The idea that transformation projects are simply one-off events designed to modernize or update legacy internal process is daft. It would be like updating a mobile network to 3G then resting whilst competitors forge into the 3.5G and 4G worlds. However, there are CSPs that have embarked on transformation projects without clear progression plans once the first is completed. Is it because they fear the wrath of shareholders and board members who see continuous outflow of capital or their own nervousness at making long-term plans?
It takes considerable guts and fortitude for CEOs like Telstra’s David Thodey and CSL’s Joe O’Konek, despite coming through long and costly transformation processes to stand up and say ‘enough is not enough’. The need to keep moving forward in highly competitive markets may be the driver but it is just as likely that cost reduction and optimization of resources are the real reasons.
Nobody willingly takes on transformation of any description if the benefit does not outweigh, in the long term, the cost and disruption it creates. Despite the best laid plans, it’s probably fair to say that no CSP has experienced a trouble-free transformation but once embarked on, there is usually no turning back.
David Kennedy, research director at Ovum, put it well when he stated that despite a slip in market share and depleted share prices, Telstra had forged a ‘credible plan’ for reversing its fortunes when it recently announced ‘Project New’. The local press was far less friendly, many dismissing the announcement as no more than an endless series of transformations that appear to have become the norm for the broader industry. These would be the same people who revel in writing ‘bill shock’ stories and the very same to report horror customer experience stories that transformations are specifically trying to address.
“The reality is, the days of super-normal growth in telecoms have probably ended – [Telstra’s] overall performance is increasingly going to be determined by cost control efficiency,” Kennedy told CommsDay. “Continuous transformation is the reality in the industry now. What would be strange would be if they weren’t announcing a new transformation!” he said. “There is no industry that isn’t undergoing constant transformation – I’d be surprised if they weren’t talking about it.”
Now, that’s the sort of objective industry commentary we should be seeing more of.