MSFT: The 'Surface' may be irrelevant, but is this the Beginning of the End for Microsoft?

Is the Microsoft Surface "too little, too late" or another Big Play that will crush the competition?
It is only, as Android devices are, similar to the iPad in design, features, construction and price, not a "must have" device.


Security: The Desktop Wars are over

Comments back from a friend on an idea I was toying with for security on PC's.

It seems the Desktop Wars are over and I need to embrace the New World Order:
 Smartphones, Tablets, Mobile-Devices have changed the problems and our thinking.


TLS: Sol Trujillo's Telstra legacy

Two views of the same events, how Telstra performed under Sol Trujillo and the three friends he brought with him: Greg Winn, Bill Stewart and Phil Burgess.

Sol's own biography describes his triumph at Telstra (ASX:TLS):
Sol served most recently as CEO of Telstra Corporation, Australia’s largest media-communications enterprise, where he completed the privatization of a previously government-owned monopoly and led the transformation of a traditional telecommunications utility into an integrated media-communications company – including telephone, CATV, wireless, directories, advertising, online trading, and the world’s largest, fastest, and most advanced mobile internet.
And summarises his achievements at Telstra as:
  • Privatized a previously government-owned telecommunications ultility.
  • Built an integrated media-communications company with CATV, Internet, directories, phone, and satellite.
  • Built the world’s largest, fastest, most advanced mobile Internet – a high-speed wireless 3G network.
  • Achieved highest user and revenue growth in the industry.
  • Grew average revenue per user (ARPU) by approximately 15 percent and data ARPU by more than 200 percent.
  • Created Hong Kong’s largest mobile business.
  • Changed the company’s focus from products to the customer experience.
Sol's wikipedia entry reports his time at Telstra as:
He was appointed Telstra's chief executive officer on July 1, 2005.

During the period of Trujillo's tenure, Telstra's share price underperformed the market by around twenty percent, losing over $25 billion in value while customer complaints rose 300 percent.

Major factors in the company's share price decline were the global financial crisis of 2008–2009 and being disqualified for submitting a non-compliant bid to the National Broadband Network tender issued by the Rudd Government.

On February 25, 2009, Trujillo announced he would stand down as Telstra's CEO on June 30, and return to the United States with his family. On May 19, 2009, Trujillo left Telstra and shortly after returned to the US.
'Crikey' described Sol's legacy as 'a shambles' as ambitious projects didn't deliver promised benefits, revenues fell short of projections and Telstra acquired a reputation for abysmal customer-service:
Exactly why Trujillo was paid so much to deliver so little remains a mystery to all except the Telstra Remuneration Committee. Trujillo was already a very rich man before arriving in Australia, having been paid a US$72 million golden handshake by US West after leading the company into an ill-fated merger with Qwest.

It isn’t only be Telstra shareholders who have rights to be aggrieved at Trujillo’s remuneration. Former CEO, Ziggy Switkowski who presided over a company which made similar profits and employed far more people than Trujillo’s Telstra was paid only $1.65 million in 2000, rising to $6.3 million in 2005 (which included a $2 million termination payment). Trujillo’s local replacement, David Thodey, is receiving fixed remuneration of $2 million, 33% less than Trujillo’s base pay.

Hiring expensive, celebrity CEOs never seems to deliver solid returns for shareholders. It’s a shame no one told the Telstra board in 2005.
How the Stock Market valued Telstra:

Sol doesn't mention the share price collapsing under his reign and  that slide continuing to nearly half his starting price ($2.60). Signing the NBN agreements has consolidated a share price recovery this year.
  • 28-Nov-1997: $3.50 [$3.30 issue price for 'T1']
  • 01-Oct-1999: $8.00 [$7.40 issue price for 'T2']
  • 17-Nov-2006: $3.75 [$3.60 issue price for 'T3']
  • 01-Feb-1999: $9.15 [peak]
  • 07-May-1999: $7.36 [low for 1999]
  • 20-Jul-1999: $8.95 [peak]
  • 31-Dec-1997: $4.11
  • 31-Dec-1998: $7.63
  • 31-Dec-1999: $8.28
  • 05-Jan-2000: $8.00
  • 01-Jan-2001: $6.73
  • 07-Jan-2002: $5.52
  • 01-Jan-2003: $4.41
  • 05-Jan-2004: $4.84
  • 03-Jan-2005: $4.91
  • 04-Jan-2006: $4.06
  • 02-Jan-2007: $4.12
  • 03-Jan-2008: $4.71
  • 05-Jan-2009: $3.70
  • 04-Jan-2010: $3.45
  • 05-Jan-2011: $2.79
  • 16-Mar-2011: $2.60 [low]
  • 02-Jan-2012: $3.33
  • 03-Aug-2012, $4.02 [peak in 2012]
  • 05-Oct-2012: $3.95 [last close]
  • 01-Jul-2005: $5.02 [Trujillo becomes CEO]
  • 26-Jun-2009: $3.82 [Trujillo leaves]
  • 28-Feb-2012: $3.26 [ACCC approves Structural Separation Understanding]
  • 07-Mar-2012: $3.23 [Definitive Agreements in force]


Unringing the Bell: Impact of IT systems on Large Business Survival

I've posited that Telstra will be severely challenged within 15 years due to Structural Change within their Industry. They aren't fast or agile enough to adapt to the new world..

