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Business Process Outsourcing

KPNs march toward high performance

through business process outsourcing continuesClient backgroundThe former incumbent, KPN is the leading

information and telecommunications provider in

The Netherlands, offering wireline and wireless

telephony, Internet and TV to consumers, and

end-to-end telecommunications and ICT services

to business customers. In Germany and Belgium,

KPN pursues a multi-brand strategy in its mobile

operations and its two companies E-Plus and

BASE together are ranked third in the market.KPN provides wholesale network services to

third parties and operates an efficient Internet

protocol-based infrastructure with global scale

in international wholesale through iBasis.

Business challengeTelecommunications has always been an industry

characterized by continuous change. That pace

picked up even further with the advent of the

Internet, and then mobile technologies. These

technologies fueled a veritable communications

revolution that is radically changing the way thatpeople interact and thus the way that business

works. For a broad-based telecommunications

service provider like KPN, this is a business

environment full of opportunities but, at the

same time, some significant challenges.

One of the key opportunities for KPN is the

growing range of new and profitable services

based on Internet protocol. To position itself in

this rapidly expanding and highly competitive

market, the company needed to build and

maintain higher-bandwidth networks, while

upgrading its systems to support the new

technologies. At the same time, however,

it needed to maintain its focus on existing

customers using traditional technologies.

For KPN, the solution was outsourcing. By

allocating certain processes within its existingportfolio of services, it would be able to manage

its costs more tightly while deploying its own

skilled professionals in the areas of most impact,

creating a much more agile and focused team.

KPN knew that choosing the right business

process outsourcing provider would be crucial

in the success of its strategy. It chose to work

with Accenture based on its in-depth knowledge

of the communications sector, and the Dutch

market in particular. KPN also recognized

that Accentures strong project and program

management skills, coupled with its experiencein outsourcing, was also crucialparticularly as

it decided to move its work offshore. Accenture

is a leader in the BPO market with an extensive

range of methodologies, particularly transition

methodologies, to help ensure a smooth handover

and that ongoing collaboration and service

delivery is constantly improving.

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How Accenture helpedWith the initial contract signed in 2008,

Accenture took over responsibility

for all order intake and engineering

activities (Digistream,ISDN30,Analog

and switching in SDHand VVIS).1 In a

second phase in 2009, customer delivery

and international SDH engineering were

transitioned to the Accenture DeliveryCenter in Manila, the Philippines. These

projects delivered on their promise with

savings of 55 percent as compared

to the 39 percent postulated in the

business case. First-time-right resolution

rose by 10 percent, and in response

customer satisfaction rose by 4 percent.

Based on this success, KPN elected to

continue working with Accenture as

it implemented its strategy of moving

legacy business processes offshore. The

next phases involved order processingfor legacy voice services (PSTN and

ISDN),2 and then handling fallout for

multiplay clients. Multiplay refers to

those clients using multiple services

provided by KPN such as Internet,

telephony via voice over Internet

Protocol (VoIP) and television, and

Accentures remit is to resolve those

orders that cannot be provisioned

automatically, and connect the clients

as required. Work of this nature means

that Accenture is directly involved withclients.

For KPN, this outsourcing journey

covers both its legacy and existing

businesses as well as its investment into

fiber-optic, next-generation networksa

true indication that BPO is integral to

its strategy. These subsequent phases

entailed the growth in the number of

employees working on KPN business

in Manila by almost 150, freeing up a

number of original Dutch employees

to focus on new areas. The complextransition was governed by Accentures

proven transitioning methodologies.

An extensive train-the-trainer program

was initiated, complemented with

sophisticated work-shadowingall

with the aim of transferring knowledge

from the original employees in the

Netherlands to the new team in Manila.

Digistream, ISDN30, Analog and

switching in SDH and VVIS

Accenture fielded two teams, one for

the transition and one for the delivery

of the new project. These specialists ineach of the two very different processes

helped to ensure that KPNs customers

did not experience any drop in service

during the handover and thereafter.

Throughout the transition, KPN and

Accenture performed 100 percent

quality assurance to minimize any

impact on customer service.

High performance deliveredThe recent phases of KPNs outsourcing

journey with Accenture have continuedto deliver stellar results. The run rate

saving is 50 percent, meaning that

breakeven was achieved within the

first full year. The team in Manila

grew by 300 percent to just more

than 200 full-time equivalents, and

further rollout of more multiplay and

asymmetric digital subscriber line

(ADSL)3 customers is underway.

Under Accentures continuous

improvement of the businessprocesses, efficiencies continue to

be gained, allowing the number of

full-time equivalents to be reduced

over time. These efficiencies are also

making themselves felt across the

total KPN value chain, with rework

dropping by some 80 percent.

The substantial cost savings delivered

thus far have not come at the expense

of customer servicefar from it. In

fact, the score for first-time-right

resolution is 95 percent and even higherfor all services in scope. The dramatic

decline in the amount of rework will

also have a beneficial effect on the

experience of KPNs customers.

People are obviously at the heart of

any successful business undertaking,

and creating a joint onshore/

offshore team that incorporates

both KPN and Accenture employees

has been a major success factor

in this ongoing BPO. Creating one

team that spans the globe plays a

vital role in facilitating the smooth

progress of each business processacross the value chaina key driver

of value for KPN and its customers.

It is also worth noting that although

BPOespecially offshoringis often

thought to have a negative impact

on jobs in the home country, KPNs

experience has been positive. Those

KPN professionals who remained

with the company greatly value the

opportunity to focus on new areas

and build their careers. They foundthe experience of passing on their

knowledge to new and enthusiastic

team members invigoratingand

enjoy working alongside a team that is

delivering work of such a high standard.

About AccentureAccenture is a global management

consulting, technology services and

outsourcing company, with more than

223,000 people serving clients in

more than 120 countries. Combiningunparalleled experience, comprehensive

capabilities across all industries and

business functions, and extensive

research on the worlds most successful

companies, Accenture collaborates

with clients to help them become

high-performance businesses and

governments. The company generated

net revenues of US$21.6 billion for the

fiscal year ended Aug. 31, 2010. Its

home page is www.accenture.com.

Copyright 2011 Accenture

All rights reserved.

Accenture, its logo, and

High Performance Delivered

are trademarks of Accenture.

1 Synchronous digital hierarchy (SDH), Digistream, Integrated Services Digital Network (ISDN) and VVIS are all technologies or technology protocols used intelecommunications.2 Integrated services digital network (ISDN) is a set of communications standards for simultaneous digital transmission of voice, video, data and other networkservices over the traditional circuits of the public switched telephone network. The public switched telephone network (PSTN) is the traditional telephone network.3 A form of the Digital Subscriber Line technology, asymmetric digital subscriber line (ADSL) is a data communications technology that enables faster datatransmission over copper telephone lines than a conventional voice modem can provide.