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.

5. Our consultancy capability

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.

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

Requirements /
Voice of customer

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

Operations /
Systems
Assessment
Pragmatic
considerations

Design & Build

Iterative driven by transformation roadmap

Business Case

Test with Voice

of Customer

Industry
Standards

Modeling
suites

Process
Design

Process
Modeling

Business
Scenarios &
Test Processes

Operational
Design
Operational
KPIs
Training

Data Model &

E2E systems
solution design

System
Build & Test

E2E Systems
Testing

Systems
Deployment

Opportunity
Identification
& Agree
Initiatives
Transformation
Roadmap

Implement & Control

Iterative driven by transformation roadmap

Operations
Readiness
Testing &
Launch

Inputs / Outputs / Enablers

Figure 2

In-Life
Improvement
Projects
Lean Six
Sigma based

SID, SOA
Based Design

Lead and Manage

Transformation

Business
Activity
Monitoring

Governance
Architecture
Organization Change Management
Key Activities

Systems Transformation Activities

Meet the
consultants

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.

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.

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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