What are the factors that will prevent them from adapting? My top two:
  • Management Culture
  • IT Infrastructure
An underlying problem is that we don't have language or metrics to describe and quantify the many important aspects of management. In Physics and Engineering we have many concepts and terms that are measurable to great precision. The importance of those is shown by the materials revolution over the last 100 years. For a tour de force on the topic, a book that's been in print for 45 years: The New Science of Strong Materials.

Whilst "Management" and descriptions and theories about it has become an increasingly large field of study, we don't have a "Science of Management" with precisely defined and measurable terms.

This is crucially important when ownership (shareholders) and control (managers) is separated. The owners have no nuanced, standardised measures to evaluate the most critical part of the business: management. All we've got is the Accounting Standard Reports provided in Annual Reports. This is far from enough to make informed decisions on a business' future prospects.

I can't detail or quantify the many problems of Telstra's Management Culture, just waive my hands and say "it's the vibe". E.g. they not only don't do Customer Service well, they prioritise short-term cost-savings above good service and seem to go to great lengths to not resolve customer faults, at least in some areas.

Management is about doing what's important consistently well, doing what has to be done well enough and not doing at all the things that don't need to be done. [And avoiding entirely the things that should never be done.]

My Professional expertise is in IT Infrastructure. I hold a contrary view to the mainstream Management view of "IT is a Cost Centre". IT provides automated Business Processes, like employees directly responsible for all the Business Revenues: IT is a Profit Centre, not Cost Centre.

We've already seen businesses failure due to their failed I.T. systems: One.Tel is a shining example.

IT Infrastructure has, for the last two decades at least, constrained business mergers. If I recall correctly, the St. George-Westpac merger was cancelled twice due to "incompatible IT systems". Not sure how they solved that in the end.

Westpac itself is notorious for a decade long project, CS90, that was cancelled in December 1990. It was meant to be the ultimate Banking System (an 'ERP') that IBM would resell around the world for them. It was consuming 5-10% of Westpac's operational revenue.

The $10B Telstra "IT Transformation" under Greg Winn ran for around 5 years with the intention of reducing 1500 systems to 300. It failed to meet its targets and went live in 2009 with the 30% most valuable customers not migrated [from my Case Study evidence, now full of migration errors.]

The point: large businesses are inextricably intertwined with their IT Systems - they are part of the Business DNA and essential to the Business Differentiation: What we do differently that people value.

Too often IT Systems are allowed to "grow like topsy" and are never rationalised or reorganised, presumably because no immediate savings or value can be demonstrated, but mostly because nobody is responsible for everything and ensuring IT Systems are well maintained and suitable.

Leading to "Big Bang" projects like Telstra embracing of off-the-shelf ERP and CRM systems to resolve the mess. Inevitably they find that things are much more complex and intertwined than they knew, not the least because they have no correct, current System Maps and the whole was never designed or planned, it just happened. All of which suggests Management asleep at the wheel.

It will probably take Telstra 10 years to get staff trained, most, not all, data corrected in their new systems and workaround established to cater for what the new systems don't do.

But what will it be left with then? Will those systems be nimble, quick and responsive or big, cumbersome and so hard to change as to be effectively frozen?

Young, small companies start small and add functions as needed: the I.T. equivalent of "greenfields".

They don't carry of a legacy or mindset of "we have to cope with everyone and everything".

This is the commercial advantage small ISP's had over Telstra: no past, no baggage, just simple effective systems.

This will be the problem that Telstra will have to face again in 2020 as Retail Providers using the NBN challenge it. Telstra knows the pain, cost and delay in redoing their I.T. Systems, they won't be going there again anytime soon.

This is a generic and on-going challenge for all successful businesses, including those small, nimble Retail Providers: how to keep I.T. Systems from degrading into an unchangeable morass?

When Data hardens in Organisational Arteries and structures/processes ossify, a major Cardiac event will follow... More of the Same cannot fix the problems, radical rethinking is needed.

In an increasingly automated world, a problem looms for every large business: what happens to the IT Systems when you downsize?

You get to drag the big, bloated corpse of yesterdays organisation along with you. It never gets better with age...

It's easy to lay-off staff and "reorganise", but I've never heard of any organisation looking to make commensurate simplifications to their I.T. systems.

I suspect that Large Business who aren't consciously and deliberately cleaning-up and refreshing their I.T. Systems will ultimately fail due to the complexity, inflexibility and inadequacy of their Legacy Systems.

You can lay off Staff and cut whole Departments, but where do you start with the weeds that permeate your whole organisation and choke the life out of it?

Once built, it seems you can't "Unring the Bell" of legacy I.T. systems, you're stuck with them and they define what you can do, while smaller companies whizz past you on their way to Market Domination and being strangled by their Legacy systems.

Jerry Gregoire as CIO of Dell Computers in 1999 talked about how he tackled this problem - and won.
When he joined Dell, there was a massive ERP project underway, "One System To Rule Them All". It was late, over-budget and failing. His first action was to cancel the project and front the board...

Instead, he moved Dell to a new architecture dubbed "G2", based around a message broker.
It reduces the N*N-1 or N-factorial system interface problem to one...

All every system needs to interact with every other system is one 'message broker' interface.
It comes with a cost - you need infrastructure and rule sets to switch the messages. But at least that's a known, computable cost.

Dell Business Strategy Secrets
An ERP Package for You...and You...and You...and Even You

Telco Customer Service Madness and the NBN

Will Telstra, as it is now, survive to see the NBN contracts end in 35 years?
My view: It won't, not in its current form.

