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Best Practices for Quality Management in the Telecommunications Industry ENSE627/ENPM647 Spring 2004 Guangming Zhang Graciela Piedras Rowin Andruscavage.

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Presentation on theme: "Best Practices for Quality Management in the Telecommunications Industry ENSE627/ENPM647 Spring 2004 Guangming Zhang Graciela Piedras Rowin Andruscavage."— Presentation transcript:

1 Best Practices for Quality Management in the Telecommunications Industry ENSE627/ENPM647 Spring 2004 Guangming Zhang Graciela Piedras Rowin Andruscavage ENSE627/ENPM647 Spring 2004 Guangming Zhang Graciela Piedras Rowin Andruscavage

2 Presentation Outline Telecom Market Overview Network Evolution What is Quality? Malcom Baldrige categories Vision for the future Lessons learned Conclusions Telecom Market Overview Network Evolution What is Quality? Malcom Baldrige categories Vision for the future Lessons learned Conclusions

3 Looking at the telecom past… The business climate used to be like a ship on a calm sea.

4 Then, Challenge came by…  Rapid time to market with shorter development and life cycles  Very well-educated, technically excellent, multicultural work force  Rapid time to market with shorter development and life cycles  Very well-educated, technically excellent, multicultural work force  A growing body of de facto global standards  A customer base that may have little or no experience with the product or technology  A marketplace that is willing to accept innovative solutions to problems they may not yet know they have New Competitors – CLEC, ISP, ASP New Technology Solutions – VoIP, MPLS, QoS but you need backwards compatibility w/ legacy systems Blind Faith in the Stock Market Unrestrained Spending Globalization (Mergers and Acquisitions) so highly competitive  A growing body of de facto global standards  A customer base that may have little or no experience with the product or technology  A marketplace that is willing to accept innovative solutions to problems they may not yet know they have New Competitors – CLEC, ISP, ASP New Technology Solutions – VoIP, MPLS, QoS but you need backwards compatibility w/ legacy systems Blind Faith in the Stock Market Unrestrained Spending Globalization (Mergers and Acquisitions) so highly competitive

5 Revenue ( $ in trillions ) Local, Long Distance, International, Voice Wireless Data Emerging Worldwide Communications Services Revenue Steady Growth in Voice Revenues, Volume MOU Offset by Price Compression, Increase in Advanced Data/IP Revenues Source: ABN Amro, Cahners In-stat, Dittberner, Telecom Next Strategy Group CAGR >50% IP VPN, VoIP, Hosting/Content, Wireless Data CAGR 16% ATM/Frame, X25, Internet & Broadband Access CAGR 12% CAGR 4% Source: Motorola, QuEST Forum

6 Other Wireless Wireline Cable MSO OSS $268.0B $232.0B $243.0B $257.0B $276.0B Revenue ($ in billions) Return of Steady Telecom Growth Overall Steady Growth, Increased OSS Importance, Within Segment Dynamics Define Growth Opportunities Source: ABN Amro, Cahners In-stat, Aberdeen Group, Dittberner, Telecom Next Strategy Group Other: Fiber optic cable, submarine optical, non-core ancillary OSS: Network & systems, Software ops, customer care, billing, support systems

7 Evolution of Voice and Data Mobile Continues to Be the “Killer” Application – We Expect 50% of 2010 Telephony Will Be Wireless New Technologies Add Capacity for Voice and Data and Differentiation Opportunities for Carriers for integrating networks Data Will Be at Least 20-25% of Mobile Industry Revenues by 2006 vs. an Estimate of 6% in 2002 $ Value of Mobile Services 2002 (Estimate) 2006 (Estimate) and Messaging 4% Web Services 2% Voice 94% Source: Yankee Group Voice 75% Location-Based Services 3% Web Services 6% and Messaging 16% Quest Forum, Brussels December 2002 Source: Motorola, QuEST Forum

