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Technology Acquisition Local Case Study: PLDT x Comverse

Article · November 2018

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LOCAL CASE STUDY
TM-241 Technology Acquisition

Group 4
Abe, Jay Anne Patricia
King, Nyker Mathew
Fernando, Mirzi
I. Brief Background of the Organization

The Philippine Long Distance Telephone Company (PLDT) is the leading

telecommunications and internet service provider in the Philippines currently owned by Manuel
V. Pangilinan. PLDT offers the largest and most diverse range of telecommunications services
owning the majority of the advanced network architecture and infrastructures across the
Philippines. PLDT has a network of 174 central office exchanges serving the Metro Manila area
and 188 other cities and municipalities throughout the country. International long-distance
services are also provided using two international gateway switching exchanges, submarine cables
and satellite systems that connect PLDT’s network worldwide. (Angeles, 2011) It has the most
extensive fiber optic backbone, fixed line and cellular/satellite network. PLDT caters to the
communicational needs of Filipinos through its principal business groups- fixed line, wireless
and information and communication technology.
Figure 1. PLDT’s Group Corporate Structure
Smart Communications,
Inc. and Subsidiaries

Chikka Holdings Limited

and Subsidiaries

Wireless
Smart Broadband, Inc.
and Subsidiaries

Digitel Mobile Philippines,

Inc. (Sun Cellular)

Pilipinas Global Network

Limited

ePLDT, Inc. and

Subsidiaries

Digital
PLDT

Telecommunications
Philippines, Inc.

Fixed Line PLDT-Maratel, Inc.

PLDT Global Corporation

and Subsidiaries

PLDT Subic Telecom, Inc.

PLDT Clark Telecom, Inc.

PLDT Communications
and Energy Ventures, Inc.

Others Philippine Global

Investments Holdings,
Inc.

PLDT’s mission is to empower Filipinos everywhere with customer-focused digital

innovations that unlock and share their infinite potential. PLDT aspires to be the service provider
of choice for every Filipino family by delivering a digitally connected experience in every
household. As they humanize technology, they keep families connected in a meaningful way. And
by providing a compelling suite of multimedia services and solutions, relationships within the
family are being strengthened. As a result, consumers show their loyalty and affinity, helping
PLDT achieve market dominance and value creation which allow people, shareholders and
communities to prosper. PLDT is listed on the Philippine Stock Exchange (PSE:TEL) and its
American Depositary Shares are listed on the New York Stock Exchange (NYSE: PHI). It has
one of the largest market capitalizations among Philippine-listed companies. With the fast-paced
technological evolution, PLDT continuously strives to provide the best communication solutions
by investing in various technological advancements. It's all part of PLDT's culture of innovation
 to bring its operations to world-class standards and become the best telecommunications
company in the region.

II. Organization’s Business Need and its Technological Solution

As a telecommunication company catering to millions of customers and subscribers, it is a

necessity and obligation for PLDT to keep track of all its customers’ personal records, network
usage and billing histories. Since PLDT was established, it has already acquired a technology,
through licensing, to support its core business operations. The technology acquired was the
Integrated Customer Management System (ICMS) developed by IBM that ran in
AS/400(Application System/400). AS/400 is a midrange server designed for small businesses
and departments in large enterprises. ICMS is IBM’s own telecommunications industry customer
care and billing solution. ICMS is a system that can cover all activities and functionalities needed
to support PLDT’s core business operations.

CRM

BSS PROVISIONING

Figure 2. PLDT’s Core Business Operation

1. Customer Relationship Management (C.R.M.)- C.R.M. refers to practices, strategies, and

technologies that a firm uses to manage and analyze customer interactions and data throughout
a customer’s lifecycle. In PLDT, CRM can be done in ICMS. It is a functionality to capture a
customer’s request. For example, a customer applying for a PLDT wired line or telephone
service.
2. Provisioning- This is a part of ICMS as well wherein a facility or a specific address is being
provided by the system as basis if a port is available for installation of a PLDT line network.
It basically checks the customer’s address before the lineman proceeds with the actual
installation.
3. Billing Support System (B.S.S.)- ICMS also has a built-in database where it stores all the
customers’ records and its billing history. This is where the customer's statement of account
is being generated as well.