In 2006 I started to write about my concerns for Microsoft's future, giving them 5-6 years before major cracks appeared. They haven't collapsed yet, but Horace Dediu (asymco) has produced a graph that unequivocally shows their rapid decline in whole-sector market share: the quantitative support for my hypothesis.

I didn't understand that when "the pie is rapidly growing", as in technology, companies can survive, even increase sales, whilst their market-share falls off a cliff. The model is IBM post-1980, not Unisys post the 1986 merger of Burroughs and Sperry, with their revenues shrinking by around 10 times.

Telecomms Industry Structural Changes

There are three structural economic changes that Telstra has to master to survive another 15, let alone 35 years:
Telstra have regarded the vertically integrated network as their "birthright", operated under the "Traditional" Telco Business Model ("what the market will bear" not "cost plus margin") and relied on captive markets. Once they could claim "Engineering Excellence" as a counter to outrageous Customer Service, but not so for the last 2 decades. Their management mindset must change to accept current conditions, or with the NBN, they will "lose the farm".

All these "pillars" of their business are being shattered, first by Internet Everywhere, by the NBN removing their customer lock-in and an increasing number of Technology Businesses that "get" Apple's insight and innovation: The User/Customer is all important for your Business.

What Telstra should be doing to undo the resulting Brand Damage

Below is a case study that Telstra should deeply investigate as it encapsulates most of their challenges/deficiencies and could be used as an on-going Reference for Change, but why would they?

In an ideal world, the centre of the study would have these outcomes:
  • A personal meeting with the Head of Telstra for the State.
  • An apology from him, a guarantee it would never happen again and his personal phone number if further problems arose.
  • An audit of all records for their services and accounts to correct all errors.
  • A written account of:
    • Exactly what went wrong,
    • Why it couldn't be fixed, and
    • Why it won't recur.
  • An offer of compensation for the non-supply of service, for the hours of customer time wasted on the phone and waiting and an ex-gratia payment for the "pain and suffering" caused.
Does any of that sound "over the top" to you?

Consider for a moment, "What would Richard Branson do?". If he was in the country, he'd personally see them, otherwise it would be someone very senior and it would be done very quickly. Stories about his interventions are legion, this is not wild speculation.

If you think Branson and his Virgin Empire are "off with the pixies" and not in the real-world of Big Bureaucracies, mass workforces and challenging business environment, consider the page, "Turn Complaining Customers into Advocates" by The Royal Mail, one of the oldest communications companies on the planet, working under one of the most demanding Industrial Relations systems, riven by Unions and staffed by British Workers, renowned for their lack of customer empathy and poor work-ethic.

If The Royal Mail management understands Customer Complaints are opportunities to both fix your business processes and to convert a hostile customer who'll damage your brand into a strong Brand Ambassador for you, then why don't Telstra?
Don't they understand the rules of Customer Service or read the same well known management books?

What Telstra says it does

In the 2005 Telstra presentation, released to the ASX, supporting their 20,000 node 12Mbps ADSL2 network, I was very impressed with their guiding principles (p3), but those are nowhere to be seen in this case:
  • Principle #1: Do it once
    • Right first time, every time
    • Simplify, standardise, focus
    • Less of everything – fewer products, platforms, applications, processes, vendors
    • Capture the benefits of scale through focus
  • Principle #2: Do it right for the customer
    • Invest against the things customers value
  • Principle #3: Do it in an integrated way
    • One Factory
    • End to end approach
    • Whole greater than the parts
  • Principle #4: Do it at the lowest unit cost
    • Scalable
    • Costs grow slower than revenues and volumes
    • Limited manual intervention
Case Study

The facts of the case study and an analysis of causative Systemic Failures are in a previous post.
Psychological Dimension: Stirring strong customer abreactions

Feelings of Frustration, Powerlessness and Agitation in response to poor Customer Service aren't a "minor annoyance" or idiosyncratic: there is some very deep human psychology involved.

The positive effects of Goal Attainment means the inverse, preventing people from achieving goals, is devastating, more so for high-performing individuals as here. If intermixed with multiple events setting up false hopes and then dashing them, the customer response is even more profound.

Treating customers badly, especially when you know about it, is really bad for business. The cumulative Brand Damage may not be curable. It will cause massive customer revolt and backlash when they have reasonable service substitutes available, such as from the NBN.

Business Consequences

This whole episode was preventable: it was clearly an internal fault within Telstra systems.
It wasn't a user-error (the Client did nothing), it wasn't a hardware, connection, patching or line fault nor a an accounting or software error.

My speculation is that Telstra has significant service database errors since the $10B 2005 (1st phase live in 2007) "IT Transformation Project" led by Greg Winn, one of Sol's "Three Amigos" whom returned to the USA with full saddle-bags. It seems complex, high-value customers like the Client were never catered for, from the 2009 article on the project over-running by $200MM (2%):
Thodey said 9.2 million customers have moved onto Telstra's new billing and CRM systems, which represented over 70 percent of the carrier's customer base.
The final thirty percent were "multi-product holding customers" he said - referring to those Telstra customers that use more than one of the carrier's services.
The fault had something to do with a modem attachment being incorrectly setup in the database, possibly by an automatic provisioning system attached to the order/fulfilment system.

The ARPU for the single service is $60-$80/month. Total revenue on this account, would be $1-2,000/month. Gross Margin must be 30-60%, Net Margin more like 10-15%??

