1. The Hitchhiker’s Guide To
Telco Business Train:
An essential overview of the industry megatrend
and business process improvement
Laura Liu 311039103
Spring – MMGT6101
Business Project Thought Leadership

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When the signal of an upcoming bid opportunity lightens up, the backend crews
immediately start to allocate resources. Based on client’s requirements, different
processes are set up accordingly in a timely manner with layers of internal governors’
decisions. From sales, presales, commercial evaluation to legal teams, each department
handles a crucial part of the delivery journey and serves the ultimate goal of ‘bid to win’.
Along these rails to the final destination, there are inevitable unscheduled stops, where
an express bullet train can easily turn to an old steam locomotive if it stops too
frequently, not adapting to the rapidly changing environment. As a hitchhiker,
accidentally jumping on board means being able to observe the business process with a
fresh pair of eyes, pinpointing the key factors that are affecting its success.
The guide starts by a macro scope on the current Telco business environment, from
external changing markets to the root cause of internal process complexity; argues that
Telco has little choices but to adapt and innovate their business process to compete
against nimble rivals and new attackers. The guide maps a couple of challenges for this
future megatrend, and suggests McKinsey’s 7s framework and an analytic approach
within the current process can potentially mitigate those challenges.
It’s Complicated
The word ‘telecommunication’ has its roots in Greek: the front ‘tele’ stands for ‘over a
distance’, and the latter ‘communicara’ means ‘the ability to share’. The initial Telco
business was relatively simple, with fixed phone lines setup and wireless telegraph
service delivery; it bridges vast distances across different regions and allows people to
share information (Arias et al, 2014). In the past few decades, the liberalisation of the
Telco market combined with the revolution in communication technology has reshaped
the whole industry. It is no longer dominated by a small number of state-owned
monopolies but has become an extreme competitive market consisting of numerous
private service providers (Given, 2014).
The role of the customer also shifted from minor bargaining power over monopoly
operators to having increasingly high quality customised service choices. In order to gain
the market share, Telco companies start to progressively add new variety of technologies,
products and services to attract customers. Vast combinations of fixed, mobile and
hybrid networks have been built (Arias et al, 2014). A high level complexity of internal
business process is developed to support the service and to maintain competitive
advantages.
However, the side effect is the profound confusion around Telco’s customers as well as
its own stakeholders (Bower et al, 2014). A typical example for the complicated business
process can be a delivery of a bid proposal. When sales bring in a deal through the initial
qualification, classifies the opportunity, confirms the customer requirements, and finally
wait for the resource allocation. A common situation occurs before the first proposal gets
out of the door, various internal departments have already planned to ‘intersect’ the deal
by setting up strict door gates: strategy review, commercial evaluation, peer review,
solution approval, delivery acceptance and legal permission. In order to safely guard the
company’s interest, there is no longer a simultaneous loose-tight process structure,
allowing the employee to have maximum autonomy and responsibility. Instead, layers
of governors under fancy executive titles are invited to squeeze into one small meeting

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room, knitting brows, reading internal documentations pre-filled by the frontline
employees, trying to work out the decision ‘to bid, or not to bid’.
As human capital is one of the most expensive company resources, it needs to be spent at
the right place and time. Having too many hands-off in the process is a waste of
resources and the negative impact can be a huge delay to final deliverables, time to
market, extra input costs and declined customer satisfaction. If the dynamism of Telco
sector already contributed to the overall complexity of the business, the duplication of
company resources use and multi-layer of the process even worsen the situation. During
the process, customers can easily become the victim of complexity (Bower et al, 2014).
The uncoordinated internal process can result in different company representatives
frequently approaching customers for the same requirement validation. Confusion and
growing impatience from the customer can lead to the direct failure of the deal.
The New Business Megatrend & Challenges
The notorious Telco business complexity needs to be substituted by the industry’s
megatrend for simplicity. The concept of business megatrend focuses on the fundamental
and persistent shifts in how companies compete (Esty & Lubin, 2011). The idea is about
performing old things in new ways: by improving and simplifying the current business
process, securing company’s long-term competiveness in the market. Such
transformations should start by mapping out each process; making it clear what a
‘business process’ really is and how they support the final deliverables. In other words,
the new simplified processes should be all about better coordination and alignment
around the end result (Sharp & McDermott, 2008).
However, the improvement to new process involves enormous challenges. First is the
complicated ‘mind-set’ of the current stakeholders who work within the process flow.
The interpretation of the word ‘process’ can vary among different departments. A sales
team leader may refer to a process as engaging with customers, receiving enquiries,
setting up opportunity accounts, waiting for resource allocations and following up on
governors’ decisions. A solution architect from the consulting and design team may
consider it as getting customers’ requests, collecting business and functional
requirements and developing product solution plans. A governor from the strategy and
operation team would recognise business process starts from the very backend of
network and service delivery to the completion of engineering and legal approval, and
finally being able to utilise the products to cover company’s initial investment. Within
each department, stakeholders are always concentrated on meeting own specific needs
and there is huge confusion around process identification. This can further contribute to
bad coordination and unnecessary repeatable work.
Identifying business processes properly and eliminating the confusion right at the outset
of an undertaking would mark a right start for process improvement. However, even
after the identification, there is another common challenge lies in the scenario of
improving process independently. This is also known as ‘local optimisation caus[ing] global
sub-optimisation,’ a phenomenon described by business management guru Goldratt (2004).
As the front-end constraints can easily increase the efficiency in small process, but the
overall preceding process can become slower due to the shifting burdens, having the
pieces working well does not mean the whole process can work effectively (Sharp &
McDermott, 2008). In fact, the complexity is still there. A sales specialist can bring

