Case Study of Pacific bell: Centrex Reengineering

Presented by:

Afaq Ahmed Khan 4394Muhammad Meraj 4095Muhammad Ali 3789Noman Hashim 4425Muhammad Azhar Javed 4356

Thinking of Reengineering

“If pacific bell is to be the customer’s choice for video, voice, data and multi-media services, we’ve to move onto a fast track this means looking

beyond continuous improvement for more substantial changes. We need a systems and technology, infrastructure inside this business that allow us to move quickly…to respond to specific needs with tailored responses.”

Marty Kaplan, executive vice president

Company Introduction• Pacific Bell was a subsidy of Pacific Telesis Group.

• They provide local exchange services, network access, toll service, directory advertising and selected information services

• They serve 39 million customer approx two-thirds of California’s population.

• Company’s workforce at the end of 1993 was 50,000 peoples

• In 1993 declared $8.9 billion revenue

Technology as a KEY

•The management consider technology as a key to success.▫reduce cost.▫strengthen competitive position.▫ improve customer satisfaction.

•In 1993 plan of $1 billion from analog to digital switches

Long-term Initiative• In 1990 CEO & President announces a competitive

readiness plan.

• 3R ‘s:▫ Restructuring:

Breaking monolithic company into decentralized units (regional, statewide and support organization)

▫ Refocusing: Organizing firm’s priority and resources around vision,

value and bold goals (for key areas like maintenance, provisioning, revenue, job fulfillment complaints etc)

▫ Reengineering: More targeted, more focused than other two: it consist of

applying many of techniques of Total Quality

The Centrex Reengineering Project

•Centrex Reengineering Project was initiated in 1991 by Jack Hancock, then executive vice president P&TS Group, who partnered with Bill Downing, then vice president, of the regional business unit of headquartered and referred to as the Bay business unit.

•Hancock Says•I attended an external reengineering

seminar in 1990 and became enthusiastic about its possibilities for Pacific Bell.

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•Then he had discussions with Bill Downing, Marty Kaplan and others, they all agreed that reengineering was something that we should try.

•But no one had any idea how long it would take to roll out one of these projects. Hancock assumed that Centrex reengineering completed within 18-24 months.

•They can differentiate Centrex from competitors offerings is by quickly and accurately fulfilling our customers orders.

•Because of the numerous product features, Centrex order fulfillment was highly complex, labor intensive, and error prone.

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•One order would touch 11 systems and involve 10 to 12 people from several function areas who did not function as a team.

•Multiple handoffs were required and an error at any point in the process could necessitate significant rework.

•Before the Centrex Reengineering, lead times to fulfill orders were long. Customers were quoted a minimum lead time of 5 days to fulfill a “Simple” (2-19 lines) and minimum 15 days for complex order (>19 lines)

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•In April 1991, a project team of 13 individuals representing the various specialty groups involved in Centrex provisioning was assembled at Pacific Bell headquarters to develop an initial design. A management consulting firm with reengineering experience assisted the design team.

•They were decided to documenting current process of or Centrex order fulfillment. The team spent 20 days documenting the current state.

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•The team established the following measurable stretch or radical objective for the new design:

1. To provide Centrex service when the customer wants it

2. To reduce internal costs by 75 to 80 percent

3. To have error free orders and

4. To have 100 percent customer satisfaction.

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•Reengineering team completed the new design in June 1991. The new design assumed primarily two scenarios:

1. Flow Trough Scenario: an order would be fulfilled by a single person and team estimated that 80% of the Centrex orders could be handled via this scenario.

2. Virtual Team Scenario: when a pre-provisioned package did not exist to fulfill the customer request then virtual team would go into effect. This scenario a team of two or more people.

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•Team also considered third more radical scenario where customer would enter order directly into Pacific Bell’s system and thereby cause a virtual team to be formed,

The Centrex Trial - Regional Business unitThe Centrex Trail • July 1991, (Little john and Binley).

• Purpose the design of Centrex reengineering

• In January 1992, 90 Day Trial with regional business Unit

• Four sub task team Formedi. Job Descriptionii. Technology Task Teamiii. Modeling Task Teamiv. Metrics Task Team

Two Type of System

• Simple System (2-19 Lines) and Complex System (19+)

• Three New Role ▫ Customer Coordinator▫ Software ▫ Facilities Provisions

The Centrex Trial - Regional Business unit cont…Little John • The Member of Centrex Reengineering initiatives

• Lot of People who could not understand why would tear down

After Trials• 5 Day process of one order will be done with in 2 days

Regional Business Unit Pilots

• Six Business unit visited bay Bay regional Business unit.• In Dec 1993 Five to Seven Regional business unit has Pilots Current State and Future State highlight for features of Centrex Reengineering

Orange County • Orange Management was eager to understand how it

could leverage.

• In May 1992, Two manager visited bay regional business unit for modify the current process.

• Orange Management noted that Setup a trial similar to the one done at in the bay regional business unit.

• In july 1992 Orange County Processed Its first order using the redisgned.

Sacramento• In 1992, the Sacramento regional business Unit

began to invest age the possibility of Piloting the Centrex reengineering process

• Chunk Smith (V.P)The Trail had gone very well and we really wanted Sacramento to get on Board

Five Employees were selected: two for Customer Service Coordinator, two Software provisions and One for designed Facilities

Other Regional Business Unit:• In Sep 1992 the Valley Central regional business

Unit formed team. To explore the Centrex reengineering.

• In January 1993 the team Spent approx. 6 week in Orientation and training activities

• 1993 End, North Coast management has unresolved issue with the regarding the Customer Service

• In Dec 1993 San Francisco Bay regional Business unit had not implemented a formal Pilot

THE ROLE OF INFORMATION TECHNOLOGY• Advanced IT Capabilities• Jeff Ironfeld ( New Head)• Development of IT Applications• Trial Applications• Establishment of Collocated Teams• Productivity Improvement• New Technology Support

PILOT ACHIEVEMENTS

•Significant Savings In Cost•Significant Savings In Time•Increased Customer Satisfaction

Comparison of Centrex & Premises-Based Systems

Centrex Reengineering - Expected Benefits

THANK YOU