This whole episode put at risk $10-15,000/year on-going revenue for a $10/month Net Margin. I'm sure Telstra won't bother to detail and account for the cost of the event. Why would they? The fault is fixed.

Over the six week period, there must have been:
  • 30-50 phone calls
  • 20 staff directly involved and 10-20 indirectly or in 'backroom'.
  • 50-100 hours of phone calls [$50/hour?]
  • 4-6 site visits, each 1 hour or more [$150+/hour]
  • 10-40 hours of marketing and engineering effort [$100+/hour]
This preventable error has cost Telstra close to $10,000 for under a $100/year return. They can never make their money back. They are also quite likely to lose all of the Clients business, forever, if they don't directly attempt to follow The Royal Mail's approach and win them back.

As a shareholder, the Client was frustrated that the business was wasting money so prolifically, yet the organisation resisted all efforts to hear this news.

The worst aspect is that Telstra seems oblivious to any need to learn from this affair and follow their own Principles espoused in 2005, "Do it once, Do it right for the customer and Do it in an integrated way".

  1. If faults aren't covered by the (telephony) Customer Service Guarantee, then Telstra behave very poorly towards Customers.
  2. The Telstra Customer Service and Complaints fails dismally with complex issues.
    • There appears to be no recognition of "process faults" or identification of "not previously seen" faults.
    • There appears to be no fault escalation process.
  3. Shareholders are not treated better than anyone else. A marketing opportunity to improve shareholder relations going begging.
  4. Busy people's time is worth a lot to them, yet Telstra fail to acknowledge this nor provide ways to bring more certainty to site visits. Telstra could help itself and customers by:
    • Having registered 'home sitters' that customers could use to allow them to carry on with their lives, or
    • Telstra could charge extra for shorter attendance windows (2 hours, 1 hours, 30 mins). If this is allowed by the ACCC and Telco Regulations, it would earn them considerable money and by only reordering technician visits within a single day, not affect service calls.
  5. Telstra seems not to have a culture of Review Incidents, Learn from Mistakes to intentionally Improve Service, Profits and Productivity.
    • Telstra has a major improvement opportunity here and seems to be deliberately discarding it, being intent on destroying customer goodwill and shareholder value.

Within 10 years, NBN-Co has planned to displace most of Telstra's wholesale copper network with fibre.

By then, all Retail Providers that can provide good Customer Service will beat Telstra in the marketplace. We are likely to see many small retailers who can offer good, local service, like ISP's, as well as a few large existing companies that compete solely on price,

The NBN seems to be the "magic bullet" that will allow customers to change and release decades of pent-up frustration with Telstra and their oligarchy and monopolistic mindset. The Internet and smartphones/mobile devices have changed the rules of the Telecommunications forever.

If Telstra doesn't learn the lessons of Great Customer Service practiced by the likes of Richard Branson, their only competitive asset will be their 4G mobile network. Which, because they haven't allowed competitors open access via third-party roaming, and forced them to overbuild networks (like HFC Cable TV) is of very little value.

Unlike Microsoft, Telstra is in a Mature Market with moderate, but non-zero, barriers to entry. In a low-growth market like Australia, its revenues will be "eaten" by others, it will follow the Unisys path downhill, but like Unisys, is likely to remain as a brand or engineering operation, though nothing like they are now.

In the same way that I viewed Microsoft as entering a challenging period, I think Telstra is as well, though I don't have a way to estimate or forecast the timeline.

My father spent his entire working life within PMG/ABC/Telecomm/Telstra and it was one of Australia's finest achievements for many decades. I doubt he would be proud of what they've become and I am saddened at their fall from grace.


Telco Customer Service Madness: Case Study

Will Telstra, as it is now, survive to see the NBN contracts end in 35 years?
My view: It won't, not in its current form because of multiple failures within the Organisation.

Below is a case study that Telstra should deeply investigate as it encapsulates most of their challenges/deficiencies and could be used as an on-going Reference for Change, but why would they?

In an ideal world, the centre of the study would have these outcomes:
  • A personal meeting with the Head of Telstra for the State.
  • An apology from him, a guarantee it would never happen again and his personal phone number if further problems arose.
  • A desk audit of all records for their services and accounts to correct all errors.
  • A written account of:
    • Exactly what went wrong,
    • Why it couldn't be fixed, and
    • Why it won't recur.
  • An offer of compensation for the non-supply of service, for the hours of customer time wasted on the phone and waiting and an ex-gratia payment for the "pain and suffering" caused.
Case Study

