Business Process Outsourcing

KPNs march toward high performance through business process outsourcing continues
Client background
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. 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 its in-depth knowledge of the communications sector, and the Dutch market in particular. KPN also recognized that Accentures strong project and program management skills, coupled with its experience in outsourcing, was also crucialparticularly as it decided to move its work offshore. Accenture is a leader in the BPO market with an extensive range of methodologies, particularly transition methodologies, to help ensure a smooth handover and that ongoing collaboration and service delivery is constantly improving.

Business challenge
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. These technologies fueled a veritable communications revolution that is radically changing the way that people interact and thus the way that business works. 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

How Accenture helped

With the initial contract signed in 2008, Accenture took over responsibility for all order intake and engineering activities (Digistream,ISDN30,Analog and switching in SDHand VVIS).1 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),2 and then handling fallout for multiplay clients. Multiplay refers to those clients using multiple services provided by KPN such as Internet, telephony via voice over Internet Protocol (VoIP) and television, and Accentures remit is to resolve those orders that cannot be provisioned automatically, and connect the clients as required. Work of this nature means that Accenture is directly involved with clients. For KPN, this outsourcing journey covers both its legacy and existing businesses as well as its investment into fiber-optic, next-generation networksa 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 Accentures proven transitioning methodologies. An extensive train-the-trainer program was initiated, complemented with

sophisticated work-shadowingall with the aim of transferring knowledge from the original employees in the Netherlands to the new team in Manila. Digistream, ISDN30, Analog and switching in SDH and VVIS Accenture fielded two teams, one for the transition and one for the delivery of the new project. These specialists in each of the two very different processes helped to ensure that KPNs customers did not experience any drop in service during the handover and thereafter. Throughout the transition, KPN and Accenture performed 100 percent quality assurance to minimize any impact on customer service.

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. Creating one team that spans the globe plays a vital role in facilitating the smooth progress of each business process across the value chaina key driver of value for KPN and its customers. It is also worth noting that although BPOespecially offshoringis often thought to have a negative impact on jobs in the home country, KPNs 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 invigoratingand enjoy working alongside a team that is delivering work of such a high standard.

High performance delivered

The recent phases of KPNs 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)3 customers is underway. Under Accentures 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 servicefar from it. In fact, the score for first-time-right resolution is 95 percent and even higher for all services in scope. The dramatic decline in the amount of rework will also have a beneficial effect on the experience of KPNs customers.

About Accenture
Accenture is a global management consulting, technology services and outsourcing company, with more than 223,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the worlds most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$21.6 billion for the fiscal year ended Aug. 31, 2010. Its home page is www.accenture.com. Copyright 2011 Accenture All rights reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

1 Synchronous digital hierarchy (SDH), Digistream, Integrated Services Digital Network (ISDN) and VVIS are all technologies or technology protocols used in telecommunications. 2 Integrated services digital network (ISDN) is a set of communications standards for simultaneous digital transmission of voice, video, data and other network services over the traditional circuits of the public switched telephone network. The public switched telephone network (PSTN) is the traditional telephone network. 3 A form of the Digital Subscriber Line technology, asymmetric digital subscriber line (ADSL) is a data communications technology that enables faster data transmission over copper telephone lines than a conventional voice modem can provide.