Single telecom provider for multinational companies

Abstract

Multinational companies (MNC) require control over their own communications. This control has three main aspects: reducing total ownership costs, improving management and quality of service and complying with regulations.

Wholesale telecommunication companies (WTC) help their clients by giving them global service worldwide. They use volume discounts to reduce total ownership costs, they use their worldwide capillarity, branches and interconnection partners, to provide a global service with one bill. They use their technological capabilities to improve the information and communications technologies (ICT) services and they have the best knowledge about regulations.

With this landscape we could think that the natural way to expand de MNC ICT services is through the collaboration between MNCs and WTCs as strategic partners. That is true, but there are a lot of problems which companies, and therefore project managers (PM), have to face up to. In this document we try to show the main difficulties that can be found working in these situations.

Introduction

Traditionally companies with presence worldwide have contracted ICT services locally on each country. Due to cost reduction, merges and centralization among others, this tendency has evolved into contracting only WTCs. On the other hand, national operators have local markets saturated and have the need of expanding. Throughout MNCs, national operators are opening new markets in countries where they had no presence before. This trend solves many problems, but at the same time it generates others which are explained in detail in this paper.

We can consider that the relationship between MNCs and WTCs are projects with three main phases: Feasibility study, Provider selection (Request for proposal-RFP response) and Execution and two points of view, as we can see in Exhibit 1.

Project Phases

Exhibit 1 – Project Phases

Project managers have a great challenge. We have to control the following parameters:

  • Different languages: Sometimes it is very difficult to have someone able to understand every language used in the project.
  • Different cultures: This problem is an extension of the previous point.
  • Different laws (locally regulated markets): We can know our regulated market, we can know international commerce laws, but it is a big challenge to know every regulated market. Telecom services and its provisioning are strongly linked to local regulations.
  • Different technology culture: Culture does not stop in social attitudes. IT professionals and countries possibilities (geography, traditions, assumed standards, GSM vs CDMA…) influence our work in different manners.
  • Different interests. Clients, telco operators, technology providers, consultancy firms, regulatory authorities, competitors, employees…
  • Different positioning of the company in the different markets. Normally multinational companies are not equally strong in the different markets and countries.
  • Different technology availability in the different markets. Telecom services, telecom service packs and their availability and provisioning time are not global.
  • A new & wide market (the market for Multinational Clients): Telecom operators such as Telefonica International Wholesales Services, BT Wholesale Services, Orange International Wholesales Solutions, Telecom Italia National Wholesale Services…
  • MNC requirements. Telecommunications central control, reduction of telecommunications budget, inventory of the telecommunications assets…
  • Positioning of the WTC in the MNC account. It is possible that the client had different telco providers in the different branches, countries or even inside a branch or inside the corporation.
  • Market trends. The telecom market changes continuously and very fast. Today we cannot know the services available during the next 5 years or even the next year, although the contract duration could be 3, 4 or 5 years.
  • MNC resources for the negotiation process management. Volume contract, assets, geographical dispersion, inventory…
  • Economical and technical viability of the competitive process for each stakeholder (current providers, new providers, corporation, national branches, regulatory agencies…)

Paper Objectives

The objectives of this document are the following:

  1. To introduce the telecommunications wholesales market to the reader
  2. To explain how to face up to telecommunications wholesales projects features by Projects Managers.

Main Characteristics

Common characteristics with other projects: Ex. Multiple providers per country, branch or corporation, different cultures, languages…

Special characteristics: Technical evolution, providers without physical presence in client locations, different services and technical possibilities in different countries, technical innovation partnership, local monopoly providers in some client locations…

How do Project Managers overcome this challenge? PM’s point of view

Face up to new project integration management features:

Client’s point of view.

Technological changes are use by companies to provoke other structural changes. The PM has to know or discover all the relationships between his project and the other initiatives set in motion by his company. The crucial step is to identify all the stakeholders.

