CASE STUDY

RUNNING BUSINESS CRITICAL

PROCESS CHAINS
How Belgacom and HCL share a mission to achieve success
Introduction
To deliver operational results, many business processes are tightly connected to the IT infrastructure. The
telecom sector is an example where this is especially true. Without a well performing technology platform,
the business of telecommunication will come to a halt. Many organizations have chosen to cooperate with
external service providers to optimize and improve business processes. Success within these strategic
relations is not a given: unlocking the potential of cooperation needs continuous attention from all parties
involved.
Acting as a partner does not come naturally; it is hard work for both supplier and outsourcer. Two Belgacom
managers, Kurt Smet (manager mobile voice operations) and Luc Cavents (domain manager mobile voice
core), were willing to explain what it takes to design a productive relationship that delivers a mission critical
business platform. Belgacom, the leading telecom company in Belgium, chose HCL to run their mobile voice
operations. In the following pages we will discuss all the various aspects that were important to create the
current relationship between Belgacom and HCL. Some aspects are tied to the specific situation within
Belgacom, but many of the aspects can be used by other organizations to take a critical view on their own
relationships with external service providers.

Business perspective: the importance of Mobile Voice for Belgacom customers

A focus on the needed operational results is important to create success in an outsourcing relationship.
Belgacom recognizes an increasing demand for quality in mobile voice. While the total revenue for mobile
voice declines, the total calling time in minutes is not decreasing. Lower revenues are primarily the
consequence of stricter European regulations concerning the termination fees1. And because consumers
switch increasingly from fixed to mobile phones, a very high quality voice connection is expected. The
increased dependency on mobile phones also means that consumers expect to be connected to the network
at all times. Non-performance reflects immediately on the corporate brand of the company. Because
failures of the network have an immediate impact on the customer perception of Belgacom, management
indicated that the number of high priority incidents needed to be reduced to a minimum.
For reasons of financial optimization, Belgacom decided to outsource mobile voice operations and the
running of the associated infrastructure. A thorough due diligence took place to determine the right vendor
and to make sure that HCL the selected partner was up to the challenge. HCL took over the
responsibility to run the mobile voice platform and the two companies have been cooperating for the past
five years now.
When incident reduction became an important target, employees of Belgacom and HCL worked together as
one team. Even though the operational part of the mobile voice services is outsourced to HCL, Belgacom is
actively involved in delivering the intended results and acts as a true partner. Belgacom team members see
it as their duty to make sure that the services of HCL are received within the Belgacom operations in the
most efficient and effective way. This ensures the best operational quality and continuity.

Termination fees are the charges which one telecommunications operator charges to another for terminating calls on
its network. Call termination refers to the routing of telephone calls from one provider to another.

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How Belgacom and HCL share a mission to achieve success

Taking an active approach is the first step

What is the first step if your assignment is to reduce the number of incidents? Some organizations blame
the environment and take a passive approach. Incidents are solved, but the actual source of failure is not
tackled. Belgacom and HCL take the opposite approach and look actively how business continuity can be
improved. Internal analysis showed for example that most failures were not the result of any external act of
God, but were flowing from network changes. Most failures could be prevented with the proper preparation
of bringing the needed changes live.
Two actions were put in place to correct the existing situation.
The first action was to improve the testing process before bringing software live in the infrastructure that is
managed by HCL. Since the Belgacom software is developed by other partners, errors in the code cannot be
controlled by HCL. Belgacom defined different steps to improve the testing approach. First, the vendor is
responsible for testing the functional part of the software against the agreed upon specifications. As a
follow-up Belgacom performs functional testing in the test environment. The next testing is done in the
acceptance environment: this time, not only the functionality of the software is important; also the effect on
the operational process is thoroughly tested. It was also discovered that last-minute, minor adjustments can
have a big impact on the success rate of a change. If minor alterations are made, testing is repeated to
prevent a possible failure later on.
The second action was to adopt a first-time-right approach. Doing work right from the start improves
predictability and quality by eliminating rework caused by preventable mistakes as much as possible.
Elimination is done by continuous improvement and learning from previous mistakes. It is always possible
that an error occurs. When this happens, it is important that the focus is on solving the problem with a
focus on quality. Belgacom makes sure that after repairing the incident, analysis is done as part of the
learning cycle so the same type of problem does not happen again (in quality management this is called a
zero-repeat approach). Or as Belgacom puts it We dont believe in Murphy anymore, we organize to
control the law of Murphy.

