Five Reasons the Telecommunications Industry Needs Process Excellence
Posted: 03/06/2012 12:00:00 AM EST | 1
From consumers expecting more and being willing to take their money where they can get better service, to trends within the industry itself, the telecommunications sector needs process excellence more than ever. Here are five reasons why.
Reason #1: Increasing competition
Competition in the industry is growing – and not just from the traditional players. Internet traffic is playing a greater role in communications, with 50 to 70 percent annual growth rates, and is far outpacing voice telephony, Engineering News reported last year.
Dr Tingye Li, an optical communications researcher, told the publication: "The landscape in telecoms is changing. It's changing because people like Google are putting themselves in the centre. The telecoms companies are on the periphery."
With margins being squeezed, efficiency is essential and process excellence helps remove non-value added activities, which will have a positive impact on the bottom line.
Reason #2: The whole industry is on a burning platform
The now infamous burning platforms memo released by Nokia chief executive officer Stephen Elop last year (if you haven’t read it you can read the text on the WSJ) is a lesson to all in the sector about the importance of staying at the cutting edge of the market.
Missed opportunities when the smartphone market was developing mean the company is now playing catch up to the likes of Google and Apple.
Firms like Nokia which find themselves behind the curve can benefit hugely from having experienced process improvement teams in place to ensure operations – and the finished product – do not suffer if quick changes in direction are needed.
Don't be left hanging around while the market moves on
Those at the top of their game should see it as an investment for their future, allowing them to stay in their prime position.
Reason #3: Customer satisfaction is a key differentiator
Research has consistently shown that consumers are willing to pay more to receive good customer service. For companies which achieve good customer satisfaction, like Apple, the results really speak for themselves.
Process excellence can act as the differentiator which separates your company from others in the sector.
Recent customer satisfaction figures released by the UK regulator Ofcom shows little differences in the scores for the biggest mobile phone operators, with just three percentage points separating the top five.
With around 20 percent expressing neutral sentiment, and just two percentage points separating those in the top five in this area, there are clearly customers there to be won over by excellent customer service. Process excellence is one way in which to ensure this is achieved.
Apple is a shining example for how customer satisfaction pays off in terms of sales. Speaking after Apple topped the J.D. Power and Associates' smartphone customer satisfaction rankings for the fifth time, Kirk Parsons, senior director of wireless services, said: "It really is Apple, and then the next tier."
Reason #4: Fast pace of innovation
Although what you do is important, making sure you not only do the right things but that you do things right has perhaps never applied more to the telecommunications sector. The telecommunications sector is one where last year’s model and services feels outdated and three years is practically ancient history. Companies which develop new ways of doing things – and do these things well – will be the ones that succeed in the longer term.
Reason #5: Mergers and Acquisitions
Google's acquisition of Motorola last year typifies what is occurring in the telecommunications industry in a number of ways. As a relatively new player, Google has now set itself up in a place of dominance to tackle established market members and has feelers in numerous sections of the industry.
Yet the cultures of the two organisations are incredibly different, and this is where process excellence has a role to play in the M&A process.
The Wall Street Journal reported that the pair's very diverse offerings inherently create variations in the way the companies have worked. Sanjay Jha, chief executive of Motorola Mobility Offerings, explained if he was at Google and "wrote a little bit of code, and if there are bugs, I can fix it later."
"When I deliver a phone, I don't have that flexibility," he added.
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