Roland Berger develops Lean Blueprint for telco players

01 September 2014

European telecommunication companies should rapidly consider adopting new and leaner business models, or else they might find themselves succumbing to the fierce competition and new reality in the marketplace, warns a new report from Roland Berger Strategy Consultants. To help telco’s with responding to the challenge, the strategy consultants have developed a blueprint which can save up to 20% of OPEX costs.

For decades the telecom business was a highly lucrative industry: an analysis from Roland Berger shows that between 2000 and 2007 the market size of the European telco industry grew from $287 billion to $467 billion, a growth of 62%, or an impressive 7% per annum. Since 2008, however, this upsurge has given way to a constant decline of around 2% a year. Key reasons include the rise of new technologies such as VOIP (lowering fixed line and mobile revenues), free instant messaging services such as Whatsapp (impacting SMS and mobile revenues) and increased competition and regulation, which has put margins under pressure.

Revenues of European Telcos

Telco’s have over the past years generally responded to these new dynamics by implementing rigorous cost-cutting programs, yet according to Roland Berger this potential is close te being exhausted, or requires a substantial effort in order to capitalise on. “There are limits to what straightforward cost-cutting programs can still achieve within inherited structures. Often, their potential has long since been exhausted," points out Carsten Rossbach, Partner at Roland Berger. The key lies in accepting the new playing field, and exploring and embracing new business models, explains Philipp Leutiger, also a Partner at the strategy consulting firm. “Telco’s have been too complacent about their business models for too long. That has precipitated their downward slide in recent years."

Returning to profit: Lean telco

If telco’s want to return to profit, then according to Roland Berger they must go through two fundamental steps. Firstly, they need to thoroughly revisit and update their strategy. To do so, they need to find the answers to three key questions:

Three key questions

Secondly, based on the new strategy, telco’s need to create leaner corporate structures. Although the common misconception is that lean is all about downsizing, this is not the case. “Lean means powerful, flexible and adaptable to current and future market needs” write the consultants in the report ‘Lean Telco. Redefining the telecom business – from cost-cutting to smart efficiency’. The question though is: how can telco’s become more lean? In Roland Berger’s view, which is based on decades of consulting experience and in this case more specifically on dozens of interviews with telco executives*, firms should consider four essential components.

Four essential components

In addition, they recommend breaking down the organisational structure of telco’s into three main layers: Marketing, Sales & Service | Network & IT | Support Functions. By using the above approach, telco’s can in an effective manner transform their operations into a ‘lean machine’. Examples include a leaner product and service portfolio, reduced process complexity, lower total cost of ownership through the outsourcing of non-core functions and increased automation. At the same time, cost savings can be plowed back into core business activities to fund more innovation.

If the approach – which Roland Berger calls the ‘Lean Telco Blueprint’ – is successfully implemented, telco’s can in its view achieve OPEX reductions of up to 20%, leading to a “significant increase in annual EBITDA margins.” For some, well-performing telco’s, Roland Berger’s advice may be no more than a subtle warning, yet for providers that find themselves sliding away the transformation to a Lean Telco may be imperative.

Phillipp Leutiger - Carsten Rossbach - Roland Berger

* In the report, Roland Berger states that 85% of the interviewees in its survey ‘strongly’ or ‘partly’ agree to its so ‘Lean Telco Blueprint’.


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Project management industry adds £156 billion of value to UK economy

15 April 2019

Project management has grown into one of UK’s largest areas of business over the past decade, amid the increasing ‘projectification’ of work. With the gross value added to the UK economy by project management estimated to be £156 billion, this trend is likely to continue in the coming era.

Despite the huge success of project management in recent years, until now there has been relatively little data available on the size of project activity. As a result, there has been a great deal of debate on things like the number of people involved in the sector, the number of projects, and how it contributes to economic output. Due to this need for clarity, APM, the UK’s professional body for project management (the largest organisation of its kind in Europe, with 28,000 individual members) commissioned economists from PwC to shed light on the industry's economic impact.