The facts of the case study are:
  • Customer, 'A', has on their account multiple individuals, multiple service addresses, and multiple services for each individual and service address (mobiles, landlines, ADSL, Cable TV, Cable Internet, ...).
    • Whilst these are all domestic services, Telstra regularly deals with this complexity for SME's.
    • They are a "high-value" Telstra customer. This seemed irrelevant in the process.
    • Unsure if all individuals and services are billed together or by separate, linked accounts.
  • 'A' is also a Telstra shareholder, which seems to have been irrelevant in the process.
  • 'A' is highly educated, has run businesses and is well conversant with modern PC's and networking, relying on it for work and private life.
    • There are multiple family members who are quite I.T. literate and provide in-home I.T. support and troubleshooting.
  • A new Cable Internet service was ordered by 'C' in June. (date?)
    • The modem was never delivered.
    • When queried at the Telstra shop, customers were advised "the order had been cancelled".
    • The customers had not cancelled the order, nor been advised of that action.
  • 'A' had a working Cable Internet service that then became intermittent. It met their needs and wasn't reported as a fault due to very poor past customer experiences.
    • "Not wholly broken, don't tempt fate" was the reasoning.
  • 'B', another of the service holders, took it on themselves to report the fault to Telstra.
  • The first technician attended on 23rd-August, intending to change the cable modem.
    • They were unable to rectify the fault, did not replace the cable modem as it was serviceable and left saying "there is an error", which at some point changed to "an activation error".
    • The replacement cable modem was left on-site, unconnected.
    • 'A' was told the install failed because of "Error Code CCP0012",  and Tech suggested that the system “thought” there was already a modem on order.
    • Technician advised 'A' to call the general BigPond Enquires number (137 663), quote the Error Code, and the fault would be fixed.
  • Multiple technician attendances were booked:
    • Technician did not attend, did not phone customer. More than once? (date?)
    • Technician sent to wrong address, an old service address on the account. (17-Sep-2012).
    • Technician 'M' attended (19-Sep-2012), gave customer personal contact number and spent considerable time on-site and continued to work at resolving the fault.
      • Possibly instrumental and worthy of commendation.
    • 'M' followed-up a week later (25-Sep-2012) saying:
      • TRG (Technical Response Group?) were aware of the problem,
      • other customers (in the area, state, nationally?) were affected and
      • TRG didn't know when or if the Error Code could/would be cleared.
  • There were a large number of unsatisfactory and long (1-4 hour) calls to the "Help Desk". e.g. 18-Sep-2012 following Technician no-show.
    • 'A' was repeatedly shunted between departments (Accounting, Technical, ...), with no-one taking responsibility. The call finally dropped whilst 'on-hold'.
    • No evidence on subsequent calls of any knowledge of previous calls. Every call was a return to the "pass the parcel" with no person/department taking responsibility.
  • A Telstra complaint was lodged (04-Sep-2012), 'A' was given a "trouble ticket" number and told to contact Technical Support (number supplied). [[Two people assigned to the case (?), with promises to call-back within 24 hours.]]
    • Tech Support called (11-Sep-2012), on-site visit booked for following week (17-Sep).
    • Being able to speak to someone with "English as a First Language" had been an immense relief to 'A'. Finally their concerns were noted and seemed to be taken seriously.
    • Neither person called 'A' back within 24 hours.
    • When contacted, the complaints folk said they'd tried to contact 'A' using an incorrect phone number, one 'A' had never held. No apology was made for this. The complaints people could not correct the database error.
      • Having the number corrected took a good deal of time and effort in itself. Multiple departments claimed "can't do it" or "not my area".
    • 'A's mobile phone number has been registered with Telstra as their primary contact point for more than a decade. Why were any of the databases incorrect?
  • After this (mid-late Sep-2012?) a very confident Telstra employee rang and identified themselves as "Level 3 support" and embarked on a very long and trying support call. They reassured 'A' that they could and would fix the fault.
    • Under instruction, the replacement modem was connected by 'A' and failed to work.
    • When the original modem was reconnected, it failed to work as well.
      • The service was now non-operational and the support person left it that way.
      • No apology or explanation was offered.
      • The "support" person did not book a recall or ever call back.
    • 'A' was nonplussed: Telstra had oversold their competency and destroyed a usable service without progressing resolution of the fault.
  • 'A' visited a local Telstra Shop (26-Sep-2012). Wished:
    • a credit for the time the service was not provided, and
    • to cancel the cable internet service.
    • 'A' was told that because of the technician visit arranged for the next day, the service could not be cancelled. The Telstra Shop staff were not interested that the fault had not been fixed in a month.
    • 'A' had wished to speak, as a shareholder, to someone senior about costs to the business for the fault. The manager was not present, no meeting was organised.
    • 'A'  had wished to request checking and correct all related account and service records. This was not organised either.
  • 'A' purchased a Telstra prepaid wireless modem from Australia Post (26 or 27-Sep-2012), unable to get working after spending time with Call Centre. Device returned. (date?)
  • 'A' bought a Vodafone prepaid wireless modem from Australia Post (26 or 27-Sep-2012) and after a few false starts, got it working and regained their Internet service.
  • Telstra Complaints officer called next day (27-Sep-2012) to say "we're working on it".
  • Telstra sent a standard e-mail survey following up on the prepaid wireless modem (bought 27-Sep-2012).
    • 'A' detailed their disappointment in Telstra service and invited them to call.
  • (02-Oct-2012) A Melbourne based Customer Service rep.. 'R', called 'A' about the wireless modem and the on-going fault. 'R' said they would ring the next day.
  • (02-Oct-2012) The Teltra Complaints Officier assigned to 'A' called saying another person in their section would contact 'A' later that morning.
    • No call was received.
    • 'A' left messages that afternoon and the next morning. These were not returned.
  • (03-Oct-2012) 'R' rang 'A' in a conference call including a technician , 'J'  in Melbourne. 'R' had to leave the call early, with 'J' spending an hour on the phone with 'A', attempting "a manual override" of the Error Code. This required long waits and providing the hardware address of the original modem. This had to be read by 'A', 'J' did not seem to have this on record.
    • This over-ride appeared successul at the time.
    • The connection failed overnight.
    • It seems to be working today.
    • How will 'A' know the fault has been cleared?
      • They currently believe the fault is rectified.
    • Why wasn't this done on, or just after, the first site visit, six weeks earlier?
      • Why the long wait and run-around?
  • After the apparent resolution, 'A' had multiple calls from people within Telstra, all very excited the fault had been fixed.
    • None offered an apology or any compensation, some seemed to claim direct credit.
    • None offered an explanation of either the Technical fault within their systems, nor what had gone wrong with internal Telstra processes and automatic systems to cause the multiple faults suffered.
    • None offered a "magic phrase" to be repeated to Technicians and Help Desk about the fault should it recur.
    • No on-going "trouble ticket" number was given to 'A', should the fault recur.
    • No-one offered a shortcut for service if the fault recurred shortly.
  • After the overnight service disruption, it wasn't clear if one of the other Telstra personnel had undone the "manual override" with an individual attempt to rectify the fault they'd claimed.
    • There was no evidence of good co-ordination amongst the various Telstra "Silos".
  • 'A' had concluded on 3 October, that  Error Code CCP0012, is not a technical problem, nor is it an accounting problem, but an Activation error problem and simply a code that needs to be removed from the Telstra system to allow the modem to connect and activate.
  • 'A' raised a complaint with the TIO (Telecommunications Industry Ombudsman) (03-Oct-2012) sending their records of the incident.
  • 'A' had been originally told "there is construction work in your area, a cable may have been cut". This seems to have been a deliberate, misleading statement.
  • Telstra did not give any hint that after a month:
    • That the fault had been escalated
    • That for failing to provide the service, they would rebate 'A' the service charge.
    • No offer was made to supply a temporary service, such as a 3G USB modem.
  • 'A' had had to cancel a number of important business and personal meetings to wait aimlessly for a Telstra technician to attend on multiple occasions.
    • No option for an increased priority owing to the long-standing nature and difficultly of the fault was offered.
    • Telstra would never offer better than a 4-hour window for any attendance. They never scheduled 'A' at the beginning of the window, always near the end, or didn't attend.
Psychological Dimension: Induced Pain and Suffering

