1. No category

Best Practices for Quality
Management in the
Telecommunications Industry
ENSE627/ENPM647
Spring 2004 Guangming Zhang
Graciela Piedras
Rowin Andruscavage
Presentation Outline
• Telecom Market Overview
• Network Evolution
• What is Quality?
• Malcom Baldrige categories
• Vision for the future
• Lessons learned
• Conclusions
Looking at the telecom past…
The business
climate used to
be like a ship
on a calm sea.
Then, Challenge came by…
 Rapid time to market with shorter development
and life cycles
 Very well-educated, technically excellent,
multicultural work force
 A growing body of de facto global standards
 A customer base that may have little or no experience with the product or
technology
 A marketplace that is willing to accept innovative solutions to problems
they may not yet know they have
• New Competitors – CLEC, ISP, ASP
• New Technology Solutions – VoIP, MPLS, QoS but you need backwards
compatibility w/ legacy systems
• Blind Faith in the Stock Market
• Unrestrained Spending
• Globalization (Mergers and Acquisitions) so highly competitive
Worldwide
Communications Services Revenue
Steady Growth in Voice Revenues, Volume MOU Offset by
Price Compression, Increase in Advanced Data/IP Revenues
1.5
Revenue ( $ in trillions )
Emerging
1.25
Data
CAGR >50%
IP VPN, VoIP, Hosting/Content,
Wireless Data
CAGR 16%
ATM/Frame, X25, Internet
& Broadband Access
1.0
Wireless
.75
CAGR 12%
.50
Local, Long Distance,
International, Voice
.25
0
2001
Source: Motorola, QuEST Forum
CAGR 4%
Source: ABN Amro, Cahners In-stat, Dittberner ,
Telecom Next Strategy Group
2002
2003
2004
2005
Return of Steady Telecom Growth
Overall Steady Growth, Increased OSS Importance,
Within Segment Dynamics Define Growth Opportunities
300
$276.0B
$268.0B
260
$232.0B
$243.0B
$257.0B
Other
OSS
Revenue ($ in billions)
220
Cable MSO
180
140
Wireless
100
60
Wireline
20
0
2001
2002
2003
2004
2005
Source: ABN Amro, Cahners In-stat, Aberdeen Group, Dittberner, Telecom Next Strategy Group
Other: Fiber optic cable,
submarine optical,
non-core ancillary
OSS: Network
& systems, Software ops,
customer care, billing,
support systems
Evolution of Voice and Data



Mobile Continues to Be the “Killer” Application – We Expect 50% of
2010 Telephony Will Be Wireless
New Technologies Add Capacity for Voice and Data and Differentiation
Opportunities for Carriers for integrating networks
Data Will Be at Least 20-25% of Mobile Industry Revenues by 2006
vs. an Estimate of 6% in 2002
$ Value of Mobile Services
2002 (Estimate)
2006 (Estimate)
Web Services
6%
Web Services
2%
E-Mail and Messaging
4%
E-Mail and
Messaging
16%
Voice 94%
Source:
Yankee Group
Quest Forum, Brussels December 2002
Source: Motorola, QuEST Forum
Location-Based
Services
3%
Voice 75%
Wireless
Global Cumulative Subscribers
(in millions)
1200
1000
800
600
400
200
0
Source: PCS and GTSS – Global Marketing Operations
Technology Migration Paths
2.5G
CDMA
IS95A
IS95B
1XEV-DO
1XRTT
3G
2G
TDMA
GSM
TDMA
IS-136
2G
GSM 900
GSM 1800
PCS 1900
1XEV-DV
2.5G
3G
UMTS
EDGE
GPRS
14.4Kbps - 64Kbps - 144Kbps - 384Kbps - 1.4Mbps - 2Mbps - 5Mbps
The Benefits of Integrating IPv6
Large Address Space
Enhanced Security
“Plug-and-Play”
The Ubiquitous
Internet
Enhanced Performance
Enhanced Mobility
Telecommunications
Industry Needs
•
•
•
•
•
•
•
•
•
•
Interoperability
Tackle resistance to change
Cover the areas of more potential to grow.
To have a supportive Regulatory environment
To offer “cost-effective” solutions, in particular, integrated
services
Differentiate the offer and the quality depending on the
customer.
Control the operative costs and have structures to maximize
efficiency.
Capacity of investiment.
To partner with others as required.
