An article by Claudia Nemat, Member of the Deutsche Telekom AG Board of Management, Technology and Innovation.
The ability to adapt to rapidly changing conditions has always been considered a success factor. And it has always been a good advice to prepare for an uncertain future by consciously deciding to shape it.
However, a crisis such as the current COVID-19 pandemic, which has posed and continues to pose the greatest challenges to the entire world population, states, and economic systems at an exponential (spread) rate, has hardly ever occurred in any scenario.
As of today, Deutsche Telekom has handled this crisis well. During the COVID-19 restrictions, our networks were confronted with substantial stress tests in the shortest possible time: within days, the number of digital conferences increased by 322%, the number of Netflix parties by 3074% and the volume of voice minutes in the German fixed network by 100%. Everyone was part of it. Everyone was connected. The networks have been stable and secure. And they will be so in the future.
We might not have coped so well with this challenge if we hadn't already addressed crucial issues in our company in the past. Needless to say, that people are hesitant to make difficult changes in "good" times. And that the subconscious resistance that goes along made the task even bigger.
So, what did we do right at Deutsche Telekom? In my view, two technological and one cultural innovation were of fundamental importance allowing us to act flexibly during the crisis. And thus, to be resilient:
1. The digitization of our networks - from Find&Fix to Plug&Play
The complete digitization of our networks, the IP transformation, was the major technology project of the past decade, which I had started eight years ago - at that time still as Board member responsible for Europe. At its core, this was about removing energy-inefficient technology, replacing it with new software technology and shutting down old platforms such as ATM and SDH. The key challenge in IP transformation is to migrate ALL connections in an area and ultimately in an entire country. Therefore, it proved to be a successful model to first carry out a complete migration in smaller countries such as Slovakia, Croatia and Hungary. And finally finish it in Germany, where we will reach completion this year. IP migration was the technical prerequisite for the rapid nationwide expansion of broadband connections with (super)vectoring, for "plug and play" service provisioning from the customer's perspective (immediate activation of new connections) and for a significant improvement in energy efficiency. Today, 250 Mbit/s Super Vectoring connections are available for more than 23 million households. This would not be possible without the major technological project of IP transformation.
In 2015, we faced the question of whether we should initially equip 20% of all households with fiber to the home in the following years. Or, instead, to initially install fiber to the curb in all streets in order to supply 80% of all households with bandwidths higher than 100 Mbit/s. And then focus on fiber to the home in a second step. We chose the latter approach. Especially during the lockdown, this broad rollout approach proved to be a blessing, because the bandwidth requirements have increased simultaneously for many households due to home office and remote work.
Also, our mobile networks are secure and stable. We are expanding and modernizing our LTE network fast - because every radio gap is one too many. At the same time, we are implementing the upgrade to 5G. As early as July, we create for half of all citizens in Germany access to 5G.
Yet, in order to be able to act flexibly in the crisis, it has been crucial to change our working methods in recent years: flexible instead of hierarchically rigid. In concrete terms: we monitor network traffic on a very granular level on all platforms, all the time. If our technicians detect traffic anomalies in real time (such as impending platform congestion during the lockdown), they can quickly reroute traffic and upgrade platforms.
2. IT - turnaround - from problem child to strategic enabler
In 2016, the IT restructuring at DT was deemed to have failed. It became clear that many expected functionalities could not be provided. "IT crisis" became a familiar word.
At that time, I brought a new team on board and we started a comprehensive restructuring program with focus on employee skills, culture and working methods - and a far-reaching change in the way we develop IT. This enabled us to improve the average development speed by a factor of 3 and restore stability and delivery reliability. Even before Covid-19, it was everyday practice to work together virtually in cross-functional teams with members spread across different locations or even countries. Trustful relationships with partners allowed us to massively increase capacities and licenses with very short lead times when the pandemic containment measures were implemented. Overall for a total of 180,000 people in the home office, therefore 80,000 in Germany alone.
During the crisis, our IT has proven to be stable: In Germany, for example, we moved 16,000 service and call center employees into the home office within a very short time. We enabled the setup of remote service organization from a standing start, which since then was tirelessly working for our customers across 16,000 locations. In parallel, remote accesses increased enormously also in other areas of the organization. Supported by the expansion of the capacities of important collaboration platforms, such as Cisco WebEx. And in all this, there was even a customer satisfaction boost.
3. Skill transformation - managing change in "good" times
Recognizing and mastering future changes have always been my team’s and my guiding ideas for Deutsche Telekom's major innovation projects of recent years. Whether it was the digital transformation of our networks or the turnaround of the IT. However, changes become sustainable, above all, through accompanying cultural innovations. At Deutsche Telekom, this includes skill transformation, i.e. the systematic reskilling and further training of our employees to advance into new, future proven capabilities such as software engineers, AI experts and network architects.
At the beginning, many people were firmly convinced that this was an "impossible" undertaking. But the IP transformation’s successful principle is turning out to be right once again: "start small, and - if successful - scale fast" (but also: if failed, stop fast). We initially implemented our new IT development logic in defined areas ("green field"). We also piloted further education and skilling academies. We started with a few dozen people, followed by several hundreds. We initially began with a few skill categories. Now, we will train thousands of colleagues in my board area. Only when more and more people realize that something is working well, innovative changes succeed across the board. Crises can accelerate change. However, hoping that changes which have been known for a long period of time without having been addressed, can be easily initiated and implemented during a crisis, will most likely not work. In this respect, investments into resilience lead to a strength that is essential for survival in times of crisis. Enabling people to have access to sustainable infrastructures, trust-based partnerships and a "can do" culture with flexible working methods in times of uncertainty, is crucial for success. In addition, it requires the courage for long-term and far-sighted investments.
We at Deutsche Telekom will continue to adapt and progress. And we won’t stop delivering our promise to connect everyone safely, - every day.
DT invests several billion euros every year in building networks.