Realising the right information flow

Improvement can only be realized if the cooperating partners operate with the same set of data. From an
operational perspective, HCL works on the systems of Belgacom, so service delivery is no black box for
Belgacom. This also ensures the needed systems transparency: the information flow is quite transparent in
both directions. The sending and receiving of relevant data by both partners is called the information flow.
It took Belgacom and HCL some time to fine-tune this information flow. Communication will not be perfect
from the start of any relationship, so making adjustments is necessary and must not be seen as some kind of
failure. When the Belgacom-HCL information flow would be blocked, both operational and governance
changes were made. For example, it was sometimes challenging to convey the importance of some issues to
the offshore team. In India they did not feel the same heat as in Brussels. HCL appointed an onsite
coordinator to solve this situation. The onsite coordinator makes sure that if something has a very high
priority for Belgacom, the offshore team has visibility of this and also feels the same pressure.

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He is empowered by HCL to do what is necessary within HCL to make sure that the offshore team follows
Belgacom.
The coordinator has daily updates with a dedicated counterpart within Belgacom and there are also weekly
reviews on the current status.
The relationship matured in approximately 18-24 months. During this period, a no-error commitment was
put in place to show business stakeholders that the work could be done by an external provider. Belgacom
improved the information flow based on the observation that half of the success comes from having the
right knowledge in the team, the other half comes from organizing the right structure in which information
is shared and the work is done.
When Belgacom started with outsourcing, the assumption was that every aspect of the current processes
could be outsourced. After some first experiences, they realized quickly that some work could not be done
from India alone. While HCL has professionals with all the needed knowledge in the offshore team,
Belgacom created an internal team with specific knowledge that is crucial for the Belgacom business. The
internal Belgacom team is looped in when the offshore team cannot resolve queries or need help from
within Belgacom. This approach also prevents HCL from having to manage expectations within internal
Belgacom departments. Engineers from Belgacom and HCL work jointly on delivering the needed results.

Creating trust: success within the cooperation between Belgacom and HCL
Relationships exist between people and ask for more than just business transactions. Belgacom stresses that
the HCL employees who work for Belgacom have the same rights and duties as Belgacom employees. The
HCL professionals are treated as equal Belgacom team members and are considered part of the family.
When Belgacom team members are invited to celebrate a project success, their HCL colleagues will join
them.
When this approach was introduced, there was both a positive and challenging side. The positive side was
that the HCL employees felt empowered and it provided the right drive. At the same time, it was a big
change compared to the usual situation for most HCL-employees. They saw Belgacom as the client, whereas
Belgacom wanted HCL to think as Belgacom employees and care about the clients of Belgacom. It took
some time, but it really made the difference in how the relationship evolved.
At the side of Belgacom this is called the ability to trust: it is an essential ingredient to make the
relationship productive. Both sides invested in demonstrating the needed behavior. Belgacom organized
internal workshops on inter-organizational cultural differences, to prepare the organization for cooperating
with an external provider. It was also included in the contract that Belgacom will visit India at least once a
year and the responsible delivery manager from HCL will travel quarterly to Brussels. The central idea is
that local management provides a good example. If they manage the Belgacom and HCL professionals as one
integrated team, all individual team members will feel safe to do the same.

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While some additional communication efforts might be necessary at the beginning of the relation, this small
investment is negligible and pays back. One example would be the backing of HCL within the Belgacom
organization. IT professionals share the same jargon; communication in English is therefore not a big
problem. This is different for professionals in the business. They are not used to work with persons from
outside the organization even outside the country. It is natural for many persons to perceive that not
everything is going well if they cannot understand the other party immediately.
Members of the Belgacom team did not hide HCL somewhere in the background as a logical reaction when
someone pushed back a little. Instead, they insisted to let HCL work within the organization to create
improvements. Expectations and the different roles were clearly communicated and the cooperative
approach helped to create a solid base for the work ahead. From the start, everything was approached as an
us-challenge instead of an us-versus-them-challenge.

