs / Outputs / Enablers
Figure 2

Governance Architecture Organization Change Management

Key Activities Systems Transformation Activities

Meet the consultants

Ankur Bhan Ankur is a business transformation expert and has deep experience working closely with communication service providers as a consultant on several of the largest programs in the industry. My clear experience is that operators will need to go beyond automation and simplification of their telecom software and rather be bold about some of the core process changes in their operations. This will be clearly reflected in the effectiveness of their transformation programs Ankur is head of Process Consulting at Nokia Siemens Networks Consulting. Previously, Ankur held leadership roles at Infosys, where he successfully built a global process transformation practice from scratch within their telecom vertical. Nicolai Tillisch Nicolai has served all types of communication service providers, ranging from fixed and mobile telecom operators, internet players and companies in IT and media. The communication industry has reached a level of maturity which will trigger further consolidation and intensified pursuit of efficiency. The ability to change effectively is pivotal for traditional operators. Nicolai has worked in most parts of the world and is currently based in Dubai. Before coming to Nokia Siemens Networks, Nicolai worked for T-Mobile International, Hutchison Whampoas 3, and McKinsey & Company. Nicolai is global head of Consulting in Nokia Siemens Networks.

David Caudle David has extensive experience in Asia Pacific providing Operations-focused consulting to service providers. Often we see RFPs coming out for support systems with little emphasis on the organization and processes governing those systems. The key word is support. Systems support business processes. Yet many operators have little process design and measurement skills. David is the Principal Consultant for the Service Management & Charging focus area across Asia-Pacific. David has previously worked for Accenture and IBM in their telecommunications consulting practices. Alessandro Magnino Alessandro works as part of the Consulting team in West South Europe. His role is to encourage the development of the consulting business with operator customers, proposing new projects and subsequently managing their delivery. Alessandro identifies a number of key challenges facing operators today: One of the major challenges is the increased need for operational efficiency, particularly as the credit crunch begins to bite deeper. Before working as a consultant for Nokia Siemens Networks, Alessandro worked for seven years as a senior manager at Value Team, part of Value Partners Group, a management and IT consulting firm based in Italy. In 2003 Alessandro founded an online vertical portal, which he built into a profitable business and sold in 2008.

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