For a long period of time, PLDT was satisfied with the use of ICMS. IBM was consistent with
releasing an enhanced version of the application to cope up with the needs of its clients and
customers. However, according to Mr. Leander, PLDT’s lead business analyst, PLDT’s future
roadmap was also changing to catch up with the latest technology whilst still maintaining the
quality of its service. PLDT was gearing towards a new technological architecture with a future
 state that is content providing and can support web integration and data warehousing. One of
the main functions ICMS did not have at that time was the ability to integrate with the web.
Gearing towards a generation centered in web-based applications and software, PLDT had to
step up its technology. ICMS simply did not have it on its basic functionality at that time and
proposing a change request will also incur a cost. With this, the firm decided to acquire a more
advanced and better technology that is already available in the market. Another main factor that
pushed the firm to acquire a new technology was its technology architecture wherein all its core
business operation activities were being done in a single system only, which deemed risky. A daily
business operation for a telecommunication company is busy and heavy and it cannot be avoided
to have a system down or failure. If this scenario occurs, all operations are bound to stop unless
there’s a server for failover. PLDT realized the risk having this kind of technology architecture
that’s why they came up with a technological solution to have an integrated system. The objective
was to have a separate system for each core business process. Each system is stand-alone and at
the same time functioning harmoniously with each other to keep track of customers’ records.
This was PLDT’s technical solution and to successfully implement it, PLDT’s procurement team
initiated a bidding process to outsource a vendor team or firm that will meet all the deliverables
agreed upon by the management and stakeholders considering the cost and timeline.

III. Organization’s Procedures for Initiating and Planning its External Technology
Acquisition

Defining the Involve all

Create a role of the stakeholders
business case members in in the
the commitee research
Figure 3. PLDT’s Initiating and Planning External Technology Acquisition Process

A business case is first drafted wherein the need for change of PLDT is defined.

With the need of future-proofing its system, as well as to further drive its digital
transformation, PLDT decided to look for a new billing system which will cater to a complete end-
to-end billing system, from customer service management to customer relationship management
billing cycle. According to Mr. Leander, PLDT’s lead business analyst, PLDT also sought to
integrate its billing system to the web for direct consumer viewing of their invoice. These are the
business needs that they identified to compete with its competitors.

The organization then identified the members to be involved in the acquisition project. Heads
of different stakeholders identified key persons to be responsible for securing the details of the said
project.

With the newly formed committee, it then starts to lay out and scrutinize the requirements for
the new billing system by writing a project charter. The committee starts to describe the proposed
solution, which is licensing in a new billing system, to address the business need. It then takes into
writing several factors such as the benefits of successfully implementing the new billing system and
the consequences of not implementing or finishing the acquisition. The committee also defined the
project timeline.

The committee also identifies the risk involved in acquiring the new billing system such as
possible delays during the first use of the system as employees may need to be on-boarded first on
the new billing system before they can use it. The technical members of the committee assess the
technical risk of integrating a new billing system to PLDT’s current data warehouses such as the
possibility of misrepresentations of data and the possibility of data loss during migration from the
old billing system into the new. These risks pose a threat in achieving the project’s objectives in
terms of performance, safety, cost, supportability, and schedule; thus, the committee sees this as a
vital phase of the project. Those risks were then classified into different degrees of impact, major,
moderate, and minor.

The committee then designed for plans in mitigating and monitoring risks. Some of the steps
were defects found in the acquired technology were to be collated and then reported to the vendor
for proper support and fixes.

The committee also plans for contingencies in case the new billing system may fail in some
parts or as a whole. Strategies like regular creation of backup were identified as contingency plans.

