Connectivity and Competition: The future of business communications

Transcription

1 Connectivity and Competition: The future of business communications March 28, 2012 Dean Prevost President, Allstream Vancouver Board of Trade March 28,

2 Hello everybody. And thank you, Ken, for the introduction. Now before we get going, Ken I would like to acknowledge the special partnership we have with your company, HSBC. You have been a valued customer of Allstream for 12 years now. As everyone here knows I m sure, HSBC stands out today as one of the world s most international banks certainly one of the most global banks to operate in Canada. With over 7000 branches in more than 80 countries it s a real success story in globalization. But it s so much more than that. HSBC also takes great pride in being as you like to say the world s local bank. And being committed to being on the ground, in every market, and being responsive to customers locally. Being truly global and being truly local both at the same time. That is a huge challenge but HSBC has succeeded at that. And in my biased view, I believe this has something to do with the power of communications and networking. 2

3 It s the ability to integrate operations/transactions from around the world to give your employees the tools to work productively everywhere and most of all to be responsive to customers on their terms in all your markets. This involves managing some big challenges or, put another way, it s about managing the paradox of being global and local at the same time. And doing it through the power of networking. Which brings me to my topic today. Let s define a few terms: When you hear the word Greece do you think beautiful islands in the Mediterranean? Or volatility in financial markets? When you hear Jobs do you think about employment data? Or the guy who changed everything about computers, music distribution, and mobile communications? When you hear Cloud do you think about something over your head with rain in it? Or a new way of offering a communication service over the network? I could play this game all day These words have all acquired new meanings lately. I want to talk about one of the reasons for this And it relates to one more word which is also acquiring new meanings in today s economy: NETWORK. 3

4 The global communications network or a series of many networks that connects your world and mine today. This network today has billions of access points through the smart devices in your pocket. It s a network changing everything about business. Let s define three of those changes a little more forcefully: 1. Interconnectedness in everything 24/7/365. Someone doesn t pay their taxes in Athens and someone else is out of a job in Langley or Burnaby. Someone buys a portfolio of mortgage debt in Florida and a hedge fund in London goes bust. Or, more positively, someone creates a better mousetrap in a warehouse on the Sunshine Coast, then a factory opens in China and a new distribution channel in Denver for that matter. Everything s connected completely whether we like it or not. 2. Every industry seems to have a near-death experience and then is often born again or changed. It s not just itunes and iphones and ipads. Or Blackberries. Every business every sector public and private will experience a radical change in definition because of the network. Is your business ready for that? 4

5 3. The network has not just entered the mainstream of business planning and strategy -- it s arguably hijacked it. It s not just CIOs and folks in IT who need to worry about the newer developments in networking like Cloud and Virtualization. I d argue you do. Whether you run a big business with thousands of people. Or something much smaller. Your network or ability to network, and be networked is at the centre of a modern business, especially how you serve customers. I realize it s easy for me to say all this. At Allstream I run a network company with over 30,000 kilometres of fibre cable and nearly 65,000 business customers all across Canada who use our services. Big companies, medium and small businesses. And here in Vancouver, and all across the West if we include Alberta in our definition we have over 1200 business customers. And we re investing for the future here, too. In our network. And in our people. Why we re doing it is obvious, and pragmatic, too. There s more than a new optimism about the West being an engine of the Canadian economy it s a reality. And being raised in the West myself, I take pride in that very personally. Our team here is led by the very capable Larry Goerzen who is here today. And Larry, I hope you would agree with me that for businesses in the West to succeed at home, and in markets 5

6 globally, they need to put networking at the centre of their strategies. I wonder, though, how you all see it? The test (glass half full/empty test) Let s do a quick test. When you think of networking and your business do you see risks or threats? Is the glass half-empty? Or do you see rewards -- opportunity? Is the glass also half full? The answer I d argue is both. You have to look at networking as both threat and opportunity. And that s really what I want to talk about: the paradoxes that are at the centre of business today. Staying with our networking theme, some of these paradoxes were created by networking, and some can be only be managed through networking. 6

