Challenge

Two similarly sized service providers choosing to merge turned to TMNG Global for help with unification of processes and systems to ensure timely realization of cost efficiencies that were fundamental to the rationale behind the merger.

From an external perspective, this was an ideal case for a merger. The companies offered similar products, albeit to slightly different market segments – one tending more to medium-sized businesses, the other to smaller businesses, professional offices and home offices. They were geographically contiguous. And while there were differences in the extent to which their networks had been converted to an IP base of operations, both were strategically committed to the converged services capabilities of an IP infrastructure.

The carriers found that internal dissention and marked differences in processes and systems threatened to undermine achievement of merger goals. While technology investment strategists often fail to fully understand the potential barriers to success that lurk in the complex details of operational cultures and systems, this was a particularly worrisome case that required assistance from professionals who know how to address such issues.

TMNG Global has a long history of working with merging entities in telecom, cable and other sectors to help them rationalize disparate processes and systems and to ensure that staff reductions, often the largest component of anticipated cost efficiencies, are achieved in the context of creating a new organizational structure that fully accommodates the operational and strategic goals of the merged company. In this case the challenge was to produce a comprehensive set of recommendations that would allow the new company to overcome the barriers to effectively combining the two entities within a timeframe that would meet the cost savings targets.

As in any such case, successful integration of the two companies hinged upon comprehensive upfront planning and execution. We were hired to help the management team maximize the synergies between the companies and to establish a “best of breed” operating environment in the new entity.

Normally both companies in the merger would have created a Project Management Organization under the leadership of a Chief Integration Officer to work with a set of Integration Teams at each company from the planning phase on through complete execution of full integration of all process, systems and organizational components. However, in this case, managers at one of the companies opposed open sharing of information prior to finalization of the merger, in effect establishing a “firewall” preventing a full accounting of that company’s processes and systems through the typical team-level interactions that would have transpired in TMNG’s information-gathering process. This problem meant that the TMNG Global team and the new company had to work without a PMO and formulate a strategy for bringing the needed information into play after the merger in a way that would not seriously impede the integration process.

Adding to the challenge was the fact that effective integration isn’t just about rationalization of processes and systems into a single operational environment. It also requires full acceptance of the new operational framework by the staffs of the merged organizations. Inevitably choices have to be made which go against the wishes of some in the organization, and they must be won over to the new way of thinking through full understanding of the merits of the new structure. In this case, along with impediments posed by the disaffection of management at one of the companies prior to merger, achieving a single corporate cultural identity was further complicated by the fact that within the existing companies, there were business units that had no relationship to the primary service provider business.

There were other issues as well. In order to facilitate unification of the operational framework it was imperative that both companies be fully migrated to the same IP-based services platform. This meant the company that lagged in this regard had to adopt a more aggressive migration pace so that the integration solutions could be implemented on time.

The absence of a sophisticated workflow management system at one of the companies posed another challenge. Achieving uniformity of provisioning processes required that both companies work off the same workflow engines. Along with identifying optimum processes and systems, we had to propose a migration path to a single workflow management platform that would accommodate those processes and systems.

All of these issues complicated the already challenging task of planning a smooth transition to integrated processes and systems for two disparate organizations with different OSS components in place. One of the companies had four billing systems and the second company used still another billing system. The companies had different sales management tools, order entry procedures and many other disparities on the front-end side of the sales-to-cash process.

The complexities were immense, and many were unique to this particular situation. But TMNG, with professionals long experienced in the vicissitudes of real-world telecommunications management, was able to suggest an integration strategy that was well suited to the needs of the new company within the timeframes required to meet the merger’s cost-savings goals.

TMNG Global Solution

Our team provided process and systems rationalizations between the companies and developed a transition plan to move from the two-company environment to the unified new company environment. The analysis and recommendations adhered to the following tenets:

1. Maintaining the highest levels of customer satisfaction
2. Minimizing revenue loss during the transition
3. Achieving synergistic cost savings in a cost effective and timely manner
4. Providing a realistic and achievable transition plan
5. Providing clear process ownership

Successful integration of all systems to form a single BSS/OSS platform in the new company required that all the processes associated with these systems be rationalized. Once the processes were optimized to suit the service requirements of the new company, the team looked at the systems in both companies and developed its recommendations based on how the various systems support the processes and how they scale to support future requirements plus any additional requirements from future acquisitions.

A transition plan and time line was developed that linked the process and system rationalization plans together. The system transition plan was broken up into phases that closely mapped to the processes as they were scheduled in the transition plan. Great care was taken to ensure that people, processes and systems were linked throughout the entire transition.