IV. Description and Justification of the Organization’s Selected Method of

Technology Acquisition

PLDT is a telecommunication company, a communication service provider. Its forte is

telephony, mobile and data communication. With the emerging technology, PLDT has a separate
business unit for I.T. handling data transformation and process of everyday business operation.
Even with its own I.T. department, PLDT knew that its own forte is not in developing a system.
PLDT has the financial means to acquire a new technology so it is reasonable to search for a
vendor who can provide the firm’s business needs. It is a cost-effective approach, minimizing the
expenses and planning needed in setting-up a new billing system. Also, as an industry practice,
there are already several available emerging technologies in a global scale that can cater the
transformation needs of PLDT. Thus, licensing in a billing system is the most appropriate method
of technology acquisition.

V. Organization’s Procedures for Evaluating and Selecting its Technology Supplier

Figure 4. PLDT’s Technology Acquisition Process

Determine
Issue
the criteria Vendor Invitation Awarding
Request for Evalution
for Conference to Bid of contract
Quote
selection

1. Determine the criteria for selection.

a. Vendor profile and its clients’ testimonies
b. Product roadmap of the billing platform
c. Billing platform functionalities and compatibility
d. Cost
e. After-sales support
2. Vendor conference - The vendors are on-site and take turns in demoing their proof-of-
concept billing system to the committee. The committee then scrutinizes if the vendor can
support all business needs.
3. Issue Request for Quote - These requests the vendor for a breakdown of fees and charges
of the said acquisition and any other after-sales support and improvements.
4. Invitation to bid - All vendors who submitted the requirements then are sent an invitation to
participate in the bidding process.
5. Evaluation - The procurement committee considers all factors such as the cost and the
technological feasibility of the proposed billing system, and the after-sales support offered by
the vendor. Another criterion is the roadmap of the billing system. Since the main objective
of the billing system acquisition is future-proofing the company, the technology should be
continuously evolving which means the roadmap of the technology to be acquired should be
aligned with the technological advancement and business transformation roadmap of PLDT.
Scores are then assigned, with more weight given to the most priority feature of the system,
in each criterion.
6. Awarding of contract - After the procurement committee reviewed all pertinent documents,
they then give a recommendation to the project sponsors who will then approve the awarding
to the qualified vendor.

With the above procedures used by PLDT, the contract was awarded to Comverse Technology
Inc. Comverse is an international firm located in New York that was focusing on developing and
marketing telecommunications software. The firm provided value-added services to
telecommunication service providers, particularly to mobile network operators, making it fit to
PLDT’s nature of business. Specifically, Comverse’s Kenan FX was the technology acquired in
the process. Kenan FX was part of Comverse’s billing portfolio. According to Napoleon
Nazareno, President and CEO of Smart and PLDT at that time (2007), "Kenan FX is a
convergent billing system capable of supporting multiple network platforms will help ensure that
PLDT and Smart are well positioned to meet changing market demands and to capitalize on new
evolving business opportunities ahead of us...As a consolidated system capable of supporting
next generation services, the Comverse Kenan FX framework will enable us to continue to
differentiate ourselves with superior customer service and innovative solutions. In addition, this
approach provides a more cost-effective way to serve our customers, today and in the future."

Customer Center is the COMVERSE Kenan FX Graphical User Interface (GUI) that
Customer Service Representatives (CSRs) can use to provide all customer care and billing
functions to the customer. CSRs and supervisors use the Customer Center interfaces to view and
manage customer billing information and to carry out related tasks. The modular Kenan FX
framework provided an advanced set of customer lifecycle management software solutions that
is fit to the core business operation of PLDT shown in Figure 1 of this paper.
 Figure 5. Kenan Customer Lifecycle Management (Comverse, n.d.)