7 The Paradoxes/Summary A few examples of paradoxes we can probably all relate to. 1. Apart + Together wireless/mobility, the Internet, teleworking, globalization, outsourcing, partnering, etc. are stretching companies apart. In opposition, we place a much higher value today on togetherness on teamwork. 2. Fast + Slow We are all wired to connect at very fast speeds. But with that speed also comes communications overload, a lack of slow time to think, to reflect or to plan the erosion of mental space. This creates demand for more choice, and more control in how we are reached or how we reach others. 3. Open + Closed The Internet has opened up information flow for relationship-building, for new customer touchpoints and different kinds of conversations. And yet you need to be more closed for security threats: identity theft, hacking, protecting your reputation online. 4. Simple + Complex Everyone wants simplicity in everything. You push a button and boom the right voice or the right data is right there. We want things to be simple but the technological fact in the background is that it s complex. 5. Global + Local and, for good measure, referencing HSBC again, the ability to global and local at the same time is important, no matter how big you are, or small as a business. Finally there is another paradox that brings all of this together the battle cry that every one of us hears at some point. 7

8 MORE + LESS Do more with less. On some level, this is a very annoying phase. People just say do more with less as if it s as easy as waking up in the morning. But it s difficult stuff: Like growing your business without hiring more people. Like improving your bottom line while investing in new systems. Like controlling costs while serving customers better. Doing more with less and all the other four paradoxes represent opposing or polarizing forces you can t easily choose between. It s not either/or it s both. You need to reconcile them not in theory, but in reality. And to my mind networking or the network is a force that can reconcile those challenges we all face today. 8

9 This is how networking helps Here are some principles that we value, at Allstream, in working with businesses across the country: The first is Institutionalize flexibility We provide our customers with flexibility in their choices for using networking to strengthen their business. An example: Your call centre, if you have one or need one. The old way of doing business is to offer let s say 300 or 400 full-time employees an 8-hour shift with 2-hours notice, over a 3- shift per day, over a month-long cycle. People come to one big building at the designated time, leave at the designated time. Think of the cost structure built into that model. Think of the lack of flexibility. Is there a better way? Maybe some people want to work from home and not travel? Or maybe you want some people to work at home to cut down on your real estate costs Maybe some people want a 3-hour shift so you say fine, but you give them 1-hour notice of shift, not two. Maybe you can t find enough employees in one community or in one time zone and need to hire people in a different county or country? 9

10 And maybe you need three or four smaller contact centres in different areas to meet changing business needs or avail yourself of local economic incentives. Each of these possibilities and the alternatives are endless can be explored if your call centre solution is flexible. The second principle Integrate messiness. We have all been sold the line that today we live in the plug and play world for everything we buy. But even the smallest of networks like the little wireless router in your home office isn t always simple to manage. You realize this when you spend an hour with technical support tweaking the preferences you never knew you had. Now, look at a mid-market or larger business. Turning on a service for 10/100/1,000/10,000 users. Across geography big distances. With varying levels of bandwidth at different facilities. With different access for different employee groups. With a new service uniquely customized to your business as reflected by the type/style of traffic it carries. Try extending your unique solution out to a partner in your supply chain. Or even your customers. Try -- for example -- bringing video to the desktop for 1000 people and not have your network go down on you. On a tight deadline. 10

11 And try doing all this off the shelf? One button everything s running. It s not that easy no matter what people tell you. Networks are, to put it in polite language, heterogeneous entities. They re messy very messy. The fact is: a networking service for a large or mid-size company does not usually come off the shelf. It needs to be integrated to be powerful. To make that happen, you need to manage or simplify complexity and that is our third principle 3. Simplify Complexity A growing part of our business is what we call Managed Services: where we take away the uglier, complex parts the network from a customer. We just give them the services they need so that they and their IT people can sleep at night. Without worrying about up time, restoral, surveillance or patching. So that they can focus on what they do best: their business. The challenge itself is even getting more complex when you consider things like: Cloud a very hot topic. A bit of a second coming of main frame compute models with a twist. Everything (again) can be bought as a service, hosted remotely, in a private or public cloud ie: the Internet. 11