To offer: Security, Availability, Reliability
To be a key force in the global
telecommunications industry to
improve the quality of products for
customers through the
collaborative efforts of service
collaboration
providers and suppliers.
quality
Quality Is ...
• More than a collection of tools
• A state of mind
• Linking processes to financial results
“You don’t have to do this, survival is not compulsory.”
W. Edwards Deming
How to compare quality
models?
Certification
Benchmarking
Best Practice
Business
Excellence
Models
TL9000
Adders
Low
Industry Synergy
 European Foundation for Quality
BEM + BEAM
Management (EFQM);
Guidance
Malcom Baldrige
 Demming Price
Business Performance
High
ISO
9001
Beam: Business
Excellence
Model
Quality System Maturity
Conformance
Driven
Source: QuEST Forum
Performance
Driven
ISO 9001
Fundamentals:
– Supplier quality assurance: the driving motivator
– Consistency of process and reduction of variety as business
objectives for standards.
– Documentation of work and training of employees as key delivery
methods of consistent performance.
– Corrective action and problem solving as approach.
Why is not enough?
– Weak on quality improvement / costs and customer-supplier
relationships
– Customer only sees certificate; no levels
– Too much supplier discretion
– No cost-based metrics / benchmarking
– Does not encourage whole-business registrations
– ISO 9000 is non-prescriptive
What Is TL 9000?
• TL 9000 is a common set of quality system
requirements and measurements designed
specifically for the Telecom industry,
encompassing ISO 9001 and other best practices
• TL 9000 Quality System Requirements
– Hardware, Software & Services Best Practices
• TL 9000 Quality System Measurements
– Well-defined Comparable Measurements
Why Baldrige?
• Systematic approach to provide an
operational definition of the total quality
approach to business management.
• Demonstrate superior business results
over time
• Provides validated, leading-edge
practices
• Defines a model for high-performing
businesses
• Helps companies enhance
competitiveness
• Baldrige criteria are non-prescriptive.
And, Six Sigma...
• Six Sigma is a disciplined, statistically-based
approach for improving business performance:
removing defects that occur in the products,
processes and transactions, decreasing the cost of
operations and goods sold, and increasing
satisfaction of ultimate consumers.
• Six Sigma is highly prescriptive!
• Fundamentals:
– Business problems require multivariate solutions to
eliminate multiple causes and factor interactions.
– Cross functional problems tend to be multivariate.
– Customer requirements and process performance are the
keys for defining sustained performance.
Future of Quality?
• Future quality management
systems will combine the
best of all systems:
Identify key
business areas
– ISO 9001 as a lower
of concern.
ISO9000/
specification limit;
TL9000
Baldrige Award
– Malcolm Baldrige National
Six Sigma
Quality Award criteria as a
target for achievement;
and
– Six Sigma as the
integrating method.
Sustain gains
and document
the process.
Eliminate the
critical source
of variation.
Example:Anatomy of the Quality
Efforts and changes of Verizon
1992: BA, NYNEX & GTE each adopt Baldrige
1996: GTE Directories wins Malcom Baldrige Award
1997: First Telecom Mega-Merger -- Bell Atlantic &
NYNEX form new Bell Atlantic; Adopt Quality Policy
based on Baldrige
1997: New Bell Atlantic participates in
development of QuEST Forum. First
Inaugural meeting held Baltimore,
Maryland - 1998
2000: Bell Atlantic and GTE merge to
form Verizon; Quality Policy updated to
include ISO 9000
2001: Quality Integration
establishes portfolio of
Business Improvement
Enablers
2001: Verizon Corporate Sourcing
Launches TL 9000 Registration
Source: `Verizon, QuEST Forum
2002: Quality Strategy introduced:
Registration for TL 9000 begins across
organizations. Corporate Sourcing
receives Registration
1. Leadership Requirements...
•
•
•
•
•
•
Involvement
Communications
Outcome Driven Process Focused
Provide Stability
Reward And Reinforcement
Involvement:
– Coach People To Make Their Own Decisions and Achieve Goals
– Spend 50% of Time On Top Priority Items In Full View Of Your
Team
• Communications:
–
–
–
–
–
Listen
Be Approachable And Accessible
Broadcast the Agenda
Encourage Debate “In The Room”
Be Enthusiastic
Best practices for leadership (1)
• Have a constancy of purpose and create a sense
of urgency
• Use executive meetings
• Use quality methods and tools
• Visit customers
• Ensure promotion criteria reflect quality values
• Be open in surfacing problems
• Define values that are concise and well-focused
• Communicate values often using various media
• Ensure senior management demonstrates the
quality values
Best practices for leadership (2)
• Define management roles and responsibilities
for quality
• Reward management behavior as well as results
• Promote cross-functional cooperation
• Conduct annual quality planning at every
management level
• Measure employees’ perceptions of the gap
between espoused values and real values
2. Strategic Planning
• Select benchmarking priorities according to
critical success
• Emphasize analysis that correlates market
position with the company’s objectives,
plans and actions.