1. Profile Management – This corresponds to PLDT’s core business operation which is CRM.
In this part, a request from a customer will be received that can be an update on the customer’s
account or creation of a new one. The actual request will be received from a separate CRM
system then the actual creation will be done in Kenan.
2. Customer Service Management- This corresponds to PLDT’s core business operation which
is provisioning. In this part, once an account is created, appropriate identifiers should be
assigned by adding products and services to the account along with its charges and
subscriptions. During the provisioning, Kenan will integrate with a separate provisioning
system to check the availability of the facility and services in the customer’s area.
3. Customer Financial Management- This corresponds to PLDT’s core business operation
which is the BSS (Billing support system. This part computes and stores all of the customer’s
data and the monthly statement of account.
4. Customer Relationship Management- Relationship with the customers are very important
that’s why Kenan has functionalities to adjust any necessary disputes or complaints reported
by the customer. Billing can be adjusted, products and services validity can be adjusted or
terminated, value-added services can be added during a contract and services can be
terminated within the contract as well with a corresponding fee.

All these core Kenan FX functionalities were customized based on the type of products and
services being offered by PLDT. One specific customization done to Kenan is the application
integrator. Kenan FX should be ready to integrate with other systems acquired by PLDT being
used in other core business operations.

VI. Organization’s Strategy and Tactics in Negotiating its Technology Acquisition

Contracts

There are various contractual options during acquisition depending on the degree of
commitment and involvement of both parties. Both firms involved tend to discuss possible
uncertainties and issues that can be encountered during the execution of the project. To protect
the interest of parties involved, a good negotiating strategy should be in place. PLDT’s desired
 technology was acquired through a licensing agreement, making Comverse the licensor and
PLDT as the licensee. As reported, the cost of this deal reached around millions of dollars (no
actual amount was disclosed). Having a huge deal like this requires a contract to be precise and
ready to cover any possible issues and to plan out corresponding contingencies. Even if Kenan
is already an out-of-the box application and readily available for acquisition, there were still a lot
of customizations needed to meet PLDT’s requirements. PLDT considered the following factors
during contract negotiation:

1. Scope and limitations- A well-defined scope and limitations was discussed. Based on PLDT’s
business case, Comverse prepared and presented an Implementation Planning Analysis to
make sure all requirements will be covered. PLDT conducted a thorough review and made
necessary changes. This will help in making sure that the desired timeline will be met within
the allotted cost.
2. Change Request Process - Any change that will hugely impact the project incurs an additional
cost to PLDT as it is not part of the original system design initially agreed upon. This is
applicable during the project execution phase and support and maintenance phase.
3. Project Milestone- PLDT negotiated its desired timeline with the vendor. Each milestone
incurred a cost (payment of PLDT to Comverse). Any changes on the timeline, depending on
the reason of the adjustment, incurred cost as well.
4. Resource Management – Comverse is an international firm and its resources are coming
from their main office in the United States. It was agreed upon that all vendor resources will
be working on PLDT site for easy communication and collaboration. Comverse was
responsible for all the logistics needed to provide enough resources needed for the project.
5. Support and Maintenance- It was explicitly stated in the contract the scope and limitations
of the support and maintenance that will be done during the implementation and operation of
the system in production environment. This part protected the interest of the vendor in doing
and fixing any issues reported by the user. If the issue reported is not part of the support
contract, it should undergo the change request process.
6. Knowledge Transfer- Part of the contract is the responsibility of the vendor to properly
transfer the know-how of using the system. PLDT made sure that before the contract ended,
there will be proper training for those key employees that will be using the new system.
7. System Enhancements- Any system updates, affecting its functionality and performance
should be disclosed by the vendor to PLDT. And vice versa, any update or enhancements
initiated by PLDT should be disclosed to the vendor as the intellectual property owner.

Overall, the contract negotiation was successful. There were some issues that were
encountered during the execution of the project (Refer to 1.7 for the Problems in implementing the
technology), but each issue was discussed among the vendor and client teams. They followed a strict
process to resolve each issue basing every decision on the contract.

