Telecom Management: Illustrating Business Value to the C-Suite. Sponsored by:

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1 Telecom Management: Illustrating Business Value to the C-Suite Sponsored by:

2 Telecom Management: Illustrating Business Value to the C-Suite TELECOM MANAGEMENT Telecom management is the business practice of managing an enterprise fixed and mobile services environment. The scope of telecom management includes technical, financial and operational practices that support service delivery across the enterprise. Technical Financial Operational Network Design Implementation Maintenance Break-Fix / Repair End User Support Budgeting Auditing Accounts Payable Expense / Cost Mgmt ROI / Business Case Support Sourcing Vendor Mgmt Business Analysis Reporting Project Planning Traditionally, telecom management has been viewed as a pure service delivery and support function offering a technology storefront for business users to acquire mobile devices, internet connectivity or telephone service. The ultimate business goal for telecom management practitioners has historically been to align services with business requirements and to master delivery excellence, but the performance bar has been raised as the information age dominates the global economy. Service delivery alone is no longer adequate for telecom management there needs to be something more to the practice that eclipses service-to-business alignment objectives and positions telecom management as a business accelerator. This thought leadership paper offers perspectives on increasing the business value of telecom management practices and insight on illustrating value in business terms recognized across the business. Page 2

3 ENABLEMENT vs BUSINESS ACCELERATION Service delivery and support are quintessential attributes of an enablement relationship. The telecom management business practice delivers and supports services and devices that enable business users to communicate. The power in this enablement relationship is one-sided. Business users and groups create service delivery demand and assume responsibility for generating business value on their own. In a typical telecom enablement relationship, business users ask for the tools to do the job. The concept of business acceleration expands upon the mission of enablement by incorporating information exchange between the telecom management practice and the business. This information exchange directly influences the ability of business users to better leverage the telecom environment to achieve business objectives. Business acceleration is an applied practice that correlates assets within the telecom environment directly with business results. In a typical business acceleration relationship, the telecom environment delivers services designed to support specific business objectives. Elevating telecom management practices from an enabler to a business accelerator requires adoption of two fundamental principles. First, a singular mission is required. Alignment of technical, financial and operational objectives within the telecom environment must be achieved to reach this goal. This means that telecom management practitioners will operate in harmony as a singular center of business excellence. By aligning these objectives, conflict between work groups can be minimized and execution on a single, business-focused telecom management strategy will prevail. Second, telecom management strategy must explicitly address how the fixed and mobile telecom environment is utilized to drive bottom line business results. This is achieved through mining telecom environment transaction and usage data and then correlating it with business performance data. When this occurs, enterprises gain clear visibility into the business value of the telecom environment and the practice of managing it. A Center of Excellence (CoE) is a group or team that collaborates and utilizes best practices around a specific focus area or business practice to drive business results. Telecom management becomes a CoE when the two fundamental principles of business acceleration are adopted. Center of Excellence (coe) elements: Leadership Collaboration Best Practices Focus Area(s) Targeted Business Results Page 3

4 A quarter (25%) of enterprises report their telecom management practice is viewed as a CoE by the business, according to AOTMP research. These enterprises indicate that CoE status has been achieved through reliable and consistent performance, and working in harmony with the business to drive results. Telecom Management YES Center NOof Excellence Don't Know Status Thought Leadership Paper Telecom Management: Illust Telecom Management: Illustrating Business Value to the C-Suite Telecom Management: Illustratin FINAL PROOF DRAFT Telecom Management Center of Excellence Status 31% Telecom Management: Telecom Management Center of Telecom Management Center of Telecom Excellence Management Status Center o Excellence Status Excellence Status 25% YES No NO Don't Know YES NO Don t Don't Know Yes YES NO Don't Know 44% Telecom Management: Illus Telecom Management Telecom Management: Illustratin One practice component that directly relates to a telecom management practice s ability to achieve CoE Business Analytics Maturity in Telecom Management Practice status is business analytics. Telecom Management Center of Telecom Management Center Telecom Management Excellence Status Center of Excellence Status Business Excellence YES No NO Analytics Status Don't Know Yes YES NOMaturity Don't Know in Business Analytics in Telecom Business YES NO Don t Don't Know Management Analytics Practice Maturity in Telecom 61% Management Practice Telecom Management Practic Business Analytics Maturity YES NOin Telecom Don't KnowManagement Practice 16% 23% YES NO Don't Know YES NO Don't Know YES NO Don't Know Business analytics is a primary enabler in the transformation from business enablement to business acceleration. The practice of mining and analyzing telecom environment data and correlating the data to business results enables telecom management professionals to identify drivers within the telecom environment that influence desired business results. When this bond between telecom environment data and business data is forged, business acceleration is possible. Business Analytics Maturity in Business Analytics Maturity in Business Telecom Analytics Management Maturity Practice in Telecom Management Practic Telecom Management Practice v Page 1 of 2014 AOTMP. All Rights Reserved Woodland Drive, Suite 250, Indianapolis, IN (800) YES NO Don't Know Page 4 YES Copyright NO2014 AOTMP. Don't All Know rights reserved. YES NO Don't Know

