Celcom expects smoother IT transformation this round, may launch fixed-related services

• IT transformation involves moving from back-end system to front-end system
• Exploring the introduction of fixed-related service this year

FOR many companies, transforming its IT system can be a painful process. It may require moving critical data and processes from one system to another, and sometimes, the journey may not be as smooth as planned.

Celcom Axiata Bhd, a wholly-owned entity of regional telecommunications company Axiata Group Bhd, had a painful IT transformation journey.  

To recap, Celcom embarked on its  IT transformation programme about four years ago. It was a programme undertaken along with with Oracle and Accenture.

During the initial stages, the transformation programme went fairly well. As the journey continues, it started to face a number of systems-related issues -- whereby some of the interfaces from the IT to network equipment have gone wrong.

It was so serious that it resulted in Celcom losing customers and dealers.

While the transformation programme was completed, the company is now embarking on another round of IT transformation programme. The company is planning a capital expenditure of up to RM1.4 billion this year, and part of it will go to the IT transformation programme.  

Just like the previous IT transformation programmes, the current transformation programme will be crucial in determining the company's success and survival in the future. 

"In the current business situation, in many companies, because of the digital impact, you need to really transfer your IT from the back end to the front end," said Celcom chief executive officer Michael Kuehner (pic above) in an interview with Digital News Asia in Kuala Lumpur recently.

"Now, IT is the back end system. In the future, IT is the front end system."

By moving its IT to the front end, Kuehner said that it will allow the company to be more agile, and react faster to changes and customers' needs.

Good news is that it expects the journey - which has already begun and happening in stages - to be smoother than the one the company experienced few years ago. 

"It easy easy to plug on, change out and integrate. For any IT piece you buy now, the maximum depreciation time is one and half years (18 months). It is very fast. Technology changes all the time so you cannot afford to have a system that is static," Kuehner explained.

Key benefits of moving to a front end system

By moving its IT to the front end, it allows Celcom to do something that it has always envisioned -- personalised customer experience.

"Personalised customer experience is a clear requirement of the customer. What this means is essentially shifting the power of decision making, the transparency from yourself to the customers. 

"You tell him (customer) everything he can do, but he decides what he wants. We are moving towards that. To do this, we need the up-to-the-mark, state-of-the-art IT system. That is why the requirement to shift from back to front is absolutely necessary, to interact with millions of individuals," Kuehner said.

May offer fixed-related services this year

A few years ago, Celcom signed a strategic partnership with fixed-line giant Telekom Malaysia Bhd. The partnership basically allows TM to explore the opportunities to offer mobile services (via the mobile virtual network operator model), and for Celcom to offer fixed-broadband services. 

However, until today, Celcom has yet to step into the fixed broadband space in a serious manner.

"In any market now, there is a trend towards fixed mobile convergence and an individual does not want to be restricted by the access he has.

"Malaysia is not at the forefront yet, but it will happen of course. You need to have competitive offer to able to offer that. We are looking into it. I can't talk a lot about it yet, but you will see something," said Kuehner.

Taking Celcom to the next level

Kuehner joined Celcom as CEO on Sept 1, 2016 last year. He succeeds long-serving Celcom CEO Shazalli Ramly. 

Prior to Kuehner joining Celcom, he was the CEO of Robi. While the market dynamics Robi and Celcom faced are complete different, Kuehner stressed the importance of having the right corporate culture.

"From a market perspective, the Robi experience and what we do here (at Celcom) now, is completely different. Robi was a high growth voice market and here is a saturated data market, the most opposite you can imagine. It is more complex when it comes to IT processes because data business is more complex by itself.

"What is important also is the need to have the right company culture to deal with certain situation. A digital culture is real time and it is autonomous, empowered, fast and agile. This is something similar to what we have in Robi. There are some traits we can transfer some learning, depending on the situation," said Kuehner.

However, changing a company's culture is easier said than done and Kuenher understands that very well. 

"This is a long-term process in Celcom. It is the most difficult thing to do because people fell comfortable in their comfort zone. Some people are adverse to change, some will say they will do something, sometimes it is painful as well. You need to change certain habits you have, certain comforts you have, this is never ending, and it will take two years or so," he said.

While it is still in the early days, Kuehner said that he is seeing some positive changes.

"Do I see indication for change? Yes I do. One of the really important topics is to foster open and straight forward communication in the company. My floor visits shows me the atmosphere is different now. Obviously, there has been some changes."

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