VII. Organization’s Procedures, Techniques, and Problems in Implementing its

Externally Acquired Technology

PLDT followed the following procedure in implementing the acquired technology:

1. Proof of Concept- This is the alignment of between the vendor and the firm regarding the
initial business requirement to have an initial idea of implementation goal. This has to go to
 an approval with the vendor team as well to prove that they can support the stated business
needs.
2. Project Execution- The actual project itself lasted for 18 months. The vendor is working on
PLDT site for easy communication and collaboration with the different business units - sales,
marketing, customer service, finance, I.T.

PLDT formed an internal implementation team which consists of implementation project

manager, trainers, technical analyst, and testers. The team was responsible for ensuring that the
gaps between the requested billing system requirements and Comverse’s Kenan FX have closed.
The team was also responsible for thoroughly testing the billing system end-to-end. Furthermore,
the team was set to ensure that the billing system has passed user acceptance testing and has been
properly trained. Lastly, the team was also accountable in the proper deployment of the new
billing system.

The assigned project manager is the business Subject Matter Expert (SME) of the billing
platform. He oversaw the coordinating and managing the whole procurement process. He was
also the key person to negotiate with the vendor for a win-win situation on both price and quality
of the system. He was also responsible for driving vendor performance reviews.

The trainers were trained by Comverse trainers. They are responsible for ensuring the know-
hows of the system are well-cascaded to the end users.

The technical analysts played a big role in ensuring technological gaps are bridged by custom
development. The compatibility of the data used from the previous billing system were ensured
to be successfully migrated to the new billing system with the analysts’ monitoring.

The testers are end-users who test for defects, issues, or data inconsistencies across Kenan FX
submodules.

According to Mr. Leander, PLDT’s lead business analyst, PLDT considered the acquisition of
Kenan FX as a “program” rather than a “project”. For PLDT, a project is a system or application
change without any huge impact on the actual business process. Since the billing system is a core
process of PLDT in revenue generation, acquiring a new technology will transform processes
across various business units.

In the pre-implementation phase of the new system acquisition, the following challenges were
encountered.

1. The vendor over promised during the proposal stage. The vendor committed to delivering
various features for the billing system. However, the vendor failed to deploy all the
functionalities at once. The vendor had to coordinate again all the business requirements with
PLDT and decided what are the “must-haves” for the system to fully function on the first
deployment and what are functionalities that can be deferred for the next deployment. Since
Kenan FX was not implemented in one deployment, several features cannot be used during
its initial implementation. Features such as settling customer disputes were not possible until
Phase II was deployed. Instead, the end-users were forced in doing workarounds in the system
to continue their daily business operations. In the end, the entire deployment to of the
complete system were divided into three:
 Figure 6. Comverse Kenan FX Three Phases of Technology Deployment

2. PLDT was using the waterfall model as its software development lifecycle project management
methodology. The vendor team did not have its own project implementation process that’s
why it adopted the waterfall model as well. In this model, phases are not overlapping, and no
working software is produced until the later part of the cycle. The challenge for the team was
the changing requirements. In this model, it is very difficult to go back and change something
that was not well-thought out in the planning stage. That’s why, as stated in item 1 (vendor
overpromising), they ended up dividing the deployment of deliverables into three phases.
3. The company failed to give a clear direction of its desired digital transformation. There are no
specific or identified areas of improvement for the said transformation.
4. Majority of PLDT employees are advanced in age hence the culture of the company itself had
gone complacent to change and became resistant to it.

During the implementation phase, the following challenges were encountered.

1. The end users kept on comparing the new billing system, Kenan FX, from its predecessor,
ICMS - when an old system can perfectly accomplish the same process which the Kenan FX
Phase I lack.
2. Some end users underestimated PLDT’s vision and long-term goal for digital transformation.
PLDT handed down the decision that a new billing system will be used without addressing
the doubts, the concerns, and the hesitations of the new system’s stakeholders.
3. Vendor resources came from overseas resulting in different logistics that the vendor has to
handle such as immigration, passport and visa issues and residency here in the Philippines.
Since Comverse’s personnel have foreign nationalities, there were instances that key persons
were not on-site as scheduled thus delaying the implementation process.

