The cost of complexity for telecoms: And how companies can reduce it

September 23, 2014

Executive summary

The consequences of unnecessary complexity are notorious in virtually every industry, and in very few places is that truer than in telecommunications. It’s a hugely complicated business under the best of circumstances, but the proliferation of products and services, sales channels, marketing campaigns, and networking and business processes, along with the IT systems needed to support it all, has become unsupportable for most operators. As a result, customer confusion rises and satisfaction declines, service offerings mount as their profitability declines, internal processes slow down, and the cost of doing everything goes up.

Lots of operators have tried to simplify their businesses, typically by starting with internal operations that will save them the most money. But that’s the wrong approach. Rationalizing their most conspicuous customer-facing activities — product and service portfolios, marketing efforts, and sales channel strategy — fully in line with their strategic goals is the only way they can hope to successfully reduce complexity. Simplifying each successive layer provides a big head start in simplifying the next layer.

This report offers a framework for carrying out a complexity reduction program, beginning with those activities most visible to customers and continuing through to organizational design. Only by working from the outside in can operators hope to reap the benefits in savings and speed that reducing complexity can bring.

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Conclusion

Achieving simplicity is by no means an easy task. The very idea of simplicity is relative, and the degree of change needed will inevitably cause stress in day-to-day activities, and create reluctance about doing what’s necessary and uncertainty about the final results. A simplification switch will be successful only if top management shares the overarching vision, believes in its benefits, and is committed to the process.

Such a metamorphosis has never been more important: The entire telecom industry is transforming rapidly, and a new breed of aggressive and disruptive player is elbowing its way in. By simplifying and streamlining their operations, telecom companies can not only free up funds that can be invested in becoming more competitive, but also gain the agility and speed-to-market needed to move quickly in their quickly changing business environment.

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The cost of complexity for telecoms: And how companies can reduce it

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