Make Your CLEC Succeed

April 16, 2001 -- Many CLECs began with limited ordering and support organizations to minimize their investment in processes and procedures. But if you look at your competitor base, you will probably see a host of CLECs that have yet to make a profit and may never be profitable. Alas, many have closed their doors over the past few years, because they did not develop the necessary internal operational support structure.

If you're waiting on regulatory approvals to do business as a new CLEC, you have to decide what you will be selling. Your business plan should have details on what you want to sell and the progression in which you will achieve your plan. You'll have some real decisions to make: resale or facility based, local, ISP, LD 800 calling card, operator service, business, residential, bundled, and unbundled-these all have different problems and unique methods in setting the service and managing the installation.

When just starting out, it's easy to grab a vendor's reseller handbook and give it to your newly minted VP's to diligently set up operations to do the minimum possible to support and grow the business. At first, their focus is always minimal because not only is the order and customer volume small, so is the staff. The theory is that it will be easy to manage the business using spreadsheets, e-mail and personal fortitude. Some actually believe that software which offers " CLEC in a box "applications is the way to go-you simply throw it onto a PC and you are in business.

But whether you manage the business using spreadsheets or a series of entry-level applications, you have two things to think about. What if you grow beyond the software application and how will you manage the process today and in the future?

Of the two, managing the process is most important. It is not just taking the order and requesting service, it is the entire process that performs the following:

Accepting the order
Validating the customer
Validating the services requested
Requesting the services internally
Requesting the supporting services externally
Assuring that the service is set up properly and in a timely manner
Maintaining contact with the customer
Validating that the service works
Verifying that the billing components are set-up and rates are correct
Verifying and processing daily usage
Verifying the billing
Processing payments accurately and in a timely manner
Managing vendor costs
Processing and auditing commissions
Servicing the customer ongoing

And Lastly,
Handling the exceptions to all of the above

The fact that many CLECs are unsuccessful or will never be a profitable is due to a failure in their plans and their ability to not perform the above functions. Parts of them may be done, but never to a level of detail that assures quality. The failure to properly map processes and assign responsibilities leads to the different organizations focusing on their areas and not where and how they fit into the big picture.

The first thing every VP wants to do is show that their area is ship shape. One would think with this attitude the above issue would never materialize, but reality is, total focus precludes communication, and lack of communication results in failure. Business plans seldom go into such detail. And even if they did, how many times is the business plan actually shared with the people responsible for implementing it? The plan is the owner's view of the business, and how it should be organized to convince investors to become part of the venture. The details are in the actual implementation.

Make It Successful
So how can you guarantee success? Even before the first customer signs up, flow the processes to a detail level. Start at a general level and lay out customer entry points; basic qualifications; how orders should be written; the flow of an order through the provisioning process; and the handling and installation of the service in either a resale or facility mode. Other factors to consider include account setup and billing management, and methods of servicing customers. How do you expect to manage vendor costs? And, most importantly, how you will deal with exceptions along the way.

Your ability to identify and address root problems will give you a value proposition that enhances your entry position. How many times has a building been built without a foundation? Never. The reason is that a strong foundation provides the basis for all other activity. If a building is built on sand, it may look sound initially, but it will fail and fall.

The objective in creating a company is not to fail. The management team and the employees want the business to succeed. Why else would they work for the company? Focus on the foundation. Keep management focused on proper building techniques that include smooth hand-offs between the organizations. Identify the touchpoints and report on them regularly. Initiate metrics that provide a pulse on the business in every operational area. Stress constant communications of issues and efforts. Define roles and responsibilities in every organization and where those roles fit into the bigger picture. Stress continual process improvement by emphasizing with every employee the need to identify and take ownership of problems. Lastly, reward initiative and spread praise.

Jim Marsh is a senior consultant for The Management Network Group, a telecom consulting organization.  Jim has worked in telecom for 15 years and is an expert in revenue assurance, risk management and fraud. Jim speaks and writes on improving operational systems and functions to improve bottom lines.