After the implementation phase, the following challenges were encountered.

1. Delayed support when an issue was encountered. Comverse provided offshore support that
made it difficult to collaborate in fixing the issue. Once an issue is reported, the support will
evaluate if the issue is part of the agreed support under the license contract. If not, the issue
will not be fixed and will be needing to undergo the change request process incurring an
additional cost for PLDT.
2. This technology acquisition program started last 2007 and lasted for almost 3 years. By the
year 2010, end users can already use the system on their daily operations. However, in 2012,
the Philippines passed the Data Privacy Act 2012, a comprehensive and strict privacy
legislation “to protect the fundamental human right of privacy, of communication while
ensuring free flow of information to promote innovation and growth.” (Republic Act. No.
10173, Ch. 1, Sec. 2). Additional workaround and update were applied in Kenan to make sure
that PLDT complies to this act. PLDT stores millions of personal data from its customers and
a secure application system is required.
3. End users resisted the change and stuck with the old ICMS data entry which led to a lot of
redundancies to be left migrated. There were instances as well even after years of using the
new billing system, users tend to compare it to the old ways, resulting in random complaints
rather than just accepting the change. Thus, even if the executives aspire to a digital
transformation and advancement in its technological processes, the same mindset was not
present in its employees - leading to a difficult and slowed transformation.

PLDT employees underwent the transition curve of how their emotions and reactions change
in time with regards to the change implemented. Below is the sample model of transition curve
based on the Kubler-Ross model:

Figure 7. Kubler-Ross Model

The Kubler-Ross Change Curve, which is also known as the 5 stages of grief, is a model
consisting of the various levels or stages of emotions experienced by a person who is soon going
to approach death or is a survivor of an intimate death. The 5 stages included in this model are
denial, anger, bargaining, depression and acceptance. This curve can be effectively used by
business leaders across the world to help their workforce adapt to change and move towards
success (Anastasia, 2015). Since PLDT’s billing system is one of the core applications being used
by its employees, changing it had a huge impact. The following are the 5 stages of emotional
transition and the corresponding employee’s resulting attitude or scenario applied to PLDT’s
technology acquisition:

Emotion Resulting Attitude or Scenario

Shock Employees were informed about the management’s plan after a long time of
using ICMS.

Denial PLDT employees still hoped that the acquisition would not materialize. They
were looking for any proof that the technology acquisition process has really
begun already.

Frustration The actual project execution for technology acquisition is already in place.
Employees were finally recognizing that things will be different.

Depression Employees were feeling demotivated realizing that what they are used to will
change. Sometimes, some people did not view it as a challenge or as an
opportunity to learn something new.

Experiment The functionality of the new system was taught. This is the first time the
employees had a hands-on experience with the new system.

Decision After the training, the end-users are trying to use the system on their own,
realizing the difference between the old and new system.

Integration Employees already coped up with the use of the new technology, totally
transitioning and adapting the new way of doing things.

Change is inevitable, and this is being encountered by most industries especially in this
technology-aged generation. Technology keeps on evolving, and just like any other industry trying
to compete in the market, PLDT must make sure that it always paves the way for transformation,
while striking a balance to be a prime telecommunication company and to be an excellent
provider of services to its loyal customers.

VIII. Organization’s Policies, Procedures, and Techniques for the Absorption and
Mastery of the Externally Acquired Technology

Knowledge transfer is vital during technology acquisition. There must always be

someone who can be a subject matter expert (SME) that people can rely on. PLDT and Comverse
used traditional approaches in teaching the acquired technology to the end-users.

