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Friday, 6 November 2009

Are operators converging billing systems?

A few weeks ago, I wrote a piece about convergent billing, where I argued that there was not yet a real case in terms of customer features for convergence of prepaid and postpaid billing infrastructure (see ). Whilst I still doubt there are sufficiently sexy consumer products to be developed around payment convergence to be worth the painful journey to get there, I think it's time to review this position from a slightly different perspective.

I recently took part in a webinar on billing convergence, where the keynote speakers were from an American billing system supplier who should probably remain nameless. They were discussing why telecoms companies were moving towards convergence, mostly for reasons of convergence of service type (e.g. triple and quad play services) but also for convergence of payment type. I'm afraid I got distracted from the message by the unnecessary obfuscation of management Newspeak, culminating in a slide which gave the three key "Customer Experiences" as Real-time Policy Enforcement, Value-Centric Rating/Charging, and Proactive Contextualization. Now I have no real problem with the first two, but I spent some time distracted from the presentation trying to work out what on earth Proactive Contextualization might be, and failing. I know Americans love complicated jargon - I recall once seeing a weather forecast on American TV where the weather man announced gravely, "There will be a 50% probability of precipitation activity". Why didn't he just say, "It might rain"?

Anyway, the one interesting thing to come out of an otherwise disappointing webinar arose from the online audience survey. The first question was as follows (I paraphrase the wording):

What is the status of your strategy for convergence?

  • In place – 26%
  • Considering options – 52%
  • Understanding the problem – 22%
  • Not considered to be necessary – 0%

Particularly noteworthy I think that 74% of respondents are in the process of working out what to do to implement convergence, and that none consider it unnecessary. Now I think that service convergence is highly desirable, and would even argue that payment convergence is advantageous in terms of platform simplification and future flexibility. For me the issue is that whilst service convergence is going to be non-trivial programme, it is relatively speaking a like for like systems migration. Payment convergence, on the other hand, involves considerable architectural upheaval to marry the flexibility and capability of postpaid billing systems for rating, package building and discounting with the realtime capabilities of prepaid billing systems for event authorisation and balance management.

There is an interesting battleground developing in the software supply industry as to whether this comes about by extending the 'Billing' capabilities of the prepaid platform (essentially an IN-based solution) or by developing the realtime balance management capabilities of the postpaid platform (a traditional transaction-based solution). In either case, however, there is a platform architecture change and a major migration project attached, therefore with considerable accompanying risk. I'd be interested to know to what extent the webinar correspondents were answering this question as referring to both service and payment convergence.
Maybe the second question shed some light on this.

What is the biggest challenge you face:

  • Launching competitive price plans – 6%
  • Time to market – 28%
  • Churn – 18%
  • Reduction of complexity and Opex in IT – 47%

So almost half of respondents are dissatisfied with the state and cost of their IT to the extent that it is their biggest challenge. Clearly, a programme to rationalise their billing environment by converging all onto one platform would simplify that (and probably also significantly reduce the time-to-market problem). I suspect however that it will not be until there is a more robust economic recovery that companies will feel confident enough to initiate such a major programme.

I certainly look forward to getting involved in a programme of this sort in the not too distant future!

Wednesday, 30 September 2009

Programme Management and Roy Keane

I have a confession to make: I am an Ipswich Town supporter. I know, don't mock, I suffer enough as it is. I have watched over the past five months after Jim Magilton was sacked for only taking Ipswich to 10th in the Championship, and Roy Keane brought in with a great fanfare as the man to put an end to Ipswich's "underperforming" and win promotion to the Premiership.

He immediately professed himself satisfied that the core of his squad was sound, and that he was confident of winning promotion within 2 years. Since then, he has acquired I think 9 new players - I tend to blink now and again and miss one - and has transformed the team into one making a realistic challenge for - er, relegation, actually, bottom of the table in 24th place.

Now I have in my career a few times been introduced as a replacement IT programme manager for a failing project and told to improve matters. On one or two occasions, I have also been told to reduce costs because the budget was already overspent. As any PM knows, you can only juggle with four basic parameters: cost, timescale, quality, scope. And what is more, these are closely linked - you can't change one without affecting another. Reduce cost? OK, then unless you are a magician with higher productivity yet cheaper resources to produce out of the hat, at least one of the other three must move in balance. Now in Roy's case, he has an increased budget, a fixed timescale, pretty much a fixed scope, and so should see quality increase. The jury is still out on that one, but it now looks pretty unlikely that he will win promotion in his first year - indeed, I begin to be a bit nervous as to whether he will keep us in the Championship at the other end. At least the scope was set as 'within 2 years'.

So I started to think around some of the similarities between the roles of Programme Manager and Football Manager. Broadly, Roy has three main communities to keep satisfied: his team's chairman and board of directors (in Ipswich's case, the owner, Marcus Evans); the players; and the fans. That ties in nicely with a PM, who also relates to three communities: the "chairman" (usually the COO or CIO) and a Programme Board of business stakeholders; the implementation team; and the user community. Let's look at how these relationships work.

No outsider really knows what Roy's relationship is like with his Chairman and Directors, and indeed they shouldn't. Similarly, a PM will keep that a confidential relationship. In both cases, the approach, costs versus budget and performance against planned milestones must be reported, progress highlighted and shortfalls explained, and sufficient confidence in your competence and performance maintained.

