Simpler Business Drives Customer Focus

Simpler Business Drives Customer Focus

28 October 2010 Telstra today announced another stage of its move to a simpler business model, with changes that will empower local managers, create a new Innovation Office, simplify sales and marketing channels, and reform key internal processes.

"Telstra will now be organised as a sales and marketing company that is faster to market and more focused on our customers," Chief Executive Officer David Thodey said today.

"Telstra's simpler new operating model will shift decision-making from head office to local managers and allow our frontline employees to get results more quickly, with fewer steps and approvals."

Under the changes Telstra will establish

* A single, local consumer business that will combine Telstra Country Wide and the retail shop network, creating a strong and integrated local consumer model across regional and metropolitan areas.

* A new Innovation Office that will elevate the importance of long-term innovation and link product development with customer needs.

* A simpler product management structure that will eliminate duplication between customer-facing business units and Telstra's Chief Marketing Office.

* Simpler business planning and reporting processes that will streamline company strategy, planning and internal reporting.

The changes are part of a company-wide program to simplify company processes, improve customer service and satisfaction and save costs.

Today's announcement will mean an overall reduction of 950 jobs. Job losses will predominantly affect executive and middle-management roles in capital city offices. Affected employees will have access to assistance programs and, based on their length of service, redundancy entitlements of up to 80 weeks pay.

Mr Thodey said Telstra will improve customer service, even with fewer employees, because it is simplifying the way decisions were made, reducing process errors that require manual intervention, and introducing online-self service options for customers.

"Change is always difficult, even where it is made in a way which is focused on improving service to our customers," he said.

Single consumer business

The centrepiece is a local management model that will build on the successful Telstra Country Wide structure and expand it into metropolitan areas. Under the new model, 33 local area managers will be responsible for Telstra's 5,000 points of presence including shops and dealers throughout Australia.

"This change will finally apply a single sales model for all Australia, replacing an approach that saw accountability divided between multiple channels and performance measured by overlapping financial reports," Mr Thodey said.

"Telstra's local area managers will now be responsible for all the shops, dealers and service in their local community, giving them the tools they need to run their business for local customers.

"Telstra is the only telecommunications provider with deep roots in communities right across Australia, and this model builds on this competitive advantage by putting local Telstra managers in charge of decisions affecting local communities."

The expanded Telstra Country Wide group will be led by Andy Ellis, formerly Head of Retail. He will report to Gordon Ballantyne, who remains Group Managing Director, Telstra Consumer & Telstra Country Wide.

New Innovation Office

Telstra will elevate the importance of long-term innovation by creating a new Innovation Office led by Dr Hugh Bradlow. Dr Bradlow will join the Chief Marketing Office to ensure technical research is directly informed by research into customer preferences and behaviour.

"Telecommunications technology is changing rapidly and demand for telecoms services has never been stronger. Telstra's new Innovation Office will capitalise on that opportunity by developing a long-term innovation road map, leading industry discussion on technology issues, and incubating breakthrough products like T-HubTM, T-BoxTM and T-Touch TabTM," Mr Thodey said.

The company will also create specialised product groups that match the company's main revenue pools and targeted growth markets including media and content, and network-based applications and services.

Simpler product management

Telstra will assign a single business unit to manage key stages in the product lifecycle, ensuring that accountabilities are now clear. Innovation and product management will be consolidated in the Chief Marketing Office. Product delivery will be managed by Telstra Operations to ensure products are co-ordinated with the IT systems, delivery platforms and networks that underpin them.

The tactical marketing function will be devolved to customer-facing business units to ensure that direct communication with customers will be driven by the managers closest to those customers. Brand and strategic marketing will remain in the Chief Marketing Office.

Simpler corporate processes

Telstra will also substantially simplify the internal processes it uses to set budgets, measure business performance, allocate capital among competing projects, model options and forecast outcomes.

The new approach will collapse four processes into one, giving the company a consistent and coordinated view of its performance.

"The changes we are announcing today will reduce duplication of roles, clarify job accountabilities, eliminate unnecessary steps in company processes, and substantially simplify decision-making," Mr Thodey said.

"This will enable Telstra to deliver its strategic objectives of improving customer satisfaction, winning market share, and building successful new businesses in high-growth markets."

Media contacts: Electronic - Craig Middleton (0400 931 772), Print Julia Foley (0439 916 989)
Reference: 391/2010

Also available:
1. Maps of new TCW areas (high-res available on request)
2. Bio and photo of Hugh Bradlow, Chief Technology Officer (high-res available on request)
3. Bio and photo of Andy Ellis, Telstra Country Wide (high-res available on request)

SOURCE: Telstra