Processes included the business process, which governs management of the business, and various technical processes such as IT and network infrastructure management that support the sales-to-cash process. To perform the analysis and provide recommendations, TMNG Global used classic industry definitions and separated the sales-to-cash process and support processes into the following “mega” processes:

• Operational Processes
  – Sales – Lead Generation to Order Submission
  – Service Delivery – Order Engineering to Bill Verification
  – Ongoing Business Management
         ›   Billing operations
         ›   Customer care
         ›   Revenue Assurance and Collections
  – Network Operations
         ›   Engineering
         ›   Operations
         ›   NOC
  
•  Support Processes
   – Network Infrastructure
   – IT Infrastructure

The task, then, was to work within each of these process categories, comparing companies A and B with respect to each category against industry standards and identifying gaps that needed to be filled through implementation of additional functionalities.

The process analysis was performed using the following criteria:

1. Is work performed in a logical sequence?
2. Is information accumulated and carried out in the appropriate work steps?
3. Are there redundant work steps?
4. Are work steps missing?
5. Are work steps successfully completed or do they require rework?

To help answer these questions, our team interviewed executives and subject matter experts from both companies and within each of the process areas listed above. We used our proprietary and industry-leading toolset Quality Business Controls, TMNG QBC™, to baseline the processes within each company. This baseline was used to identify gaps in the processes versus industry standard processes. The team then looked at each mega process and supporting sub-processes to identify “best industry” practices in each sub-process area. Organizational recommendations were then made to support the processes and best practice recommendations.

Once optimal processes were identified, these were used to drive the systems rationalization process. Following the same types of procedures with respect to comparisons with industry standards, identification of gaps and selection of best-of-breed options, the team determined the optimum systems framework and made its recommendations as to how the company should transition the two OSS/BSS platforms to a single OSS/BSS.

Insofar as the team could not perform the process and systems rationalization tasks with one of the companies until the merger was finalized, these rationalizations were carried out in sequence, with provisions being made for accommodating what had already been accomplished with the first company when it came to assessing what needed to be done respecting processes and systems at the second company. As a result of careful planning for this contingency, TMNG Global was able to put together its complete recommendations for the migration to a single OSS/BSS while adding just two weeks to the time it would have taken if the project had been done in the normal fashion.

A key requirement set by the TMNG Global team in its recommendations was that the company lagging in conversion to IP from TDM expedite that migration so that there would be no operational differences imposed by the TDM/IP distinctions by the time full OSS/BSS integration was achieved. The team also predicated its process and systems recommendations on the understanding that the company lagging in workflow management would implement a sophisticated workflow management platform prior to integration. Without this, the companies would have to continue operating from separate inventories, working off separate trouble-ticket generating systems and struggling to integrate the entire sales-to-cash process.

Setting these goals with respect to IP migration and workflow management was essential to ensuring timely implementation of a smooth-running, cost-saving OSS/BSS that could deliver on cost-savings targets. TMNG Global made the case that without taking these extraordinary steps, the new company would become bogged down in transitional modes of operations that would make it much harder to get to a single platform, not only delaying the savings benefits but also complicating the task of bringing personnel together around a single solution.

Equally difficult but necessary was the solution to the multi-business agenda of the merged company. Our experience has shown that companies intending to integrate the operations of new acquisitions must take immediate and decisive action to enable the merging companies to act as one. Integrating cultures in a timely and effective manner is key to winning the “hearts and minds” of the employee base. Without employee buy-in, the company risks covert resistance to change, which can completely undermine the integration effort.

However, this was an unusually difficult task in this case, because, with one company structured around three different businesses, the merger was essentially bringing four companies together. We concluded that integration of procedures and systems to meet the best-practice requirements of all entities would be impossible, resulting in compromises and inefficiencies that would be counter to the best interests of the new merged service provider and the ancillary businesses alike. Consequently, we recommended that two existing units retain their identities and that their operations centers and work forces be separated from the new company. This was essential not only to smooth operations but to the critical goal of creating a new, integrated corporate culture in the newly merged service provider operation.

Benefits to the Client

To say such demanding requirements with regard to IP acceleration, workflow management improvements and attaining cultural unity were a hard sell would be an understatement. But TMNG Global’s obligation was to provide recommendations that would produce the results the company wanted. In the end, the company’s management has chosen to do what’s best for the company, even in the face of considerable resistance from various operational groups.

The first 12 months following a merger of this nature are critically important to getting the amalgamation done right. TMNG Global’s work with this company has brought the firm to the point where the chances are excellent that the merged company will be well positioned within that timeframe to deliver on its goals.