Tuesday, 16 October 2012

TLS: After the NBN, Now what?

The Telstra share-price has rebounded ~30% (~$3 to ~$4) since the formal commitment to the SAU/SSU (Special Access Undertaking, Structural Separation Undertaking), the management commented they were "spectacularly agnostic" on the different political NBN promises and the first Annual General Meeting in the New Era has taken place.

The War has been fought and won, now Telstra has to survive Peace. As the US Army showed  in Iraq,  the challenges of Peacetime can be much harder than winning a War. [An older example is the United Kingdom and WW-II. It "won" the military victory but exited with a crippling debt and years of rationing and scarcity, only clearing the debt in the last decade. Germany did make reparations, but was rebuilt under the Marshall Plan financed by the USA, becoming the powerhouse of Europe with a standard of living well in advance of the "victors".]

Telstra under David Thodey is revitalised and playing a very different game. But can he turn the company into what it could've been, can he unlock revenues and new markets and realise the potential of the business?

I think they are looking in the wrong place.

This isn't hubris from a Monday morning quarterback, but an analysis based on solid technical and business principles: "Customer Service comes first", "You can't cut your way to new lines of business" and, from Dr Deming the Quality Improvement expert responsible for Japan Inc's world domination in manufacturing, "If you focus primarily on costs, they tend to rise over time while Quality decreases. If you focus primarily on Quality, it tends to increase over time and costs decrease".

My evidence is a recent Customer Case Study I wrote up for a Bigpond Cable fault:
  • It took 6 weeks to resolve, but was never escalated, was a known "Problem" affecting many people, but with no known resolution or work-around and nobody allocated to fixing the underlying Problem.
  • The fault was rectified within 2 days due to an accidental interaction with a Customer Service rep.
  • There were at least 18 avoidable and correctable, at zero-cost, systems and management errors and failures.
  • This failed process cost Telstra $5-10,000 (estimated), around 100 years of profit from the service.
  • The whole process left the client, with many services, underwhelmed and actively considering Anything but Telstra.
  • The management team is solely responsible for allowing multiple systems failure to continue, but more importantly, for not actively pursuing a high-value client and converting the "fail" into winning back the client.
    • I believe the CEO, or at least the State Manager, should've personally contacted the client to apologise, explain the problem, how they are preventing it from recurring and offering a reasonable ex-gratia payment for the excruciating experience.
    • Ask: What would Richard Branson do? That and more...
  • The need for multiple levels of Customer Service is achingly apparent yet ignored: people who are time poor will pay a premium for better, more predictable service. Having to wait around 4 hours for a technician to go to the wrong address is a Customer Relations disaster and support nightmare.
The fault was not a connection, customer-action, line, equipment or configuration fault. Some automatic provisioning software went wrong and its actions could not be undone normally: this was a known, preventable systems fault that was allowed to continue and grow unabated and uncorrected.

It took a systems engineer an hour to find and remove the offending database record. The fault should never have happened and, in an efficient organisation, been fixed on the first day.

So, I'm impressed with Telstra's rolling out 4G networks, selling iPhones hand-over-fist and pocketing a few billion a year in NBN-related windfalls.

But I don't see Telstra attending to its Core Competencies nor addressing its most pressing operational problems. Does Mr Thodey and each of his Division and State Mangers have a "Top Ten" list of Quality, Process and Customer Service Problems they monitor and address each and every day? That is an item I'd like to hear about at the next AGM.

Telstra are too important to let fail and too good an organisation to let slide into mediocrity or worse.

If Telstra management had started to slowly convert the Customer Access Network to Optical Fibre in 1990 when, presumably, the first technical planning was done, by 2005 it would've been completed. Customers would have 100Mbps or better services available and the TLS share price might be $30.

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