Two major outsourcing agreements concluded in the past fortnight by Telecom signal a new focus brought to bear by general manager corporate Peter Thompson since he took up the reins at the beginning of the year.
ANZ Bank has outsourced its telecommunications infrastructure to Telecom in a three-year enterprise agreement consolidating more than 300 existing contracts. And last week Inland Revenue announced it had named Telecom as preferred provider for all of its telecommunications services for the next five years.
Thomp---son, who came from server and services specialist Data General, expects to announce another large out-sourcing deal “within weeks”. He won’t name the party at this stage.
Telecom corporate has been in place as a business unit for around 14 months. “We recognised that some accounts were absolutely critical and needed a different level of service,” Thompson says.
For example, Telecom had taken a major step to align itself with ANZ Bank by the business value the bank got rather than by the traffic it generated.
That’s meant the telco coming to grips with a billing system that was primarily written for consumers. In practical terms, Telecom will take the output from the ICMS billing system and reconfigure the bill to meet what the customer requires. Thomp-son says that may be on a fee-per-transaction-concluded basis. “How do we know how many were concluded? In some cases that may mean we have to get the information from the customer.”
The key message is flexibility, he says.
“Three and five-year contracts have not been the norm. But the truth is, if the customer doesn’t want to do business no one is going to force the issue.
“Today the market is hugely competitive and technologies are going to change very quickly. Within any three or five-year agreement there will be regular reviews of products and services.”
Netway becomes pivotal to Telecom’s outsourcing contracts. “We’ve refocused Net-way from having network products to providing high-service added value. Netway is now refocusing on a new role.
“Outsourcing is at the top of my mind.”
Thompson says e-commerce has been treated separately but he sees it going hand in hand.
“However, we won’t take on traditional IT outsourcing. Where a customer wants the lot [outsourced], we will work with traditional IT vendors.” That might mean Telecom priming a “total solution” contract or perhaps sub-contracting to an IT vendor.
“We’re not going to posture as a total solution provider. We’re not in the business of application software, operating systems or PCs.”
Telecom’s network is not configured optimally for cost because of the way it has grown over the years. Thompson sees out-sourcing as an opportunity for efficiencies where both parties to the contract gain.