N. Srinath*

Mergers and acquisitions have become an important part of the corporate marketplace in India today, particularly with the government privatising several public sector undertakings (PSUs). The acquisition of a PSU like VSNL and its integration into the Tata Group present a number of unique challenges that need to be tackled effectively.

Environment
When we got into VSNL in February 2002, the market for the company’s products and services was about to undergo some significant changes. The international long-distance (ILD) voice sector, which contributed a major part of the company’s revenues, was to be thrown open to competition from April 1. Internet telephony for PC-to-phone calls was also supposed to be permitted from the same date.

In February 2002, apart from ILD voice, the major product lines of the company were Internet services, in which we were the market leaders; corporate data services, in which we were leaders in several products like international private leased circuits; frame relay services and Internet leased lines; data centre services; and a host of other value-added services. Some services, like TV uplinking and Inmarsat services, completed the offerings.

Our initial objectives were to protect our market position in the ILD business, get the national long-distance business launched as soon as possible, and work on making the operations of the company more market/customer focused and efficient. Multiple task forces, focusing on business priorities, were set up to achieve these objectives. Over time the priorities changed and evolved as projects were completed.

Don’t lose sight of the people
While the integration of operations, processes and technology was important, one of the key issues that we needed to focus on was the issue of people. We knew we were operating in a very different work culture, with well-established but different practices and structures, and people with different capabilities, expectations and concerns. What was heartening was the commitment of the people and the enthusiasm with which they welcomed the Tata acquisition.

We ran a special programme called 'Confluence' at the Tata Management Training Centre for 40 officers of the senior management team. We explained the mission, value systems and practices of the Tata Group through presentations and interactions with senior officers and directors. A visit to the Tata Archives helped create an appreciation of the history of the group. We held similar programmes for more than 500 employees.

Simultaneously, we embarked on an organisation restructuring exercise for the functions of the headquarters. This initiative was driven entirely by the people who were being restructured. We got a mix of employees of different disciplines and levels to talk about the working of the organisation. To our surprise, the feedback was very candid. There were suggestions that people’s roles, the organisational structure and the level of accountability be reworked.

Over the years repeated time-based promotions, transfers and rotations contributed to diffused roles, ownership and accountability within the system. We asked the same people to come up with new roles and functions, and a new structure. The people also took on the responsibility of identifying people for specific positions. The new structure helped to make roles clear, simplify processes, and improve accountability and coordination within the company. Having achieved some success in this respect at the headquarters, the focus is now shifting to similar initiatives at the regional and branch offices.

Several new functions were also created where none existed, or where they were buried as part of some other department in the organisation. Areas that were weak were strengthened and supplemented by sales and marketing people brought in from other Tata Group companies. These areas included carrier relations to work with domestic and international telecom carriers, OSP or outside plant to implement the countrywide fibre optic backbone for NLD, and customer services. Having evolved, these areas continue to change with the needs of customers.

The changes in structure and the creation of new roles within the company presented the need for developing new skills within the system. Traditionally, the company had been very strong in technical areas, but the increased market competition created a greater need to be more customer focused, commercially more flexible and operationally very efficient. In order to build these skills, training programmes were organised on functional areas.

To supplement the management skills of the team, the company also developed a management development programme. This programme focused on critical commercial skills like business management, people and performance management, negotiating skills, and planning and budgeting skills. A key part of this exercise was that Tata Group executives, who are operating managers, were invited to share their experiences as managers with the VSNL teams.

Keep people in the know
Ensuring that information about initiatives or changes is communicated properly is very important. To this end, we created new processes within the system. The house magazine, Patrika, was supplemented with a monthly wallpaper called VSNL Buzz, which shared information about important developments within the company — new customer wins, major milestones achieved, new technical and product developments, etc — to make the employee feel proud to be part of the VSNL and Tata family. Periodic briefing sessions, at which members of the management spoke on the recent performance and achievements in the company, were also started.

Align processes to suit the customer
Having worked the necessary changes in the structures and with the people development programmes under way at the functional and managerial levels, the focus shifted to changing the processes within the system. The existing processes could not give the company the competitive edge in the marketplace going forward.

VSNL is restructuring a few of internal processes, ranging from product development to service delivery. It has also begun leveraging the experience and processes available in the Tata Group telecom companies in marketing, customer acquisition and customer services. Many of these are applicable to VSNL, though with fine-tuning to meet specific requirements.

The first areas to be re-engineered will be those that impact the customer. In today’s environment, companies need to be totally aligned with the needs of the customer. Customers have short memories and shorter loyalty spans. A small slip-up can lead to the loss of crucial customers. We are putting into place a structure that is aligned with the industry best practices in customer care.

Customer service is being broken down into four functions. The first is the customer access point, the call centre or the public office. The second is the backend that handles the issues, queries or complaints received by the front office. The third function is credit and collection; the fourth is that of order management.

We realise that our most valuable asset, across all our businesses, is people. They are the repository of business experience and culture, and the outward face of the company to the client. This combination of structures, skills and processes, supported by the right tools, should provide our employees a healthy work environment to enable them to reach their full potential, while facilitating the company’s drive to achieve all its objectives in the marketplace.

*Mr Srinath, director (operations), VSNL, spoke to Christabelle Noronha

Uploaded on: May 27, 2003