It's also worth noting that completely out of character, 'A' suffered extreme agitation, frustation and desperation at both the impenetrable wall of "service" and the inability to be heard, treated respectfully and to get a resolution to a service that had become necessary for conducting their business and life.

This isn't a "minor annoyance" or idiosyncratic: there is some very deep human psychology involved.

There's a branch of psychological therapy that relies on our limbic systems' (the cingulate nucleus) response to attaining goals: pre- and post-goal attainment happiness, two very distinct and important phases.

For all humans, striving and overcoming challenges is innate and core to our psychological well-being.

Consistently setting goals and achieving them isn't just "nice", but necessary, for our continued happiness and psychological well-being. Goal Attainment forms the basis of various powerful approaches addressing Depression and other conditions.

Knowingly and uncaringly forcing people into powerlessness and frustration would, in an OH&S workplace setting, be illegal: employers are required in Australia to provide a Safe Workplace. Deliberately causing employees harm, physical, emotional or psychological, is illegal and attracts civil penalties, as well as curative support for those affected.

I'm not sure if current OH&S law can be extended to customers. If so, companies like Telstra which seemingly have a policy and strategy of blocking communications and frustrating customers, would face considerable penalties...

The positive effects of Goal Attainment means the inverse, preventing people from achieving goals, is devastating, more so for high-performing individuals like 'A'. It can be categorised as "cruel and unusual" treatment, especially if intermixed with multiple events setting up false hopes and then dashing them. The human response in this case is even more profound and damaging.

Systemic Failures within Telstra

This whole adventure was unnecessary and presumably preventable: some automatic system failed when a new Cable Modem was ordered and incorrect configuration data uploaded to an operational system, without detection, audit or correction. Who has been charged with finding the root cause?

The final fix, a "manual override", should at worst, have been done the next day by the technician 'R' in Melbourne, prompted by the call from 'A'.

If Telstra's fault resolution system had worked properly, the fault would have been automatically passed to 'R's section as soon as the first technician recorded the Error Code.