With both the players and the implementation team, the Manager has to build the right environment for them to be as able as possible to do their job, then structure them and set objectives and priorities, and of course ensure that as far as possible the best resources are part of the team. An important part of that is motivation, and giving them the confidence to deliver their part. Now, often a "parachute PM" dropped into an existing team has limited ability to execute rapid large-scale change of the environment and the resources, so the key is to ensure the structure is right, the objectives are appropriate and achievable, and that the team morale is lifted to the optimum level. In Roy's case, we have to assume he is capable of creating the right team structure and delivering the motivation - his track record with Sunderland, and the fact that several Sunderland players wanted to rejoin him at Ipswich suggest that is the case.

So what about the final community - the fans/users? In both cases it is harder to win wholehearted support than doubt and criticism. In both cases too the community responds to results - or lack of them. Here the PM has a marginal advantage over the football manager, in that the latter has to deliver results once or twice a week, whereas the PM's deliveries are normally months apart. Clearly Roy Keane has what is hopefully a temporary problem in this regard, and the opinion of the fans is clearly getting a little frayed.

What is key in both cases is that the right message must be communicated to all communities. A PM has to make this happen, ensure the opportunity and the timing are appropriate, and that the message is exactly right. The football manager has to do this for two of his communities, but the fans are normally addressed through the media, which is a much tougher proposition. Getting the message right here is harder because it is not possible to pick the moment, and the resulting message is all too often interpreted the way the press want to present it, not necessarily how the manager intended it. In this regard, Roy has done better than I expected - his TV interviews have been thoughtful, and whilst some may consider him too dispassionate, I have been fairly impressed with his control and care with words.

Now all both he and I need to do is to deliver...

Thursday, 17 September 2009

Crystal balls

It’s always fun to speculate about the future.

History is of course littered with men who made predictions which were ever so slightly wide of the mark: my favourite is the prediction of Thomas J Watson, IBM president in about 1950 who opined: “I think there is a world market for maybe five computers.” To be fair to him, that was probably true of the computers of the day, but even so it was a bust flush by the time the fifth was delivered.

To take great leaps of imagination about the more distant future is relatively safe. I could aver that by 2100 we will be taking holidays on Mars, and we might agree that this is an interesting speculation, but since both I and my audience will be dead long before then, it is not exactly sticking my neck out.

Looking at the near future, extrapolating from the world today is more interesting: it is possible to get pretty close to what is likely to happen, but getting the timing right is much more difficult. For example, the use of mobile handsets to run non-telephony applications has been not only long predicted, but operators have been trying to go there for some years now. Only recently however has this started to become the norm with modern high spec smart phones now reaching the mass market.

Now I started to think again about predictions as we seem to be debating the future on several related communications issues. We have the concerns about delivery of television programming, and the (this time predictable!) self-interested complaints from Mr Murdoch; we have comments about the potential demise of newspapers due to competition from digitally provided news; there’s discussion about how we deliver faster broadband across the country (and who pays), and meanwhile the mobile operators are at last moving their services into information provision (or at least enablement for third party information providers), fuelled largely by the surge in smart handsets – thank you again, Apple, for the stimulus of the iPhone.

I’m sure we can draw some strands out of these trends. Here then are my top five predictions.

1. Broadcast TV is doomed.

The BBC iPlayer is the first step in this process. Essentially, we will all move more and more towards watching what we want, when we want it, from the internet – even for live events: not home in time for kickoff? See it from the start when you do get home.

This would mean the TV channel companies becoming more aggregators of content, probably published on a daily or weekly basis, rather than to a serial timetable like today. Content providers will be like the TV production companies or film companies today, and may well start publishing directly since they don’t need airwaves.

I would not be surprised to see the BBC therefore become more a channel to market for published content, including pay per view (which is much easier to arrange on the internet), and focusing its production efforts more on information and news services.

Of course, all this requires adequate high speed internet access – and a lot of it will be mobile. The government no doubt will be slow to give up on TV due to all that investment in the digital switchover, but the frequencies can no doubt be put to other profitable uses, including more wireless internet services. I wonder what Sky will do with all those satellites?

2. Telephony is doomed.

OK, I’d better qualify that a bit. What I mean is that making and receiving voice calls over a switched network is already looking outdated. Skype is pointing the way: internet based voice traffic (VoIP) is increasingly how both business and personal calls are made – unless a mobile is used. And in the case of mobile, with more handsets becoming WiFi enabled and mobile broadband aware, I see VoIP increasingly the way in the mobile world as well.

What this really means is that both fixed and mobile networks will evolve into data only networks delivering just broadband service, with old fashioned switched voice dying a death. It already irks that there is a complicated tariff for voice calls, and in order to attract customers they have to build even more complicated products to give a lot of it away again. Very little call traffic nowadays actually needs individual call pricing: premium rate numbers perhaps, where the operator is collecting a fee for the called party, and – er – well, nothing else really. Even calls to other operators’ networks – including international – could be covered by inter-operator agreements given the low cost of carriage over IP.

This will change all sorts of areas. Billing systems can be much simplified with no need to price most calls, and with effectively all bills becoming prepaid monthly service charges. Quite a lot of things will change in the networks, with no further need for voice switches and IN platforms – ‘calls’ will still need some form of processing but not through this technology. Even the needs of security forces will be impacted – phone taps are different in VoIP networks!

3. Books are doomed.

Alright, I don’t really mean it, but I do think that we are close to the point where eBook readers will become mass market. I doubt we will see dedicated eBook devices, but I do anticipate that smart phones and notebook PCs will quite soon start to become the devices of choice for books (and, indeed, whatever passes for newspapers in the new digital age). As people become accustomed to taking these devices everywhere, thanks to the ‘internet anywhere’ attitudes now emerging (maybe this should be a prediction too? – no, it’s already happening), no-one will want to carry a large paperback as well when it can just as easily be downloaded for no extra weight.

