GIA Newsletter 3/2010

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CASE ORANGE

Framework for Strategy

“Everyone in the organization should ‘sing from the same song sheet’” says Andrew Beurschgens.

Orange UK is a mobile network operator and Internet service provider in the United Kingdom, owned by Orange SA, a subsidiary of France Telecom.

Orange is the key brand of France Telecom that serves more than 167 million customers in five continents, of which two thirds are Orange customers. In 2006, Orange became the Group’s single brand for Internet, television and mobile services in the majority of countries where the company operates, and Orange Business Services the banner for services offered to businesses worldwide.

Intelligence and the Strategy Process at Orange UK

“Everyone in the organization should ‘sing from the same song sheet’” says Andrew Beurschgens, Business Intelligence Manager at Orange UK, summarizing the role and purpose of BI in the company’s strategic planning process.

Beurschgens speaks from the point of view of making sure that the strategy process is being served with such Business Intelligence that everyone involved is on the same page regarding the anticipated market developments. At the same time, he acknowledges the challenge: “It may be difficult sometimes for the BI operation to take into account different intra-organizational and political issues that may pull the analyses and conclusions into different directions. Our BI operation really exists to ensure that it ultimately drives sound decision making through insight for the internal business groups it serves, and secondly for those individuals who have mandates to make decisions within those business groups.”

The initial focus in Orange UK’s intelligence activity was on relatively operational and tactical issues. The idea was to develop a solid intelligence framework and a platform of knowledge that would eventually support strategic decision-making. Organizationally, the intelligence team was placed in the Market Insight unit under the Strategy & Business Performance operation.

The Market Insight unit in turn hosts Market Research, Strategic Insights, and the Competitive Analysis sub-units.

The main target groups for the Business Intelligence operation at Orange UK are top management and the strategic planning team, management teams in the consumer and broadband business segments and people involved in sales, distribution and finance.

Beurschgens reflects on the challenging parts in the setup process of the intelligence operation: “Organizational culture and internal politics are an area where I think most companies face challenges in when establishing an intelligence capability, especially when it is geared at serving the strategy process. People typically have a lot of own ideas and perceptions of the company’s strategy, and intelligence professionals may find it tough to feed in neutrally positioned insight for every different unit’s needs.”

Beurschgens continues: “Strategy is also under constant revision, and it is not always so simple to serve the insight needs of the old strategy while waiting for it to be replaced by an updated one. And on top of serving the strategy process, our unit is also responsible for addressing intelligence requests from all of our business areas. This makes the intelligence scope very broad, which makes it important to think and work on many levels at the same time."

Business Intelligence Framework for Orange UK’s Strategy Process

It takes time to establish and solidify a corporate intelligence operation. Beurschgens highlights the stepwise nature of this development process: “Initially, we had little structure in our intelligence activities. Most assignments were conducted on an ad-hoc basis, using very basic information sources.”

“It was a bit like stick-fetching”, Beurschgens describes. “A manager says he needs something and someone tries to deliver that, without knowing much about the purpose of the request, let alone the larger context. Over time, we have developed a more structured approach by digging deeper into the end users’ true intelligence needs, and by utilizing an increasing variety of information sources and analysis methods”, he continues.

It is important to understand the relationship between intelligence end users and intelligence providers, respectively. The challenge for the CI Manager has been to understand the perspective from both sides – the strategically focused consumer and that of the practitioner. Then deliver the “what’s next” rather than the “so what” to that strategic issue. The graph below illustrates the different roles and perspectives involved in a corporate intelligence operation.

Management typically looks at the intelligence operation from the results and value perspective, asking the what’s next questions, rather than the so what does this mean for our business?” Intelligence practitioners on the other hand are naturally more focused on the insight creation process and techniques.

The middle ground is an important area to define and develop in order to allow for efficient exchange of information between these groups. It is vital to first agree on the expected outcome of the intelligence process and then to design a process with roles and responsibilities to ensure smooth insight delivery.

“Our intelligence operation produces anything from single customized powerpoint slides to comprehensive research studies, scenario reports and early warning signals reports”, Andrew Beurschgens describes. For the strategic planning process, Beurschgens and his team have developed a specific framework with building blocks that focus on specific topics which are listed out in the following.

Intelligence Briefing Packs – With input from Orange UK’s own win-loss sales analysis and information collection, coupled with internal field signals, an overview is provided of the existing market situation on both macro and micro levels.

Scenario Analysis Workshops – Based on the Briefing Packs, a workshop will be run where the participants identify and analyze issues that will likely impact Orange UK’s present and future business. For each issue, the scope of impact will be determined, along with the probability of the event. Finally, a set of scenarios will be developed that might or might not actualize in the future. For each of the scenarios, opportunities and threats will be identified from the perspective of Orange UK’s business.
Competitor Reactions Analysis – Orange UK also tries to understand how their competitors’ anticipated actions would fit to each of these scenarios. War Gaming has also been used in order to build a more profound understanding of the competitive moves in the market.
Orange Action Options – Based on the above activities, Orange UK will determine strategies for obtaining and maintaining favorable positions in its different market segments. The strategic overview provides a basis on which different unit managers will need to build their unit-specific strategies.

These steps are laid out in the graph below.

Once again, it is vital for the intelligence professionals to maintain awareness of how the output of the intelligence processes will be used by the organization’s decision-makers. When several people are involved in producing intelligence input to the strategy processes of different business units, the risk exists that the “right hand does not know what the left hand is doing”, i.e. especially tacit information is lost in handing over an analysis product from one person to another for further processing before its final delivery.

Lessons Learned: Intelligence professional, be bold and daring!

Being asked about the key success factors in Orange UK’s intelligence operation for the strategy process, Beurschgens says: “You need tounderstand where the highest impact can be made to develop methods and processes for winning the battles that you want to win.” He contin- ues: “In our company, decision issues often stem from the bottom up but they are decided by top management. It is therefore of obvious importance to have an impact on middle management and BU directors, since they will bring the important issues to top management’s attention.”

Another distinct success factor in Beurschgen’s experience is the delivery of intelligence. “It is essential to have multiple ways to deliver intelligence; From face to face meetings and public presentations to memos, documents and e-mails. Personal meetings are very important since managers will typically not only give you feedback, but will also share their views on the issues discussed. Here you have to be bold.“

“You will need to feel comfortable delivering your intelligence work face to face.”

Finally, Beurschgens comments on what the team might have done differently in the past, looking back now: “We would probably have been more bullish and direct about the inferences on the analysis and its insight that we have provided. We have sometimes conformed to the traditional way of thinking, having done things based on intra-political agendas. Now, we feel that we need to develop a bit more independency, stand up for what we believe given the work we have done. This is proving to be beneficial to both the team and the wider business as demonstrated by the fact that the strategy door is still open to us.”