NTT Group in Japan deployed TM Forum's Open Digital Architecture and an extensive change management program to transfer back-end systems used by 170,000 employees to the cloud.
NTT adopts ODA to drive standardized back-office systems
Who: NTT Group in Japan
What: Standardized and automated back-end billing, finance, procurement and approval systems and processes used by 170,000 employees across the NTT group of companies in Japan.
How: Deployed TM Forum’s Open Digital Architecture (ODA) to define the structure and building blocks of its enterprise architecture and undertook an extensive change management program in collaboration with employees.
Results: All of NTT Group’s back-end systems now operate in the cloud, resulting in a 25% reduction in the number of business processes and a 15% decrease in operating costs.
Creating a plan and strategy to transform
When NTT Group decided to transfer its legacy back-end systems to the cloud it faced a much greater challenge of scale than most telecoms operators: Its billing, finance, procurement and approval software were used by 170,000 employees across 115 companies within the group.
The company therefore had to both carefully structure its approach to automating and standardizing systems and processes and gain the support of its large employee base by demonstrating the benefits of being able to better share and deploy data.
The principal aim of the transformation was to better connect, share and use data across the Group, according to Ken Komazawa, Vice President of IT Strategy Office at NTT.
First, though, it had to decide on what shape the transformation should take.
“There were over a hundred ideas about how the company should transform,” says Komazawa. In total, the company devoted 20 months to planning between late 2018 and mid-2020.
The IT architecture design had to take into account 85 peripheral systems and 1,017 peripheral interfaces. Planning was further complicated by the decision to manage the transformation of billing, approval, finance and procurement as one large “big bang” project rather than four separate deployments.
Adopting an ODA framework
The IT team was clear it needed a standardized enterprise architecture that would provide future design flexibility and agility. With this in mind, it chose TM Forum’s Open Digital Architecture (ODA) as its framework. The IT team then held weekly meetings during the three-year delivery period of the program from 2020 onwards to determine which code and data to standardize and how to implement changes. Key considerations were the simplification of processes and much greater data transparency for the entire employee base, via a dashboard.
NTT used ODA to develop a structured, uniform data environment, which employees and partners can access via a single user interface. Each process is supported by the same data governance rules, underpinned by a platform that provides network, security and server resources.
A challenging delivery phase
Despite the inherent difficulty of planning what to standardize, how and when, it proved less challenging than delivery.
“Sticking with the architecture was the most challenging thing for us as there were lots of small projects combined into one huge program,” explains Komazawa. “During the delivery phase, there were 3,000 employees involved, and governing them and getting them all to adhere to the architecture that we created was very tough,” he says. As was “changing the mindsets of the users of the system”.
Indeed, the program only succeeded because of NTT Group’s considerable investment in change management.
“From the IT side it was very difficult for us to do, and we would have failed without cultural change management,” says Komazawa, explaining that a people and culture layer was an integral part of the architecture. Indeed, he believes that 80% of the success of the transformation program was down to emotional intelligence, compared to 20% for the architecture.
“Not many people were used to utilizing data, and changing their mindset was a massive challenge,” adds Motoi Yamana, Senior Vice President of Digital Innovation Department, Digital Transformation Headquarters at NTT East Japan, who oversaw the cultural change program.
Greater transparency and visibility
The company wanted the transformation to give employees greater understanding and visibility of activities across the entire group, and how they served the wider business strategy. “We made sure that every activity within the entire group is visualized and transparent … and can be related to business strategies,” explains Komazawa.
In total 7,000 employees took part in quarterly change management events. They then spread their knowledge throughout the group via communities where people could learn from each other how to use data.
“Going onsite and presenting everyday operations to employees in the form of data and showing what they could do and visualize with data, and how it will make them efficient, was really an [important] step,” Yamana explains.
Yamana also points out that it was crucial to “listen to users – how they understand and use data and their level of maturity. Capturing all this information was key to being successful.”
The transformation has improved employee experiences and, notably for the sales team, is enabling the company to deal with a demographic shift. “We have an older workforce, so as people reach retirement we can fill their roles with automated processes and assistants,” says Komazawa.
Automation is also helping NTT Group deliver on its mid-term strategy of increasing earnings per share by more than 50% and reducing costs by more than 800 million yen by the end of 2023.
Going forward, NTT Group intends to market to enterprise customers its insight into managing digital transformations, as well as applications it has developed internally. “One example is an application to manage workloads, which has been shared with customers,” explains Yamana, as well as a training package to help reskill employees.
In addition to its program to transfer the back office, NTT Group is also connecting and transforming other platforms to create an internal end-to-end system. Again, the company will seek to create an enterprise transformation package that it can sell externally to Japanese companies that require solutions to digital transformation challenges.