This will have considerable ramifications for the publishing industry. Anyone will be able to publish their latest novel; the only value the publisher will add will be the marketing organisation and revenue collection – oh, and the ability also to produce the hard copy version (which I’m sure will still exist, albeit in reduced form, much like CDs today alongside MP3 downloads).

4. The ‘core network operator’.

It has been interesting to note the growing proliferation of Virtual Mobile Network Operators (MVNOs), buying their airtime in bulk and then addressing everything from tightly focused market sectors to broad spectrum markets. In addition we have the recent coming together of Orange and T-Mobile in the UK.

In effect what is happening is that we have a saturated market – no likely significant growth in the overall subscriber base – and a steady erosion of revenues as services become commoditised and competition drives prices down. The operators are trying to push up the added value chain with triple and quad plays and data services, but network costs are a significant issue for them. One of the significant factors for the Orange/T-Mobile merger is in network savings.

Now in effect we have only two national local loop wireline networks in the UK: BT and Virgin Media (other networks from the likes of COLT are local and business oriented). Virgin’s network is of course dominated by television; but BT is increasingly losing out on telephony service delivery to many other wireline service companies, such as Talk Talk. This ecosystem nevertheless continues to be sustained on the single local loop network that BT runs as a regulated service.

But we still have four mobile networks, effectively providing the equivalent of a ‘mobile local loop’. Now I can see continued cost pressures reducing that number further – even perhaps to one regulated core network? Wouldn’t it be better for the network operation to become a separate business, delivering service through as many MVNOs as wish to set up in business? There’s plenty of market space for the likes of Virgin Mobile, Tesco, and so on to compete for the end user, so why should a mobile operator sell them air time, only to compete with them for customers, and all the while groaning under the cost of maintaining an expensive national network? Might it have made sense for Orange and T-Mobile to combine and float off their networks and continue as separate retail companies?

5. A wallet on my phone

The advent of the electronic purse has been predicted for a long time, but progress has been slow. Mobile operators have explored how this might work for several years, but trial services like buying your can of cola from a machine have not been wholly successful – the palaver of texting to make a payment is so much more long-winded than sticking a coin in a slot. Operators have shied away from serious solutions partly because of concerns about straying into the territory of banking regulations, money laundering and so on.

This is an area where more advances have been made in developing countries – particularly in areas like the Philippines – where banking is less well developed or accessible to ordinary people. Services are now available there for transfer of small amounts of cash, using the mobile phone account as a kind of purse. This is another key development – it’s one thing to use a phone to pay a retailer, but the ability to pay small amounts to friends and family is what will make this into a mass market service.

I am not an expert in financial regulation, but I suspect the pressure to be able to deliver such services in the UK will lead to ways being found before long.

So in conclusion, I don’t think these are particularly outrageous predictions; however getting the timing right may be tricky. I don’t think I’ll stick my neck out there...

Wednesday, 2 September 2009

Why is Customer Care so hard?

Network operators and service providers are uniquely positioned amongst all industry sectors, in that they have the data that describes exactly how all their customers use their services, through call and data records. Every single time a customer uses the network, there is a record logging this.

All this data is painstakingly collected so that bills can be produced. And what else is done with it? Well, not enough in most cases. It will be used to ensure quality of service thresholds are being met, where appropriate, and it is aggregated to help with network planning and optimisation. No doubt various other reports are spewed out of data warehouses to tell directors if the number of call minutes has gone up or down this month, and other pertinent management information, but as to using the information to manage individual customer relationships – well, er....

One of the problems for telcos pretty much ever since number portability became mandatory has been that of churn. Estimates of churn rates vary wildly, and even those that the operators will admit to are difficult to compare, since what constitutes churn can be defined and measured in different ways. Nevertheless it is likely that a mobile operator in the UK will lose as much as 30% of its customers every year, and for ISPs it is even higher, perhaps as much as 50%.

Now these are pretty eye-watering numbers. Some churn is inevitable – people move away from the coverage area, or even die, companies may cease trading, and indeed some customers (such as bad payers) might even be encouraged to leave; however this would be a core churn rate down in the single figures. Something is not right!

Clearly it is much cheaper to retain a customer than to have to recruit a new one as a replacement, and add to the recruitment cost the loss of revenue stream from the existing customer and it all adds up to a significant cost of operation.

Now telcos do make efforts to identify potential churners through data mining and pattern analysis, but clearly these efforts are not bearing significant fruit as yet. The trouble is that the main actions of these operators is to find more attractive products and tariffs, such as double and triple plays which (in theory) are more difficult to churn from. But this simply fuels churn, as the ‘arms race’ between operators means that there is always a more attractive offer out there if you can find it. People are not entirely driven by slightly better deals elsewhere, however, especially as this requires effort on their part – there is usually some other reason why they are ready to move.

One survey by Pitney Bowes identified the three top reasons why people change supplier, and found that these are consistent across Europe and the US. They are:-

1. not being recognised as a valuable customer (all countries average – 55%)

2. unhelpful staff (all countries average – 47%)

3. ineffective call centres (all average – 42%)

Now although this research is almost 2 years old, I very much doubt the position is significantly different today. This should be giving COOs sleepless nights – this implies that better or cheaper deals may dictate the operator a customer switches to, but the trigger for leaving the existing supplier is poor customer care.

Take the first point: the worth of a customer should be apparent to an operator very easily – we are back to the fact of a complete data record of a customer’s activity. Of course a customer will have an inflated view of their own value, but take into account both revenue streams and cost of losing the customer, and most customers are valuable enough to merit effort to retain them. The second and third points above are simply variations on the theme of bad customer care.

