The Payoff of IT Transformations

The Payoff of IT Transformations

          
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The Payoff of IT Transformations

An Interview with Erdal Altintas of Türk Telekom
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  • In This Interview
    Erdal Altintas

    Career Highlights

    Network and IT Budget Planning Manager, Türk Telekom
     

    TeBIT 2015 Executive Report

    “It is hard to measure in numbers the return of investments in big data. But we are certainly benefiting from it.”

    IT transformations can be expensive and challenging, but for telecom operators, the payoff—when it comes—can be on multiple fronts. Chief among the payoffs are lower operating costs as well as the ability to support innovative and differentiating products and services. Investments in this area are crucial, but they need to be decided wisely, as Erdal Altintas, network and IT budget planning manager for Türk Telekom’s finance department, explains.

    In the TeBIT 2015 data for Türk Telekom, we saw, for instance, that IT capital expenditures (capex) make up a relatively high share of total IT spending and that the project landscape is fragmented. This investment pattern suggests that Türk Telekom is undergoing an IT transformation. Is that the case and, if so, what are the critical areas of focus?

    We are indeed undergoing a transformation. Last year, we started an all-new phase of a transformation, and we started to integrate our three companies. For the IT side, that means investing broadly in integrating their systems. The goal is to have one integrated IT landscape in the end.

    We saw that a significant portion of Türk Telekom’s capex for digital initiatives is allocated to IT. How important are digital initiatives to Türk Telekom?

    Digital is the future of all telecom and IT services. As a company, we are directly making this revolution happen and are very aware of the importance of digital. As such, we will continue to invest in digital technologies, such as IPTV, as well as data centers, Internet technologies, e-advertising, and so on.

    What other areas are currently a focus for investment—and why?

    We are mainly focusing on IPTV and data centers. For example, recently, we have invested heavily in Tivibu, which is our premium television offering. We see a lot of potential in the pay-TV market, and we have a fiber network. In data center services, we see great potential as well; it is an area where demand is increasing significantly. So we invest in all of the topics mentioned earlier.

    In TeBIT 2015, as well as in last year’s benchmark study, we saw that integrated players seem to manage costs better than pure fixed players. How does Türk Telekom manage IT costs?

    Although a transformation, of course, initially increases complexity and costs, in the long run—and even in the midterm—we expect it to bring significant cost reductions. Integrating the three companies will bring other benefits, too, such as increased negotiating power with suppliers. Right now, we are sourcing from various vendors for IT services, hardware, and so on. Consolidation is a key lever in managing these costs. We try to review existing contracts and not only reduce the number of suppliers but also renegotiate pricing.

    Already Türk Telekom is conducting quite sophisticated big-data analytics. How is the business benefiting from it?

    Since I am in the finance department right now, I cannot comment on the technical side of big-data analytics. What I can say is that measuring the benefit realization of IT projects is hard in general, because the relation between the revenue and the investment is not direct, as in the case of network investments, for example. Since big-data analytics is not an IT service directly used by the end customer, such as CRM or billing, it’s even harder to measure in numbers the return big data provides. But we are certainly benefiting from it.

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