Case study

Case Study /

Case study: Better processes save VIVO $700,000 in just three months

  •  Who: VIVO in Brazil, Telefónica Group’s biggest operating company outside Spain
  • What: Transformation program to exploit digital opportunities, reduce costs, change operational and business culture, maintain #1 position
  • How: Learning how others use TM Forum’s Business Process Framework, combining and deploying it with other proven best practices
  • Results: Saving $700,000 in three months from reducing network failures; reducing processes by 22 percent overall; average savings of 22 percent on providing infrastructure for extraordinary events like Formula 1 and applying those efficiencies to ordinary business practices; moved up to second place for M2M in a static market

Telefónica Group’s biggest operating company outside Spain is VIVO in Brazil. Since launching into this market in 1996, the company has invested €55 billion ($61.4 million) on acquiring Telesp (Brazil’s biggest telecom operator), and modernizing and expanding the network. In 2014, VIVO set up an ambitious business transformation program to exploit opportunities in the digital world and consolidate its leadership.

VIVO Network Directorship´s transformation is a local initiative, aligned to Telefónica Group´s strategy, which aims to increase capacity, and decrease investment and operating costs at the same time. The Directorship, which includes Engineering & Planning, Operation, Management & Support, is responsible for providing communication technologies and managing all resources efficiently to increase VIVO’s productivity

In turn, the Processes Department is part of the Directorship, charged with achieving operational excellence through consolidating the Business Process Management (BPM) model and driving continuous innovation to meet the rapidly changing needs of this emerging market. In 2013, the department drew up a plan to implement ‘management by processes’ for the Network Board.

Transforming processes

This was a huge task. Initially, the biggest obstacle to create a culture of operational efficiency across the company to support the scope of the BPM cycle, hence commitment by top level management was critical. João Paulo de Oliveira Prado, Manager, Process Management, VIVO, comments, “Their participation was terrific. They gave us real attention and support because they believed in this transformation. In fact, we started this transformation with the senior management group, and after all the alignments we received the ‘go ahead’ to work with entire VIVO Network Directorship.”

This involved 47 divisions, 133 departments around 3,700 employees.

Learning from others’ experience

The Processes Department decided to align the Network Board’s core processes with the best of breed established practices it could find – TM Forum´s Business Process Framework (eTOM) Release 14.0. De Oliveira Prado explains, “Following our transformation plan we worked to enhance our management model, undertaking a series of benchmarking exercises. This was a classic benchmark project.

“We visited units from the Telefónica Group and other reference companies, looking for answers to our agenda for each. The focus of each visit was different, according to our own business needs. We used that information to assess the maturity of our processes, review our goals and adjust our way. From the results, we compiled an updated set of best practices to use in our operations and found that the Business Process Framework was the common factor – we proved, without a doubt, that TM Forum´s Business Process Framework is the best reference model available.”

He adds, “It allowed us to restructure our own business practices to meet new business needs, and in particular to increase our production capacity, and decrease investment and operating costs at the same time.”

Bringing all Network Directorship together

“Using this strategy, we organized our business processes in ‘logical groups’, where those ‘responsible’ for various areas were organized in boards (aligning with the vertical columns of the Business Process Framework) and those ‘accountable’ were arranged in business layers, [reflecting the horizontal lines of the framework]. In this way, we were able to consolidate ideas and business goals into one management tool which we called Process Map 4.0.”

The Process Map 4.0 was created through the combined efforts of the senior executives directing the strategies, tactics and recommendations, and the Processes Department delivering methodologies for internal best practices to support them.

Getting the three crucial elements of Engineering & Planning, Operation, Management & Support to work together closely is often a big problem for network operators, but de Oliveira Prado says, “This was not a problem here in Brazil – we were already part of the same Directorship and also, we’ve been following TM Forum´s Frameworx recommendation since 2003, just not in such a total, cross-organizational way.”

Greater productivity and intellectual capital

VIVO Network Directorship recognized that it needed to organize all the relevant information within the new guidelines. De Oliveira Prado says, “We decided to create a ‘functiongram’ – a document that show the activities of all processes in an organization, containing the hierarchical structure and descriptions of organizational and departmental functions. It contains all the activities related to functions needed to develop to the board´s responsibilities. This in turn enabled a structure for a RASCI [an established methodology for designating who is responsible, accountable, supporting, consulted and informed]plan for the whole methodology we created for this initiative.” 

He explains that to support the dissemination of business strategy and the processes management culture right across the company, “We also developed a training program with strong cultural bias, to qualify our employees and executives as true ambassadors of this idea, called ‘advanced processes representatives’. We combined the market´s best practices with internal expertise to consolidate a reference model to improve the performance of internal processes. This initiative provided a massive increase in human capacity and improved the retention of ‘intellectual capital’ in the company.”