And we all know from personal experience how frustrating these companies can be. Not just the call centres, which seem to specialise in getting you through to any department which can’t solve your problem, but also the web sites for self care, which are often impossible to navigate around and find what you want without resulting in dangerously elevated blood pressure.

The problem isn’t the people: they are usually trying to help you as best they can. The problem is partly in the technology that supports them (back to ways of analysing and understanding that customer data), partly the result of poorly designed processes and business flows, and partly the corporate structure, which stove-pipes customer care and treats it as a business cost to be handled as cheaply as possible.

Communications companies have to be better at treating customer care and customer value holistically, or these high churn rates and costs will never reduce - and as consumers we all pay the price.

Wednesday, 26 August 2009

Whither WiMAX?

There are strongly divided opinions about WiMAX.

Its supporters have a vision of a world where many devices are wireless mobile enabled, so that for example a camera can take a picture and have it automatically and immediately uploaded to the photographer’s own picture archive on a server somewhere, gaming devices can use mobility and geography as part of the game, a phone can make a freed VoIP call, or the expected new generation of digital notebooks as well as laptops can access videos, books, online newspapers, and social networking sites seamlessly. Access to the web anywhere on any device at high end broadband speeds.

On the other hand, observers point to the approaching ‘Long Term Evolution’ (LTE) standard for transforming 3G mobile networks (UMTS) into 4G networks based on IP. These will offer speeds in excess of current WiMAX technology, but less than next generation WiMAX (and both are in excess of speeds likely to be achievable over current fixed wire local loops). They say that there is no business case to build a WiMAX network when the mobile companies can deliver the same through the current mobile networks enhanced to 4G.

So should the title to this article be “Wither WiMAX?”

The position in the UK is not promising. At present, Ofcom has only licensed two operators to provide fixed point services based on the 802.16d standard. This has limited capacity and does not enable mobility (802.16e is ready for deployment and enables mobility including cell handoff). Therefore at present WiMAX can compete with fixed broadband services but not mobile – yet mobile is the raison d’ĂȘtre of WiMAX. Meanwhile the WiFi hotspot operators and GSM/3G operators are signing up mobile broadband customers as fast as they can, which is mopping up all the pent up demand that would otherwise be potential WiMAX customers.

If this particular cork were removed, how would WiMAX operators respond? They are broadly ready to deploy 802.16e technology but face significant problems in getting a return on investment.

Firstly, it will be a major undertaking, and investment, to build out a network of base stations to support wide area coverage. Mobility is not an easy sell unless coverage extends to at least the main areas a mobile user may go to – this means at least metropolitan cover in the area you live and work, and probably most of the main metropolitan areas in the country to be a convincing proposition. The big issue in base station building is in acquiring sites appropriately located for WiMAX frequency and wave propagation characteristics, which are much more significantly affected by topography and are less able to penetrate buildings than are GSM frequencies. The mobile phone companies on the other hand already have all their base station sites, and therefore cost of deployment is much less and the speed of deployment much greater – even though LTE is behind WiMAX in terms of development, it may be able to overtake WiMAX on deployment.

Secondly, the WiMAX-enabled user devices are not by and large on the market yet. Smart phones and PDAs on the market today are WiFi and GPRS/UMTS enabled but not WiMAX. The latest laptops are starting to be deployed with WiMAX as well as WiFi built in, but the rest of us will need to buy a dongle transceiver.

Thirdly, the technology is still on the leading edge, and despite deployments elsewhere in the world – most notably by Sprint in the USA – is not yet routine in terms of deployment, network management, or coverage prediction.

And finally, can the services offered by differentiated – and priced – competitively with both WiFi and GPRS/UMTS? On the one hand, it may compete for speed, especially uplink (WiMAX is a symmetrical service, unlike wired broadband, so uplink is very fast compared with normal domestic broadband), so this might suit those needing capacity to upload large files on the road, such as photos or videos, or even some fixed location users for similar reasons; but this advantage is offset by the very limited coverage until a lot of network building has taken place, which will take years not months.

It seems to me that WiMAX has its greatest potential where mobile (especially mobile data) is less well developed, particularly in developing countries, and where fixed broadband is not universally available; but with regret I have to conclude that the odds against WiMAX succeeding in the UK are long.

Thursday, 20 August 2009

What's in a name?

I've been in the IT industry for - well, you don't need to know, but suffice it to say many years. There has been such huge technology change in that time: when I started as a trainee, there were no personal computers, only monolithic mainframes which you programmed by writing code with paper and pencil, and then sat at your desk and effectively executed the program line by line on paper. When you were happy, you sent this to a room wherein young ladies of the type much admired by male trainees typed onto punched cards for loading onto the mainframe.

But it's not so much the technology change, constant and amazing though it is, which I am interested in exploring here; it is the continual change in job titles. Thus I was a Programmer, but these days of course you don't have Programmers, you have Developers. You don't have Programmers because you don't write Programs any more, you write Software. I don't know why the change arose, because despite the technology now enabling code writing and testing to be done online and in real time, it is still essentially the same job of producing logic instructions to achieve a business requirement.

In the main, however, the issue driving changes in job titles is essentially one of 'job inflation'. When I started my career, a company was administered by the Board (as it still is today), but headed by a Managing Director, assisted by the Finance Director, Operations Director, Sales Director and so on. Then there was the management layer, where the managers were all called - well, Managers. At the Project level, you had a Project Leader running the show, and within the Project there were Teams, each led by a Team Leader.

Then it was decided that being called a Manager was not sufficiently important sounding, especially if you were in Sales, and if you were called a Director you sounded much more impressive to a prospective client. That in turn meant that the Board's important titles were diluted, because you couldn't tell if a Director was really important or just moderately important.