8 Source: PCS and GTSS – Global Marketing Operations Wireless Global Cumulative Subscribers (in millions) e2002e

9 TDMA IS-136 Technology Migration Paths 14.4Kbps - 64Kbps - 144Kbps - 384Kbps - 1.4Mbps - 2Mbps - 5Mbps CDMA TDMA GSM 2G 2.5G 2G 3G 2.5G 3G IS95A EDGE UMTS 1XEV-DV 1XEV-DO GPRS 1XRTTIS95B GSM 900 GSM 1800 PCS 1900

10 The Benefits of Integrating IPv6 Large Address Space “Plug-and-Play” Enhanced Mobility The Ubiquitous Internet The Ubiquitous Internet Enhanced Security Enhanced Performance

11 Interoperability Tackle resistance to change Cover the areas of more potential to grow. To have a supportive Regulatory environment To offer “cost-effective” solutions, in particular, integrated services Differentiate the offer and the quality depending on the customer. Control the operative costs and have structures to maximize efficiency. Capacity of investiment. To partner with others as required. To offer: Security, Availability, Reliability Interoperability Tackle resistance to change Cover the areas of more potential to grow. To have a supportive Regulatory environment To offer “cost-effective” solutions, in particular, integrated services Differentiate the offer and the quality depending on the customer. Control the operative costs and have structures to maximize efficiency. Capacity of investiment. To partner with others as required. To offer: Security, Availability, Reliability Telecommunications Industry Needs

12 To be a key force in the global telecommunications industry to improve the quality of products for customers through the collaborative efforts of service providers and suppliers. quality collaboration

13 Quality Is... More than a collection of tools A state of mind Linking processes to financial results More than a collection of tools A state of mind Linking processes to financial results “You don’t have to do this, survival is not compulsory.” W. Edwards Deming

14 Benchmarking Business Excellence Models Best Practice Quality System Maturity Business Results High Business Performance Performance Driven Low Certification ISO 9001 Conformance Driven TL9000 Adders  European Foundation for Quality Management (EFQM);  Malcom Baldrige  Demming Price BEM + BEAM Guidance Industry Synergy Beam: Business Excellence Model How to compare quality models? Source: QuEST Forum

15 ISO 9001 Fundamentals: –Supplier quality assurance: the driving motivator –Consistency of process and reduction of variety as business objectives for standards. –Documentation of work and training of employees as key delivery methods of consistent performance. –Corrective action and problem solving as approach. Why is not enough? –Weak on quality improvement / costs and customer-supplier relationships –Customer only sees certificate; no levels –Too much supplier discretion –No cost-based metrics / benchmarking –Does not encourage whole-business registrations –ISO 9000 is non-prescriptive Fundamentals: –Supplier quality assurance: the driving motivator –Consistency of process and reduction of variety as business objectives for standards. –Documentation of work and training of employees as key delivery methods of consistent performance. –Corrective action and problem solving as approach. Why is not enough? –Weak on quality improvement / costs and customer-supplier relationships –Customer only sees certificate; no levels –Too much supplier discretion –No cost-based metrics / benchmarking –Does not encourage whole-business registrations –ISO 9000 is non-prescriptive

16 What Is TL 9000? TL 9000 is a common set of quality system requirements and measurements designed specifically for the Telecom industry, encompassing ISO 9001 and other best practices TL 9000 Quality System Requirements –Hardware, Software & Services Best Practices TL 9000 Quality System Measurements –Well-defined Comparable Measurements TL 9000 is a common set of quality system requirements and measurements designed specifically for the Telecom industry, encompassing ISO 9001 and other best practices TL 9000 Quality System Requirements –Hardware, Software & Services Best Practices TL 9000 Quality System Measurements –Well-defined Comparable Measurements

17 Why Baldrige? Systematic approach to provide an operational definition of the total quality approach to business management. Demonstrate superior business results over time Provides validated, leading-edge practices Defines a model for high-performing businesses Helps companies enhance competitiveness Baldrige criteria are non-prescriptive. Systematic approach to provide an operational definition of the total quality approach to business management. Demonstrate superior business results over time Provides validated, leading-edge practices Defines a model for high-performing businesses Helps companies enhance competitiveness Baldrige criteria are non-prescriptive.

