Why do towercos standardize processes?

Towercos face mounting pressure to deliver measurable improvements in deployment speed and cost of service for mobile network operators (MNOs). Such pressure comes as construction of DAS, small cells, and fiber adds new layers of complexity to the operations of telecom infrastructure companies. How should towercos streamline operations to meet these challenges?

We explore here how creating standardized business process flows—spanning sales, engineering, construction, colocation, maintenance, government relations, and support functions—allows towercos to confront increasing complexity while minimizing the growth of operating expenses.

Organizations undergoing initial periods of rapid growth tend to defer process documentation despite its importance for scalable growth. The reason why is simple: entrepreneurs and early-stage executives focus on top-line performance—after all the adage is “sales cures all ills”—and tend to avoid initiatives that could distract from the revenue growth. We have repeatedly seen, however, that when a telecommunications company comes under private equity ownership or lists its equity in public markets, management’s focus often shifts from growth to efficient capital allocation and maximization of free cash flow.

“Tower companies (towercos) and other operators of telecommunications infrastructure who document, test, iterate, and automate their operational processes will be rewarded with happier customers and higher operating margins“

Stonewater Partners supports return-focused shareholders and management teams by developing and optimizing operational processes. Once we complete process improvement exercises, our clients commence building/integrating systems to automate even the most complex processes that collectively compose the factory model for passive telecom infrastructure. 

Telecommunications infrastructure operators ordinarily give a business division—often called the Program Management Office (PMO) or Business Process Management division—responsibility for overseeing continuous process improvement. This division reviews and updates business processes in consultation with end-users at least once annually. While a PMO can document companywide processes in as little time as a single quarter, the iterative journey in which a towerco documents, tests, iterates, and automates processes can last many years. Furthermore, process documentation usually grows in scope with time; what begins with high-level process flows tracing the main activities required to deploy infrastructure ends with dynamic employee handbooks specifying actions required to complete low-level tasks. If some executives are skeptical that such granular documentation is necessary, it is because they find it difficult to quantify the value of uniform process standardization.

As standardization and automation progress toward a mature state, however, such skeptics become evangelists when they discover that:

1. Teams can deploy infrastructure up to 40% faster
2. Standardization can reduce man-hours required per deployment by up to one-third
3. Visibility into deployment progress becomes real-time
4. Employees are accountable for both positive and negative outcomes
5. Data and metadata produced by automation enhances teams’ decision making

Although it goes without saying, the infrastructure company that deploys towers, DAS, small cells, and fiber faster and at lower cost than competitors will be well positioned to maintain or gain market leadership. After all, many MNOs sell or spin off infrastructure assets in the first place to more efficiently manage capital and lower total cost of ownership. Towercos that reduce the total cost of ownership through process standardization and share some of the resulting cost savings with MNOs are well positioned for the future.

Interested in learning more? Find the next post in this series, “The Value of Process Standardization” here