Much the same thing happened in the States, where Directors were known as Vice-Presidents. A few years back, I encountered the delightful title of "Vice-President of Blue Sky", which I gather meant he looked for new business markets. (So were existing customers, by implication, Grey Sky?)

So the Board members became Chief Officers, and the Managing Director as a title now means the head of a subsidiary or division.

Interestingly, there is now a trend where the management layer is populated not by Managers or Directors, but by Heads of Department. My own favourite job title, which I came across recently, is "Head of Web", a title I now espouse when assisting the technologically challenged amongst my family. They of course, in their ignorance, still think a Head of Web is what you find in those corners you don't dust as assiduously as you should.

Now, large developments are not just big Projects, today they are Programmes, and Leaders have become Managers (since the Management layer no longer needs the term, and it sounds more impressive than Leader). Except that even quite modest developments are now Programmes, so that what used to be a Team is now a Project. Thus the leader of a small team is now a Project Manager, and quite possibly has no Project Management training or accreditation. It is getting harder to decide if it is better to present myself as a Project Manager, a Programme Director or a Head of IT Implementation.

We have also started to see that the leader of some project teams is known simply as 'Lead'. Thus the head of the Testing team, who has recently been known as the Test Manager (Head of Testing is obviously too grand for what is an essential but regrettably unglamorous role), now seems to be increasingly termed 'Test Lead'. Clearly this is not the same as Test Leader, because we don't want to go back to the past, and Lead sounds more modern - or at least, with the use of an adjective as a noun, more American.

So, where next? I suspect that the next round of title inflation is overdue, that the Director will become a Chief of something, if not a Chief Officer, and all Project Managers will become Project Directors. This will only be acceptable to the Board members if they in turn have their escalation route mapped out.

I have a suggestion: how about Minister? After all, the important Government ministers are now all Secretaries of State, so their importance can still be maintained. And I would love to go into a meeting with my Board level boss and be able to agree by means of a simple "Yes, Minister!"

Wednesday, 12 August 2009

Agile Waterfalls?

There is something of an ongoing debate at present concerning project methodologies between the traditional approach known as Waterfall, and the new kid on the block, Agile, which has become somewhat - dare I say it - trendy. So is it appropriate to change IT development strategy from Waterfall to Agile?

Now there are many different flavours of each of these models, but broadly speaking the principles of each are as follows. Waterfall requires that the project moves through defined stages (broadly - requirements confirmation, design, development, test, acceptance, deployment), whereas Agile is about reducing time into service for software developments by establishing a collaborative relationship between developers and users, and using iterative development techniques to ensure best correlation between requirement and solution. This is normally achieved by time-boxing the overall interval between releases to typically 3 months, and by reducing the project stages to four: release planning, where the approach to the release, including dates, budgets, resources and functionality focus areas, is agreed with the principal business sponsors; the hothouse, an intense, competitive workshop over normally 3 or 4 days to agree the requirements scope and the business case for the release; iterative development, a period comprising typically four or so iterations through the development cycle, delivering successively refined prototypes of the solution; and finally deployment into service.

So should all developments in future move to an Agile model? Agile certainly has some key benefits that are highly relevant to certain project scenarios.

Implementation of new products and services in a fast-moving business can happen more responsively due to the short release cycles. This in turn leads to increased customer satisfaction due to rapid delivery of usable functionality.

There is a closer relationship between business benefit and functional delivery prioritisation, which has to be a good thing. Furthermore, the close co-operation between users and developers leads to a better understanding of the business by the developers, and an increased sense of collaboration and ownership of the solution by the business.

New requirements that are developing during a short implementation timeframe can be accommodated in a method which allows for some flexibility of requirement and prototyping during the development iterations.

However, there are also disadvantages of Agile compared with Waterfall.

Pressure for throughput of development can lead to short-termism of design - a lack of attention to the overall solution architecture and the way that this supports future flexibility and maintainability. Similarly, the rigidity of the time-boxed development cycles can lead to releases being changed in scope at a late stage.

Agile relies largely for its success on a high level of involvement of user communities with the development teams through the iterations, in order to maintain a close link between requirement and solution. This is much harder to deliver effectively where the development teams are off-shore.

Developers need to be experienced and responsible in order to maximise business benefit from the development cycles. This can also be an issue with Indian development teams due to the strongly hierarchical culture in India. Furthermore, it can also increase the average cost per developer day, as it is harder to use more junior resources effectively.

Requirements documentation is often insufficiently precise to form a sound basis for acceptance (or indeed for business process amendment and staff retraining) and can lead to commercial issues between supplier and user, as well as scope creep during development iterations.

Finally, because of the fluidity of requirements and delivered scope inherent in the Agile approach, it is harder to tie a supplier’s contract price to functionality.

In conclusion, it seems to me that where there is the need to provide change on an existing environment, and to keep that change focused on maximum return in a short timescale, then Agile provides a compelling case. However, for major developments - particularly for large scale IT refresh programmes (e.g. billing system replacement) or for greenfield developments for start-ups - there seems still to be a strong case for these being managed in a Waterfall based approach. But there are lessons to be learned here from Agile experiences: large Waterfall projects also benefit from being broken into appropriate phases for frequent delivery of value, from establishing and maintaining a close involvement of the relevant communities within the business, and from a more progressive approach to Acceptance.

Although the advantages of Agile are widely promoted at present, it is also becoming increasingly clear that not every project would benefit from being implemented through wholly Agile techniques.