18 A High Performance Business System 2. Strategic Planning 1. Leadership 3. Customer/ Market Focus 6. Process Management 5. Human Resources 7. Business Results 4. Information and Analysis Customer and Market Focused Strategy and Action Plans 450 Points 85 Points 85 Points 90 Points 85 Points 85 Points 120 Points Business Results Process Manage- ment Human Resource Focus Information & Analysis Customer & Market Focus Strategic Planning Leadership 1000 Total Points

19 And, Six Sigma... Six Sigma is a disciplined, statistically-based approach for improving business performance: removing defects that occur in the products, processes and transactions, decreasing the cost of operations and goods sold, and increasing satisfaction of ultimate consumers. Six Sigma is highly prescriptive! Fundamentals: –Business problems require multivariate solutions to eliminate multiple causes and factor interactions. –Cross functional problems tend to be multivariate. –Customer requirements and process performance are the keys for defining sustained performance. Six Sigma is a disciplined, statistically-based approach for improving business performance: removing defects that occur in the products, processes and transactions, decreasing the cost of operations and goods sold, and increasing satisfaction of ultimate consumers. Six Sigma is highly prescriptive! Fundamentals: –Business problems require multivariate solutions to eliminate multiple causes and factor interactions. –Cross functional problems tend to be multivariate. –Customer requirements and process performance are the keys for defining sustained performance.

20 Future of Quality? Future quality management systems will combine the best of all systems: –ISO 9001 as a lower specification limit; –Malcolm Baldrige National Quality Award criteria as a target for achievement; and –Six Sigma as the integrating method. Future quality management systems will combine the best of all systems: –ISO 9001 as a lower specification limit; –Malcolm Baldrige National Quality Award criteria as a target for achievement; and –Six Sigma as the integrating method. ISO9000/ TL9000 Baldrige Award Six Sigma Identify key business areas of concern. Sustain gains and document the process. Eliminate the critical source of variation.

21 Example:Anatomy of the Quality Efforts and changes of Verizon 1992: BA, NYNEX & GTE each adopt Baldrige 1996: GTE Directories wins Malcom Baldrige Award 1997: First Telecom Mega-Merger -- Bell Atlantic & NYNEX form new Bell Atlantic; Adopt Quality Policy based on Baldrige 1997: New Bell Atlantic participates in development of QuEST Forum. First Inaugural meeting held Baltimore, Maryland : Bell Atlantic and GTE merge to form Verizon; Quality Policy updated to include ISO : Quality Integration establishes portfolio of Business Improvement Enablers 2002: Quality Strategy introduced: Registration for TL 9000 begins across organizations. Corporate Sourcing receives Registration 2001: Verizon Corporate Sourcing Launches TL 9000 Registration Source: `Verizon, QuEST Forum

22 Involvement Communications Outcome Driven Process Focused Provide Stability Reward And Reinforcement Involvement: –Coach People To Make Their Own Decisions and Achieve Goals –Spend 50% of Time On Top Priority Items In Full View Of Your Team Communications: –Listen – Be Approachable And Accessible – Broadcast the Agenda – Encourage Debate “In The Room” – Be Enthusiastic Involvement Communications Outcome Driven Process Focused Provide Stability Reward And Reinforcement Involvement: –Coach People To Make Their Own Decisions and Achieve Goals –Spend 50% of Time On Top Priority Items In Full View Of Your Team Communications: –Listen – Be Approachable And Accessible – Broadcast the Agenda – Encourage Debate “In The Room” – Be Enthusiastic 1. Leadership Requirements...

23 Best practices for leadership (1) Have a constancy of purpose and create a sense of urgency Use executive meetings Use quality methods and tools Visit customers Ensure promotion criteria reflect quality values Be open in surfacing problems Define values that are concise and well-focused Communicate values often using various media Ensure senior management demonstrates the quality values Have a constancy of purpose and create a sense of urgency Use executive meetings Use quality methods and tools Visit customers Ensure promotion criteria reflect quality values Be open in surfacing problems Define values that are concise and well-focused Communicate values often using various media Ensure senior management demonstrates the quality values

24 Best practices for leadership (2) Define management roles and responsibilities for quality Reward management behavior as well as results Promote cross-functional cooperation Conduct annual quality planning at every management level Measure employees’ perceptions of the gap between espoused values and real values

