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KPN is the leading telecommunications and information and communication technology (ICT) service provider in the Netherlands, offering wireline and wireless telephony, Internet and TV to consumers, as well as end-to-end telecom and ICT services to business customers.KPN extended its longtime business process outsourcing relationship with Accenture to include order intake and engineering for certain activities, with later phases covering customer delivery and international SDH engineering. Much of the work moved offshore to Accenture Delivery Centers. This new phase has delivered stellar results and continues to make a significant contribution to the company’s drive to achieve high performance.
The former incumbent, KPN is the leading information and telecommunications provider in the Netherlands, offering wireline and wireless telephony, Internet and TV to consumers, and end-to-end telecommunications and ICT services to business customers. In Germany and Belgium, KPN pursues a multi-brand strategy in its mobile operations and its two companies E-Plus and BASE together are ranked third in the market. KPN provides wholesale network services to third parties and operates an efficient Internet protocol-based infrastructure with global scale in international wholesale through iBasis.
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Telecommunications has always been an industry characterized by continuous change. That pace picked up even further with the advent of the Internet, and then mobile technologies. For a broad-based telecommunications service provider like KPN, this is a business environment full of opportunities but, at the same time, some significant challenges.
One of the key opportunities for KPN is the growing range of new and profitable services based on Internet protocol. To position itself in this rapidly expanding and highly competitive market, the company needed to build and maintain higher-bandwidth networks, while upgrading its systems to support the new technologies. At the same time, however, it needed to maintain its focus on existing customers using traditional technologies.
For KPN, the solution was outsourcing. By allocating certain processes within its existing portfolio of services, it would be able to manage its costs more tightly while deploying its own skilled professionals in the areas of most impact, creating a much more agile and focused team.
KPN knew that choosing the right business process outsourcing provider would be crucial in the success of its strategy. It chose to work with Accenture based on our in-depth knowledge of the communications sector, and the Dutch market in particular. KPN also recognized that Accenture’s strong project and program management skills, coupled with its experience in outsourcing, was also crucial—particularly as it decided to move its work offshore.
With the initial contract signed in 2008, Accenture took over responsibility for all order intake and engineering activities (Digistream, ISDN30, Analog and switching in SDH and VVIS). In a second phase in 2009, customer delivery and international SDH engineering were transitioned to the Accenture Delivery Center in Manila, the Philippines. These projects delivered on their promise with savings of 55 percent as compared to the 39 percent postulated in the business case. First-time-right resolution rose by 10 percent, and in response customer satisfaction rose by 4 percent.
Based on this success, KPN elected to continue working with Accenture as it implemented its strategy of moving legacy business processes offshore. The next phases involved order processing for legacy voice services (PSTN and ISDN), and then handling fallout for multiplay clients.
For KPN, this outsourcing journey covers both its legacy and existing businesses as well as its investment into fiber-optic, next-generation networks—a true indication that BPO is integral to its strategy. These subsequent phases entailed the growth in the number of employees working on KPN business in Manila by almost 150, freeing up a number of original Dutch employees to focus on new areas. The complex transition was governed by Accenture’s proven transitioning methodologies. An extensive train-the-trainer program was initiated, complemented with sophisticated work-shadowing—all with the aim of transferring knowledge from the original employees in the Netherlands to the new team in Manila.
The recent phases of KPN’s outsourcing journey with Accenture have continued to deliver stellar results. The run rate saving is 50 percent, meaning that breakeven was achieved within the first full year. The team in Manila grew by 300 percent to just more than 200 full-time equivalents, and further rollout of more multiplay and asymmetric digital subscriber line (ADSL) customers is under way.
Under Accenture’s continuous improvement of the business processes, efficiencies continue to be gained, allowing the number of full-time equivalents to be reduced over time. These efficiencies are also making themselves felt across the total KPN value chain, with rework dropping by some 80 percent.
The substantial cost savings delivered thus far have not come at the expense of customer service—far from it. In fact, the score for first-time-right resolution is 95 percent and even higher for all services in scope.
People are obviously at the heart of any successful business undertaking, and creating a joint onshore/ offshore team that incorporates both KPN and Accenture employees has been a major success factor in this ongoing BPO.
It is also worth noting that although BPO—especially offshoring—is often thought to have a negative impact on jobs in the home country, KPN’s experience has been positive. Those KPN professionals who remained with the company greatly value the opportunity to focus on new areas and build their careers. They found the experience of passing on their knowledge to new and enthusiastic team members invigorating—and enjoy working alongside a team that is delivering work of such a high standard. Learn more about Accenture Network Services for the Communications Industry
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