5 ECOVA CENTER OF EXCELLENCE CASE STUDY Situational Analysis Small box retailer with 7,500+ offices across the country Telecom spend was spiraling out of control Late fees and service interruptions were at an unacceptable level Negotiated carrier contracts were not being leveraged No visibility into services in use or ongoing order activity Lack of ordering standards and service requirements created operational chaos 500+ people placed orders with no consistency New network technologies and bandwidth were needed to support business change Ecova was brought as a trusted advisor to gain control of the environment, implement best practices, drive costs down and enable business acceleration through the following processes: 1. Redirect all billing to Ecova for consistent audits and bill paying 2. Build a detailed inventory using Ecova s Invoice First methodology 3. Correct allocation errors to ensure all service costs are charged to the proper cost centers 4. Complete a line validation test to eliminate all lines not belonging to the client or not in use 5. Develop and implement standard service profiles that identify the optimal number of lines required by site based on sales through a series of capacity and traffic studies 6. Implement Ecova s Service Order Management to enforce order control, leverage existing carrier contracts and eliminate late fees and disconnects caused by misrouted invoices Program Outcome 37% reduction in annual telecom expenses ($25.3M to $16.1M) over the course of 5 years Established full visibility into telecom costs and inventory down to the store level Enabled client to implement new technologies to meet the demands of the business while maintaining strong financial control Increased the success of strategic sourcing activities through service visibility and cost gained through the program Improved the ability of the client to optimize store bandwidth (increase or decrease) and leverage new technology while reducing overall cost Page 5

6 Business analytics plays a valuable role in developing short-term and long-term technology strategies as well. According to AOTMP research, 41% of enterprises use business analytics moderately or extensively in developing IT / telecom strategy, while nearly a third of enterprises (31%) rarely or do not use business analytics. The most common insight sought by enterprises when using business analytics to support technology strategy development includes: Call center infrastructure and agent performance Services usage, traffic, traffic trends, usage by line of business / business activity Cost of delivery and cost-to-service ratios 71% of enterprises report their telecom management priorities align with corporate strategy and business objectives. Adopting and maturing business analytics within the telecom management practice improves the ability to identify the correlation between telecom data and business results, and enables transformation of telecom management from business enabler to business accelerator. BUSINESS VALUE Business value can be measured in several ways, but the most convincing method of illustrating business value uses objective measures that correlate actions and results. Reducing operating expense is the most common business priority identified by enterprises in this research study. In this case, the most relevant business value delivered through telecom management practices should answer the question How do telecom management practices reduce business operating expense? Meeting this business objective requires insight and understanding of all cost components contributing to the operation expense of the business. Enterprises cite spend visibility and budgetary control as the top two value propositions delivered by the telecom management practice to the business, which support the business objective of reducing operating expense. The relationship between financial stewardship in the telecom management practice and operating expense objectives is clear in this case. This financial business value proposition is common and is a byproduct of the services enablement relationship between telecom management and the business; however, new value propositions are emerging that align with the business acceleration relationship. In enterprises where telecom management is perceived as a CoE and the telecom environment is positioned to drive business results, the value propositions address business growth and bottom line results. Page 6

