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Telecommunications Telstra names two new directors
Telecommunications Telstra names two new directors | Telstra names two new directors |
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| by Stuart Corner | |
| Wednesday, 17 May 2006 | |
  
Zeglis presently sits on the boards of AMX Corporation, Helmerich & Payne and State Farm Mutual Automobile Insurance Company, he had a long career at AT&T, culminating in being chairman and CEO at AT&T Wireless from 1999 and 2004. He previously sat on the boards of Georgia Pacific, Illinois Power and Sara Lee Corporation amongst others. Willcox is, according to Telstra chairman Donald McGauchie, "one of Australia's most respected and experienced executives and now non-executive directors". He is a fellow of the Australian Institute of Company Directors, chairs Mayne Pharma, is a director of the CSIRO and sits on the advisory board of CVC Asia Pacific (Australia) Limited. Previously he was the chairman of AMP Limited and Mayne Group, sat on the boards of Lend Lease, JH Faulding and James Hardie amongst others. He was the CEO of BHP Petroleum between 1986 and 1994. "Both John and Peter have participated in significant corporate change processes during their expansive careers and will be well positioned to make a major contribution to the transformation of Telstra currently being implemented by the CEO," McGauchie said. Their appointments will require endorsement at the next Telstra AGM on 14 November 2006. As previously announced, John Fletcher will leave the Telstra Board on 30 June 2006. McGauchie might be full of praise for Zeglis but describing him as "having participated in significant corporate change" is well short of the full story. It was on his watch that AT&T botched a major CRM upgrade that, according to reports ended up costing it $US100 million, many customers and which has been credited with precipitating its sale to Cingular in 2004 for a fire sale price. Some of the lessons from that era are extremely germane to Telstra. In its April 15 2004 edition, US magazine CIO, said " A major [AT&T Wireless] CRM system...crashed during an upgrade, and customer service representatives could not set up or access new accounts. The system breakdowns, which continued through February 2004, swamped other AT&T systems, gridlocked customer service phone banks and sent furious customers scurrying to other providers...The failure so damaged AT&T Wireless' reputation that many analysts believe it hastened its sale to Cingular in February for $41 billion, or $15 per share, which was just under half the value of AT&T Wireless's shares when it went public in April 2000." CIO went on: "AT&T Wireless' mistakes offer valuable lessons for CIOs. For one, it's unwise to freight major system upgrades with external complications. AT&T Wireless' CRM upgrade was hamstrung from almost the very beginning by rumours of outsourcing deals and future layoffs. These rumours generated pervasive morale problems that hurt the productivity of project staff." (Sound familiar?) Another parallel exists with Telstra's plans to scrap its CDMA network. According to CIO: "when AT&T Wireless began its Siebel CRM system upgrade in 2003, it was a company that had slipped from unquestioned market leader to middle of the pack...Worse, AT&T Wireless was playing catch-up on its most important technology asset, its phone network...Even before AT&T Wireless was spun out from its parent AT&T in 2001, it had begun a furious buildout of ... [a GSM network]... Only one other major carrier, Cingular, was saddled with the challenge of building out a new GSM network while still servicing the old [TDMA network]. The other carriers had all chosen network technologies that could handle data transfers...The company had to convince its old customers to move off TDMA, which worked as well as most other carriers' networks for voice calls, and onto GSM, which had poorer voice quality...It also had to convince new customers that GSM was the wave of the future, that they would soon be shipping data over their phones instead of their laptops." (Echoes here of Telstra executives dismissing CDMA as a technology dead-end?) And there is more: "Compounding these difficulties [with the CRM upgrade] was the hit employee morale had taken on Nov 16 [2003], when AT&T Wireless president and CEO John Zeglis confirmed the layoff rumours....He did not say where the cuts would come or when. But IT managers started telling employees that layoffs would begin in February 2004, according to former employees." The full CIO article can be found at http://www.cio.com/archive/041504/wireless.html |
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