  • Telstra has no fault escalation procedures, conclusively demonstrated here.
    • After any fault has been open/unresolved for two weeks, it should have been escalated to the Head of Operations for the State.
    • Any fault that is due to an internal process failure, like this, should be immediately escalated to senior officers with full cross-organisational authority and access to diagnose the root cause and initiate permanent prevention measures.
    • Own-goal process faults like these need to be reviewed, tracked and addressed by the CEO and their Senior Management Team.
      • They threaten the viability of the whole business and sufficient Responsibility and Authority only comes together at the top of all Silos, the CEO and their team.
  • High-value multi-service clients are treated worse than low-value customers: there are demonstrated errors in Service and CRM databases.
    • There is a major deficiency within Telstra: nobody is checking and correcting these service records.
      • After the "IT Transformation" project, it was known that high-value customers could not be automatically transferred.
      • To have stale data in multiple locations (service address, customer contact) says the database is seriously compromised, leading to many costly preventable errors.
    • Who is responsible and accountable for Data Quality, and do they have the Authority, will and budget to force records to be corrected?
      • This appears to be a major organisational failing and oversight.
  • Correcting faults in Telstra records is onerous and time consuming for Customers, it should be simple and easy.
    • It cannot be done in real-time whilst speaking to Service Reps, or
    • Service Reps are poorly trained or refuse to execute their tasks.
  • Telstra shareholders are treated no better than anyone else.
    • This is a marketing opportunity going begging to create engaged and supportive shareholders. Telstra has one of the largest 'Mom and Pop' share registers.
      • Service discounts, special offers and loyalty bonuses are possible.
      • Special service and access arrangements for shareholders would encourage them to give all their business and that of their immediate families to Telstra.
  • Telstra BigPond seems to offer nothing like the Telephony Customer Service Guarantee (CSG).
    • The Internet is a vital lifeline personally, professionally and in business for almost all Telstra customers now.
    • Decent Service Guarantees would match Consumer expectations and usage, as well as provide Product Differentiation.
  • Telstra's Offshore "Help Desk" with ESL speakers are counter-productive, especially for complex, long-running faults.
    • Whilst possibly tolerable for simple tasks and "script driven" data acquisition, they are a Nett Negative Value in this situation and many others. Saving money on Help Desks may be illusory and detrimental to the whole business.
      • Allow Customers to choose more expensive support options:
        • Like Airlines, offer multiple levels of pay-for-service, allowing the business to maximise profits by offering multiple price-points. (No "money left on the table").
        • Higher cost support could be automatically included as 'upgrades' for high-value customers, as Banks do.
      • After two calls on the same fault, automatically direct the Customer to a specialist Held Desk with a single person assigned and responsible for achieving Customer Satisfaction.
        • Instead of measuring "time to finish or transfer call", complex calls need to measure "Time until Customer is fully satisfied". Only the Customer can close   complex faults.
  • The Help Desk practice of "pass the parcel" is frustrating to Customers and Counter-productive as it causes significant Brand Damage.
    • Somebody within Telstra needs to be responsible for detecting, monitoring/reporting and preventing this situation.
    • Ideally, the phone system should track customers who are passed around and offer them a "circuit breaker".
  • Making Customers wait on Help Desk queues for hours serves no purpose other than weeding out those with better things to do, prompting them to look for alternate service providers.
    • Long Help Desk delays are an invitation for Customers to Choose Another Carrier, a tactic which would not impress shareholders one iota.
    • Under provisioning Help Desk service staff only serves to reinforce the stereotypical image provided by Lily Tomlin in her "We're the Phone Company" sketches. This is against the best interests of the Business.
    • This reinforces Telstra as a Toxic Brand to Customers. Whilst Customers have no better place to go, they will tolerate it. Given the choice, they will flee, never to return.
    • This is known, preventable Brand Damage at its worst.
  • Complex faults are slow and difficult to solve. This isn't simply a Customer Service and Brand Damage issue, but very expensive to the organisation.
    • This fault cost $5-10,000 more than it should have.
    • We know that this wasn't a one-off and that other Cable Internet subscribers were affected, but their faults weren't resolved.
  • The initial problem, the non-supply of an ordered service, was never addressed.
    • How much business can an organisation deliberately throw away and survive?
    • It seems nobody is directly responsible or accountable for this lost revenue.
  • Telstra, if it wants to engage and retain customers, must never internally cancel a service order without contacting the customer, explaining the situation and offering alternatives, It's an opportunity to "upsell" the client.
  • There is a major fault with the Technician ticket system: The first on-site Technician should not have been able to pass a known, unresolvable fault back to general enquiries.
    • Telstra confirmed that "TRG":
      • knew of the "Error Code CCP0012" fault,
      • that it affected multiple customers,
      • presumably they had no idea of the immediate or root cause, and
      • they had no idea of when they would be able to fix it.
    • In ITIL-speak, this was a Severity One Major Problem, but wasn't classified as such.
      • An appropriate organisational response would've been to establish a war-room comprising the State Heads of Branches and Senior Line-of-Business Managers.
      • Following the successful work-around, all other faults associated with the Problem should've been corrected.
      • Investigations initiated as to the root causes (automatic systems and processes) responsible for the error and means of detecting recurrences and costs of prevention measures.
  • Telstra's Problem Management is either deficient or non-existent.
    • Problems are not Faults, but the cause of one or more Faults.
    • To have a Known Problem not detected by the Fault Ticket Handling system is a major Professional failure that should be explicitly investigated and reviewed.
    • All the Help Desk and Technical Systems should've found an outstanding Problem with "Error Code CCP0012", with a known workaround ("manual over-ride").
      • The systems and processes need Review and correction.
      • A major internal inquiry is needed to uncover the root causes of this meta-failure.
  • Multiple Telstra employees were contacting the Client unbeknownst to one another.
    • This is the compelling reason for a CRM, a "single Client Communication Flow".
    • This definitively failed, either because the CRM was faulty, or it was bypassed or procedures ignored.
      • All of these are cause for deep concern and deserve an inquiry.
  • The inability of the Complaints Officer to progress the issue, or identify it was a Known Unresolved Problem, means their systems and/or processes are deficient or faulty.
    • This is a major problem deserving immediate attention.
  • The fault was only resolved accidentally when a Customer Survey person became involved and somehow was able to refer the fault to a diligent, competent and active Technician.
  • The unidentified "level 3" support person that caused the service to fail entirely should be found and castigated, as should the many service personnel who failed to follow-through on the fault.
    • These actions are consistent with a widespread attitude of "Care Factor: Zero", inimical to resolving faults or preventing faults through good Problem Management.
    • The one Technician who persevered should be found and commended.
  • The consistent lack of apology to the Client, the lack of any offers to provide an alternate service until the service was restored or anyone offering the statutory minimum (under the TPA/CCA) of rebating service charges show a systemic failure in even adequate, not good, Customer Service training and knowledge of legal requirements.
    • At a minimum, this is a systemic Training failure.
    • It indicates that nobody is monitoring, measuring and reporting on general levels of Customer Service and evaluating adequacy of Training.
  • The most critical and over-arching and pervasive Failure is the identification and investigation/analysis of massive cost over-runs on service faults etc:
    • This fault cost the organisation an unnecessary $5-10,000, more than the $100/year service margin could ever return.
    • This will not be an isolated occurrence, many of these will be eating away at Profits and turning away Customers, particularly high-value long-term Clients.
    • This only got resolved through an accidental interaction, the Customer Survey person who bothered to follow-up on the feedback. This bodes very poorly for the future performance on the organisation.
    • By rights, Telstra should have standing reports with automatic escalation:
      • Identify full internal cost to resolve faults and other service issues.
      • Report and escalate excessive fault resolution costs to Senior Management.
      • Mandate Root Cause Analysis  (RCA) of the "Top Ten" faults found in the RCA's.
      • Require the CEO and their Senior Management Team to track all "Top Ten" issues and regularly report to the Board on progress and problems identified.