7 Optimizing telecom service cost is the top telecom management priority in 2014 for 48% of enterprises. Improving internal workflow efficiency (18%), mitigating organizational risk (12%) and improving internal customer satisfaction (8%) are the next three telecom management priorities for enterprises these priorities illustrate traits indicative of CoE s. Reducing OPEX (41%) and increasing customer satisfaction (20%) are the top two business priorities identified by enterprises. Business Objectives Telecom Management Value Propositions Improving Profit Margins Reducing operating expense improves profit margin. Business Innovation Increasing Market Share & Accelerating Customer Acquisition Increasing Customer Satisfaction Technology and applications transform business operations through automation efficiencies. Technology and applications increase the ease of communication and of the ease of conducting business. Technology and applications deliver multiple modes of communication to create the ideal customer experience. Page 7

8 BUSINESS VALUE REPORTING The information gleaned though business analytics enables telecom management practitioners to generate key performance indicators (KPIs) for use within the telecom management practice and across the business. Ultimately, business stakeholders want KPIs that measure performance against objectives. KEY PERFORMANCE INDICATORS BUSINESS RELEVANCE Stakeholder Telecom Cost as a Percentage of OPEX Reducing operating expense improves profit margin. CEO / CFO Telecom Cost per Employee Technology and applications transform business operations through automation efficiencies. CIO / CFO Ratio of Mobile Device Enabled Employees vs. Non-Enabled Employees Telecom Cost as a Percentage of Revenue Technology and applications increase the ease CSO / CMO of communication and of the ease of conducting / CIO business. Thought Leadership Paper Telecom Management: Technology and Illustrating applications Business deliver multiple Value to the C-Suite modes of communication to create the FINAL ideal PROOF CFO / CEO DRAFT customer experience. Most Common KPIs Reported to the Business Most Common KPIs reported to the business Telecom Cost as a Percentage Telecom of OPEX Cost as a Percentage of OPEX 59% Telecom Cost per Employee Telecom Cost per Employee 29% Ratio of Mobile Device Ratio of Mobile Enabled Device Employees Enabled Employees vs. vs. Non-Enabled Non-Enabled Employees Employees Telecom Cost as a Percentage Telecom of Cost Revenue as a Percentage of Revenue 18% 17% 0% 10% 20% 30% 40% 50% 60% 60% Illustrating the value of the telecom environment to the business requires a keen understanding of Contributing Organizations the business, overall business objectives and drivers behind those objectives. Through collaboration with business leaders, telecom management practitioners can gain the insight needed to establish relationships between telecom environment data and business objectives. This insight transforms telecom management from business enabler to business accelerator. Page 8

9 About the author Timothy C. Colwell Senior Vice President Global Business Analytics Timothy C. Colwell is AOTMP s Senior Vice President of Global Business Analytics and leads the Efficiency First Framework, Performance Management, Business Analytics and Performance Scoring teams. He is lead innovation architect for AOTMP s Efficiency First Framework, designed to drive efficiency into fixed and mobile telecom environments and transform telecom into a strategic business driver. Tim is owner and author of AOTMP s patented process for Telecom Environment Management, and is owner and author of AOTMP s Industry Best Practice Library. Tim frames standards and best practices for fixed and mobile telecom management around past engagement experiences and validates business value gained through performance measurement and scoring. In his role as primary executive owner and lead consultant for many performance improvement initiatives, Tim has successfully completed hundreds of fixed and mobile telecom consulting engagements focused on generating performance efficiency and business value for clients over the past two decades. He has worked with many global telecom and IT leaders to implement best practices and performance measures in Fortune 500, Forbes Private 50 and public sector client environments. Tim is Thought Leadership Paper Telecom Management: Illustrating Business Value to the C-Suite FINAL PROOF DRAFT responsible for executive oversight of all AOTMP strategic client engagements; strategic clients manage a budget of $5 million to $100 million per month of fixed and mobile telecom services. Most Common KPIs Reported to the Business Tim is a recognized thought-leader in the fixed and mobile telecom management industry, as well as a frequent event speaker and conference chairperson. He is a best practice author for several industry publications and AOTMP s Telecom Management (TEM WMM Mobility) LinkedIn Group. Tim also sits on the AOTMP advisory board. Prior to joining AOTMP, Tim spent three years as Director of Support Services Telecom Cost for per a Employee telecommunications consulting firm where he refined and proved telecommunications best practice methodology across 500+ client consulting engagements. Tho Telecom Management: Illustrating Thought Busine Telecom Management: Illustrating Business Va Mr. Colwell holds a BA in Telecommunications from Indiana University. Thought Leade FINA Telecom Management: Illustrating Business Value to 0% 10% 20% 30% 40% 50% 60% FINAL PR Telecom Cost as a Percentage of OPEX Ratio of Mobile Device Enabled Employees vs. Non-Enabled Employees Telecom Cost as a Percentage of Revenue Contributing Organizations 2% Contributing Organizations 21% 17% Telecom Management Center of Telecom Management Center of Excellence Status Telecom Management Excellence Status Center of Large YES (> $1B NOrevenue) Don't Know 60% Excellence YES Medium NO Status Don't ($50M-$1B Knowrevenue) Research data cited in this thought leadership paper was collected from 110 enterprises representing 20 industry vertical markets. Public Sector YES NO Small Don't (< Know $50M revenue) Large (> $1B revenue) Small (< $50M revenue) Medium ($50M-$1B revenue) Public Sector Page 9

