Research On Services Performance Of Telecom Operators In China

Traditional enterprise performance control responds with industrial economy. At that time, an enterprise produced a limited number of standard products, and performance improvement to a large extent depended on efficiency enhancement in internal resource allocation and production processes. As such, factors that have impacts on enterprise performance come from inside of the enterprise. Since1990s, services economy has developed fast, which is featured with information technology and knowledge intensity. Problems arise when the traditional enterprise performance control is simply applied in modern services enterprises. In this respect, the research on services economy and services performance in China is lagging far behind the requirements for the development of services economy.Telecom operators are typical services enterprises. Along with the restructuring in telecom sector, operation of all-around services, and the convergence of three-nets (i.e. telephone, broadband, and CATV), telecom operators are facing with strong pressure in performance control. This calls for thorough researches on performance control for providing guidance in practice. In the period prior to the year2008, the telecom sector in China had been developing at a high growth rate, and supplies lagged behind demands on market. The services performance of telecom operators was satisfactory. However, in2008, the growth rate of service revenues in the telecom sector became lower than the growth rate of GDP for the first time. The gap between the growth rates of the telecom sector and GDP was enlarged in2009. In2010, the growth rate of the telecom sector, though higher than the same growth rate in2009, was3.9percentile points lower than that of GDP in the same year. Along with the end of a high-growth era of the telecom sector, services performance of telecom operators drops quickly, which generates very high pressure for telecom operators to improve performance control.Based on a thorough literature study, this dissertation analyzes a conceptual model of services performance and the structure of services performance system for telecom operators. Subsequently, this dissertation establishes a model of services performance based on systems dynamics, and via simulation and control analysis, identifies key factors that influence services performance of telecom operators. At the end, this dissertation provides managerial recommendations.The main contribution of this dissertation is listed as follows:1. This dissertation identifies the difference and relation between productivity and performance based on a thorough analysis of content of these two concepts. The concept of productivity treats enterprises as a "black box" with assumptions of a closed system and constant quality, and expresses the relationship between inputs and outputs of an enterprise. This concept does not pay attention to the conversion mechanism from inputs to outputs, neither to possible impacts of external factors on the outputs. As a comparison, the concept of performance has a broader meaning. Enterprises performance depends not only on efficiency of internal conversion mechanism of production, but also on many external factors such as inflation, market price fluctuation. In addition, the evaluation of enterprises performance is not only on financial indicators such as profit ratios, but also on non-financial indicators such as quality, speed, and flexibility. As such, performance is ultimate goal of an enterprise as a whole, and represents the overall results of operation.2. This dissertation proposes a conceptual model of services performance on the basis of the conceptual model of services productivity of Fengyu Liu (2006) after a thorough analysis of evolution of the concept of services productivity and performance evaluation theories, and in particular, a comparison of the concept of services productivity of Fengyu Liu (2006) with the theory of performance prism. The proposed services performance model differs from the services productivity model of Fengyu Liu (2006) in three aspects. First, inputs include not only those of services providers and customers, but also those of other stakeholders such as competitors. Secondly, outputs include not only those of services providers and customers, but also those of other stakeholders such as competitors. Thirdly, the proposed model is focused more on the interactive coordination mechanism of internal and external factors from inputs to outputs. From the perspective of resource-based view, the contribution of stakeholders is regarded as the resource of an enterprise, which could be converted into capabilities of the enterprise under certain conditions. The enhancement of enterprise capabilities could improve the performance of internal processes. Services performance of an enterprise depends not only on the performance of internal processes but also on external environment. The ultimate performance of an enterprise is a result of the combination of both internal and external factors. Among those influencing factors, some are controllable by managers, and some (e.g. macro economy, industrial competition, and regulatory policy) are uncontrollable. Enterprises need to cooperate with those uncontrollable factors in order to improve performance. This analysis of interactive coordination mechanism from inputs to outputs enriches the theory of services performance and services management.3. This dissertation, starting from the basic functions of management of telecom operations, thoroughly analyses internal businesses and the transfer process from production to ultimate customers, and identifies key capabilities and processes enterprises should have in this process. The contribution of stakeholders constitutes the base for the generation of such key capabilities and processes. Through the above analyses of the contribution of stakeholders and key processes of enterprises, this dissertation proposes the structure model of enterprise systems of telecom operators.4. Based on the proposed structure model of enterprise systems of telecom operators, this dissertation develops a model using systems dynamics to describe the causal relationship of internal and external factors with services performance, and simulates their dynamic coordination and equilibrium. As such, the "black box " from inputs to outputs is opened:1) It successful identifies the most important stakeholder, and its influencing mechanism. When multiple stakeholders are introduced to the enterprise system, they influence key capabilities of the enterprise through their contribution and satisfaction. They influence and tie up with each other via key variables. Simulation can help to identify who is the key stakeholder in the different period of development and how this key stakeholder exercises its influence on performance.2) It quantitatively simulates the bi-lateral causal relationship between inputs and outputs of stakeholders, i.e. between contribution and satisfaction of stakeholders. It demonstrates that the relationship between variables is not uni-lateral, but bi-lateral. The contribution of stakeholders influences their satisfaction, while their satisfaction in return also influences their willingness to make contribution and the level of contribution.3) Through interviews, survey, and simulation and control analysis based on systems dynamics, this dissertation identifies key factors influencing enterprise performance in different periods of development, and subsequently, provides managerial recommendations for improving services performance of telecom operators in the areas such as tariff policies, investment policies, employee management, suppliers management,SP/CPmanagement, competitors management.