Following Kevin O’Hara’s departure as president and COO from Level 3 Communications Inc. earlier this week, the carrier’s integration troubles are making headlines again.
Although Level 3 spokespeople would not confirm a link, many analysts have speculated that the difficulties bringing together six acquisitions from an operational standpoint were behind the leadership change.
To find out more about the status of the integration, xchange spoke to Raouf Abdel, president – Business Markets Group for Level 3, at the Channel Partners Conference & Expo in Las Vegas.
“We are extremely focused on integration. It’s the company’s top priority,” said Abdel. He breaks down the task into four areas – people, process, network and systems – and says the “people part” is well integrated while the other three are pretty far along based on work done in 2007.
He claimed the integration plan is on track, but conceded the work is far from over. “We are not done by any means. ’08 is another big integration year for us to really get to the point where we have one cohesive network, one back-office platform and a common set of processes,” Abdel said.
Systems integration is taken, logically, in parts – front, middle and back, Abdel explained. Already, the merged company has a unified front end, incorporating opportunity management, quoting tools and order entry. “There’s one platform. Everybody across the company is using the same platform,” he said. This front end also extends to the company’s indirect channels.
Craig Schlagbaum, Level 3’s vice president of indirect channels, told xchange that in addition to using the same Siebel systems as does the direct side, the channel’s MasterStream tool is being extended across the seven companies’ footprints and will go live April 1. Previously it was only available for quoting service under the former Broadwing footprint. In addition, Level 3 has completed the integration of its service availability tool, which shows how near a building is to Level 3’s network, has been fully integrated into the MasterStream software. “We are excited about that. It will make it a lot easier to do quoting on the front end in particular,” Schlagbaum said.
Abdel said there also is progress on the back end – billing and customer care. The heavy lifting, however, remains in the middle, which includes provisioning, activation, testing, turn up, etc. Key to this is consolidating network elements into one common inventory platform, which is the primary activity for this year, but is not likely to be completed until the first half of 2009. “We have a very large number of network elements in our network that all have to come into one place,” Abdel said, explaining that you need to be able to see that inventory in order to logically activate service. “That’s where a lot of our work this year continues. And, when we get that through, then the turn-up activities that we are trying to improve on, that’s when that really hits home.”
Abdel said Level 3 is attacking the problem one company at a time. Already, the inventories for Progress Telecom, WilTel Communications Group, Looking Glass Networks and ICG Communications have been integrated with Level 3’s. The two remaining ones are Broadwing and TelCove.
Integrating the network also has three phases, Abdel said. “There’s connecting the networks together, so you can route traffic across them. We were done with that in ’07,” he said. “The next stage is to figure out which of the networks you want to maintain and keep and turn some of the other parts down. That’s something we are still in flight on.”
Abdel expects 80 percent of that task to be done in 2008 with the remainder wrapping up next year. The last stage of network integration involves migrating customer traffic off routes that are decommissioned, which will happen in 2008 and 2009.
Abdel said Level 3 is not as concerned with the last two phases of the network integration as with the consolidated inventory management project because of their impacts on the customer experience. “What it does for us is it optimizes our fixed costs. That’s obviously an important element, but today it’s not impacting customer experience. Today we are prioritizing customer experience over costs,” he said.
Meanwhile, Abdel said the company is filling the gaps in its systems with processes and people. “So, while everything is not systematic right now. We have done a lot of reorganization and restructuring and created new processes that essentially bridge and compensate for the fact that some of the inventory sits in multiple places,” Abdel said. “That’s the way we have been able to get customer experience improvement in the past few months.”
Abel said the company plans a formal customer satisfaction survey in April or May, but meanwhile is measuring numerous performance metrics and talking to customers regularly. “Fourth quarter last year nobody was telling us things are going well. We hear that quite often now,” he said.