10 ECOVA s viewpoint Ecova considers telecom a strategic activity for your business, not just functional. That s why C-Suite executives pay attention to the initiatives and outcomes which derive from the high-level approach. We work with clients to develop and execute fully managed, technology-optimized solutions for saving resources, which in turn increase returns, lower risks, and enhance reputations. Similar to AOTMP s scope of telecom management, Ecova developed the Telecom 9 Box, an overview of best practices that we advise companies to focus on in order to improve telecom performance, reduce costs and stay in control of an ever expanding network. Everything you must do as a telecom manager falls into one of the boxes above. Each of these functions requires telecom management to intersect with other stakeholders around the company, and each has three separate activity areas to manage, thus the 9 Box. Within each of the nine boxes are specific components that drive a best practice approach, but three major overall elements are necessary: Management must be technology driven. With significant data to capture and manage, plus complex workflows and changing requirements, automation and rich information management are critical. Companies must be structured to be proactive as well as reactive. This includes planning for future needs and changes, as well as having operational processes in place to address expected and unexpected changes or issues. Page 10

11 It s critical to be efficient and self-protective. While planning, recognize the likelihood of shrinking human resources and ever-tightening budgets, even while keeping up with the fastpaced environment. Maintain the ability to respond efficiently and effectively to inevitable breakdowns in the plan. Ultimately, these nine best practices are reliant upon accurate and total availability to relevant data. By providing a centralized information system, a company s teams and stakeholders will have better visibility into costs and services, thus reducing expenses and improving network performance. Following the nine best practices above will propel CIOs and IT departments into successful teams. Don Hobbs Director of Product Management, Telecom, Ecova Don has been in the communications field in a variety of formats from closed circuit satellite in the 1990s, to owner of a pre WebEx conferencing service to DSL deployment management to traditional audit and consultation services. His firm, TelAssess, was acquired by Ecova in 2005, and Don became Product Director for Telecom Services, leading to the development of Ecova s broad Telecom Lifecycle Management capability. In addition, Don has been a many-year board member and leader within TEMIA, the Telecom Expense Management Industry Association. Page 11

12 About AOTMP aotmp.com AOTMP is an information services company focused on establishing and maintaining high-performance, best-in-class fixed and mobile telecom environments. Partnering with both enterprises and industry suppliers, AOTMP uses information and analytics to drive efficiencies, performance and productivity. All AOTMP solutions are based on the Efficiency First Framework v2.0, a disciplined, best practicedriven approach to managing telecom environments. Adoption of the Efficiency First Framework allows AOTMP s clients to create sustainable, predictable results with short-term impact and long-term results. AOTMP s unique approach takes telecom environments to a new level of performance, measuring performance beyond cost savings and transforming telecom environments from cost centers to strategic assets used to drive business growth. AOTMP s clients represent $23+ billion in annual telecom spend and include 100+ of the Fortune 500, small and medium businesses, public sector organizations and industry suppliers. About ECOVA ecova.com Ecova is the Total Telecom Lifecycle Management company whose sole purpose is to assist Ecova clients in providing their internal and external stakeholders with superior network management capability at the lowest possible overall cost. Encompassing wireline and wireless environments, the rapid pace of device, technology and business change can be a challenge as the need for an efficient, high-performing network increases. We understand the diverse range of functions associated with managing a telecom environment. With 15 years of expertise, and the benefit of serving over 100 clients with similar needs, we offer unparalleled support for each of the Telecom 9 box. For more information, visit the company s website at ecova.com, on LinkedIn at linkedin.com/company/ ecova, or follow Ecova on Twitter Page 12