Vodafone ICT Operating Model Transformation

Vodafone asked Voco to develop and lead a programme to transform its operating model for IT services so it could respond to the market more quickly, bring key IP back in house, and reduce cost.

Vodafone New Zealand provides telecommunications services, including mobile, broadband, data and TV services, to 2.3 million New Zealanders.

Challenge

Vodafone’s rapid growth coupled with the changes to the market caused by the restructuring of the telecoms industry in 2010 and 2011 had resulted in an internal ICT department that was costly and out of step with the needs of the business. A mix of in-house and outsourced functions had evolved as required, rather than by design, over the years. Vodafone now needed to respond to the market more quickly and cost-effectively than it was able to. Taking cost out, a rebalance of the functional responsibilities, and repatriation of intellectual property were key objectives.

Solution

Vodafone’s aggressive BAU programme meant the company didn’t have the resource to handle transformational change of this magnitude in-house.(It affected all parts of the IT ecosystem). Voco set up and lead the transformation programme to drive a step change of Vodafone’s operating model. This significant change programme included sourcing strategy, organisation design, re-engineering of infrastructure and application management sourcing contracts, and knowledge transfer/skills development.

Voco:

• Led development of the programme business case, managed the establishment of the overall programme, the project’s governance and communications, and looked after the financials.
• Worked with Vodafone’s supply chain management to scope and source services through formal tenders and contract negotiation.
• Oversaw parallel execution of multiple transition projects across a number of IT domains involving organisation change and formal knowledge transfer.
• Worked with Vodafone’s IT management to bed in the new operating model.

Results

The cost of IT reduced in the order of 30% across the board. The organisation’s responsiveness increased radically, allowing Vodafone to more quickly and effectively execute new projects. Key IP that had been leaked into the market through historical outsource agreements was repatriated and the company’s dependence on external organisations was reduced. Vodafone is now in control of the key aspects of its ICT strategy.

Voco’s intervention came at a time when market changes were causing margins to be eroded. The disciplined approach Voco brought to the partnership during the transformation project challenged Vodafone’s culture and resulted in new and beneficial ways of working.