• Connect analysis to decision making
• Focus on changing fundamental business
capabilities
• Encourage openness and negotiation
• Conduct effective reviews
2. Strategic Planning
• Develop a systematic
process for managing
and improving
• Select goals that fit the
business
• Focus on few annual
objectives
• Ensure that annual
objectives are readily
measurable
• Predict the impact on
business results.
Example: Market Differentiation
of Lucent: Quality &Customer
Service Excellence
Services Satisfaction (Global)
Scale 1-10
7.80
7.51
7.60
7.40
7.29
7.32
7.12
7.10
7.20
7.00
7.56
7.24
7.33
7.52
Meryl Bushell
Chief Procurement Officer
BT Group
7.377.09
7.19
7.09
6.80
7.07
6.88
6.93
6.60
6.40
3FQ01
Lucent
4FQ01
“Lucent has a responsive,
experienced services team
with an in-depth knowledge of
BT’s technology
infrastructure and market.”
1FQ02
2FQ02
3FQ02
4FQ02
1FQ03
2FQ03
Competitive Average
Source: Lucent Customer Sat Survey
A services company is built on
its reputation
"We felt when choosing
Lucent we were picking a
company that had both a wide
range of experience, a quality
background, and somebody
that we were happy to be able
to bring on board…”
Brian Burleson
Chief Operating Officer
Priority Telecom
3. Customer and market focus (1)
• Quality Improvements
• Cost Improvements
• Data Security
– Confidentiality of Data Source (Submitter)
– Confidentiality of Data
– Security of Data
– Integrity of Data
– Reliability of Data
– Availability of Processed Data (in report form)
• Uniform Measures / Standards
Customer and market focus (2)
• Maintain continuous contact with customers
and suppliers through data interchange.
• Emphasize key points of competitive
differentiation.
• Continuously refine information and its
infrastructure
• Make key information visible
• Include all stakeholders
• Benchmark companies outside the industry
Customer and market focus (3)
• Understand what customers want
• Invest in systems and logistics to support
customer-contact
• Empower customer-contact people
• Set standards for all aspects of customer
interaction
• Make it easy for customers to complain and
provide quick follow up
• Reduce uncertainty and risk
Customer and market focus (4)
• Correlate customer satisfaction results with
internal measures of product and service
quality
• Draw comparisons with world-class leaders,
not just direct competitors
• Use every listening post.
Network Reliability
The attribute that correlates HIGHEST
to Customer Satisfaction  RELIABILITY
Network Reliability
(NO DOWNTIME)
•Higher Customer Sat
•Lower Churn
•Higher Sales
Managing Network Reliability
Determine the Appropriate
Measurements – Requirements – Objectives
 Establish Data Collection Systems
 Analyze Performance
 Share the Results to Bring about Awareness
 Take Steps Towards Improvement
• OSI model - different quality goals distributed
between different levels of communications stack:

–
–
–
–
Physical layer: high S/N ratio – need quality components
Link layer: low bit error rate via encoding
Network layer: quality of service (QoS) guarantees
Transport layer: error detection & recovery
Examples:
4. Measurement, analysis and
knowledge management (1)
• Develop a specific set of criteria for screening out
• evidence that the information was built with a
plan, rather than being something that just
evolved over time
• Measures has to be developed for all business
drivers and goals.
• Consistency of measures across business units.
• Include measures of cycle time and productivity or
efficiency.
Measurement, analysis and
knowledge management (2)
• Include measures of customer satisfaction,
process and output quality.
• Conduct research to identify correlations between
satisfaction measures and financial performance
• Most of the time in review meetings should be
spent analyzing results rather than simply
reviewing them.
• Company should use data to make decisions and
solve problems.
