The Devil is in the Detail!

Everytime we hear a story about mergers and acquisitions in the Telecom industry we get excited by the strategic opportunties.  There will be economies of scale we hear, there will be new marketing critical mass created we hear, and of course there will be huge benefits to the consumer base from more integrated services, etc., etc., .  This weeks story of the potential merger between Vodafone and T-Mobile in the UK is a classic example.  The headline stories are the potential $5bn price tag and the fact that this would catapult Vodafone back to being the UK market leader with around 40% of the market share.  But as we head into the second week of stories I suspect a much more complicated picture emerges. 

Economies of scale and marketing critical mass are all very nice buzz words, but anyone who has ever been involved in a merger of two telecoms giants will know that the real challenge is the  successful integration of the two beasts.  This is a mating of two very different animals that have evolved quite seperately for many years.  If you look inside any major service provider you will see that they have many hundreds of systems (often several thousand) running their business.  Everything from the operations centric systems such as network, inventory and performance management systems, to a myriad of service management, customer care and billing systems.  Also merging the networks themselves can have major challenges, particularly if there are complex network sharing deals at play.

The only way to successfully navigate your way through this labyrinth is to focus on the basics of what you want to achieve in the new merged entity - converged back-office systems with the duplicate systems phased out; converged processes and data so you can gain staffing economies of scale across everything from operations management to call centers and billing; converged service creation & delivery solutions, so you can continue to grow a unified portfolio of new services.  

The TM Forum has been focused on helping our members solve this type of problem for the past decade.  The TM Forum Applications Framework gives service providers an industry standard framework against which to catalogue and rationalise their profusion of systems & applications.  The TM Forum Business Framework (eTOM) and Information Framework (SID) are the industry standard ways of structuring an operators processes and data.  In an M&A scenario these provide a stable framework against which the merging companies can make mature decisions about how to merge processes and data models.  Beyond these core framework, the TM Forum offers a wealth of solutions around effective management of service delivery platforms, revenue management & assurance, as well as benchmarking , which should be the starting point for all integration activities  (measure the current state, make changes and then measure to see if you made things better!).

So my advice to any companies looking to merge is to invest alot of time looking at the details and challenges behind the processes, systems and data before taking the leap.  The TM Forum can help!