Managing competencies instead of volumes

Besides the aspect of trust, Belgacom and HCL work closely together on competencies. For example, a
rotational program was put in place. HCL has a small team of professionals onsite and the most senior
professionals rotate between India and Brussels. Visiting and working onsite helps to infuse knowledge
about Belgacom and the Belgacom structure and ways of working into the HCL-team.
In a traditional approach, the service provider will add more professionals if new competencies are
necessary. Often, this means that the work will be distributed across different teams or locations. This
introduces a lot of inefficiencies. The philosophy of HCL is to keep the offshore team in one location and
build a critical mass there.
One of the goals is to keep this critical mass, the number of people necessary to cope with all the changes
during the relationship, as small as possible. When a new competency is needed in the work for Belgacom,
the approach is to broaden the skill set of the team members instead of adding new professionals. This
ensures that the work is carried out by professionals who already understand the context of the assignment.
When it is necessary to expand the team, everyone is supposed to have the same level of expertise. With
this approach the team feels empowered, communication is easier and costs can be controlled better.
Managing for the right levels of expertise is also an important element of the back-up-plan. Every
Belgacom team member is backed up by someone from HCL. If a Belgacom team member is not able to
attend a certain meeting, the HCL backup will go. Belgacom still decides, but the knowledge is backed up at
the side of HCL. It also works the other way around: for team members from Belgacom it will always be
easier to find internal information since they know their way around the organization. HCL-team members
can always contact their Belgacom counterpart to seek help when additional information needs to be
shared.

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How Belgacom and HCL share a mission to achieve success

Both parties are transparent in their needs and capabilities. When Belgacom worked on introducing a new
platform, the involved team members from Belgacom did not know exactly how their roles would be
defined. Based on the definition of the responsibilities and goals, the resource needs were analyzed in terms
of competencies and knowledge. During the process, HCL clearly indicated what they could support, what
they could not support immediately and how the gap could be bridged. Then, HCL asked Belgacom to be
involved in the selection of the professionals needed for the new job. Again, the focus of the conversations
was on competencies, not volumes.

Keeping the relationship healthy

In both the worlds of mobile telecom and IT one can be certain that things will change, even though it is
impossible to predict the exact outcomes. It is therefore impossible to describe exactly what is needed at
the beginning of an outsourcing relationship. Both the outsourcer and the service provider must be willing
to incorporate change in the relationship.
To keep the relation healthy and relevant, continuous adjustment is needed and the governance structure
makes sure that the information keeps flowing between the two parties. Belgacom and HCL have a common
structure consisting of different layers: Daily talks on operational level, there are daily talks, bi-weekly for
engineering and monthly management meetings. During the first years, the relationship was evaluated in a
strategic meeting every three months. Now that the relation has matured, these sessions take place every
year.
Technical and operational conversations are separated from commercial and strategic conversations.
Separation allows having tough and sometimes heated discussions on the work in progress with the
assurance that the strategic relationship in the future is not hurt. Being able to disagree on certain topics
and at the same time finding common ground to move forward is a true characteristic of a mature
outsourcing relationship.
On the commercial side, Belgacom has fixed price agreements with HCL. Fixed price deals have to strike an
interesting balance: while the world around you changes, the price stays the same. In the historical
experience of Belgacom, a service provider typically can do two things: ask for an additional fee each time a
change is needed or always say NO.
With HCL, a different relationship exists. First and foremost, the focus is on getting the work done. Even in
the case of big changes, priority is given to improve the operations and business of Belgacom without
having tiresome discussions about costs. A big advantage is what Belgacom calls unwritten flexibility. HCL
is flexible in taking on smaller changes; no formal change request procedures are necessary for small
actions. This allows for short reaction times and brings less bureaucratic interactions. At the same time,
Belgacom is willing to listen when the situation changes substantially and real change requests need to be
raised with a possible impact on the price. Work in progress guides the discussions about needed
adjustments and the contract is flexible enough to incorporate change.