At the beginning of the project, in the feasibility study, we must focus our energies on a detailed inventory of services, assets and contracts. This is the basis for a good negotiation and a successful project. For companies widely distributed geographically, this work could take more than six months and easily one year, depending on how in-depth we work on it.

In selecting the strategic provider, the focus is obtaining the best fair contract for our company. Even if we are looking for a complete transparent process, we have the limitation of the confidentiality included in the current contracts and country regulations. Then we will use our best practises in procurement management.

In the execution phase (3), the main work of the PM (Client point of view) is to audit the execution of the contract technically, economically and legally, controlling times, quality, scope… and costs. For cost control, the unified bill in electronic format is very useful. This requirement is easy to fulfil for big WTCs.

Operator’s point of view

The PM has to schedule project execution end-to-end from start to finish, taking into account his previous experience and knowledge in worldwide markets. This means knowing many local providers and integration companies worldwide and also countries regulations. All these things limit scheduling at first view if the PM is not experienced, but it can be modelled and changed during project execution based on monitoring and control processes.

Face up to new project scope management features:

Client’s point of view.

In MNC distributed internationally, we can find branches in countries with small volumes. In this case, we can establish limits for the feasibility analysis where in-depth information is not asked for. In phase 2, the PM and his/her team have a challenge in the verify scope process making sure that the contract reflects the winning offer. This will avoid important problems in the next phase.

Operator’s point of view

In phase 3, service delivery at new sites has high uncertainty, even knowing average delivery time. Sometimes we do not have direct contact with the last provider and we cannot have total control at all. Then we have to use contingency plans, changing the scope, at least temporarily. For example, if we are provisioning a site which is under construction, it could be that when the last provider goes there to install the last mile, nobody opens the door for him. Then the installer has to come back another day and if the following visit is after the deadline we ought to use the contingency plan, for example using a temporary 3G connection.

Face up to new project time management features:

Client’s point of view.

When we plan our project, we have to reserve enough time for the WTC RFP response. We must remember that the response includes resources from different countries, branches and departments. This is a technical, economic and strategic decision for WTC. We can lose interesting bidders, or quality in the offers, because they do not have enough time to answer, and then we lose competitiveness in the negotiation process.

It is necessary to link the service level agreements to significant penalties in the contract to avoid future problems in the execution phase, for example, delays in provisions times or in the deployment of new technologies.

Operator’s point of view

In phase 3, the most common issue is service delivery delay, which is linked to SLAs penalties. We have no control over the whole process because we do not have full visibility of third party providers. The control of theses SLAs has to be proactive, developing scorecards for anticipating detection. The example could be the same as above in project scope management features where we do not control the third party provider schedule. To minimise the impact of this kind of issue, we have to keep track of average times and standard deviation. Also, it is very important to have a good relationship with your direct provider to ask it to monitor its provider, for example, obtaining schedules, and then we can coordinate with our client physical access, permits or other requirements for delivery.

Face up to new project cost management features:

Client’s point of view.

There is an important tool to control service costs in telecommunications projects: it is the electronic bill. It is not available everywhere, but one of the advantages of having a single telecom provider is the chance of having a unified electronic bill where the CDR (call detail records) show us the in-depth detail. WTC uses advanced scanners, business intelligence tools and even human resources to get it. The e-bill reduces control costs exponentially.

Operator’s point of view

Contracts between MNCs and WTCs include different types of cost, early end subrogation contracts, mainly at the beginning of phase 3, assets in property or renting, new interconnections contracts, SLAs with penalties in case of non-fulfillment plus the operation costs.

Face up to new project quality management features:

Client’s point of view.

Some concepts can be taken into account in order to define quality features from a client’s point of view, but most important is delivery time. Service Level Agreements (SLAs) are usually included in the General Agreement signed by both sides; client and operator. Usually SLAs that should be included are related to delivery time, quality of service (QoS), Mean Time To Recovery (MTTR) and others related to service offered after the Ready For Service (RFS) as Mean Time Between Failures (MTBF) or Mean Down Time (MDT).

