|Issue:||Europe II 2007|
|Topic:||Competing for our future|
|Organisation:||BT Global Services|
Andy Green is CEO of BT Global Services – the part of BTís business that serves corporate and government clients worldwide. He was appointed to the board of BT Group plc in November 2001. Mr Green began his career with Shell and later joined Deloitte Haskins & Sells. He took on his present role after spending periods as chief executive of BTopenworld – BTís mass market Internet services company ñ and as BTís group director of strategy. Andy Green holds a degree in Chemical Engineering from Leeds University.
The needs of the global society are dramatic. Technology gives us the means to meet many of these needs and reinvent the global economy. Companies need to re-shape themselves to pursue ëheroic goalsí. Society needs this, and customers demand it. The pursuit calls for working with the trend of work processes, digitalisation, taking advantage of the globalisation of the workforce, using the power of IP networks to automate the delivery of products and services, and outsourcing tasks to achieve maximum efficiency.
A decade or so ago, Gary Hamel and C. K. Prahalad published an influential book, Competing for the Future. In it, they talked about the need for companies to revitalise, develop the foresight to shape the future of their industries, and mobilise their people and resources in pursuit of ëheroic goalsí. Despite the rate of change in todayís global economy, I believe these remain exactly the things telecom companies should be focused on today. Indeed, they are the things to focus on, and with good reason. Convergence is changing not only the technical side of communications but the customersí expectations. Our choice is to revitalise our business or risk extinction. It is indeed a heroic goal to be the first – and best – of a new breed of services organisation that combines the skills and methods typical of an IT services company with the operational expertise and experience of a global network operator. Itís not something picked out of thin air; it is a vision of the global trends that are challenging customers, including the worldís corporations and governments, and they need to understand what lies ahead and how best to gain advantage. Global trends In all, there are four such trends at work. All are increasingly making location irrelevant, levelling the playing field on which organisations operate and eliminating barriers to participation. The first – and most advanced – is the switch to digital. Correspondence, designs, sales presentations, spreadsheets, purchase orders, phone calls, still and moving images are the lifeblood of modern business. These days, all can be converted into digital form, stored in databases and moved quickly from place to place through global data networks. Among other benefits, this allows work to be moved to people, reducing the need for people to travel to work. The second trend is globalisation of the work force. India, China and other countries in Asia-Pacific have invested heavily in their peopleís education. At the same time, the skills and experience of Eastern European countries and Russia have become easier to access. The result is a global pool of highly skilled people who, now that high-performance data networks have reached most parts of the world, can be employed as easily as those available locally. Third is the rapidly escalating power of computers and IT. Linked by high-performance IP networks, IT systems not only allow customers to serve themselves, but can increasingly automate the delivery of products and services. Computers can connect supply chains, negotiating deliveries. They can turn services on and off, configure them to the customerís requirements and arrange for billing and payment. They can speak to customers and, in limited situations, even understand their replies. Whatís crucial, however, is that computers have no understanding of geography. Once connected to the Internet, theyíre happy to serve everyone equally. Finally, thereís the trend towards outsourcing. Organisations have been outsourcing work for centuries – the construction of new buildings, for example. It has never made sense to do everything in house, and probably never will. Whatís new today is that thereís more work that can be outsourced – especially ëback officeí tasks like payroll administration, purchasing, software development and the operation of customer support centres. For many businesses, there is no longer a commercial advantage to be gained from having their own people do this work – indeed, advantage is more likely to result when a partner is engaged that has greater expertise in the area and can deliver higher quality and a lower cost. And, given the global reach of todayís digital networks, that partner can as easily be on the other side of the world as in the next city. Global standards Each of these trends is significant on its own. Together, however, their power to reshape the world is immense ñ virtually unstoppable. The result is the digital networked economy, and itís clear what lies behind it: the new standards that are the result of convergence. The telecoms business is no stranger to standards. Indeed, weíve worked harder than many industries to create them. Bodies like the International Telecommunications Union, ITU, the European Telecommunications Standards Institute, ETSI, and the TeleManagement Forum have played a central role in allowing traffic to pass between operators, for example. However, as international travellers are only too aware, such standards only go so far. To connect your PC to a phone line, you need to carry an array of adapters with you from country to country. Staying in touch through your mobile phone is much easier, but not in all parts of the world. The choice of IP as the ubiquitous common standard makes the global trends possible. It is simpler to connect people to people, machines to machines, people to machines and vice versa, and it frees organisations from the need to make difficult choices between alternative networking technologies. Today, no matter where you are, what you want to send, and where and to whom you need to send it, IP is the way to do it. IP, however, isnít like the standards the telecoms industry has been used to. Its origins are in IT, and they stem from a desire to achieve not just technical interoperability, but open access. As a result, IP has done more than level the playing field for network providers – it has completely changed the game. Raising the stakes So where is the game now? And where must operating companies focus if they are to win? The first priority, of course, is the network. The age of application-specific networks that offer a limited range of facilities is gone. The 21st century demands something different – flexible networks that can carry anything an organisation needs to get from A to B in whatever quantity they need to at the time. Although few saw it at first, change was needed, and next-generation networks were the answer. In 2004, for example, we announced a plan to replace 16 existing networks with a single all-IP 21st century network that could carry all our services, present and future. The project is both vast and all-encompassing. By the time it is complete in 2011, some £10 billion will have been invested. Much will be spent on new infrastructure – on routers, servers and other equipment – and on processes and systems to run it. But this is just the start – the stakes are high to take part in the game. Of greater importance are the services you deliver over your network and standard of service you offer to your customers. Both must be delivered consistently across the world, not just in certain countries. Letís start by looking at services. In the past, organisations could achieve competitive advantage by building and running their own networks and IT systems. Bandwidth and processing power were limited, so the ability to squeeze the maximum possible performance from the available infrastructure could make a big difference. Bespoke solutions dominated the market. Today, bandwidth and processing power are effectively unlimited. This turns the situation on its head. Before too much longer, standard applications running on standard platforms will meet most needs of most organisations. And rather than buy and operate them themselves, many organisations will access them as standard services delivered across standard – that is, IP – networks. Either that or theyíll employ expert third parties to manage the service for them. Great expectations Letís be clear, however: while standard applications and technologies may be the answer, a ëstandardí level of service is not. In every dimension, customers demand the best. Skills and infrastructure must be world class, and delivery must be both fast and flawless. Excellent customer care is an absolute essential. This is simply said, but not easily achieved – especially on a global scale. Nonetheless, it is what players in the new networked IT services market must achieve – day in, day out with monotonous reliability. The challenge is huge, and expectations are rising all the time. Success requires focus in three areas – cost to serve, customer satisfaction, and service and operational excellence – and continual investment in both skills and resources. It also requires a change of attitude. Telecom has traditionally been a product-oriented business, focused on technical performance. The services business is more about relationships and experience. The change is significant, and involves much more than an investment in new or better support systems. I have no doubt that customer service will remain one of our greatest challenges through the years ahead. Competition in the networked IT services market will be intense, and we are determined to succeed. There will be no opportunity to relax. Our view, however, is that this is where the future lies. We canít afford to ignore our heritage – world-class networking and technical skills will continue to be essential, but so too will dedication to building great relationships and delivering services that meet or exceed the customersíexpectations.