Monday, 10 August 2009

Management by Targets

There's been quite a lot in the news over the past year about the management styles of the banks that led them to reward the wrong behaviour and drive them to the brink of insolvency. That started me thinking about the way that management style has changed in the past three decades I have been working.

When I began work in the seventies, the office environment was quite different. There were no office computers for a start (the only ones used by business were in large rooms tended like temple gods by priests and priestesses behind locked doors, and used only for applications with high returns given the then astronomical cost of computer power). There were in relative terms large numbers of secretarial staff, as all documents needed to be typed. Businesses communicated by phone, letter and occasionally by telex.

The management environment for staff was different too. Staff expected to change jobs less often. The emphasis was in doing well, and employers encouraged staff to improve - there was much focus on training, development of individual capability in the right directions for the business, and getting staff to the point where promotion could be envisaged.

Staff performance assessment consequentially was more qualitative than quantitative. This had the drawback that assessment was more subjective, but usually there were enough people involved in the review processes that there was little scope for personality clashes to spoil a person's career. What we didn't have were individual targets (sales personnel excepted), but I don't think that made us any less committed to do well. We did have bonuses, usually related in some way to company performance, and relatively modest in scale compared with today's incentives.

Today of course every member of staff in all the companies in which I've recently worked have individual targets, and often large bonuses, based largely on achievement of their own personal targets. These targets are by their nature short term, and so increasingly are corporate objectives - show revenue and profit growth not just this year, but this quarter or even month, and we'll worry about next year when we get there.

The results are predictable. Managers drive their reports rather than lead them, often with unpleasant "macho management" (at least the real bullies of old are now curbed by modern employment law). Staff work in stressed conditions, focus single-mindedly on their targets even when it becomes clear these are not in the company’s interests (the company being powerless to change them once committed), and matters of true good performance and development of capabilities are lost. How many staff in, or aspiring to, management grades work the contracted number of hours per day or week? Many routinely work up to a couple of hours a day extra, with getting in a bit early, cutting lunch hour, and leaving an hour or more late - and this is not paid overtime.

It certainly riles me to go into a staff assessment interview, and have a discussion on the lines of:

"You didn't achieve your targets."

"No, but they became less important due to x and y, and I couldn't achieve them. I think I am good at my job, don't you?"

"That's not for me to say: you didn't achieve your targets."

This inability to recognise competence unless it is measurable - and only targets are measured - is one of the reasons why I've focused more and more on contract work than employment, where you are judged on performance and "results" (in a general sense) and not on targets.

There are of course some notable advances in modern management methods. In particular I would note the improved way that women are treated nowadays, which in most of the offices I've worked in recently is genuinely on an equal footing with men.

However there is no getting away from the fact that target based staff management rather than competence based rewards does seem to me to be a doubtful improvement - one the victims of the excesses of the city traders and bankers might well agree with.

Saturday, 8 August 2009

The Thrill of the Start-up

I have been involved now in several telecoms service providers either as greenfield start-ups or as 'early life growth' companies, and there is no doubt they are very exciting places to be. There is a vibrancy about them - a will to overcome problems, to get their message and their services into the marketplace, and to dare the market not to let them succeed!

Regrettably, not all do succeed. Many have particular problems with the IT implementation which is sometimes the cause, but more often I think the symptom of the underlying issues. Start-ups have certain characteristics, which are both the nature of the beast and also the source of problems with the IT requirements.

Firstly, they are almost always developing the IT infrastructure before the business has determined in detail how the network will be configured and managed or how the launch products will be defined. This is because to set up significant IT infrastructure generally takes as long as building a core network, and longer than creating products and services. This means that significant architecture and design decisions are taken before all the data impacting that decision are known.

Secondly, since the company starts from a base of no staff, there is almost no-one to be involved in detailed planning of business processes, whether the products will be sold through resellers or retailers and if so how to engage and remunerate them, how the logistics around supply and sale of handsets/SIM/routers/numbers/etc (delete as appropriate) will be managed, and so on ad nauseam. Therefore once again the IT infrastructure starts out in a certain direction, and too often the business later decides on a different course, with consequent impacts (not always taken into account) on the IT build programme.

Thirdly, business plans made well before launch have a habit of being adjusted the closer to launch you get. Suddenly, volume assumptions about wholesale vs. direct, business vs. residential, self care vs. call centre, in house processing vs. external - the list is again endless - get thrown on their head, and you find you have either too much or too little IT capacity (sometimes both!). More pertinently, you may find sudden adjustments in Capex or Opex budgets which significantly compromise the IT support you can deliver to the business.

And fourthly, start-ups have a habit of changing their ownership during the run up to launch, as funding needs necessitate new investors with an incentive to investigate how their money is being spent. Often these investors have strong preconceptions about how the infrastructure should be architected - for example, corporate policies about specific suppliers, perhaps a new requirement to converge solutions with other group operating companies - and you may find at best a distraction from the build issues, at worst a major reappraisal of direction.

I have therefore come to some simple principles to help guide IT delivery for a start-up.
  • Design the functionality as openly as possible, and keep it all simple, basic and targeted on the major volume transactions. Requirements will change, so be ready to go in different directions. Complexities and automation for the exceptional transactions can be added later.

  • Design the architecture so that the systems are scalable, but build the initial configurations for the early volumes - resist the temptation to build for 4 years out on the basis you have the capital available!

  • Define and use the change management process from the earliest days.

  • Set up and use rigorously one tool omitted from the Prince2 methodology, but in my view essential for such projects: an Assumptions and Decisions Register. You will certainly have a conversation with someone very senior and new to the organisation, probably about a month before launch, along the lines of 'Why on earth did you do it this way?' You will, I guarantee, need to produce your record of all significant business and design decisions or assumptions, who endorsed them, and why.

