Erfaringer fra Telenor Hva forventer vi av vår CIO? Rolv-Erik Spilling, CTO & VP Sourcing, IT & Technology Telenor Norway
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1 Erfaringer fra Telenor Hva forventer vi av vår CIO? Rolv-Erik Spilling, CTO & VP Sourcing, IT & Technology Telenor Norway
2 Agenda telenor a global company one Company many worlds requirement for a CIO what should the CIO focus on summary
3 Among the largest mobile operators in the world 195 million mobile subscribers* Approximately employees Present in markets with 2 billion people Mobile operations in 11 markets across the Nordic region, Central and Eastern Europe and Asia A stake of close to 40% in VimpelCom Ltd, operating in 10 markets Headquartered in Norway Among the top performers on Dow Jones Sustainability Indexes Revenues 2009: NOK 91 bn Listed on the Oslo Stock Exchange Telenor Group is an international provider of tele, data and media communication services *104 million customers in consolidated operations and 91 million in VimpelCom Ltd
4 Telenor Group mobile operations Nordic Norway Sweden Denmark Central and Eastern Europe Hungary Serbia Montenegro Thailand Malaysia Bangladesh Pakistan Asia VimpelCom Ltd. Russia Ukraine Kazakhstan Georgia Uzbekistan Tajikistan Armenia Kyrgyzstan Cambodia Vietnam Telenor Group holds 39.6% of the economic ownership in VimpelCom Ltd. India
5 5 00 Month 0000
6 Two main operational ambitions for Telenor Preferred by customers Efficient operator 6
7 Important Nordic characteristics Operates a complete and technically complex infrastructure with fixed, mobile and internet Smaller scale on each of the infrastructures Complex products portfolio in the business market Complex customer hierarchies in the business market Well organized and well regulated society Low volumes with respect to customers/subscriptions 7 00 Month 0000
8 Nordic challenges from an IT perspective Managing complete network infrastructure is much more challenging Physical network: ducts, cables, buildings) Logical networks: Equipment, ports, logical links Field engineers doing installation activities for customers Managing more complex product portfolio Complex set of business rules Complex provisioning Complex rating/charging Complex business relations Managing more complex customer structures Corporate customer modeling Benefits in Norway (regulated society): Structured addressing Structured credit checking Small scale operation (few customers, few subscriptions, few transactions, few POS etc) 8 00 Month 0000
9 Important India characteristics Operates a large scale relatively technically simple infrastructure (pure mobile infrastructure) Simpler product portfolio But challenging regime connected rating/charging due to advanced discounts/bonuses/loyalty regimes Simpler customer structures Prepaid residential market Challenging regulatory regimes Less organized society Complex sales and distribution structure 9 00 Month 0000
10 India challenges from an IT perspective Scale is the main challenge Managing large scale network infrastructures Outsourced from Uninor perspective Managing high number of customers with high number of customer interactions Sales request, fault request, information requests, charging requests Managing regulatory requirements Customer registration process Involving a lot of different external actors Structured addressing is partly missing Structured credit checking is partly missing Managing large scale sales and distribution networks 1 million pos Complex commissions Cash economy Month 0000
11 Life was simple before World War II. After that, we had systems. - Grace Murray Hopper
12 Telenor Norway business challenges Cash-flow priorities Telenor seeks to reduce costs in order to support the cash flow targets Time-to-market Continuously increasing competition, Telenor needs to quickly respond to market needs End user quality Business flexibility Telenor needs to serve the market with high quality in customer service and products Telenor needs strategic and operational freedom to cope with future structural changes 12 12
13 13 00 Month 0000 Source: Mckinsey
14 Telenors Virtual Workspace connected people do work smarter! Relevant and customized information for Telenor employees Workspaces (sites) for sharing documents and collaborating incl. document/record management Personal profile pages for employees. Enables you to browse skills and knowledge. Contact colleagues directly from your desktop using instant messaging or voice/video call Convert a Communicator call to a virtual meeting and collaborate on documents or presentations Mobile integration. Communicator on mobile and mobile application on PC. Double ring, one number, SMS Collaboration: The right competence to the right time!
15 Telenor Norway is the incumbent operator with a long history & complex legacy Telco 2.0 IMS VDSL IPTV FTTH MPLS ADSL IP ATM IN ISDN Fax Telex PSTN Telegraphy LTE HSxPA UMTS GPRS EDGE GSM NMT
16 CIO key for efficient development:the strategy is operationalized using strategic action plans, project roadmap and delivery plan! Responsible Approver Actionplans & Sourcing Strategy & Business plan (Finance) Norway strategy Nordic and Norway Management The strategic action plans define the measures that will fullfil the goals in the strategy The reality-aligned strategic actions plans may lead to revision of targets The project roadmap reflects those measures on the individual strategic action plans that are defined as projects Relevant division Project & Portfolio Strategic action plans+other* Project roadmap Norway Management Norway Management In order to create a feasible project roadmap, the timing and planning of projects must be adjusted to the limitations in available human and capital resources. The strategic action plans must be updated to reflect these adjustments To be approved for start-up and to be included in the execution plan, projects must be present on the project roadmap Project & Portfolio Execution plan** Project & Portfolio*** The project roadmap must reflect the adjustments done to fine-tune the execution plan to the actual delivery capacity in the organization. * Strategic action plansr. Other : Upgrade projects, Nordic and Group level projects, measures decreed by law. ** The execution plan corresponds to the current periodical Leveranseplanen, but this future plan will be revised more frequently. *** Presupposes that the project roadmap is synchronised with the execution plan and regularly approved by Norway Management. Source: Lean team analysis 16
17 Telenor has reduced total IS/IT spend by ~40% upto 2008 through Ultra deal and will continue to reduce this by 30% through new AD AM sourcing model IT spend OPEX and CAPEX, Ultra deals with Accenture and EDB from Developing IT AD -38% Running and managing IT Internal Personnel cost AM AO/BO SW & Other AD reduced AO/BO reduced AM reduced Internal personnel cost reduced * Assuming same rate of internal revenue for as 2004 (not specified in annual report) Source: Telenor internal data; McKinsey Telecom IT benchmark 17
18 IS sourcing strategy ADAM - implementation by New sourcing model Ensure the right combination of internal and external expertise and capacity May include both outsourcing and insourcing Vendor consolidation Consolidation to a few Prime AM Vendors with a specific responsibility for services, processes and cooperation with other vendors demanding a high percentage of off-shoring Optimized relationships with Vendors Establish long term relationships by entering into contracts with Prime AM Vendors Vendors must take more responsibility for modernization (AD), such projects can be committed as a part of AM contracts Selected Prime AM Vendors are pre-qualified to compete for new AD projects and AM for new systems during the contract period 18
19 Future CIO must focus on Industrialization Deliver on initiated activities to leverage Group scale Establish a Group program to assess viability and benefits of standardization, scalability and cross border operations for various domains Based on above, establish a clear view on where to go and roadmap for getting there for the next period Month 0000
20 Future CIO must hadle cash spend, competance and processes! Money Stability Project Deliveries IT Capabilities Complexity OPEX CAPEX User oriented measurements Value Chain perspective On-Time Without major faults For Users and Customers Versus Competitor Of the Business Of the IS Portfolio itself
21 21 Questions?
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