Alcatel Access System

Division
Building For The Future

Left Wing Group

MM Biztel 5
IMT Bandung, Indonesia

(Abdul-Arif-Ahmad-Dadang-
Fera-Krisdiastoro-
Sholahudin-Zaki)
Problems of Alcatel 1990s
Problems in 1995:
Structure: too many independent legal
entities
Resulted in costly duplication of products &
services
No real authority of Business Unit over the
Country Units when it came to P&L
decisions
Organizational Change in 1996:
Response to intrinsic organisational
challenges & external competitive
pressures
 Business Division Concept
 8 Business Divisions:
 Responsible for Strategy and P&L over country units
 Competence Center : R&D, Product Management, Sales
Support
 Better control over product development:
 Central Function:
 Provide tools, procedures, rules, processes for the local units
 Direction for allocation of resources
 Local Units
 Responsible for day-to-day management
 Logistic, administration (incl. personnel adm)
 Managing profitability:
 Rationalising the number of similar products
 Streamlining new product definition efforts &
development
 Closing some of manufacturing units
 Reorganisation challenges:
 Union constraints
 Resistance from some of the country heads
Alcatel’s MSAN
The changes in the telecom environment
Liberalisation
Internet
PTO invest in services that would yield
immediate
Previous Access Strategy (ASAN, DORA)
No focus of efforts
“Reinventing the wheel”
“Narrowband culture”
Uncertainty as to where the market was
heading
 Alcatel’s MSAN
 MSAN:
 Customer could start with narrowband applications &
gradually plug in broadband upgrades
 Provide :
 existing access services (POTS, ISDN, data)
 New services (higher speed internet, multimedia, video)

 Challenges:
 Narrowband & Broadband under different divisions, lack of
coordination & agreement  Finally agreed on acommon
architecture & blended to 1 division
 Objectives & resources for the project were not always
clear
 Technical group member were not carefully selected

 Attempts to enforce convergence of the effort:

 Narrowband & Broadband agreed on acommon architecture
 Narrowband & Broadband merged into 1 division
 Alcatel’s MSAN
MSAN Implementation Problems:
“Lack of market drive”
“Efforts were not very concentrated”
Lack of commitment : “Lots of players & local
situations survived”
 Recovery for Alcatel (1996)
Positive development of sales & net income
Key success factors according to the top
management:
Sense of urgency
An integrated view of things
The autonomy given to 8 business divisions with
concentration of the core activities per location
Challenges after recovery in 1996:
Further rationalising operations &
manufacturing
New technological change :
 circuit switch → packet switch
 → New market : increasing traffic of data
Response to the challenges : High Speed
 High Speed Diary (1997)
High speed passport as a mean of
communicating the change
Awareness of the importance of time to
market:
Flattening the organisation
Better coordination :
 ExCom
 key business strategies, major projects &
investments, long term contracts
 Management Council
 coordinating business divisions
 Strategic Analysis Function
 Assist Alcatel management & its business divisions in
areas in the strategic & economic evolution
Feedback of the
Reorganisation
Consistency of business divisions on P&L
Lack of control instrument for business
divisons to control the product
development
Many decisions still had to be taken at a
very high level => bottleneck potential to
responsiveness
Network Integration Division was not
sufficiently staffed & lacked any power over
the areas
Scope of Analysis
Problems Analysis
 2.A. Structure
(Manufacture Order Cycle)
ASPECT PROBLEMS RECOMENDATION
NUMBER  Very large & Complex Reduce number of task
facility repetitively
 Streamline country units :
-> Exibit 2
• Regrouping PC
8 Business Division • Regrouping R&D
6 PC (30 Country) • Steamline Structure of each
9 R & D Centers country unit
 Many units were  Streamline product catalogue
LOCATION overstaffed
 Very Distributed (30 Evaluate Location of BD & CU,
(Job Evaluation)
Countries) Based on :
 Suppliers
 Markets/Customers
 Labour & Mgt. Cost
SPECIALIZATI  Various  Evaluate Specizlization based
ON Products/Service on : Tools :
 Region Table 5.1
P. 148
 Process Product Line
 Prod. Volume
 Streamline Product Catalogue
Table 5.1 Assesing the differences between
alternative ways of focusing a Plant Network
Type of Focus By Region By Product

Key decision

Capacity Utilization

Lay-out

Facility size

Sourcing

Process technology

Workforce

Quality

prod'n run length

performance metrics
 2.B. Infrastructure
(Manufacture Order Cycle)
ASPECT PROBLEMS RECOMENDATION
Degree of  High Degree of  Set up policy for common
Centralizat decentralization policy
ion &  Give clear authority for
Policy integratior function :
 Business Division
 Network Integration
Division
 Table 5.2 (P.157)
Measure &  Business Division Did  Implement
 Operations virtual
monitoring
Control not have tools to control company concept on specific
 Audit System
country units projects
 Clear Key Performance
 Lack of Business Indicator Definitions &
Division consistency on distributions for Business
Profit & Loss Unit & Country Unit
 Time to Market as one of
main KPI of Business Division
& Country Unit
 2.C. Governance
(Manufacture Order Cycle)
ASPECT PROBLEMS RECOMENDATION
Governanc  Strong National/Product  Change Management
e Entities  Improve NID Staffs with
 Rationalisation of superior competences
Organization/Employees
 Resistance from some
country Heads
 NID was not suffiently
staffed
 Process Evaluation
(Customer order cycle)
PROBLEMS RECOMENDATION
The Supply Chain  Implementing Pull System in SCM &
Management failed to meet Standarized the process
market Requirement  Optimalize it to manage information
 Dora Project flow across the company
 ASAN  Focus on “New Technology” & Industry
Convergence
 Internet
Duplication of customer  Broadband
Integrate Customer Relationship
order cycle processes : Processes
 Country Unit
 Business Division
Thank you for your attention.