But despite these trials and tribulations, if given the choice between mature organisation and start-up, I would prefer to work for the start-up - they are just more lively and more fun!

Friday, 7 August 2009

Permanent or Contract?

For the first twenty-odd years of my career, I was a Permie - a salaried employee of the company I served. It didn't really occur to me to do anything else - I was a Project Manager, and Project Managers are professionally risk-averse. And I saw contracting as a risky business - you couldn't know where the next job would come from, or how much you would earn from it.

Being made redundant for the first time didn't really change that view. This wasn't a time of recession, it was simply because my employer wanted to reorganise and relocate, and I didn't want to move. I cast around until I found a new permanent position.

The second time was in a recession. The outlook appeared bleak. I was lucky - I called a client I'd previously worked for as a consultant, and he wanted me back - as a contractor. And so I had my 'road to Damascus' moment'.

Now I have several years' experience as a contractor - or as it is now more politely referred to, an Interim Manager. I can look at both types of role, and have some observations to make from the resource side of the fence.

Firstly, it is clear that the decline in job security has eroded the difference in risk between permanent and contract. It is no longer 'safer' to be in a permanent role - as soon as the company hits choppy waters, over the side goes anyone now seen as 'non-essential'. Nor indeed are the benefits any longer compelling - nobody now expects an employer to provide a generous pension scheme, and most employees find a company car is a tax liability.

Secondly, as I hit the latter stages of my career, I find there is a difference in approach by companies for permanent or contract staff. When I go for a permanent job interview (and I still do from time to time) I get the impression they are disappointed that I am nearing retirement age. They seem to seek someone either aiming to step up for the role, and so keen to prove themselves, or else they are looking not for the current role but for some future one not yet available. Often the job description requires someone who is 'ambitious' - but for what? I am no longer ambitious, if that means wanting to get there and immediately seek advancement. I don't want to work my way up to CEO, but that's not the same as not wanting to do as good a job as I can in the role I was hired for. On the other hand, for contract work, companies do indeed require experience - they want the grey hairs and battle scars, and are much less inclined to take a punt on someone keen to make a name for themselves. This is one reason why I've focused more on the contract market as I get older.

Thirdly, contractors seem to be more self-reliant. We have to be - we don't have an employer taking care of national insurance, taxation, health cover, life insurance, car allowance and the rest. Employees sometimes look at contractors' fee rates and think we are pampered - but take into account the costs they don't have to bear and the periods between contracts, and the higher remuneration isn't significant. But I have noticed that the contractor community is stacked with individuals who have the 'make it happen' attitude - an attribute our clients generally really need.

Fourthly, most of the contractors I have worked with take tremendous pride in their work. We all seem to work hard - often harder than the permanent staff - and derive great satisfaction from a job well done. That in some ways runs contrary to popular opinion, that contractors are 'only out for themselves' - but the real truth is that a contractor lives by his or her reputation, and so must constantly prove their worth.

It is clear to me that for the resourcing of projects, which are by definition finite in duration, employers are well advised to look at the contract market. The overall costs of such staff are certainly comparable to those of permanent staff (particularly if it comes to redundancies), and it is easier to get a resource which is closely matched in experience and capability to the new project in hand. Furthermore, the issue of what to do with the resources at the end of the project is no longer a concern!

Thursday, 6 August 2009

How to get CRM wrong

I've been involved with the delivery or enhancement of information systems that support customer services for many years, and I am eternally disappointed at how companies seem determined to miss the point of customer service. Customer service often seems from a consumer's point of view to be something they hate, and can result in really negative views of the organisation in question; and yet companies seem unable to address this.
Accordingly, since so many companies seem determined to deliver bad customer service, I'd like to help them by presenting my guide to making CRM unsuccessful!
Here are my top 5 decisions to ensure a reduced business benefit from CRM investment. (I could do many more, but in the interests of brevity...)
Customer service is a cost of doing business - so we will just try to handle problems as cheaply and efficiently as possible
Most of the significant inadequacies in customer service arise from the view that the cost of it must be kept under strict budget constraints. However, the results of poor customer service are felt in increased customer churn, longer payment times, reduced ARPU, negative recommendations by customers to their social circle, and adverse brand image generally. Conveniently, none of these are reliably quantifiable, and none affect the budgets of the Customer Service operation.
As with so much else in life, customer service costs are about value for money - the service levels (both measurable and 'feelgood') should be carefully defined, and only then can strenuous efforts can be made to deliver that at a sustainable cost.
This is especially true with offshore call centres - there is a tendency for these to be staffed with agents who clearly don't know the company or products they represent, don't understand how these products are used in the context of British life, and don't understand UK geography. This can only work with very careful attention to training.
We will stream customer contacts by subject of call
Like everybody else, I have had some bad experiences with calling Customer Service lines. There are plenty of ways to annoy the customer before even speaking to an agent: the interminable "press 1 for x, press 2 for y" menus, the long wait whilst "none of our agents is available", and the meaningless platitude that "your call is important to us" when all the evidence is to the contrary. But worst of all, on getting through, finding that the person you speak to is not the right one after all, and you need to be handed on to another department (or even in some cases asked to call another number altogether). I have been on calls to companies who should remain unnamed where I've been passed from one department to another, only to be transferred back to where I started.
Every company has a good reason for streaming. Mostly it is about the complexity of the issues that can arise and the degree of staff training to cover the board; often about systems and the lack of ability to join together all the data that may be required; and sometimes it is because the company needs to be careful about what authorisations they permit which staff to have (a significant portion of fraud is regrettably internal). Too few companies design and manage the streaming in an externally focused way rather than to suit themselves.
We can solve a lot of problems through the IVR programming
This should actually read, "we can create a lot of problems through IVR programming". Besides the menu chains so often leading to dead ends when the choices don't exactly tally with what the customer is seeking, often with the use of standard messages instead of a person and with no way back but to start again, there is a tendency to request meaningless information along the way. I am particularly irritated by the recorded announcement asking me to key my account number using the telephone keypad, only for the agent on finally getting through beginning by asking me for my account number. It's no good arguing, this poor soul can't help it, the systems haven't passed the data on with the call.
Not only should IVR routings and messages be carefully set up, but should also be frequently reviewed and revised. I believe that companies should force their senior managers and directors to use their own products but not as corporate facilities, but as real external customers. If the CEO of say a mobile operator had to call customer service like everybody else when a problem occurred instead of getting their PA to call the CS Director, the situation would improve dramatically.
Once we've got self-care set up, all we need to do is monitor the daily reports and let it take care of itself
Self-care seems to be particularly widely abused by Customer Service operations. There is no doubt that some self care works really well: for example, those energy companies I've used have excellent and efficient web sites and IVR systems to take requested meter readings. For anything except a routine request, however, it seems to break down.
There are a few simple rules that need to be followed for self-care (whether web or IVR based) to work better. Firstly, design the flows from a customer viewpoint - think of minimising number of clicks or time taken, ease of use, escape routes. Secondly, design usage data reports such that you can tell what is working and what isn't. Thirdly, keep on and on reviewing how easy it still is to use after changes for new products, new processes, new journey flows etc.
We aim to deliver the same level of customer service to all of our customers
Unfortunately, this usually means dragging everyone down to the lowest common denominator. You should aim to treat every customer with the same level of respect and care, but not all customers are equal. This mantra is often an excuse for the failure to recognise customers who might have cause for complaint, or who are particularly valuable and should not be aggravated, or who are at risk of churn. These failures are usually for systems reasons - again, the inability to pull together the elements of customer data that can identify such conditions and warn the customer service operator.

