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Telstra to bar legacy systems work

Telstra has vowed to place a moratorium on work on its legacy information technology systems from November and shift its entire focus to new systems designed to support its next-generation network.
Written by Steven Deare, Contributor on
Telstra has vowed to place a moratorium on work on its legacy information technology systems from November and shift its entire focus to new systems designed to support its next-generation network.

Telstra's chief financial officer John Stanhope told an investor conference yesterday the moratorium would last for seven or eight months from November as new system build projects kick in, with the only likely exception being a system governing the carrier's ability to respond to innovative pricing from competitors.

"You don't want to be vulnerable in the market if somebody comes forward with some pretty innovative pricing, so we would respond to any possibility of being at a market disadvantage, but that would be the only exception and we would expect those to be few," he told the Macquarie-organised event.

The moratorium comes after the carrier tried and failed to undertake work concurrently on its old systems while implementing new offerings.

"We are not going to [take that approach] because that's resulted in a distraction from the main game and, in fact, we've had a couple of cracks at this and we've failed because we haven't stopped work on the old systems."

Stanhope described the build of a new 3G 850 network as "relatively easy" compared to the associated IT transformation, which involves shifting from an "extraordinarily complex" IT infrastructure to a simpler, more effective set of systems.

The carrier is engaged in a massive IT project to support its next-generation network rollouts, with implementing new business support systems governing customer relationship management, billing and customer care at the top of the list.

"The earlier focus is on improving the quality of our customer information," Stanhope said.

"We have far too many handoffs at the front of house because we don't know about the customer in terms of CRM, so that is essential to be able to deliver better service to the customer."

Implementation of new operational support systems are to follow, Stanhope said.

Stanhope reiterated that the carrier's staff reduction targets were closely tied to achievement of its system transformation plans. "I think if you recall our November Strategy Day, the 6,000-8,000 over three years, and 10,000 to 12,000 staff reduction over five years, is very much dependent on simplifying on the front of house. Today our billing and customer care is very much product focused. Tomorrow it will be about our customers."

Stanhope also reinforced the company's determination to avoid custom development of systems

Telstra would remove "some 80 percent" of its systems, said the chief financial officer, most over the next three years.

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