25 Select benchmarking priorities according to critical success Emphasize analysis that correlates market position with the company’s objectives, plans and actions. Connect analysis to decision making Focus on changing fundamental business capabilities Encourage openness and negotiation Conduct effective reviews Select benchmarking priorities according to critical success Emphasize analysis that correlates market position with the company’s objectives, plans and actions. Connect analysis to decision making Focus on changing fundamental business capabilities Encourage openness and negotiation Conduct effective reviews 2. Strategic Planning

26 Develop a systematic process for managing and improving Select goals that fit the business Focus on few annual objectives Ensure that annual objectives are readily measurable Predict the impact on business results. Develop a systematic process for managing and improving Select goals that fit the business Focus on few annual objectives Ensure that annual objectives are readily measurable Predict the impact on business results. 2. Strategic Planning

27 Example: Market Differentiation of Lucent: Quality &Customer Service Excellence “Lucent has a responsive, experienced services team with an in-depth knowledge of BT’s technology infrastructure and market.” Meryl Bushell Chief Procurement Officer BT Group A services company is built on its reputation Source: Lucent Customer Sat Survey "We felt when choosing Lucent we were picking a company that had both a wide range of experience, a quality background, and somebody that we were happy to be able to bring on board…” Brian Burleson Chief Operating Officer Priority Telecom Services Satisfaction (Global) Scale FQ014FQ011FQ022FQ023FQ024FQ021FQ032FQ03 Lucent Competitive Average

28 3. Customer and market focus (1) Quality Improvements Cost Improvements Data Security – Confidentiality of Data Source (Submitter) – Confidentiality of Data – Security of Data – Integrity of Data – Reliability of Data – Availability of Processed Data (in report form) Uniform Measures / Standards Quality Improvements Cost Improvements Data Security – Confidentiality of Data Source (Submitter) – Confidentiality of Data – Security of Data – Integrity of Data – Reliability of Data – Availability of Processed Data (in report form) Uniform Measures / Standards

29 Maintain continuous contact with customers and suppliers through data interchange. Emphasize key points of competitive differentiation. Continuously refine information and its infrastructure Make key information visible Include all stakeholders Benchmark companies outside the industry Maintain continuous contact with customers and suppliers through data interchange. Emphasize key points of competitive differentiation. Continuously refine information and its infrastructure Make key information visible Include all stakeholders Benchmark companies outside the industry Customer and market focus (2)

30 Understand what customers want Invest in systems and logistics to support customer-contact Empower customer-contact people Set standards for all aspects of customer interaction Make it easy for customers to complain and provide quick follow up Reduce uncertainty and risk Understand what customers want Invest in systems and logistics to support customer-contact Empower customer-contact people Set standards for all aspects of customer interaction Make it easy for customers to complain and provide quick follow up Reduce uncertainty and risk Customer and market focus (3)

31 Correlate customer satisfaction results with internal measures of product and service quality Draw comparisons with world-class leaders, not just direct competitors Use every listening post. Correlate customer satisfaction results with internal measures of product and service quality Draw comparisons with world-class leaders, not just direct competitors Use every listening post. Customer and market focus (4)

32 Network Reliability The attribute that correlates HIGHEST to Customer Satisfaction  RELIABILITY Network Reliability (NO DOWNTIME) Higher Customer Sat Lower Churn Higher Sales

33 Managing Network Reliability Determine the Appropriate Measurements – Requirements – Objectives Establish Data Collection Systems Analyze Performance Share the Results to Bring about Awareness Take Steps Towards Improvement OSI model - different quality goals distributed between different levels of communications stack: –Physical layer: high S/N ratio – need quality components –Link layer: low bit error rate via encoding –Network layer: quality of service (QoS) guarantees –Transport layer: error detection & recovery Determine the Appropriate Measurements – Requirements – Objectives Establish Data Collection Systems Analyze Performance Share the Results to Bring about Awareness Take Steps Towards Improvement OSI model - different quality goals distributed between different levels of communications stack: –Physical layer: high S/N ratio – need quality components –Link layer: low bit error rate via encoding –Network layer: quality of service (QoS) guarantees –Transport layer: error detection & recovery