1. Training- Comverse conducted a classroom training for selected PLDT employees. This was
considered as “training the trainers”. Train experts as knowledge mentors for the next
generation. When the contract with the vendor was finished, these PLDT employees were
responsible for leading and training their own team.
2. Cross-training- This is a method to mitigate the risk of a key person leaving the team, worse,
the company. Knowledge could possibly be transferred not just to the core end-users of the
system but also to other teams integrating to it.
3. System Manual- Comverse turned-over to PLDT a user-guide in using the system. This is
still being used by PLDT up until now for training of new employees that will use Kenan. The
only problem or disadvantage in this method is that there should be someone who will update
the documentation every time there will be a system update. Unfortunately, the documentation
is not being updated by PLDT.
 4. Coaching- The coach provides guidance and enables the knowledge receivers to learn and
produce results independently. This can be done through mentoring or shadowing. Usually a
new employee will have at least 1-2 weeks to shadow someone during their actual work and
before handling a certain Kenan project on their own. This will also serve as a period of
evaluation for the learner’s competency gap.

PLDT and Comverse worked hand-in-hand in making sure their end-users will have
the proper knowledge in using Kenan. These knowledge transfers were effective as it produced
a lot of SMEs in the Kenan system. Kenan, as the billing system, is the center of PLDT’s technical
architecture where all other systems integrate. There are always changes in Kenan when it comes
to the data it stores, specifically the product and service charges being offered by PLDT. Having
a tacit knowledge in this system made it easier for project teams to collaborate whenever there
were changes to be implemented.

IX. Critical Evaluation of the Organization’s External Technology Acquisition Project

Below are the major factors that determined the success of the project:
Factor Advantage Disadvantage Remarks

Vendor Research Low cost, minimal Scheduling challenges, There are other research
Method- Internal knowledge transfer less control over the methods like External
assessment and required, seeing the presentation research and assessment,
Vendor conference product, vendor RFP, on-site demo, etc.
education But PLDT chose what
was more efficient and
cost-effective for the
firm.

Comverse Kenan as The vendor’s forte The vendor’s Comverse was perfectly
the winning Vendor was servicing resources came from fit for PLDT’s business
telecommunication overseas that needs as it already
companies. Making it somehow delayed the understood the firm’s
easier for them to project. nature of business.
understand PLDT’s There was less time in
nature of business. understanding the
business needs and
translating it to technical
specifications.

Project Management Team members were Not suitable for Comverse did not have
Method- Waterfall already expert in using projects where its own project
this method. requirements are at a implementation method.
Each phase has moderate to high risk It would be better if they
specific deliverables of changing. also suggested and
and review processes. implemented a better
method in which they
already experienced
 doing as a vendor on
their other projects.

Licensing method of Lower cost, access to Less control over the It would have been
technology acquisition new technology. development of the costly and tedious if
actual product. PLDT opted to create
its own billing system.

Methods for Mastery Lower cost, shorter Documentations are PLDT was able to
of acquired technology timeline, more not updated as the produce a lot of Kenan
involvement on the system updates. SMEs which is
knowledge transfer, beneficial to their
evaluation of business operations.
competence gaps

X. Key Learnings and Recommendations

Implementation Recommended Action

Challenges

Pre- The vendor overpromised The committee should, first, identify the
implementation vendor’s current out-of-the-box system
for this will be a guaranteed deliverable
and have almost no risk of non-delivery.
Anything not included in the pre-available
system, requested customizations should
be dealt with caution and be scrutinized as
a risk for possible non-delivery.

To mitigate the risk of non-delivery, ask

for the vendor’s estimated delivery of the
requested customizations. Then insert
appropriate internal buffers in between
their estimated date of delivery and the
actual date of implementation or use to
protect the throughput of the system
from inevitable variability.

The Drum Buffer Rope solution may be

applied in this case. (Asprova
Corporation, 2008)
Using waterfall model but Comverse can adapt agile methodology in
has frequent changing their deployment from the start since the
requirements deliverables are unattainable in just one
deployment.

Waterfall uses a linear approach in

development whereas agile uses iterative
cycles called sprints. Waterfall cannot
accommodate change requests such until
the last phase of development has
finished. Agile still follows the process of
traditional development but it can better
cater requirements change in between
sprints.

