Planning for the future

In a discussion with NME, Olivier Campenon, president EMEA at BT, opens up on the company's reaction to the current financial crisis and its plans for the Middle East

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Planning for the future Today, the emerging markets are still important but we will focus on countries we have already invested in. Olivier Campenon, president EMEA at BT.
By  Sean Robson Published  February 21, 2009 Network Middle East Logo

How does the current situation affect BT globally and your business in the region?
First, this crisis does affect BT much as it affects any company all over the world. It impacts BT because of our customers who are now under tremendous pressure and are coming back to us and asking for cost reduction. They basically want us to do the same work for cheaper.

One of the challenges we face is making sure people can see beyond the crisis. I think it's always important to say, yes there is a crisis but it is not the first and not the last. Is it bigger than any of the others, no but it's different because the world has evolved. Will it last for one year or two years or three years, the reality is nobody knows. What we should remember is that the crisis will end.

So we need both to prepare for the worst as well as to prepare for the future. When I look at the Middle East and also Africa I think it's a very good region. We have been here for many years and the Middle East is a growing environment, especially during this crisis when the rest of the world is moving towards recession this is an area where we still have some room for growth.

I would say that now more than ever we are dedicated to this region and are making sure we continue our activities here.

In detail it means that for the first time in the market, customers are coming back and saying that we need to reduce cost. We cannot just give them a 10% reduction, which implies when you start looking at a cost reduction that you actually think through what you can do differently to make it more effective. There is a lot of work being done internally to look at the solutions that exist and see how we can do it differently.

Security has become a very expensive item and so rather than investing in this yourself, you can go to a partner like BT that has the capability to make some cost reductions for you.

What we will see during 2009 is a lot of thinking on how telecommunications can help transform companies.

In terms of network hubs in the ME are you going to continue adding connections or can we expect a postponement?
You should expect a slowdown in deployment. Within BT we have a very pragmatic approach. We go wherever the customers go and we grow where the customers want us to grow, and we invest once we have customers there. For the moment, as long we do not see a need we do not go there.

Some of the things we planned a year ago have kept going and some have been slowed down to match demand. The way it works is that we have a budget for expansion but we have to make sure that the budget is adapted to what we see. Obviously what we have seen over the past six months is a decceleration of the demand and so we are actually slowing it down.

Investment scenario - are plans going to go on schedule, or is BT planning on cutting back on investments here?
We had a budget of over US $50 million planned for investment over the next few years. Much of that has already been spent and implemented but some of the future spend and investments are being postponed because of this slow down in demand.

It does not mean that we are stopping or freezing investments. We just want it to be as close as possible to the demand and, hopefully, if it comes back at the end of 2009 we can then re-accelerate quickly.

Will we be seeing a hiring freeze or even some redundancies taking place at the regional level?
The answer is no. No firing. Freezing is not a word I like but obviously we are scrutinising anything we are doing today.

In terms of hiring people it is the same. We already have 180 people in the Middle East and I don't see an emergency to grow that except if you need a specific level of expertise here and there but it's rather stable and obviously we will look at how things evolve in the future.

What sort of reactions are you seeing from both your customers and partners when it comes to the current situation?
I would say it varies from one sector to another. We basically focus on five sectors. We have everything related to finance and that is an industry which is suffering here just like everywhere else. Then you have all of the logistics and transport sector, which are also suffering but not as much.

Obviously they are seeing the reduced business but my feeling today is that it is not as harsh as in the rest of the world. Then we are dealing with the telecom operators and they are suffering, but many in the region have a large consumer component and consumers keep calling.

I think the telecom sector is still a very active one. We see a very active role in working with these people especially in their own transformation and assisting their own evolution to a next generation network.

Then there is the government sector. It is very active at the moment, for instance we are working with the Abu Dhabi government. They see the need to log new services and BT plays a key role in this.

The fifth market which has radically slowed down is that of the smart cities. We have been doing quite a job in smart cities and this clearly now is a question market. Every month we hear something new concerning smart cities. There is great uncertainty in that domain.

Are you seeing an increased enquiry for managed services?
We see a lot of interest in managed services evolving. We have three or four active deals in motion at the moment and companies are looking at us saying, we could do it ourselves but we do not believe we have the right skills so we are giving it to BT.

We have a number of opportunities in the security domain because of this. The only slow down we have seen is in the very big outsourcing deals, because that is where in the mindsets of many boardrooms it is too difficult a decision to be made.

We see a lot of interest evolving in managed services. We have three or four active deals in motion at the moment and companies are looking at us saying, we could do it ourselves but we do not believe we have the right skills so we are giving it to BT.

How is BT tuning its sales capabilities to get to more customers in the region?

That is a very active discussion, which we are having and actually have had for some time. The view is that BT has clearly invested heavily in dealing with large organisations and in doing so we believe that we have reached a very interesting leadership in the world with our capabilities.

What we have started implementing and what we are pursuing now maybe faster than in the past is our indirect model. Making sure we have a number of partners who have the local presence and the local relationship and can complement our international capabilities with the ability to sell services to customers.

That is working well and Etisalat is a good example. We are developing the same model with a number of other players; other players who we are reviving because they were not strongly focused. I am expecting a lot from that because I think it enables me to put a very strong focus on my people here and the Middle East saying, these accounts are the only ones I want you to go direct to and the rest has to be indirect.

That is the model I am developing in many other places in the world and it is proving to be far more efficient because you actually benefit your partner with your capabilities and you really keep the most complex environment for your sales force.

How are you tuning your offerings in order to deliver the most for customers?
The easiest way is to look at it this way. You used to travel from A to B in a Porsche. Do you really need a Porsche today? No. I am going to ensure you still have a vehicle to go from A to B, but that may not be a Porsche. Same travel, different car.

Exactly the same is happening in our business. We are actually dealing with customers getting to a level of understanding of their real needs. It is amazing how much waste exists either because systems were developed at a different time and had never really been managed properly, or because people had the wrong understanding or the incorrect methods of measurement.

What we have developed here and across the rest of the world is a service called quick start in which we have consultants visiting customers and in a very short time frame reviewing the system the client is using. They are coming back and saying these are the points that can be improved on.

Doing more for less means saying we are doing things differently and so it will cost less and it is really what we believe in. We are doing it differently but to do it differently you need to have a thorough understanding of what is exactly needed by the business to succeed.

What will be BT's focus going forward - supporting your existing customers or getting in new regional customers?
There are two key areas of focus. First of all there are the existing customers because we want to make sure our key customers are correctly managed and supported in this difficult period. This is an absolute priority. One aspect, which is particularly important in this region, is to make sure that what we have offered and committed to is delivered.

This does not mean that we are only focusing on existing customers, we also have a small but important number of prospects that we absolutely want to deal with.

Most of our resources are taken up between these two. We are far more discerning in making sure that if something comes up and we qualify for it quite strongly to make sure we can give resources to it. Otherwise we are pushing the same to our partners.

Are the emerging markets going to become even more important in the coming year or are we going to see consolidation?
If you had asked me the question a year ago I would have told you that the clear focus was on emerging markets and we were going to continue expanding in many countries. Today, the emerging markets are still important but we will also be focused on countries we have already invested in. This is the balance we believe is achievable.

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