BUSINESS TRANSFORMATION - Déjà vu?
The 1990s brought us Business Process Re-engineering. Now the talk is all about 
Business Transformation. Hugh Roberts contrasts and compares the approaches - and the results
‘BPR' (business process re-engineering) was the hot topic in the 90's when it came to change management. This time around, we've moved from BPR to BPM, but our new hot button is business transformation. (Still so new, it doesn't yet have a proper abbreviation!) Ostensibly, there isn't much difference between the two approaches, but the closer one looks, the clearer the differences in business prioritisation and market drivers become.
The one thing that has remained the same, however, is the high failure rate of transformation projects, often accompanied by the regular repopulation of executives at board level. After all, someone has to carry the can for all of those apparently ‘unfit-for-purpose' systems...
Towards the end of the last century as software capabilities improved, technology was first and foremost positioned as a means of enabling automation - seen as a key element in cost management programmes aimed at downsizing personnel and overcoming the restrictive work practices endemic in formerly monopolistic incumbent telcos. As a consequence of reduced staff numbers, existing hierarchies crumbled in an almost fetishistic rush to delayer organisations and establish everyone still employed in the organisation from top to bottom as a ‘Process Owner'. Similarly, whilst lip service was paid to the establishment of customer-centricity at all levels of the business, the real focus of culture change was to identify means of managing and motivating staff in a working environment that had regressed from one of high stability to one of high volatility, and where job satisfaction and staff churn were moving in opposite and unhelpful directions.
One might think that the new entrant operators would have been protected from the worst ravages of BPR, but of course - as demanded by their shareholders - skilled and experienced labour was required, and where better to get it from than the large and now freely
available pool of ex-incumbent employees? To quote Brendan Logan, who heads up Patni's Telecommunications Consulting and Advisory practice: "It took a new entrant about three years to create the same levels of inefficiency and disfunctionality in its operations environment that it used to take the PTTs eighty years to achieve."
In these new flatter organisations consisting of tens, hundreds, and in some cases thousands of Process Owners, the real problem was that very few people knew how the process that they owned actually fitted into the overall value generation mechanisms of the business, or how their processes related to those in other business units. However, they did at least know that they owned them. In the 21st century version of BPR - not least because of Sox 404, plus initiatives such as the eTOM - knowledge of process flows and inter-relationships has become significantly better. Unfortunately, the emerging convergence ecosystem has required us to maintain a much more fluid view of process ownership, so rather than declining, turf wars and inter-departmental politics are on the increase as we attempt to transform our organisations into lean, mean and agile enterprises.
Make no mistake; change is here to stay. Time-to-market constraints are typically no longer determined by technology development cycles (IMS and related notwithstanding!), so the strategic planning process must needs remain in a state of flux.
There are any number of obvious fiscal and housekeeping challenges in the finance domain raised by business transformation, amongst them the management of CapEx and OpEx, the sweating of legacy assets, the maintenance of good governance, corporate security and so on. One way or another, all of these are centred on risk management, which will undoubtedly supplant business transformation in the foreseeable future as the next ‘unifying' business focus of choice. In addressing these issues, the communications industry is probably no better or worse than most other industries. However, there are quite a number of ‘telco-specific' challenges posed by business transformation, most of which are a direct reflection of our uniquely intimate relationship with interconnected technologies and our relative lack of competitive and regulatory maturity on a global scale.
Here are four of the more insidious that we now need to face up to.
1. Recognising that ‘best practice' is, although useful to be aware of, an outmoded concept to use as a guiding principle. As the reality of globe-spanning operations and ownership bites, it is quite clear that local cultural, political, regulatory and socio-demographic factors will continue to maintain high levels of market diversity, and however mature we become as an industry this isn't going to change any time soon. Clearly, these factors must be respected. Although at the network layer and up into the bottom end of our OSS - anywhere, in fact, that functional activities could and should be totally transparent to the end user - standardisation is a given; in the BSS domain we will continue to waste an awful lot of money implementing applications and platforms that turn out not to be ‘fit for purpose' under local operating conditions. We have to acknowledge that ‘best fit' is going to be far more critical to our profitability and competitiveness, and that the determination of this may lead to conflicts with group directives and economies of scale.
2. Almost everything to do with ‘the customer'.
Telecoms must be the only industry on the planet that can't agree on a single and unifying definition of what a customer is. Quite apart from the competitive sensitivity of maintaining definitions that maximise our apparent market penetration levels, it remains common for many of the sub-systems within a single network operator's operating environment to maintain different customer data models. The challenge of developing and maintaining a single view of the customer is therefore quite daunting; never mind the challenges of doing so on an international basis or of extending the reach of telecoms into new market areas under the auspices of convergence. However much we believe we are being truly customer-centric... we're not. On a path well trodden by every other industry, CRM, CEM and BI are all steps in the right direction, but that's all they are: steps. We do, however, have some remarkable capabilities with the capture and management of high volumes of usage data. Once we learn to co-operate rather than compete with our ‘other customers' - the other players in the value chain - with regard to customer ownership, we may be able to fully leverage these skills to our advantage.
3. What to do about the information architecture.
Every business unit and function feeds off the central data backbone that we often (and somewhat erroneously) call ‘billing'. Somehow we need to find a way to take the politics out of the movement of data as we monetise the process of turning information into knowledge. Moreover, as the range and complexity of the services we offer increases, so do the number of relevant sources of knowledge about the customer's experience and perceptions of quality. We can no longer rely on the network to provide metrics that determine the value of the customer value proposition, nor can we rely on the traditional parameters we have used in the past to determine the value of the customers' attention and actions to our third party supply chain partners. We need to embrace the new methodologies entering the industry alongside the ‘X-factor' players - the network has the ability to generate knowledge but in the new generation it is certainly nether the owner nor the arbiter of ultimate (and bankable) truth.
4. Determining who your friends are.
Perhaps the greatest challenge of business transformation is that it doesn't lend itself to ‘projectisation'. Whilst elements of a transformation programme can be instigated and undertaken as projects, the reality is that transformation must be treated holistically if meaningful and lasting success is to be achieved. The impact must be felt on the systems, processes and skills deployed across the entire organisation. Unfortunately - and however much the pressures for rapid time-to-market wish to direct otherwise - the timescales required for the transformation of these three key elements of business operations are not synchronous. It is hopelessly unrealistic to expect new business processes and staff re-skilling to be in place at the point where platforms and applications have been upgraded, and vice versa. As a consequence, and even if the ‘plug and play' of COTS products were a credible reality, traditional RFP-based methodologies for the selection of products, vendors and integrators are almost certain to lead to failure. The selection of supply-side partners has now become the most critical of all transformation issues, and we have as yet no established framework in place for determining how to proceed. We need to learn how to ‘buy into' ongoing and flexible framework relationships with our suppliers for mutual - not exploitative - long term benefit.
In keeping with green operations, much of the slideware generated by BPR remains recyclable in the current climate of business transformation. But this doesn't mean that - even if it was meaningful the first time around - we should allow ourselves the luxury of feeling we've ‘been there before'. In the 90's we were competing for customer revenues by delivering a range of familiar services, albeit exploiting new technologies to deliver approximately the same services better, faster and cheaper, and we were competing between ourselves. At the moment, even the most basic of business questions remain open-ended: who we are competing with; what we are selling; who we are selling it to; and what it might be worth to them. The only answer that remains constant is the need for change, in response to change.
Hugh Roberts is Senior Strategist for Patni Telecoms Consulting and can be contact via: hugh@hughroberts.com
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