12 And it s virtual because it s available anywhere, on any device mobile or tethered my office or yours. And paid for like a utility or by the glass an arrangement including core software like ERP or CRM that is now Software as a Service or SaaS. All of which must be secured yet still accessible. That can be quite challenging! Readiness: Is your network ready? So when I think about these issues, the question I want to pose to everyone in the room is this: Is your network ready? Ready to reconcile the paradoxes I ve described to take advantage of things like cloud services, virtualization, and software as a service? Yet still keep the hackers out? Because if your network isn t ready, can your business truly be ready for today s world? Foreign investment I want to talk readiness from a larger perspective for a minute. This much we know for sure: networking drives productivity, and productivity creates jobs. And that improves our standard of living, and makes Canada more competitive at home and internationally. For your business, the network is oxygen: it s critical for survival. But that network in Canada was for decades starved of oxygen. This was the result of restrictions that inhibited investment in our sector. We were operating with rules and policies that 12

13 basically prevented companies like ours from going to the international markets for risk capital to invest in our networks. I don t want to imply too much weakness here: Allstream is part of a $2 billion company that is very competitive and successful in serving the national business market. But it is absolutely true to our thinking to say this: we believe we can do better in serving Canadian business with innovation and through competition. So where specifically were we looking to get stronger? It s no great secret that telecommunications is a very capital intensive business. The Allstream network has more than $2.2 billion invested in it. And every year, we keep investing more. Remember, a decade ago, businesses were still using dial-up as a viable option for Internet. These days, even a child at home takes high-speed Internet for granted. How did we get here? Massive investment, year after year. But for the longest time, we were restricted from access to new capital from outside investors and equity partners: the kind of risk capital that our competitors -- the largest, former monopoly phone companies -- had always gotten in the past to build their networks. But all that has recently changed for the good, if you have been following the story coming out of Ottawa. The federal government recently announced a series of comprehensive measures to -- in essence -- level the playing field in Canada in our sector. The goal is to drive investment, innovation and competition into our sector -- for the benefit of all Canadians. 13

14 To make it very simple thanks to the new government policy direction announced by Minister Paradis a couple of weeks ago any Canadian service provider that has less than 10% market share in telecommunications will soon have much more flexibility and freedom to access capital internationally for their networks, and to make their businesses more competitive. This is fantastic news for us at Allstream but also for you! The government has done all Canadians a favour: we needed, as a country, to evolve much faster into the mainstream of how so many countries function today in making their telecom sectors competitive and ultimately strategic to economic development. We are giving our sector bigger lungs the capacity to take in more oxygen. And that will make us stronger in many ways. As we see it, Canada needs networks that enable innovation that make us more competitive. Canada needs networks that look ahead. To put a very fine point on it: our networks need financial oxygen they need capital or we are risking our economic future. And we are confident that that s where are we headed today for the benefit of my company, but most importantly, for yours. 14

15 In closing And that brings me to some final thoughts A final paradox to bring everything together. Let s not forget what is most fundamental to our success as a country and to each of us in our businesses. Technology is one area I covered networking technology. Access to capital is surely another in my business especially A policy environment that promotes competition and innovation is yet another and critical for us all. But what about the human dimension? Is there anything more important? The more we rely on technology in our world the more we invest in systems and networks the more it becomes apparent to me that the differentiator isn t technology at the end of the day. It s relationships and how strong they are. It s people. TECHNOLOGY + HUMAN The more technological and networked we become, the more we need to highlight the value of the human difference. The more things change, the more they stay the same. Thanks for your time today. 15