Telecom Network Operator: Operational Design-to-cost projects

Case study
10/24/2014

Context and challenges

The business model of a longstanding telecommunication network operator was undergoing structural changes, due to regulatory developments and the emergence of new technologies, facilitating the arrival of market newcomers. A major program to improve the company’s competitive performance was launched, whose areas of work included cutting the cost of projects in order to free up additional leeway.
Designtocost seemed a natural choice, given the pragmatic approach and ambitious goals targeted (20% gains guaranteed). A designtocost project was launched with the backing of the executive management. A coordinator, a designtocost project manager, was appointed and authorized to form teams and assist them in completing their project. Ambitious goals were assigned from the beginning, with governance by executive management, who decided on the necessary tradeoffs.
The group also aimed to ensure the sustainability of the designtocost project in its daytoday practices, through knowledge transfer to team members and project heads.

Approach and methodology

The designtocost approach involved launching two waves of projects, after first selecting and prioritizing the eligible designtocost projects. In fact, ongoing or endoflife projects were unable to offer the same potential gains to the client as a project in the design stage, because, ultimately, the ranking of the application of changes determines the degree of return on investment.

The initial stage of selecting potential projects was carried out using a business plan and business priorities/client challenges analysis. A list of four projects was launched in the first wave. A second wave would then be launched on conclusion of the first wave, to validate the relevance of the approach and ensure the capacity of the organization to mobilize the necessary resources in the desired time.

During the first wave, the designtocost methodology was created and developed, and the project teams were formed prior to launching the projects. These generated more than 100 opportunities that were documented in terms of feasibility, risk and potential benefits. Opportunity validation committees, placed under the authority of the executive management, decided to validate several dozens of them.
A benefit-tracking committee, managed by management control, then ensured that these opportunities were realized as part of the competitive performance program.

The second wave of projects was then launched, applying the same methodology, with teams made up of different individuals trained in the designtocost approach and coached by their peers.

The sustainability of the designtocost approach formed part of the new organization, introduced at that time, with a «mentor» acting as the guardian of the designtocost method and tools. Several other designtocost projects were conducted, again with the same dynamic.

Results

  • Gains of more than 20%, on average, per project
  • Proven methodology and tools for specific cases that are representative of project activity and maturity
  • Trained, independent designtocost “mentors” to conduct new designtocost projects
  • New crossfunctional operational modes (procurement, marketing/commerce, engineering, maintenance, operation, management control, etc.), which have broken down silos
  • Renewed capacity for innovation, to provide customers with highaddedvalue offers