Dr. Markus Mueller am 25.04.2013 in Bonn

Telekom IT: More than Just an IT Service Provider

Mission possible: Dr. Markus Müller, CIO at Deutsche Telekom, must simultaneously raise the quality of IT, reduce the costs by one Billion euros, and deliver IT projects right on time – all by 2015. And he is well on his way.

I T operations at Deutsche Telekom were originally divided among three divisions. That changed in 2012. The corporation set up a  central IT department under the responsibility and leadership of a single unit, with unified objectives, a consistent portfolio, and low-cost production. The restructuring improved quality and reduced IT costs permanently. Telekom IT has a workforce of 7,300 employees today. Under the direction of CIO Markus Müller, it manages an IT budget of two Billion euros. The responsibility for CRM and billing systems which handle 250 million invoices a year and eleven million customer queries a month belongs to Telekom IT; it also operates the joint platform of the European Telekom subsidiaries and realizes substantial scaling effects. And Telekom IT has a challenging goal: the reduction of IT costs by one billion euros between 2012 and 2015, the improvement of IT quality, and the ontime delivery of IT projects.

At the same time, it must complete an important mission which has been designed to lay the foundation for implementation of the group’s strategy. Determined to make Telekom the “leading telco”, the division is using the broadband network gateway to provide the “IP production platform” for the mapping of new IP products in the architecture. This architecture secures the bundling of fixed and mobile networks. It creates a standardized “power strip” allowing the integration of attractive partner Services and products in the Deutsche Telekom product Portfolio and enables the integration of offers for business customers. The establishment of Telekom IT was desperately needed – and yet it required a massive effort. Dr. Markus Müller spoke to Detecon about the progress that has been made and the targets for the near future.

Download the full interview here:  8_DMR_blue_Transformation_Interview_Telekom_Mueller_E_02_2015

bank

Debt restructuring refers to the reallocation of resources or change in the terms of loan extension to enable the debtor to pay back the loan to his or her creditor. Debt restructuring is an adjustment made by both the debtor and the creditor to smooth out temporary difficulties in the way of loan repayment. Debt restructuring is of two types, and there are many ways to carry out the restructuring process.

Debt Restructuring: Types

Debt restructuring is of two kinds, depending on the terms and the cost to the debtor.

1) General Debt Restructuring
Under the terms of general debt restructuring, the creditor incurs no losses from the process. This happens when the creditor decides to extend the loan period, or lowers the interest rate, to enable the debtor to tide over temporary financial difficulty and pay the debt later.

2) Troubled Debt Restructuring
Troubled debt restructuring refers to the process where the creditor incurs losses in the process. This happens when the Debt Restructuring leads to reduction in the accrued interest, or due to the dip in the value of the collateral, or through conversions to equity.

How to Plan Debt Restructuring:

1) The crediting company should prepare a roadmap for the debt restructuring process. The strategy should include the expected time to be taken to recover the debts, the terms of loan repayment, and watching the financial performance of the debtor.

2) The decision of the financial institution regarding Debt Restructuring depends on whether the debtor has invested in the company, holds shares with the company, or is a subsidiary of the company.

3) If there is conflict within the company’s board of directors regarding the process, then it is advisable to ask for help from a third party. However, third party mediation is not needed if the debtor is a subsidiary of the company.

4) Making a cash flow projection is also important to the Debt Restructuring process. It is advisable not to include uncertain cash flow estimates in the plan.

5) The debtor’s financial situation should also be considered while making a Debt Restructuring plan. The debtor’s ability to repay the loan depends on his or her financial management, so the financial company needs to look into the debtor’s roadmap for repaying the loan. If the debtor is another company, then changing the key people associated with it, like the director, board of directors or chairperson might help.

If you are planning to go for Debt Restructuring, as a creditor or borrower, you can approach a small business consultant for help.

Debt restructuring depends on many factors like the debtor’s financial management, the projected cash inflow, the relation between the debtor and the creditor etc. Debt Restructuring is meant to help both the parties. It involves compromises made by the creditor as well as the debtor to ensure that the loan is repaid in full to the creditor without too much of a financial loss to the debtor.

Alexander Gordon is a writer for http://www.smallbusinessconsulting.com

 

 

The Turnaround Management Society’s main objective is to promote sustainability and best practice in the turnaround process. The executive director of TMS is Dr. Christoph Lymbersky. He is also the founder of TMS and a turnaround management academic with considerable experience in turnaround and restructuring processes.

The TMS Research Project

TMS are involved in an ongoing research project that looks at why companies fail. They asked 405 turnaround managers and restructuring experts their opinions as to what usually leads to a corporate crisis. This 2014 survey aims to highlight the internal and external reasons why companies enter crisis through the experience of corporate restructuring professionals in the last five years. It will also identify particular cases that professionals have witnessed fist hand during their assignments. This crisis research is then compared to the results of the previous surveys in order to identify any changes in company failures over the last 40 years. This survey has enabled TMS to formulate the International Turnaround ManagementStandard, which provides CEOs and turnaround professionals with a framework of proven strategies for the management of a crisis situation in business.

Survey Findings

The TMS survey has revealed that the majority or corporate crisis are due to the mistakes made my the top tier of management. Usually it is because management has continued to use a particular marketing strategy that has ceased to be beneficial to the company. This is generally because management had lost touch with their customers and markets. Bad strategic decisions are often made if a strategy is not clear to all involved. also, if a strategy is not flexible enough to adapt to change and managers underestimate market changes, their competitors will quickly gain new customers.
The TMS survey also reveals that another major cause of corporate failure are managers who have lost their entrepreneurial vision. This vision is vital in order to remain competitive in the race to draw in new customers. Managers without vision often stick to previous tried and tested techniques and will not take risks on new ideas and keep marketing strategies flexible to change.
Another reason for a companies downturn is insufficient communication. Often when a crisis becomes apparent, managers will cease to communicate or communicate less in order to downplay the situation. This is usually done while job and salary cuts are being implemented. Other common causes of corporate crisis as identified by the survey are financial and cash flow difficulties caused by poor accounting and financial planning. The survey also identified a lack of staff education regarding business as being another cause, and product line expansion at the wrong time.