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Case study: Telefónica Argentina embraces disruption to act like a startup

CASE STUDY

  • Who? Telefónica Argentina has a total of 26 million subscribers to its fixed network for telephony and broadband, and Movistar mobile services
  • What? A radical business transformation to become a digital communications company and differentiate itself from its competitors
  • How? Using Frameworx, Telefónica Argentina was able to replace its legacy systems, and launch commercial services within just 12 months
  • Results? A single, fully-automated, integrated system that supports a consistent, seamless user experience across multiple channels and lines of business, in a converged operational environment

Telefónica Argentina (TA) set out to transform itself into a digital communications company. Its legacy processes and IT had evolved over 20 years and presented serious hurdles.

TA’s aim was to converge its fixed and mobile offerings, enabling customers to access and consume multiple services and content on a variety of devices. Further, TA wanted to gain a complete view of its customers to be able to personalize its offers, right down to the level of one-to-one marketing.

To achieve this, the company set out to simplify all its processes, implementing a core BSS/OSS that could manage all aspects of its relationships with customers. This includes everything from its web front-end, through digital identity and ordering to billing. Another key criterion was that the core system should be able to extract value from big data, for example to support real-time decision-making.

From legacy to leading edge

Over time, business requirements had necessitated changes to IT, and there had been mergers and acquisitions without proper consolidation. There was a lack of reference architecture and standardization, and systems and processes were fragmented. Channels were product/segment-centric and siloed.

The objective was to deliver standards-based, online, end-to-end processes out of the box. The solution had to be data-centric, introduce a service-oriented architecture or web services layer, and provide a full core BSS/OSS application suite stack.

“We decided on a very disruptive transformation,” says Horacio Goldenberg, Chief Information Officer, Telefónica and Movistar, Argentina. “We decided to replace all our core stack of BSS/OSS applications and migrate our customers to the new stack. It was a sort of green-field approach, to get rid of the complexity of the legacies.”

Goldenberg emphasizes that this was not a matter of gap analysis and working out how processes could be adapted.

“On the contrary, the aim was to get rid of these processes and adopt new ones… We abandoned processes that weren’t good enough for the digital world and embraced new processes based on TM Forum standards.”

The company took a prime contractor approach, partnering with Amdocs. In the past it had gone for ‘best of breed’ and/or custom-made/modified through integrators. Now it went for ‘best of suite’, because this guaranteed the end-to-end integrity it sought. A single main contractor also ensured accountability. “We wanted to know who was responsible for what,” says Goldenberg.

The need for speed

The transformation also had to be fast: TA set itself the target of accomplishing its aims for each strand of the business within 18 months. A big part of hitting these targets was the use of all the elements of TM Forum’s Frameworx. “TM Forum standards were our guide, our bible,” says Goldenberg.

In January 2014, after 12 months, the first 1 million customers were migrated to the new platform. After 15 months another 10 million were added. After 24 months the transformation of the wireless side of the business was virtually complete with a total 24 million mobile customers migrated. The transformation of the wireline side of the business, based on the same platform, will be completed in 2015.

Feedback from TA’s customer services teams has been positive. They have seen a dramatic fall in the length of customer interaction times and a big improvement in the time taken to resolve complex issue. The time taken to train new employees has gone from three weeks to less than a week on the new platform, a major efficiency factor in a business which had a 60 percent turnover annually in customer service staff.

Movement across Latin America

The platform is already being introduced in Chile, Peru, Mexico, Uruguay and TA’s Central America hub. The next step, explains Goldenberg, is to simplify operating and business support services and networks at a local level, wherever Telefónica operates. This includes enabling digital identities and federated catalogs, providing a single global interface for multinational customers, and exposing application program interfaces to over-the-top players for content delivery and ‘mash-up’ innovations.

And the other key ingredients for success? Strong governance over the architecture and over change requests, in order to minimize them, was vital.

“This is so that we don’t repeat the mistakes of adapting the new systems and processes to the old way of doing things,” explains Goldenberg.

A shared vision and cross-organizational commitment were also key. Goldenberg stresses that although the project was powered by IT, this was not an IT project. Instead, it was a strategic project focused on transforming business processes, which meant the whole business, including senior management in a ‘top-down’ approach, was engaged to make it a success.

Telefonica argentina

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1 Comment

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    Bouke Hoving on

    I remain impressed by Telefonica’s business transformation serving as a role model for the telco sector! I will address KPN’s approach, results and challenges in our transformation at TMFlive on June 2nd!

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