Failure to give a clear Although PLDT envisioned its digital

business direction transformation, there were no actual
directions given for the said
transformation program.

(Rhythm Systems, n.d.)

Communication will play a big role to

bridge the gap. A specific cascade catered
to each department in the company will
make the employees feel included and
engaged with the vision of the
management.

Communicating the agendas and priorities

of the company to every department
member will keep the employees in track
of their daily tasks and align with it.

Engage in debates and agree on the right

priorities.
 Establish review metrics and dashboard to
easily review the plan every week and
make critical adjustments sooner than
later.

Over-communication is always better than

under-communication.

The culture of the Empower the employees to contribute to

company itself had gone the transformation process by effectively
complacent to change and delegating tasks which will help achieve
became resistant to it. the business need. Furthermore, let the
employees feel heard. Ask for their advice
and feedback from time-to-time.

Implementation Old system is better than Hear the employees’ concerns and
new system feedback on the new system. If their
concerns are missing features which are
existing from the previous system, sharing
the program roadmap will help them
understand that the change will be a
continuous process and will soon
accommodate feature requests after the
initial implementation phase.

Some end users Engage with every stakeholder affected in

underestimated PLDT’s the transformation process. A simple
vision and long-term goal memo cannot buy an employee’s
for digital transformation motivation. Establish open forums during
company town halls and encourage
healthy debates to be used as a medium
for an effective channel of change
dissemination.
Vendor logistics human Ensure that the license contract includes
resource issues Statement of Work (SOW) that clearly
states the period of performance,
deliverables schedule, and a clause
wherein failure of delivery will incur
penalty charges to the vendor.

It will also be helpful if logistics issues will

be included in the planning as risks of
technology acquisition.

Post- Delayed support when an Possible issues should have been

implementation issue was encountered. anticipated during the POC stage. The
 technical members of the procurement
committee should have anticipated such
missing requirements and requested fixes
in their system prior to its
implementation.

New government The information security of Kenan should

legislation - Data Privacy have been part a criterion in the
Act 2012 evaluation of the system.

End-users still use the old Let the end-user understand the
billing system consequences of using the old system.
Constantly look for ways to keep the
urgency up. Try to look for scenarios that
will convince them to migrate to the new
system.

XI. Conclusion

As this case study has demonstrated, PLDT’s technology acquisition is deemed

successful. However, there’s still room for more improvements in handling this kind of project.
PLDT showed poor management in the change process adding to the reasons for the project
delay. PLDT can still improve its project management methods to avoid repeating the issues
encountered in this program.

Kenan is still the billing system being used by PLDT today. However, the firm is
gearing towards the decommissioning of Kenan and acquiring a better billing system. One of the
main reasons for this is that Kenan lacks security measures for data management. As stated on
the challenges encountered by PLDT, when the Data Privacy Act was passed last 2012, only
workarounds were done to Kenan to comply with this act. As a repository of millions of personal
data from the customers, PLDT should be able to secure the data properly to avoid any leakage
of data and to protect its customers from misuse of their personal information.

Currently, PLDT’s I.T. business unit resources were all outsourced to Amdocs.
Amdocs is a multinational corporation that specializes in software and services for
communications, media and financial services providers and digital enterprises. This works well
with PLDT’s plan to decommission Kenan. Last 2015. Amdocs completed the acquisition of a
substantial majority of Comverse's Billing Support System (BSS) assets and it is now Amdocs’
responsibility to maintain and support Comverse customers around the world. With this, Amdocs
now owns the proprietary rights to Kenan and can make any changes to continuously comply
with PLDT’s business needs.
 XII. References

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Rhythm Systems, n.d. Cascading your Plan to your departments will help you better grow
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Rouse, Margaret. 2014. Understanding the Kubler-Ross Change CurveAS/400 (IBM iSeries,
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Wall, Alex. 2017. Summary: Philippines Data Privacy Act and implementing regulations.
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