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According to Belgacom, this approach avoids a lot of negative energy. Other service providers used to start
from the hardware or software perspective. When something changed, a lot of discussions would take place
to defend the use of specific software or hardware. HCL started from the service perspective: what are the
competencies, knowledge and responsibilities that we can take care of to serve Belgacom. Responsibilities
were given to a dedicated team and the team is able to organize the work efficiently. With other providers,
Belgacom would perceive that they needed to pay for the inefficiencies within the organization of the
service provider.
Conclusions: what it takes to make a partnership work
Outsourcing a business critical platform asks for a partnership approach and it works for both Belgacom
and HCL. Organizations with little outsourcing experience often expect that success of the relationship lies
solely within the hands of the service provider. More mature organizations often experience a lack of
control; they feel it is almost impossible to influence their service provider. What can they learn from this
specific case?
In a partnership, both sides need to participate actively and honor each others interests. The case describes
several important aspects that lay the foundation for success.
1. Ability to trust
Trust is not a given, it is the result of positive experiences based on consistent behavior, attention to
detail, attitude of people, problem solving skills and other social attributes. Trust can be actively
promoted, but it asks an investment in time from both sides.
2. Having an effective information flow
Running a business critical infrastructure together is only possible if all essential data and information is
shared. Outsourcers should not keep data from service providers if it could hurt the operation. And
service providers should be transparent in their delivery process.
Just sending and receiving data is not enough: both partners must listen to each other and provide
critical feedback. The goal is not to win an argument, but to realize operational improvements that drive
business success.
3. Win/win orientation
In outsourcing, it is often assumed that the win of one side is the loss of the other side. This thinking
hurts many relationships. When a problem arises, true partners look for creative approaches to solve it
without earmarking one side as the loser.
HCL understands that flexibility is important in a dynamic business environment. Belgacom knows that
fixed-price does not entail unlimited change possibilities without financial consequences. Open
conversations take place about goals, possibilities and consequences. The win/win orientation makes
sure that the agreements are supported by both sides.

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4. Manage as one
The partnership revolves around a shared understanding of business goals. Both Belgacom and HCL
realize that they need each other to deliver results. All professionals are managed as one integrated
team, regardless of location. Belgacom employees are backed up by HCL team members and HCL
involves Belgacom in the selection process of new team members.
5. Change is not a failure
Relationships need time to mature and everything cannot be perfect from day one. It takes courage, for
example, to change the governance structure if certain parts do not work as expected. Partners
recognize that change is inevitable and are open for discussions and investigating the consequences.
While reading the success factors above, one might forget that both parties also have to manage some very
technical challenges. In the selection process, Belgacom had to make sure that HCL had the right set of
competencies to run their platform. Once they were convinced and HCL got selected, half of the success
was guaranteed. The other half of the success depended on having a structure that allowed HCL to bring its
competencies into the Belgacom operations to achieve the intended business goals.
Selection of the right partner is therefore more than just investigating the technical skills or service
portfolio of a service provider. The business goal should be clear, because these goals can be used to align
the interests of outsourcers and service provider effectively. Then, the service provider should have a
culture to commit to these business goals and achieve them in cooperation with the outsourcer. Belgacom
and HCL do not focus on the paper promises in the contract, results are generated in the day-to-day
operations. It takes a lot of hard work to deliver real-world success: being able to call anywhere in Belgium
with a high quality mobile voice connection.

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Analyst: Sven van de Riet

Giarte 2013
No part of this publication is to be reproduced or altered in any form without prior written permission of
Giarte. The publication is intended to inform readers about current developments in the field of IT
outsourcing and expresses experiences and opinions of persons who do not work for Giarte. Different
circumstances may lead to different results and as such, Giarte shall have no liability for errors, omissions
or inadequacies in the information contained herein or for interpretations thereof. Giarte does not endorse
any specific service providers and organizations should use several sources for informed decision making.
Publication date: June 28th 2013
www.giarte.com

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