A game-changing strategy for a global telecommunications leader

A communications incumbent with operations primarily based in Europe faced mounting pressure to turnaround plunging growth and profits. Bain worked closely with the CEO and the management team to transform TelecomCo into an industry cost leader, while at the same time enhancing customer service.

TelecomCo was challengend by steadily declining growth and profits in its core business as well as losing ground to competitors in customer care and operational excellence. The CEO and senior management realized that to truly turn around the company and achieve a sustained impact on the bottom line, they needed to develop and successfully execute a sweeping transformational change program.

It was a formidable challenge. To become an industry cost leader, TelecomCo had to dramatically reduce operating expenses but without diminishing overall quality. In fact, the company wanted to gain a competitive edge by enriching customer service.

Next Approach

Together with the CEO and senior managers, Bain helped devise a two-stage approach to achieve increased efficiencies and operational excellence throughout the company along with a plan for implementing sweeping change.

Identify game-changing opportunities and short- to mid-term levers: We identified structural, "game-changing" opportunities for improving performance by, for example, optimizing the service delivery and broadband deployment models. In addition we screened each function for short- to mid-term levers including sales, marketing, customer and field service, IT, network and back-office costs. In this way, cross-functional processes—like activation and fault repair—were optimized end-to-end, reaping significant add-on savings.

Scope out each opportunity: We established a dedicated, campus-like environment in which to collaborate closely with the senior client team to gather input and formulate an action plan.

Craft execution plan: Since the transformation plan touched virtually every aspect of the company, success depended on using a highly collaborative approach to design a detailed execution plan and win strong employee buy-in.

Assemble implementation teams: To ensure the execution plan’s success, we helped the CEO appoint cross-functional teams led by top talent with the right mix of expertise to oversee the transformation.

Next Recommendations

Our collaborative effort resulted in a transformation plan that identified more than 500 specific measures for cost savings and improved performance.

We grouped them into three major areas:

Processes and business platforms
Marketing, customer sales and products
General and administrative expenses

To ensure success, we provided management with a customized process and tools to track each measure’s progress.

Given the scale and complexity of the program, the CEO needed to coordinate implementation efforts for short-term initiatives and long-term "game-changer" plans, especially with half of all savings coming from cross-business efforts.

Next Results

TelecomCo’s ambitious transformation plan quickly delivered game-changing results: significantly lower costs and enhanced customer service. Over three years, the performance improvement initiatives that we designed generated over 20 percent in operating savings, with three-digit million savings in the first year alone.

In addition to cost savings, the communications giant achieved its goal of boosting customer satisfaction, with more problems resolved during the first contact with customers.

The company’s performance improvement program firmly established the TelecomCo as a cost leader in the industry, with the tools and processes in place for sustained efficiencies and operational excellence, giving the company a powerful competitive edge in a fast-evolving marketplace.