Telkom AR front.qxp
Telkom AR front.qxp
Telkom AR front.qxp
Create successful ePaper yourself
Turn your PDF publications into a flip-book with our unique Google optimized e-Paper software.
242<br />
<strong>Telkom</strong> Annual Report 2009<br />
Notes to the consolidated annual financial statements (continued)<br />
for the three years ended March 31, 2009<br />
44. SIGNIFICANT EVENTS<br />
<strong>Telkom</strong> Renaissance<br />
On November 14, 2008, <strong>Telkom</strong>’s Board of directors approved the new organisation structure which is designed to fit <strong>Telkom</strong>’s defend<br />
and growth strategy. The new structure is effective April 1, 2009 and is being managed through a project called <strong>Telkom</strong> Renaissance.<br />
The Group has been restructured into three operating Business Units namely <strong>Telkom</strong> South Africa, <strong>Telkom</strong> International and <strong>Telkom</strong> Data<br />
Centre Operations. The <strong>Telkom</strong> Renaissance initiative will occur over the next 24 months to ensure that all the necessary remodelling,<br />
reorganising, revitalising and re-engineering happens in order to make the new structure function optimally.<br />
This initiative is a complete transformation of the way <strong>Telkom</strong> focuses on servicing its customers and creating value for its stakeholders. It is<br />
a positive, purposeful change towards a more accountable and competitive company. This change is a necessary part of <strong>Telkom</strong>’s strategy<br />
to maintain and grow market share in South Africa whilst building a strong footprint on the African continent.<br />
Capability Management<br />
<strong>Telkom</strong> will seek to manage costs and address service delivery constraints by realigning its structure and resources to better match its<br />
transforming information, communications and technology business.<br />
The transformation of the communications industry and increasing market and competitive pressure has put communication companies such<br />
as <strong>Telkom</strong> under increasing revenue and expense constraints while being required to improve customer service. As a result Capability<br />
Management is designed to ensure that the capabilities needed to succeed in a converged communications market are established through<br />
the optimal utilisation of external as well as internal capabilities, extracting efficiencies, where possible, through scale of a rapidly maturing<br />
retail and wholesale market and better organised functional areas in a more deregulated and liberalised communications market.<br />
Capability Management includes the internal consolidation of certain functional areas and the optimisation of strategic supplier and service<br />
provider relationships improving performance in other functional areas.<br />
Capability Management will be concerned with assisting in addressing the margin and service delivery pressures by reassessing the<br />
operational service delivery methodology currently deployed with a view of increasing flexibility, reducing expense while improving service<br />
delivery across the <strong>Telkom</strong> Group.<br />
Given the challenges <strong>Telkom</strong> faces in rolling out broadband, converged and data services, maintaining our legacy network and expanding<br />
our operations across the African continent, employees’ skills and performance must be aligned with our strategy to ensure financial,<br />
operational and transformational targets, customer expectations and shareholder expectations are met.<br />
The immediate objective therefore is to remodel service delivery. This is one of the strategic initiatives under Project Renaissance and will<br />
focus on the following:<br />
• Identify and assess existing capabilities;<br />
• Establish a <strong>Telkom</strong> Group Capability Inventory;<br />
• Determine future capability requirements;<br />
• Identify and develop a set of optimal service delivery options for achieving current and future strategic objectives; and<br />
• Enable <strong>Telkom</strong> South Africa, <strong>Telkom</strong> International and <strong>Telkom</strong> Data Centre Operations to:<br />
– Improve resource efficiency;<br />
– Improve capital productivity; and<br />
– Improve service delivery.<br />
A memorandum of understanding was entered into between <strong>Telkom</strong> and organised labour which included issues such as the deferment of<br />
the Managed Services Partner outsourcing project implementation post April 2009 and the establishment of a Restructuring Forum where<br />
all restructuring initiatives will be debated between the parties concerned.<br />
<strong>Telkom</strong> Management Services (Proprietary) Limited (TMS)<br />
TMS was registered as a company during August 2008. <strong>Telkom</strong>’s Board approved the establishment of TMS as a part of <strong>Telkom</strong>’s strategic<br />
plan to grow revenue and expand geographic reach.<br />
Appointment of director<br />
On November 10, 2008 <strong>Telkom</strong> announced the appointment of Mr Peter Nelson as Chief Financial Officer and director in <strong>Telkom</strong> with<br />
effect from December 8, 2008.