34 Examples:

35 4. Measurement, analysis and knowledge management (1) Develop a specific set of criteria for screening out evidence that the information was built with a plan, rather than being something that just evolved over time Measures has to be developed for all business drivers and goals. Consistency of measures across business units. Include measures of cycle time and productivity or efficiency. Develop a specific set of criteria for screening out evidence that the information was built with a plan, rather than being something that just evolved over time Measures has to be developed for all business drivers and goals. Consistency of measures across business units. Include measures of cycle time and productivity or efficiency.

36 Include measures of customer satisfaction, process and output quality. Conduct research to identify correlations between satisfaction measures and financial performance Most of the time in review meetings should be spent analyzing results rather than simply reviewing them. Company should use data to make decisions and solve problems. Include measures of customer satisfaction, process and output quality. Conduct research to identify correlations between satisfaction measures and financial performance Most of the time in review meetings should be spent analyzing results rather than simply reviewing them. Company should use data to make decisions and solve problems. Measurement, analysis and knowledge management (2)

37 Motorola’s measurements Data is categorized as: –Performance (ex. cost of sales, on-time delivery, share of market,annual sales growth) –Operational (ex. cost of quality, customer problem solution and view of quality) Metrics are shared using Motorola Compass Knowledge Sharing System. Data is categorized as: –Performance (ex. cost of sales, on-time delivery, share of market,annual sales growth) –Operational (ex. cost of quality, customer problem solution and view of quality) Metrics are shared using Motorola Compass Knowledge Sharing System. Process for benchmarking other companies

38 ST procedures Indicators are selected by time sensitivity There is only one source of data to avoid errors. The built-in improvement cycle ensures that the data, and use of information are continuously updated to meet user’s needs. They hold periodic operating review meetings to draw plans for improvement using Plan-Do-Check-Act. Indicators are selected by time sensitivity There is only one source of data to avoid errors. The built-in improvement cycle ensures that the data, and use of information are continuously updated to meet user’s needs. They hold periodic operating review meetings to draw plans for improvement using Plan-Do-Check-Act. Do Plan Check Act Identify process Clarify measures Verify performance (Re)define process Define improvements Get comparative data Set goals Apply improvements Verify meets requirements Report lessons learned Monitor performance

39 5. Human resource focus HR Organization –Matrixed between functional & IPT leads –Functional spheres of expertise mapped to processes; should overlap with others Communications tools –Human nodes are decision makers in net centric operations – , PIM collaboration, IM, & other infrastructure Management & Technical Proficiency –Representation in industrial consortiums, conferences HR Organization –Matrixed between functional & IPT leads –Functional spheres of expertise mapped to processes; should overlap with others Communications tools –Human nodes are decision makers in net centric operations – , PIM collaboration, IM, & other infrastructure Management & Technical Proficiency –Representation in industrial consortiums, conferences

40 Examples:

41 6. Process management Online configuration-controlled process docs Store and employ best practices Change board Continuous improvement Example: Standards process (RFC, sample implementation, adoption, certification) Example: CMMI continuous improvement of regulations, standards, deployed hardware, software updates Online configuration-controlled process docs Store and employ best practices Change board Continuous improvement Example: Standards process (RFC, sample implementation, adoption, certification) Example: CMMI continuous improvement of regulations, standards, deployed hardware, software updates

42 7. Business results standard/proprietary format acceptance, adaptation, rejection market growth / market share trouble tickets, incompatibility reports adherence to evolution plan standard/proprietary format acceptance, adaptation, rejection market growth / market share trouble tickets, incompatibility reports adherence to evolution plan

43 Vision for tomorrow Few global standards aligned measurements –industry wide application –allowing benchmarking –capability to tailor to cover specific needs –open supporting business excellence Future of Telcom Industry is on Services A services company is built on its reputation... Service Quality Few global standards aligned measurements –industry wide application –allowing benchmarking –capability to tailor to cover specific needs –open supporting business excellence Future of Telcom Industry is on Services A services company is built on its reputation... Service Quality