Furthermore, we can control the accuracy and quality of the inventory data confronting accounting versus electronic bill information, then this e-bill has to be included in the RFP requirements.

Operator’s point of view

The planning process group lead by the PM is responsible for defining a quality plan. This can be, from the very beginning of the project, quite theoretical and general, but it has to be adapted though project execution and it also has to be assured to avoid penalties. Then we transform a quality plan into money saved and we can sell this idea to the project sponsor.

Face up to new project human resource management features:

Client’s point of view.

To achieve the work in a correct manner, the project team has to include the following specialists and competences: project management, change management, communications, telecom services and technology, legal, telecom expenses management, quality and languages.

Operator’s point of view

The PM team is made up of PM, sales, presales, engineering and provisioning people from several countries with several cultures, living in several time zones. Then it is very important to develop a cross-cultural strategy in develop project team process.

Face up to new project communications management features:

Client’s point of view.

The first important step is to identify the main stakeholders: MNC decision makers, MNC worldwide information holders, telecom providers (WTC), local providers, regulators and specialists. In a global telecommunication project, power control moves from branches to the central corporation, even if branches control service orders. Furthermore, current responsibilities change from MNC to WTC. Therefore the importance of the communication area increases significantly.

Operator’s point of view

Communications with the client and sponsors follow a regular pattern with reports and control of stakeholder’s expectations. On the other hand, the communications with providers and other operators follow the timing fixed by the project management plan. We could use facilitator companies to reach providers difficult to contact or providers in countries out of our scope of influence.

Face up to new project risk management features:

Client’s point of view.

The main risk in a project distributed geographically is the lack of collaboration in information gathering. The main weapon to fight against this is a good communication plan and its correct application and the interest of a powerful sponsor. The second one, normally, is not in our power, so we have to focus on the communications plan.

Operator’s point of view

Common risks are known and unpredictable, so that despite planning risk management and performing qualitative risk analysis, the PM always has to plan risk responses usually based on alternatives.

Face up to new project procurement management features:

Client’s point of view.

The objective of the second phase is to sign the best fair contract and the objective of the third one is to execute this contract controlling the WTC execution. Then we have to take care of procuring management resources and tools. We will need to acquire the team members with the capabilities to work with international contracts and with every local contract.

Due to the diversity of profiles needed for the project team, and depending on the internal resources, outsourcing of some will likely be necessary, or even contracting companies for it: project management, change management, communications, telecom services and technology, legal, telecom expenses management, quality and languages.

Operator’s point of view

WTC needs to negotiate with local providers in those countries where it has no presence and also in those where it has no structure to offer its own ICTs. This negotiation is always a hard way to drive, even more if its business does not reach a minimum which can be considered as attractive for local providers. Negotiations with local providers are hard and long, but the importance of doing that lies in once the project is launched, reducing delivery times and granting service quality in quality agreements defined for the project.

Our experience

We have worked as PM on both sides of the project, helping our clients, Spanish MNC and WTC, with the problems raised in single telecom provider for multinational companies projects.

Final Words

Multinational companies require controlling their own communications. The best solution is to choose a wholesale telecommunication company as strategic provider. Telecommunications are the base to support the business, so they need to make the most of the possible synergies. Multinational companies reduce their problems, control costs and focus their energies on their own business. Wholesale telecommunication companies take advantage of the necessities of their clients expanding their presence worldwide and developing a new market.

Project managers are the catalyst of this relationship.

References

Valle, V. (2009, December) Las telecomunicaciones para las empresas multinacionales españolas [Electronic Version] Retrieved 03/12/2010 from http://www.enter.ie.edu/enter/cms/es/informe/8697/1

This material has been reproduced with the permission of the copyright owner. Unauthorized reproduction of this material is strictly prohibited. For permission to reproduce this material, please contact PMI or any listed author.

© 2010, Mariano de Abajo Bedmar and Alejandro Gaspar Rebollo
Originally published as a part of 2010 PMI Global Congress Proceedings – Milan, Italy

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