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multiple deals in one day, register all the opportunity forms and follow up on the
customers. Pre-sales handle all the technical requirements and categorise them into
standard and non-standard deals. A governor can read numerous documents and deicide
on the feasibility of the deal. However, if there were no filters at the beginning, the
massive number of sales opportunities boarding the train would eventually exhaust
company’s internal resources. And even if pre-sales team are able to architect solutions
for each deal, the governor can reject the opportunity based on potential high risks.
Therefore, in order to improve the overall process, the focus should not be on each
individual fragment but on the workflow that delivers value to the end customers.
Process Improvement
McKinsey’s 7s framework is a management model, most widely known for increasing
organisational effectiveness by focusing on the critical role of coordination, rather than
organisational structure (McKinsey & Company, 2008). There are seven interdependent
elements in the model: Strategy, Structure, Systems, Shared Values, Style, Staff and
Skills. These elements deeply influence an organisation’s ability to change. The model is
suggested for Telco to first assess the level of internal alignment horizontally across the
organisation, whether they are mutually reinforce each other and what will be the impact
of changes. For example, if a Telco’s business strategy is to gain competitive advantages
with a faster turnover, then the other elements need to both serve the objective of ‘speed
to market’. The coordination and alignment should focus on offering the best practice,
great products, excellent service across the board and delivering brilliant outcomes for all
parities involved in the process. Implementing a change in the corporate world can be
one of the most difficult things to achieve; the milestones should start by reducing
internal process complexity.
In order to simplify the internal process, senior management can adopt an analytic
approach by identifying the key success factors (KSF) in the process first. These factors
represent a small number of things that must go exceptionally well in order to meet the
business goals (Sharp & McDermott, 2008). For example, in the sales force, a typical
KSF could be to maintain high level of client involvement in requirements identification.
Other than this, quantifiable terms like finance performance, customer expectation, and
response time need to be taken into consideration as well (Chang, 2011). In this
approach information collection can start from productive interviews with stakeholders,
taking notes on the repeatable process patterns, finding the connection ratio between
each activity and identifying the major processes. The following step is to build a matrix
of processes with their impact on KSF, measured by numerical ranking. This will
prioritise a set of work process in the context of Lean environment.
Today, with so many scientific methodologies analysing business process and outcomes,
illustrating the improvement space by numbers and theories, is simply not enough to
convince senior management to change the current business process based on
immaterialised criteria (Gaber, 2013). But as the industry megatrend continues to shift to
simplicity, a high level of business complexity plus multi-layer governors will become
less effective in enabling companies to adapt and succeed in the future. Telco’s future
value creation is not in the maximum number of complicated products and services a
company can deliver, but in the capability to quickly gain business agility with a
minimum effort and simple process.

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Reference
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Telcoms and How Companies Can Reduce it’, PWC Report, p5
Bower, M. Debruyne, F. & Melton, J. 2014, ‘Simplify to grow in telecommunications’,
Bain & Company, p4
Chang, B.Y. 2011, ‘Business Process Management of Telecommunication Companies:
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