Slack et al. (2008, p. 2) assert that operations and process management is the action taken to manage the processes and resources that produce services and products. Organizations have an operations function since they produce some kind of services or products. Processes are managed through different approaches using any of the four operation V’s: variety, visibility, volume and variation, as related to the various services and products produced by a business organization. High visibility/variation/variety/volume procedures and processes require management in a distinct way, making use of different people and technology to design and develop a different approach to low volume procedures. Operations strategy is the outline of actions and decisions that shape the lasting objectives, vision and abilities of the operation and its part to the general business strategy. This essay discusses how the effective management of operations contributes to a competitive advantage in Ericsson Company.
Ericsson is a company from Sweden that takes part in the telecommunication industry. Its operations also involve data communication systems and the management of similar services related to telecommunication. In the recent past, operations in the telecommunication industry have become a basis of competitive advantage. Telecommunication industry operators are in search of performance objectives like speed, cost, flexibility, quality, and dependability. With the ever-increasing significance of operation, the telecommunication operators have begun looking for external suppliers to beef up their operations. Ericsson Company realized this dynamic trend and set up their managed service department which offers operation structure and human resources to Telco operators (Meurling and Jeans 2000). The DU is a telecom operator based in Dubai and outsourcing its business to Ericsson.
DU operates in the following levels. Firstly, there is a front-level operation team that monitors the entire network. Secondly, there is an operation team at the next level for managing the problem of the network and complaints from the customers. This level works with a close link to the business and marketing. The third level constitutes the management team for dealing with and scheduling any changes. The fourth level constitutes a team that deals with the performance of the network. Through this, Ericsson has brought about a significant difference and, following the outsourcing of DU, has earned a lot of profit and revenue in the Middle East region. This is very reflective of the manner in which operation has contributed in this success.
After Ericsson took up managed operations and services, there were quite a number of issues that were realized in the network. Thus, the first step was to address these matters. Next, Ericsson adjusted to best practices through modification of the operation process and tools. Automated scripts were developed in 2010 to establish proactive measures of monitoring the network and yield statistics of evaluating the market based on promotions for marketing to study trends. Likewise, the planning team applied these statistics to make plans concerning the network. The operations of Ericsson have set up the in-house MSTOP tool founded on globally used Enhanced Telecom Operations Map (eTOM). The tool can be used for processes founded on the 4Vs, interaction amidst various teams in the operation, service level accords, promoting quality, performance and speed within a given time period and finally in an escalation path.
With the application of Slack et al. (2008) operation management procedures, the operation for DU by Ericsson is changing from the third stage to the fourth stage. It is not completely at the fourth stage, but is taking up the fourth stage. In connection with both the internal and external end-use and the first stage, most of the issues concerning the external customer are addressed in the communicated time which amounts to customers that are satisfied. In addition, usual meetings with internal customer are being conducted to enhance performance. Likewise, the operation team has gone beyond reactive measures to taking up proactive approaches. All the same, there are a number of conflicts which get extended due to matters between departments.
In the second stage, considering operation practice on external neutrality, Ericsson establishes best business and operation practices. Ericsson has established MSTOP found on eTOM toll that uses best practices based on performance monitoring. Changes in the network and their management, the preparation of all processes are aligned with the strategy of the business. This increases the strategic impact and capabilities of operation. Such best business practices have offered a clear advantage to the DU over its competitor, Etisalat, and at the same time gained above 40 per cent of the share in the market, which shows that the best practice is more valuable than the competitors’. All the same, operation is not taking up responsibility for restructuring expectation and competencies of the entire supply network (Meurling and Jeans 2000).
Connections with competitive strategy and the third stage about the nature of being internally supportive is another level of operation. Quality is an important aspect to DU. The target by the top management is to increase the rate of retention and at the same time decrease the rate of churn. The churn rate is the rate at which the customer of DU leaves DU. Operations are paramount in this sense. The complaints of the customers are thoroughly addressed. The satisfaction of the customer is comparable to the speed through which the operations team will provide a solution. An effort was made in minimizing timelines for solving these issues, evaluation of the changes in the network and the implementation of the changes that add quality value to the network. Thus, those endeavors have made operation helpful to the business internal operation and strategy, while feasibly shaping the competitive strategy.
There is also a notable innovation in the operation at the fourth stage which is also externally supportive. Operation in DU takes up a proactive form. The promotions are very significant to the competitive strategy. The proactive plan in 2010 clearly showed an innovative and proactive operation. However, operation is still not involved fully in changing entirely the rules of the game and, even though operation is very important for the competitive strategy, it does not make it. All the same, effective management of operations contributes to a competitive advantage in Ericsson Company.