Magazine article CMA - the Management Accounting Magazine

CMAs in Telecommunications: The Challenge Ahead

Magazine article CMA - the Management Accounting Magazine

CMAs in Telecommunications: The Challenge Ahead

Article excerpt

The telecommunications system in Canada is one of the most competitive and technologically sophisticated in the world and the quality of communications services provided to Canadians is second to none. Despite these accolades, the dramatic changes that have swept telecommunications markets at home and abroad have challenged Canada's position as a world leader in this industry. For the first time in the history of telecommunications, regulatory reforms have exposed Canada's telephone monopolies to the pressures of competition. Recent landmark rulings of the CRTC have broken down the monopoly structure of the long distance and local telephone markets and have opened the way for competition between telco and cable companies. Consequently, many of these companies are undergoing major strategic and operational changes to cope with the effects of entrants into their traditionally protected markets.

While getting used to operating within this new paradigm, Canada's largest telcos are watching their long distance market shares drop by as much as 22 per cent due to competition from alternative exchange suppliers like Sprint and Unitel (AT&T). Meanwhile, new technologies have resulted in the convergence of the once well-separated telephony and cable industries, opening up previously untapped multi-media markets and intensifying the already frenetic atmosphere that characterizes telecommunications management in Canada today.

These changes have had a profound impact upon the way Canada's telcos conduct their business. Widespread cost-realignment, downsizing, process re-engineering, total quality management initiatives, and other advanced management accounting practices reflect a new emphasis on cost-competitiveness and improving customer service. Management accountants that were brought up in the monopoly tradition of the Canadian telco, are now being forced to re-examine their roles and to revise their management philosophies for the challenges ahead.

This article addresses some of the current issues in the telecommunications industry and describes the role of the management accountant in the rapidly evolving telecom environment. In doing so, it relays the views and experiences of one of the industries most distinguished members, Mr. Leonard van der Heyden, CMA, VP human resources and corporate services of Bell Canada International. It also obtains his recipe for success in what could be the most dynamic industry in Canada today.

A view from the top... As a thirty-year veteran of telecommunications, Len van der Heyden has not only witnessed evolution, but has also been a key player in the industry. In 1983, he was appointed chair of the BCE reorganization task force, a multi-functional team with a mandate to operationalize the restructuring of Bell Canada into BCE Inc., Canada's largest telco holding company. Acting as Jean de Grandpre's backup at the reorganization hearings before the CRTC, van der Heyden would help set the precedent that eventually prompted all other provincial telephone companies, (with the exception of Manitoba Telephone System), to restructure their organizations into holding companies. In 1988, he was appointed president and corporate director of Northwestel Inc. and the following year was made president and CEO of BCE Corporate Services Inc, a BCE Group in-house human resources/actuarial consulting firm. In his current role as vice president, human resources and corporate services at Bell Canada International, he is responsible for HR, corporate services and systems.

When asked for his views on the major challenges facing telecommunications managers in Canada today, van der Heyden points to the regulatory delays surrounding rate rationalization and other pressing issues of regulatory reform that have created a climate of uncertainty in the industry. He comments: "From a strategic management perspective, I think what's important is that we have a clearly enunciated policy where we are ultimately going in telecommunications, what the rules of the game are, what kind of game we're playing, and whether the telcos can expect a level competitive playing field in the near future. …

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