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By Tim
Young
Product management is terribly old news in certain market areas. General retail. Fast-moving consumer goods. Pharmaceuticals. However, in the telecom world, product management tends to more closely resemble something between an unattainable goal and an Achilles' Heel. In order to get a more complete picture of the realities of modern product management in the telecom space, I did what any sensible journalist would do if given the opportunity: I sat in a room full of very smart, very experienced people keen to talk to one another about the subject.
At the 2007 TM Forum Management World- Americas show in Dallas (see our December issue for a full rundown of the event), Product Management vendor Tribold assembled a considerable group of experts to chat about the realities of product management in the current market. The group was made up of individuals with experience from multiple continents and the conversation stayed market-general, avoiding Tribold's current offerings altogether, making the event no typical talking-head roundtable, but rather an open and forward-looking conversation.
Represented at the event were Tribold COO Simon Muderack, Ernest Margitta (who is now with Tribold, but also spoke of his experiences with Telstra), TM Forum Chairman Keith Willetts, Stratecast analysts Nancee Ruzicka and Susan McNeice, Ovum analyst Jessica Figueras, and McKinsey & Company principal Michael Wilshire. All told, the group possessed at least a century-and-a-half worth of telecom experience. What, in that time, had they learned about product management in the telecom space?
“No one seems to know what
a product is.”
Historically, product management in the telecom world has been lackluster. According to Figueras, the root of the issue is that “no one seems to know what a product is.” That core lack of definition limits the ability of the telcos to easily quantify and control successes and failures. Willets intones that the problems are even deeper than that. “For decades, phone companies were essentially licenses to print money,” said Willetts. “They weren't terribly good at managing anything because when you're that profitable a business you don't have to be.” Indeed, a monopoly can suffer serious losses and still remain remarkably profitable because they have no excuse not to be. “It's only now that real commercial realities are starting to dig into operators,” continued Willetts. “Most operators still could not tell you a true product line profitability of any of their business. They take all their overheads and allocate them to their products and produce allocated profitability.”
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In the telecom world, product management is tends to more closely resemble something between an unattainable goal and an Achilles' Heel. |
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McNeice agreed, mentioning the odd risk/reward situation in which many telecoms find themselves. In terms of P&L, “so often, the real carrot is the “p,” because the “l” is so difficult to get to.” Because the revenue is the driver, losses become immaterial. It's difficult, in such a situation, to know, care, or understand what the losses are. “If you aren't punished for costs you don't care,” said McNeice. “There is a lack of a balanced scorecard.”
Margitta concurs, mentioning that most telecom pushes are all about service launch and getting new things to market. The question is: “Did you hit your target on getting new things to market,” when the focus should include maintaining and managing things that are already there.
Willetts blames the situation, to some extent, on current business approaches. The two basic choices that he mentions are either a unitary approach to business, in which there are bundled costs, but some integrity to infrastructure, or autonomous business units, offering multiple replicated bits of infrastructure. Neither seem to be working at present. Wilshire categorizes the core problem of the current business model as “incrementalism,” in which an SP starts with a relatively simple set of products, then adds extra services. Then there are additions. Then new products. Eventually, Wilshire said, “You creep towards a business that's more complicated than you could have imagined.” What's the way out?
Margitta has one goal in mind. “The concept is that you can only have one delivery organization and only one holistic product organization speaking to them with one voice.” That's the aim. Beyond that, Margitta recommended making the product management organization accountable for making sure there are no substitutions, and if there are substitutions, that they are agreed to before the launch. “You need one factory organization accountable for cost control and
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