Customer Service has such a bad reputation amongst the public at large - but we don't have to accept that 'industry standard' poor levels of service need to apply to our own organisations.

Wednesday, 5 August 2009

Prepaid/postpaid convergence - is it worth it?

Suppliers of billing software to the mobile industry are advancing the capabilities for prepaid/postpaid convergence in leaps and bounds - but like many a handset feature, is it something customers really want?

It is worth remembering that operators developed the prepaid market largely because of the fraud risks with postpaid: the period from a new user being granted service, to first bill, reminders and dunning processes, to service cutoff could be up to 10 weeks. Therefore operators set a high creditworthiness threshold, and so limited the market sector they could address.

It was the advent of IN platforms for in-call management - initially aimed at number translation and routing services - that provided the opportunity for developing prepaid services. These proved very popular with customers: people liked being able to predict costs with no surprises at bill time, and also appreciated the simpler and more immediate buying experience.

However, as a result, operators ended with two distinct systems infrastructures for rating, billing and customer care. This got more complex with the advent of various data services and increasingly diverse billing arrangements. But does that matter?

There is no doubt that running two significant infrastructures is costly. This is true from a pure IT point of view, but even more so from a business point of view. The different capabilities of prepaid and postpaid billing systems tend to mean that an operator will have separate products, with separate marketing and product management functions (and a more complex marketing message), impacts on staff training and sales, considerable complexities in migration of a subscriber from pre to post or vice versa, probably separate call centres and all of the CRM that goes along with that - rewards, customer retention and recovery, revenue assurance and fraud detection, and so on. Simplification of these business functions would bring management and cost benefits.

What about the customer point of view? Would a convergent solution provide additional customer benefits?

Well, there are certainly customer options available with a convergent solution that can't be made available (at least easily) on a diverse solution. For example, it would be possible to vary payment method by date/time, or by numbers called or services used. Consider these scenarios:

1. A business provides an employee phone where calls during the working day are postpaid by the business, and calls made during the evening are prepaid, with top-ups the responsibility of the employee. The business can provide a phone for business use without preventing reasonable use by the employee, whilst the employee can use the phone for personal calls when not at work without worrying about the company view of the cost.

2. Parents can provide phones for their children knowing there will always be enough credit available for them to call home or to receive calls, but that they will not run up big bills on calls to friends, or downloads, games or mobile surfing to Facebook etc, for the parents to pay.

3. A business can provide phones to its delivery drivers but limit usage to calls to the company office or corporate VPN, paid by the company. The driver can still use the phone for personal calls on a prepaid basis if he tops up the credit.

There is no doubt too that there are benefits for the operator in being able to treat all customers the same however they pay. Any product can now be sold to any customer, greatly simplifying the marketing message, since payment method becomes just a purchase option. Any postpaid account can apply a top-up at any time. Discounts applied to hierarchies can be more easily applied to mixed pre/post hierarchies, with again a simplified sales message. And of course with only one solution architecture to update, new products should be more easily and more rapidly introduced.

But still - is it worth it? If you were a new operator with greenfield systems and processes, no doubt you would go the convergent route. But for a major operator with long established legacy systems - which will by now be horribly complex and intertwined - unpicking this to become convergent is a major undertaking: costly, risky, and lengthy (and hence highly impacted by business change). Some operators have taken the plunge, but they are still a minority. A large mobile business needs a lot of convincing that the benefits justify the pain of getting there. And as a customer, there are many more important factors when buying your mobile service.

So whilst I envisage convergence slowly increasing its presence in the industry, I don't expect to see convergence revolutionising mobile sales in the High Street any time soon.