BT's decision to open up its network to customers looking to develop their own services represents the next stage of progression in the telecoms industry according to Andy Green, the executive leading a major reorganisation of the former monopoly's internal structure. His task is to speed up BT's transformation into a fully-fledged IT services company.
Mr Green spent five years as chief executive of BT Global Services, the IT division which has acted as the overall group's growth engine in recent times. Under his leadership, the division grew into the third-largest IT contracting company in the world, behind US giants IBM and EDS. Yet last month, the well-regarded BT executive switched to a new role as chief executive of group strategy and operations. He also took charge of two new units – BT Design and BT Operate – focused on improving processes across the whole company.
Mr Green's decision to lead a new unit examining BT's internal affairs surprised most City observers, given the effort he put in to rolling out the BT IT services model across the world. However, Mr Green said BT's decision to shake-up its business, concentrating on improving customer service and opening up its networks, would be a strategic shift for the group and for the industry as a whole, as BT completed its transformation into a software-based services provider. BT was moving ahead with the plan, he added, despite there being no precedent among its peers against which to benchmark its plan. "It is a big gamble but, four years ago, we were being asked, 'How do you make money out of broadband?' and we managed that," he insisted.
The internal reorganisation will cost BT about £450m over the coming years. It will remove various management layers and write off the value of some of its infrastructure. However, Mr Green said that the payback in getting its customer service right would be "enormous" if the plan was successfully executed. "The maths is very compelling," he added, pointing out that it would take about two years for BT to reap the rewards of its investment. By that time, he claimed, it would have gained a substantial competitive advantage over its peers.
Mr Green said BT was the first telecoms company in the world to do away with its "networks" division as it attempted to steal a march on rivals by opening up its networks for customers to develop their own services. More than 3,000 clients had already registered to test BT's new "software development kit" – from huge companies, such as Oracle and Microsoft, down to small businesses which were keen on developing innovative services tailored to their own needs.
The decision to open up BT's network was central to its proposals for improving service for all customers, Mr Green said, from residential broadband users to large corporate clients. With broadband and other IT services, such as security and disaster recovery, becoming increasingly important, BT had to step up its performance, he said. "I'm hugely disappointed with the service we give. It is not good enough," he added. Although the company's plan sounded like a "simple idea", bringing about the change was likely to be an incredibly complex procedure.
Mr Green said the largest telecoms companies spent billions of pounds a year convincing their customers that disruptions to services were not the company's fault. Operators should instead concentrate on providing an "end-to-end" service model, he explained. This was because their customers, whether large or small, did not care what caused things to go wrong – only why their telecoms service had been interrupted.
Recent market turmoil represented a good example of how customer needs had changed in recent years, Mr Green said. The level of trading had "gone through the roof", he added, meaning that BT had a lot of engineering work to complete before it could cope with the additional capacity requirements. Offering BT customers more network flexibility meant that sourcing communications services would become "just like figuring a spreadsheet", he said. He added: "Instead of us running around with screwdrivers all day, it can be done on the customer's terms using software."Reuse content