The research concluded that the profession makes a more significant contribution to the UK economy than the financial services sector. 2.13 million full-time equivalent workers (FTEs) were employed in the UK project management sector, generating £156.5 billion of annual gross value added (GVA). In comparison, the financial services sector contributes £115 billion, and the construction industry adds £113 billion.

Gross value added to UK economy

Commenting on the discovery, Debbie Dore, Chief Executive of APM said, “Project management runs as a ‘golden thread’ through businesses, helping to develop new services, driving strategic change and sector-wide reform.”

Who is a ‘project manager’?

To reach these estimates, PwC’s researchers used detailed models to map out the value of project management activity. They ultimately defined relevant ‘projects’ as “temporary, non-routine endeavours or rolling programmes of change designed to produce a distinct product, service or end result… [with] a defined beginning and end, a specific scope, a ring-fenced budget, [and] an identified and potentially dedicated team with a project manager in charge.”

Building on this, they then went on to define what the act of project management actually is. The job consists of applying “processes, methods, knowledge, skills and experience” so that clients can meet their objectives and bring about planned outputs or outcomes. The analysts added that this includes “initiating the project, planning, executing, controlling, quality assuring and closing the work of an identified and dedicated team according to a specified budget and timeframe.”

Importantly, it should be noted that the profession is not exclusive to only roles explicitly labelled as ‘project manager’, but to any role where specialist project management skills are used. This means that across sectors these roles can have very different titles, from the self-explanatory contract managers of procurement, or the campaign managers of advertising, to the likes of festival co-ordinators in the events sector, and many more. The roles in question also span all strategic levels of the profession, from strategic to tactical and operational positions.

Gross value added of project management profession

From a sector perspective, the financial and professional services, construction and healthcare industries make up almost two-thirds of the total project management GVA. At the same time, understandably, the UK Government has a huge project portfolio, which further drives the size of the GVA the sector contributes, thanks to megaprojects like HS2 and Crossrail.

Commenting on this to the report’s authors, Oliver Dowden, Minister for Implementation remarked, “Project delivery is at the heart of all Government activity, whether it’s building roads and rail, strengthening our armed forces, modernising IT or transforming the way government provides public services to citizens. Getting these projects right is essential if we are to ensure that we build a country that works for everyone.”

Throughout 2019, 26 major government projects were delivered, representing a fifth of the overall Government Major Projects Portfolio (GMPP) of 133 projects. According to the IPA annual report 2017-18, these represented a whole life cost of £423 billion. In addition to this were a plethora of smaller scale projects, and those in early development.

Elsewhere, with the increasing digitalisation of the economy impacting entities of all shapes and sizes, IT and digital transformations tended to dominate the projects of the UK scene alongside new product development projects, with a respective 55% and 46% of organisations in the research sample having undertaken these types of project in the past year. At the same time, this varied across sectors, and unsurprisingly, in the construction and local government sectors, fixed capital projects were the main project type undertaken.


Looking to the future, 40% of business leaders expect project management will grow in the coming years due to the increased use of projects – or the ‘projectification’ of the UK. In a trend that has been witnessed elsewhere, organisations have to rapidly and continuously change in the digital age of business, driving the need for project management.

Outlook for project management services

An increased focus on value over cost – especially in the construction sector – and a forecast increase in the number of international projects are predicted to be key drivers of growth, according to the expert contributors. However, this will not happen in the absence of challenges; more than half of organisations expressed concern over the perceived impact of political uncertainty in the UK. Skills and capability shortages were also cited as a potential barrier by a third of organisations.

With regard to budgets, meanwhile, a third of those surveyed by PwC said they expect the size of project budgets will increase in the coming three years, while 40% anticipate a growth in project size. As the profession continues to mature, and as the recognition of the importance of good project management grows, it is expected that a greater proportion of project work will gain more distinct attribution to the profession itself, giving more recognition and appreciation to the role of the project manager.

Speaking on the findings of the study, Sandie Grimshaw, a Partner at PwC, concluded, “The project management profession is relatively new compared to some other professions, such as lawyers, teachers and doctors. However, as project management is a core competence vital to organisations in the UK, the profession is critical and will continue to grow in stature.”