Motorola’s measurements
• Data is categorized as:
– Performance (ex. cost of
sales, on-time delivery,
share of market,annual
sales growth)
– Operational (ex. cost of
quality, customer problem
solution and view of
quality)
• Metrics are shared
using Motorola
Compass Knowledge
Sharing System.
Process for benchmarking
other companies
ST procedures
• Indicators are selected by
time sensitivity
• There is only one source of
data to avoid errors.
• The built-in improvement
cycle ensures that the data,
and use of information are
continuously updated to meet
user’s needs.
• They hold periodic operating
review meetings to draw
plans for improvement using
Plan-Do-Check-Act.
•
•
Report lessons
learned
Monitor
performance
Plan
Verify meets
requirements
Identify process
Clarify measures
Verify performance
(Re)define process
Do
Act
•
•
•
•
•
Check
•
•
•
•
Define improvements
Get comparative data
Set goals
Apply improvements
5. Human resource focus
• HR Organization
– Matrixed between functional & IPT leads
– Functional spheres of expertise mapped to
processes; should overlap with others
• Communications tools
– Human nodes are decision makers in net
centric operations
– e-mail, PIM collaboration, IM, & other
infrastructure
• Management & Technical Proficiency
– Representation in industrial consortiums,
conferences
Examples:
6. Process management
•
•
•
•
•
Online configuration-controlled process docs
Store and employ best practices
Change board
Continuous improvement
Example: Standards process (RFC, sample
implementation, adoption, certification)
• Example: CMMI continuous improvement of
regulations, standards, deployed hardware,
software updates
7. Business results
• standard/proprietary format acceptance,
adaptation, rejection
• market growth / market share
• trouble tickets, incompatibility reports
• adherence to evolution plan
Vision for tomorrow
• Few global standards
• aligned measurements
– industry wide application
– allowing benchmarking
– capability to tailor to cover specific needs
– open
• supporting business excellence
• Future of Telcom Industry is on Services
• A services company is built on its reputation...
Service Quality
“Top 10” Lessons learned
1. Leadership Commitment
- Unshakable commitment is critical to success- Create a
vision and values statement
2. Cross-functional teamwork and benefits
- Cross-functional teamwork in tackling the white
spaces
3. Consistent communications and information
- Took great pain to explain
- Use organizational primes to close gaps identified
through Gap Analysis
4. Pride
- A lot of work and a lot of fun
“Top 10” Lessons learned
5. Focus on what you do
- Organizational readiness must reflect what you
actually do otherwise everything will fall apart under
intense scrutiny
6. Learning and leveraging best practices
- Huge learning opportunity - Develop Training
requirements and schedule
7. Focus on linkages
- Focus on individual categories is not enough
8. Demonstrated Results
- Maturity and performance of deployed processes
MUST yield demonstrated results over time
“Top 10” Lessons learned
9. Select a total quality management model
- Integrate strategic quality goals into the corporate
strategic planning process, develop an organization
structure to implement it, establish a design team to
tailor quality process implementation and prepare a
communications plan for quality.
10. Constructive dissatisfaction & continuous improvement
- The biggest and most consistent source of
improvement is driving an ongoing constructive
dissatisfaction of our current performance and a
passion for continuous improvement. Benchmark
operations against world class quality companies.
How to ensure lasting change
•
•
•
•
•
•
•
A committed unwavering and highly visible leader
a well articulated vision, values and business focus
a strategic emphasis on direction and education
personal responsibility and accountability
an accurate, reliable and timely measurement system
effective means of communication
a systematic way of designing, implementing and
leading future changes
• a commitment to be persistent and flexible based
upon what the environment dictates
Links/references
•
•
•
•
•
•
2004 Baldrige National Quality Program Criteria for Performance Excellence
http://baldrige.nist.gov/PDF_files/2004_Business_Criteria.pdf
Zhang, Gunagming; Quality Management in Systems, The Commercial Press,
1998
Draft ITU-T Recommendation X.805 (Formerly X.css), Security architecture for
systems providing end-to-end communications
http://www.ietf.org/IESG/LIAISON/itut-sg17-ls-x805-end2endcommunications.pdf
QuEST Forum (http://www.questforum.com
AT&T Batting 1000 (ISBN 0-932764-23-1)
Juran, Joseph M.; Blanton, Godfrey A.; Hoogstoel, Robert E.; Schilling, Edward
G., Juran’s Quality Handbook, Fifth Edition, McGraw-Hill, 1998.
Thanks for the
attention
Q&A