BT GLOBAL SERVICES SCORES FIRST BT emerged the global leader of global leaders in our Enterprise Strategy Scorecard, the first in an annual evaluation of the all-round capabilities and performance of global service providers. This report explains some of the thinking and process that went into that assessment. SCORECARD VERDICT BT ASSERTS LEADERSHIP IN GLOBAL SERVICES Ovum recently published its first ever Enterprise Strategy Scorecard. Our report looks at all the big telco-led global services players; BT Global Services leads its main rivals from the US and Europe. The scorecard is an all-round view on the capabilities and performance of those service providers. Based on a year s research reports, surveys and enterprise client engagements, it encapsulates all of the evidence they bring for market impact, user evaluation, financial performance and management strategic roadmap. When the scores all fell out from the elements of the scorecard, BT Global Services emerged best in class; the global leader of global leaders. BT has shown strengths in customer support. That came out clearly in the scope of the contracts that BT is winning and the content and services that are in them. It showed also in user evaluation and the feeling that MNC users have of the customer support they get. It was evident in the service provider s ability to move out of legacy service revenues and into newwave services such as networked IT services. BT is winning truly global contracts and that gives it an edge. There was clear evidence that BT is winning contracts from companies not just headquartered nationally in the UK or regionally in Europe, but in all regions; for example in the US with Procter & Gamble, in EMEA with SAB Miller, and in Asia-Pacific with Total Information Technology Co, where BT is giving its customers global end-to-end services. These are stand-outs, but also important was the evidence of the management appreciation of the need for a strategic commercial framework for delivering network services; an appreciation of what needs to be done around service-oriented infrastructure and what is required to get service delivered from that. Examples include the Right First Time programme within the organisation, global accounts teams and the professional services programme being driven across the organisation. Finally, there was evidence of continuous innovation in BT s services throughout the network (e.g. VDC, Carbon Impact Assessment) and through acquisitions like Ribbit, the voice-enabled applications developer unit in Silicon Valley, or WireOne which gives BT Conferencing a strong position in managed telepresence.
THE SCORECARD APPROACH A SNAPSHOT OF THE BIG FOUR Ovum s scorecard draws heavily on research reports we produce, in particular the Enterprise strategy review and Global services contracts report series. But we also draw on experience from engagements with operators and their enterprise customers in bid consulting and market evaluation for example. The 2009 scorecard is a snapshot of the big four as rated by the market (contract wins), their own customers (user evaluations), the operators themselves (financial performance) and of course Ovum analysts (strategic review). The scorecard evaluates services providers in four business areas: Market impact: how many global network contracts have been won with some significant international service requirement? User experience: how do users rate their service providers according to quality and value of services and customer support? Revenue profile: how fast is the operator migrating from legacy revenues to new valueadd business? Management vision: how effectively has senior management explained the global operator s business plan? Operators are scored in each area for how well they have been doing in the past 12 months and how well they are expected to do in the next year, based on a series of questions answered either directly from Ovum reports and databases, or from analysts and enterprise users additional assessment of strategic plans. BT scored highest in User experience, joint highest in the Market impact and Revenue profile categories, and shared second highest score for Management vision. Overall, BT scored highest across all categories.
Figure 1 Enterprise Strategy Scorecard 2009 Market impact Current capability User experience Companies BT Global Services Strategic coherence Best Strategic coherence AT&T Orange Business Services Verizon Business Other Revenue profile Current capability Management vision Source: Ovum WHAT THE SCORECARD APPROACH HIGHLIGHTED AT BT Five years ago it was not clear to everybody in the telecoms sector that there was a case for global services, and that operators could ever really provide global managed network, let alone reliable service across that network, or innovating continuously and providing new services. Ultimately, the model was asking the operator to become part of the business framework for the customer; to provide service to the customer as partner. The scorecard demonstrated that all four operators are doing better jobs in managed services, but that BT has done it best of all. BT showed: consistent development and roadmap for integrated IT and UC services which mapped well to enterprise technology plans expectations of good service delivery were high among enterprise users rapid conversion from legacy service revenues to new value-add services high level of understanding of business customer priorities and coherent plan to develop customer partnership. BT s Service Orientated Infrastructure (SOI) was identified as one of the best examples of telco 2.0 strategy in next-generation network investment plans and how these apply to global networking
A review of the way BT manages major contracts indicates it will be more cautious about signing mega-deals, and all but a marginal number of major accounts remain satisfied with customer service from BT. The operator needs also to clarify its alliance partnerships and reinforce these where there is a risk of reduced capability. BT s extension of IT capabilities through a three-year programme of acquisitions is now seen to have put it in a good position to support the kind of applications-led services that enterprises are factoring into their network communications plans. COMPETITION WILL INTENSIFY Ovum s Enterprise Strategy Scorecard highlights how difficult it is for one operator to maintain leadership in global services. That won t change in the next couple of years. In fact, competition is only likely to get more intense. BT s challengers are still in the form of its traditional operator rivals like AT&T and Verizon Business in the US still BT s biggest challengers together with Orange Business Services, owned by France Telecom. The Internet, the so-called cloud, and players like Google and Amazon represent new challenges for the telco players in global services. But the direct competition is still from other telecoms operators with global networks, global capabilities and global investment resources. Vodafone with a new global enterprise division and Telefonica with a new MNC business unit both large operators with major mobile operations will be challengers too. The biggest challenge of all will be to get the financial model right, as the review of major contracts at the end of the last financial year showed. That s a challenge for all the global providers. Those playing catch up with BT on global accounts, extending their networks and rolling out managed services to compete with BT on the global scale, will also find it is their turn to do some financial fine-tuning at volume. If BT can be the first to get it right, that will put the operator in a stronger position further out in the timeline. BT will have been encouraged to be winning global accounts this year. That hasn t stopped, and renewal rates have been maintained. BT as a company and the people in it have clearly applied themselves to the task. But the scorecard evaluation shows that the market and end users don t want BT to stop innovating, especially in customer services where users want to see continuous improvement in service levels. BT can continue to innovate in the technologies, but it also can innovate in the commercials around the contracts that are provided for customers. There are lots of ways in which BT Global Services can continue to differentiate. All service providers are not the same. BT should strive to stand out as a differentiated service provider to its customers.
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