44 “Top 10” Lessons learned 1. Leadership Commitment - Unshakable commitment is critical to success- Create a vision and values statement 2. Cross-functional teamwork and benefits - C ross-functional teamwork in tackling the white spaces 3. Consistent communications and information - Took great pain to explain - Use organizational primes to close gaps identified through Gap Analysis 4. Pride - A lot of work and a lot of fun 1. Leadership Commitment - Unshakable commitment is critical to success- Create a vision and values statement 2. Cross-functional teamwork and benefits - C ross-functional teamwork in tackling the white spaces 3. Consistent communications and information - Took great pain to explain - Use organizational primes to close gaps identified through Gap Analysis 4. Pride - A lot of work and a lot of fun

45 5. Focus on what you do - Organizational readiness must reflect what you actually do otherwise everything will fall apart under intense scrutiny 6. Learning and leveraging best practices - Huge learning opportunity - Develop Training requirements and schedule 7. Focus on linkages - Focus on individual categories is not enough 8. Demonstrated Results - Maturity and performance of deployed processes MUST yield demonstrated results over time 5. Focus on what you do - Organizational readiness must reflect what you actually do otherwise everything will fall apart under intense scrutiny 6. Learning and leveraging best practices - Huge learning opportunity - Develop Training requirements and schedule 7. Focus on linkages - Focus on individual categories is not enough 8. Demonstrated Results - Maturity and performance of deployed processes MUST yield demonstrated results over time “Top 10” Lessons learned

46 9. Select a total quality management model - Integrate strategic quality goals into the corporate strategic planning process, develop an organization structure to implement it, establish a design team to tailor quality process implementation and prepare a communications plan for quality. 10. Constructive dissatisfaction & continuous improvement - The biggest and most consistent source of improvement is driving an ongoing constructive dissatisfaction of our current performance and a passion for continuous improvement. Benchmark operations against world class quality companies. 9. Select a total quality management model - Integrate strategic quality goals into the corporate strategic planning process, develop an organization structure to implement it, establish a design team to tailor quality process implementation and prepare a communications plan for quality. 10. Constructive dissatisfaction & continuous improvement - The biggest and most consistent source of improvement is driving an ongoing constructive dissatisfaction of our current performance and a passion for continuous improvement. Benchmark operations against world class quality companies. “Top 10” Lessons learned

47 How to ensure lasting change A committed unwavering and highly visible leader a well articulated vision, values and business focus a strategic emphasis on direction and education personal responsibility and accountability an accurate, reliable and timely measurement system effective means of communication a systematic way of designing, implementing and leading future changes a commitment to be persistent and flexible based upon what the environment dictates A committed unwavering and highly visible leader a well articulated vision, values and business focus a strategic emphasis on direction and education personal responsibility and accountability an accurate, reliable and timely measurement system effective means of communication a systematic way of designing, implementing and leading future changes a commitment to be persistent and flexible based upon what the environment dictates

48 Links/references 2004 Baldrige National Quality Program Criteria for Performance Excellence Zhang, Gunagming; Quality Management in Systems, The Commercial Press, 1998 Draft ITU-T Recommendation X.805 (Formerly X.css), Security architecture for systems providing end-to-end communications communications.pdf communications.pdf QuEST Forum (http://www.questforum.com AT&T Batting 1000 (ISBN ) Juran, Joseph M.; Blanton, Godfrey A.; Hoogstoel, Robert E.; Schilling, Edward G., Juran’s Quality Handbook, Fifth Edition, McGraw-Hill, Baldrige National Quality Program Criteria for Performance Excellence Zhang, Gunagming; Quality Management in Systems, The Commercial Press, 1998 Draft ITU-T Recommendation X.805 (Formerly X.css), Security architecture for systems providing end-to-end communications communications.pdf communications.pdf QuEST Forum (http://www.questforum.com AT&T Batting 1000 (ISBN ) Juran, Joseph M.; Blanton, Godfrey A.; Hoogstoel, Robert E.; Schilling, Edward G., Juran’s Quality Handbook, Fifth Edition, McGraw-Hill, 1998.

49 Thanks for the attention Q & A


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