Telstra's internal revamp delivers results

David Kennedy/Ovum
OvumLast week, Ovum attended Telstra’s annual analyst day. Robert Nason, Group Managing Director for Project New and Customer Experience, discussed Telstra’s internal change program called “Project New”. 
 
Telstra openly described its old customer service systems as having been “broken”. After a six-month assessment process, Program New began in June 2010. In its last full year results, Telstra reported A$622 million ($625.3 million) of savings attributable to Project New initiatives.
 
Project New has three main components: process simplification, customer service improvement, and cost savings. However, all three are closely related to each other. “Bad volumes” in the company (e.g. customer complaints) are drivers of cost and are often related to poor process. Telstra stated that it is “lots of little things” that make for improved performance.
 
Project New: key initiatives
Telstra has reorganized its product and consumer service activities in the past 18 months, placing more emphasis on integrated management. There is now a single retail unit under Chief Customer Officer, Gordon Ballantyne that is focused on sales/service/channel management, and a single marketing/product/innovation group under Group Managing Director, Kate McKenzie. This integration has streamlined product processes, improved accountability, and reduced conflict between departments. The success of these initiatives is evident from the 2012 product map being resolved in three weeks under the new model, compared to months under the old divisional structure.
 
Project New has 27 sub-projects that employ 500 people. While none of these sub-projects are solely responsible for cost reduction or customer service improvement, all of them make contributions to the overall goal. These sub-projects can be separated into the following groups:
 
- End-to-end process simplification. Each of 16 basic business processes in the company now has a responsible manager who oversees simplification. A standard methodology for process improvement has been rolled out.
 
- Sales and service channel enhancement. There is considerable effort being put into building up online channels (which are low cost) and streamlining traditional channels such as call centers.
 
- Pricing simplification. The company is working to reduce the number of bundled offers, and is simplifying price matrices. It is also redesigning its bills.
 
- Third-party spend and productivity. Vendor numbers have been reduced by 19%, and Telstra plans to achieve a 30% net reduction.
 
The early emphasis has been on getting processes right, but there are supporting initiatives in cultural change. Over 5,400 Telstra managers have spent two days with the senior leadership team as part of its cultural change program.

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