Collaboration paramount in KPN’s successful business transformation

Dutch telecoms provider KPN took two years to carry out a complex transformation, redesigning internal operations for the future and moving from using about 80 applications from third-party suppliers to Oracle Fusion Cloud.  

KPN is the largest telco organisation in the Netherlands, with more than 12,000 employees, some 10 million customers and annual revenues of more than $5bn. The company aims to make the Netherlands the best-connected country in the world, as well as offer its customers the most environmentally friendly network and services.

“With the arrival of WhatsApp in 2009, KPN’s revenue from mobile services began to decline,” said Hamza Tedik, executive vice-president for group business services at KPN, during a customer session at Oracle CloudWorld 2023 in Las Vegas in September. “Year over year, revenue was falling. As of last year, the company is growing again because of our clear strategy that is all about connectivity.”

KPN was running on a legacy enterprise business services environment and various third-party applications – some 15 years old with more than 370 integrations and more than 1,000 customisations, according to Michael Bell, vice-president for enterprise IT at KPN, in another CloudWorld session. “Our ambition is to connect everyone in the Netherlands, and also provide a sustainable future,” he said. “We want to grow as a company and offer customers a digitised experience.”

This, however, requires further digitisation of the company itself. “As a technology company, we are looking to the future,” said Tatiana Sumina, executive vice-president and program director for Oracle Cloud at KPN, during a keynote. “When you do that, it quickly becomes clear that complexity and legacy will hold you back. We had to change to stay ahead.”

The company looked for a platform on which it could house multiple processes, with standardisation and simplification leading the way.

“Previously, we were running numerous different applications that were upgraded only sporadically, leaving little room for innovation in between,” said Sumina. “We wanted to move towards one integrated platform that dynamically evolves on a regular basis and offers more possibilities for innovation.”

Keep repeating your vision

To shape the complex cloud transformation, KPN enlisted the help of Deloitte. “That close collaboration kept us on our toes,” said KPN IT head Bell. “In such a big project, it’s crucial to provide structure, and make sure all parts of the business are on board and linked to the strategy of the company.”

This is also endorsed by Tedik. “One of the things we learned is how important it is in such a journey to have a clear vision and to keep repeating it,” he said. “People tend to forget the why; they get tired over time. It is paramount to keep reminding everyone why you are doing this and what it will deliver.”

The scope of the project was huge, and revolved around five streams: finance, procurement, projects, supply chain management and HR.  

The transformation started in November 2020, and had three deployments. “In January 2022, we migrated to Oracle HCM,” said Tedik.

“Then, in May of that year, we migrated our fibre business to Oracle Cloud for finance, procurement, and projects,” he continued. “Our fibre business is our big subsidiary, driving roll-out of network, and this turned out to be a good decision; to basically try a new way of work in real operations and support this domain with advanced tools. In April of this year, we migrated all the Oracle modules and other applications in scope to Oracle Cloud.”  

One of the challenges KPN faced in the process was that services had to continue as usual, even though there was heavy rebuilding going on in the background.

“That’s why it was so important to work in a structured way through a proven project methodology, governance and principles,” said Bell. “Every transformation is rocky and has its ups and downs. But sticking to a set of agreed rules gives you ground to cover to ensure you stay on the right path.”

For example, we had two guiding principles, which were essential for the project: stick to the standard as much as possible – “Oracle to the max” – and redesign functional processes by implementing best practices.

After the migration, KPN has three customisations and a variety of best practice processes. “I’m really proud of that,” said Bell. “If you had told me that at the start of the project, I would have thought that was far too ambitious.”

Moreover, the company has managed to reduce the number of integrations by roughly 50%. “In the past, we had about 370 integrations, and in our current situation, we only have 170,” he said. “That is a huge benefit from a cost perspective and an operational point of view, because it’s easier to maintain and reduces the complexity in the organisation.”

Data quality is success factor 

Change management proved crucial in the process, said Sumina. “This transformation required a change of mindset of our people, for them to be open to new technology,” she said. “We have been trying to leverage a maximum of standard functionality, as any customisation creates complexity. That required for some people to be open to change the way they worked.” 

The telecoms provider has simplified its IT landscape, reduced the number of integrations and retired almost 80 applications. “As a result, we have better insight not only into processes, but also into the Euros we spend,” added Sumina. “The transformation forced KPN to look critically not only at which applications were running, but also at what was running in those apps. We had to clean up datasets from 15 years, which was quite a challenge.”

That was one of the reasons why one out of three go-live moments was delayed by six months. “Initially, we were supposed to go live with the last piece of transition in October 2022, but we wanted to make sure everything was right,” she said. “Data quality defines how fast you can stabilise processes and deliver proper support to the business. Because we delayed the migration, we were able to achieve a higher automated migration rate and went live with a massive volume of operations in a smooth manner.”

KPN shared key lessons from the cloud transformation in several sessions at Oracle CloudWorld 2023. Besides change management and structure and methodology, Bell pointed out the importance of support from the board members.

“You will run into situations where users want to stick to their own customisations,” said Sumina. “Three of our six board members were truly owning the transformation programme, driving decisions and securing the direction we took. That support is needed to move forward in challenging moments.”

In a migration of this magnitude, everything is interlinked, and making strong cross-string alignment is also necessary. “We involved specific functional users, as well as technical experts, that sat together to figure out what was logical and what changes needed to be implemented,” she said. “There were fierce discussions at that table, but you have to cater for that in your governance.”

But perhaps the most important lesson for KPN is that these kinds of transformations are almost impossible to do alone. “The success cannot be attributed to KPN, or to Oracle, or to Deloitte; it was the collaboration and synergy that made this a successful business transformation,” said Bell. “At one point, you couldn’t even tell who was Oracle, who was KPN and who was Deloitte. Everyone shared the same view and goal. It was very hard work to get to that point, but it proved paramount for success.”

Exploring artificial intelligence 

Now that KPN's IT landscape has been modernised and the company has technologically prepped for the future, there is room to think about the next steps.

“We are exploring the next level of automation for specific processes and the development of advanced models of forecasting,” said Sumina. “And even though AI is not new to us, we are aware that our transformation has greatly increased possibilities, which we will leverage further in time.”