PACIFIC BELL:CENTREX

REENGINEERINGSiddharth Mazumdar(400807026)

Vidit Gupta(400807029)Preyas Saxena(400807022)

Shubham Jindal(400807036)

Subsidiary of Pacific Telesis Company. Broad range of services:

◦ Local exchange service◦ Network access◦ Toll service◦ Directory advertising◦ Selected information services

• Management viewed technology as a means to reduce costs, strengthen competitive positioning and improve customer satisfaction.

Company Background

In 1990 Bell CEO and President announced a long term initiative called Competitive Readiness.

Included 3 R’s:◦ Restructuring◦ Refocusing◦ Reengineering

• This led to the implementation of the Centrex Reengineering in 1991.

Private Branch Exchange(PBX)- Telephone exchange which serves a particular business or office.

Makes connections among internal telephones of a private organization and also connects them to the public switched telephone network.

Centrex is a PBX-like service providing switching at the central office instead of at the customer’s premises.

Centrex

The telephone company owns and manages all the software and equipment required to implement the Centrex service and then sells various other services to the customer.

Stations inside the group can call each other with 3,4 or 5 digit codes(extensions) depending on the size of the user base.

Case is about reengineering of order fulfillment process of Centrex in Pacific Bell.

Earlier process was highly complex, labour intensive and prone to error due to numerous features.

Order used to touch 11 systems and involve 10-12 people from various functional areas who did not function as a team.

Multiple handoffs required

Why Centrex Reengineering?

Error at any point required significant rework to identify and rectify the error.

Lead times were long-5 days for simple order(2-19 lines) and at least 15 days for complex orders(>19 lines).

Unhappy customers Poor cost effectiveness and quality Totally new process required.

Project team of 13 individuals representing various specialty groups developed initial design.

20 days to document current state. Established radical objectives for new

design: Increase speed Minimize cost Error free process 100% customer satisfaction

What they did?

Completed new design in June 1991. Assumed 2 scenarios:

◦ Flow Through Scenario(FTS)-order would be fulfilled by a single person from an inventory of pre-provisioned packages.

◦ Virtual Team Scenario(VTS)-when a pre-provisioned package did not exist, 2 or 3 people with required expertise would be electronically assembled to fulfill order. These members would work concurrently as against serially in the past.

Reengineered Process

First trial done by Downing in January 1992. 90 day trial During planning several changes were

made to the scope:1. Role of customer service provider was

scaled back to include only ordering and provisioning service(previous role also included customer contact). Title was changed to Centrex service coordinator.

Trial Test

2. Scope of trial was originally for all Centrex orders but was scaled back to only simple orders. This was to assist in training.

3. IT was not as sophisticated as originally conceived due to long lead time to develop it. Resulted in conversion of virtual team’s work to manual.

First pilot test was in Orange County Management estimated that

implementation of BPR would be expensive and realization of benefits would be delayed.

Anticipated that union negotiations would be required to redefine the roles and job responsibilities.

Did not collapse job roles

Pilot Test

2nd RBU to implement pilot testing was Sacremento.

Interested to experiment with new job roles. Interested to make a permanent change. But did not agree with making pre-

provisioned packages as they argued that the number of customers were too high.

Valley Central RBU implemented the pilot testing and successfully improved productivity by 10%.

Enhancements made more people willing to follow proposed changes.

North Coast RBU successfully implemented the changes but had unresolved issues with the union about the customer service coordinator.

Many other RBU’s followed with partial implementation with changes according to their local needs.

Improvement in time, cost, quality and customer satisfaction.

Reduction in lead time of simple orders to 3 days.

Reduction in number of errors. Less complex process involving fewer

people.

Advantages of Reengineering

Project management team did not consider difference in environment and customer base for all RBU’s at time of proposal.

Project management team did not look into the software availability for the complex systems.

Implementation was restricted only to simple orders

Problems

Systems required for implementation were not properly integrated.

Unsuccessful in convincing he union people about the reengineered process.

FTS should have been made customizable depending on the customer base and environment of each separate RBU.

Project management team should have considered availability of system software.

Union members who were opposing the change should have been given the option of VRS with compensation.

PossibleAlternatives

Management should be properly educated so as to prevent misunderstanding as in the case of the Orange County management.

Reengineering was a success despite the slow pace of implementation.

In 1993, managers performed a diagnostic study to identify the opportunity associated with “Core Process Reengineering”.

This meant “fundamental rethink and redesign of business processes to enable dramatic improvements in customer service, cost, structure and job design.”

Future Reengineering Initiatives

Team identified 80 initiatives. A steering committee headed by EVP Marty

Kaplan decided to get started on 20 of the proposed 80 changes.

The firm wanted to leverage what had been learned from Centrex to enable even greater success.

Centrex reengineering project team worked well but neglected some aspects of the project.

RBU’s were decentralized and self-focused. Union members opposed the changes

because of which full implementation was not possible.

The implementation was successful but not to the radical extent that was being aimed.

Conclusion

www.google.com en.wikipedia.org/wiki/Pacific_Bell www.iesep.com/.../pacific-bell-centrex-

reengineering www.pacificbells.com/

References