The irony is that I shouldn't be writing this analysis at all. None of this should've happened in a well-run organisation that cared sufficiently for its Customers.

The tragedy is that Telstra will probably continue "Fat, Dumb and Happy" for the next 10-15 years in blissful ignorance of this piece and then wonder why they are "suddenly" losing Customers, disproportionately their most valuable, at an accelerating rate.


The Klingon Guide to I.T. Management

My mate the DBA, whom I think writes wonderfully, coined the idea of "The Klingon Guide To Management" - not everyone might be pulling in the same direction within an organisation, not all agendas and rules may be stated and overt and those you thought were your friends may be elsewise.

I only recently came across Prof Fred Brooks latest book, "The Design of Design: Essays from a Computer Scientist" (Brooks first described The Mythical Man-Month, "adding more people to a late project only makes it later", when he wrote on the lessons he'd learned being in charge of developing OS/360 for IBM in the early 1960's). He still has useful new insights on Project Management and other Computing/I.T. topics.

Chapter 4 of The Design of Design is titled "Requirements, Sin and Contracts". He lays out nicely the human frailties (even 'sins') that make Real World Project Management much more difficult that the Ideal World assumed in the Rational Theories of Project Management.

  • Clients can be greedy, unreasonable, capricious and not pay or play fairly.
  • The Architect and Designer may have different agendas to each other and not always act in the best interests of the Client when acting as 'agents'.
  • Builders often don't have the commitment to quality, budget and schedule that the Client, Architect and Designer expect or desire.
  • "All Players are honest and truthful and communication amongst them is excellent". Or: Egos never get in the way.
My DBA mate when told this, countered with: "You know what's wrong with ITIL, don't you?"
Q: "What?"
A: .... I can't remember what he said, I was doubled over with laughter, it was so good and so true.

It was along the lines of "Everyone is competent, on the same page, helpful and cares about results".
Nope! Not within a Bulls Roar. Not seen by either of us in any Real-world organisation of more than two people.

It's a nightmare in most I.T. Ops organisations:
  • Big Ego's and on-going vicious internecine wars ("Office Politics") are the norm.
  • Finding Competent or Engaged staff is unusual, finding both in the one person is exceptional.
  • For all those of you who've rung a Help Desk, you understand "Help" has a special meaning within the I.T. Reality Distortion Field, or "It's not Help as we know it, Jim".
  • Recalcitrant Clients, Programmers and Users and Clueless Project Managers are to be expected.
  • Denial and Avoidance and  Blaming, Placating, Appeasing are the normal emotional responses of Management. The more Senior the Manager, usually the more extreme the disconnect with Reality.
  • Project Managers often get "performance bonuses" to motivate them in achieving features, budget and schedule. What you get instead is bullying, intimidation, threats and lies directed at staff and vendors and "snow jobs" for those up the chain. Getting those "bonuses" take precedence over all other Stakeholder Requirements... Which doesn't improve the result for the Client or Organisation.
The People Side of I.T. Ops and Projects overwhelms the Technical. The only saving grace is that I.T. people are usually very poor at Office Politics, so in spite of them, things occasionally happen.

There is a real need for The Klingon Guide to Management, especially in I.T.
I'll keep my fingers crossed for it to be written.

"My enemy's enemy is my friend". Nope! They're both your enemy, destroy them both with all means available! Ahhh, if only I'd known that when a youngster.

An addendum: Another good friend volunteered two things about problems in IT Ops:

  • Are they competent, diligent, helpful and prepared to listen/debate (vs arrogance)?
  • Do they recognise and understand the problem? Are their responses considered and supported?
    • Not acknowledging problems, being defensive, blocking or deflecting ("we didn't change anything. What did you do?") are classic responses we've seen in IT Ops when asking others to repair services under their control.
    • Is the solution or facility they offer or want backed by need or evidence? Very often what gets done comes down to a battle of wills. Confidently asserting you position is what makes you right, not facts and evidence. Evidence based repair and remediation is the exception, not rule.
      • One client I advised chose to ignore my written report and purchase a $1MM "special" package from a vendor - a less than 50% List Price "End of Fin Year" deal. Salesmen do deals to make their quotas, not meet client needs... My recommendation was for a $300,000 system, which they bought within a year for another project.