Management World: Transformation still job one for global telcos

ORLANDO – Business transformation – enabled and in part driven by the move to converged IP networks – remains as important as ever for large, global service providers, and just as challenging.

That was the word from the IT and network leaders of four of the world’s largest carriers – AT&T, BT, Vodafone and Telstra – at the Management World show today in Orlando. All four are deep in the midst of ongoing business transformation projects, efforts that impact their networks and BSS/OSS systems while also touching on deep strategy and culture issues.

Economic downturn or not, such projects will continue on pace – although the changing business environment will make the choices to be made all the more difficult, said Mark Francis, vice president of AT&T enterprise architecture for AT&T. Those decisions go to the core of what it means to base the future of telecom networks on IP networks and services, which are fundamentally unreliable.

“In the core of most [service provider] networks, we are running at six sigmas,” said AT&T’s Francis, referring to the quality management process used to measure network reliability. But the customer experience of those networks is a different story, inevitably including things like order delays and billing areas, he said. “We’re running the core of the network at six sigma and running the customer at three sigma.”

Many carrier transformation projects are aimed at bridging just that gap, rebuilding back-office systems to improve customer experience. “The issue during a recession is, you can’t make everything six sigma,” Francis said, noting that those investment decisions are even more difficult because they directly affect customers. Make the wrong decision in today’s environment and customers can quickly turn to a competitor’s service. “That’s the issue we face over the next couple of years.”

The conundrum Francis describes emphasizes the fact that while telco transformation projects are in large part about driving out costs, that’s not all they are about. “Yes, you want to take out costs. That’s what’s driving a lot of this. But that’s not all,” said Michael Lawrey, executive director of operations for Australia’s Telstra. Above all, service providers must dramatically rethink how they work with their customers. “You can’t change out all these networks and systems and keeping doing the same thing [with customers and service delivery]. That’s the definition of insanity.”