The Advance Knowledge Program on Process put in place by VIVO combines and tailors customized methods and tools (BPM, Lean Six Sigma, BPMN, PDCA, Process Mapping, Brown Paper, Design Thinking, Gamification etc.) for direct application to the company’s operations. De Oliveira Prado says “More than just ‘giving certificates’, we are committed to creating the right culture and ambassadors of that culture inside the departments. We need to have power at all levels of process (management and operations) so we built it in to where ‘metal meets the meat’.”

Fast results

The transformation efforts quickly began to bear fruit for all three of its stated goals – increasing production capacity while decreasing investments and operating costs.

Within just three months of the new processes being implemented, VIVO gained greater mobile network coverage through better site deployments. This cut the revenue lost due to ‘events’ or failures by R$ 2.24 million ($709,850) and achieved much smoother operations.

The company also reduced the risk of regulatory sanctions by creating a new operating model for the process of New Location Deployment. This is a legal obligation for telecommunications providers in Brazil to provide voice infrastructure, and make services available anywhere they are requested by 300 people or more. As de Oliveira Prado observes, “This is hard stuff, believe me, in a country of continental dimensions.”

Turning ‘emergency’ into everyday measures

VIVO radically changed the way it thinks about meeting demand for services around big events in Brazil (such as the soccer World Cup, Olympics and Formula 1) and the Campus Party – an annual technology event that VIVO sponsors.

The company established a process to ensure service levels would not degrade in the face of huge surges in demand by treating them as an ‘emergency’, with careful, detailed planning and dedicated, exclusive teams to guarantee the execution. Providing services at these events is very important to VIVO´s brand, but the company also used them as an opportunity to learn how to bring greater effectiveness and efficiency to its wider operations.

De Oliveira Prado says, “To give you some idea how important our work is at these events, during the World Cup our network carried most of the traffic on 3G network and 50 percent of total 4G traffic in the stadiums. At the Campus Party event, where we are responsible for all telecommunication infrastructure, we provided a 50Gbps for the 8,000 visitors.”

Combining the best of the best

Through the use of the concepts as Lean Six Sigma, supported by TM Forum’s Business Process Framework principles, VIVO allocates the right responsibility to the correct person with the appropriate authority. Mr. de Oliveira Prado comments, “It sounds simple, but it is very complex to make people accept a new idea, without an ‘unquestionable reference’.

“However, we discovered that even such a reference is not enough; we need to an approach that suits all kinds of events of different sizes, at different places, with different scopes. Once we understood this, we decided to use a strong method to ensure success and minimize our risk. Only one approach was suitable – the Lean Six Sigma Method, which our company has been using with great success since 2007. By combining this with the Business Process Framework, the result was brilliant! We saved 22 percent, on average, on the cost of implementations for these sort of events.”

Better processes around supplying services to new condos generated savings of R$48 million in capital expenditure, achieved by greater use of new technologies over consolidated networks (fixed and mobile), in addition to the expected growth in revenues. He adds, “In the past, we lost out to other companies because we couldn’t deploy capacity and infrastructure fast enough to meet demand – for example, where a new condos were being built. After our transformation, we realized that we don’t need huge investment to meet demands of new builds.”

Faster time to new markets

Decreasing time to market for machine-to-machine (M2M) communications from its previous best of 45 days down to 13 was the next challenge. Mr. de Oliveira Prado states, “We provide the underpinning connectivity, not the devices, to our clients for solutions for applications from running ATMs, to logistics, controlling energy supply, remote management of devices and much more. At the moment we are working on proofs of concept for the Internet of Things.

“Our success so far in the M2M market has made us number two and leaders in the Brazilian market with growth of 150 percent in our installed base between 2013 and 2014, up from fourth place – we were the only operator in Brazil to increase market share during this period.”

Profiting from lessons

After a series of lessons learned, we sought to better understand the maturity of our processes, our governance processes, our board’s approach and also if the business process management is really incorporated into our organization’s culture. For this job, we choose the Process and Enterprise Maturity Model methodology, used by other Telefonica´s Operating. 

From our findings so far, we are absolutely sure that the adoption of the reference methodology, developed internally and enriched by the experiences of our executives and employees is the determining factor for success. Similarly, the utilization of a solid reference as TM Forum´s Business Process Framework also continue to sustain and confirm our initiative,” de Oliveira Prado asserts.

The big rollout

In 2015, the company reconfirmed the sustainability of these principles in the business, an important step in preparing to for the Process Map 4.0 Rollout – itself a huge project – using all the knowledge acquired between 2013 and 2014.

Mr. de Oliveira Prado says, “We set out our final goal with great accuracy and presented a plan that will improve the total capacity of our processes by 22 percent. We promise to publish our results as soon as we finish the last part of this transformation initiative and are happy to share what we did in more detail with any of your readers.”

NEW Telefonica Brazil Infographic v3


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