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For about 50 years, GVTC -- originally Guadalupe Valley Telephone Cooperative -- enjoyed the security and other benefits of being a monopoly serving a serene, low-profile rural market, the picturesque Texas Hill Country north of San Antonio. Management really didn't have to do much other than provide good telephone and later cable service and meet regulatory requirements. That was the situation until a few years ago when things began to change rapidly, thanks largely to explosive growth in real estate development and the deregulation of the telecom business.
As the Hill Country population grew in both numbers and spending power, it began to attract the attention of giant communications companies, particularly Time Warner Cable. In addition, the wireless phone companies, led by San Antonio-based AT&T were beginning to nibble away at GVTC's landline phone business. All of a sudden, little GVTC, www.gvtc.com, with annual revenues then of less than $60 million, faced the challenge of transforming itself or vanishing from the landscape.
Changes in GVTC management brought a new determination and ability to rise to the challenge. GVTC management determined that in order to compete in the new deregulated environment, the company would have to offer superior technology - specifically, Fiber to the Home or Premises -- and superior, locally based customer service.
One of the new executives, Chief Financial Officer Mark Gitter, quickly realized that in order to compete effectively against the giant communications companies, GVTC would have to overhaul its obsolete information technology infrastructure. The GVTC team concluded that existing information systems were hopelessly antiquated and not worth upgrading. They would have to rebuild from the ground up.
They set out to design new financial structure that could take advantage of the functionality of OutlookSoft -- powerful enterprise software that mid- and large-size companies use to manage their financial and operational performance requirements including planning, consolidation, reporting, analysis, compliance, and performance measurement.
Gitter, whose background includes nearly 25 years in information technology, finance and accounting, wanted an IT consultancy and systems integrator that had solid telecom and OutlookSoft experience, as well as a strong commitment to client service. He found it in Dallas-based Akili, www.akili.com. (Since then, OutlookSoft has been acquired by SAP, and Akili is now an SAP Services Partner.)
The challenges were considerable. Basic financial analysis was difficult because they couldn't extract the data they needed and had no defined processes and procedures for accumulating the data. The systems, such as they were, were obsolete.
Similarly, Key Performance Indicators (KPIs) had not been established yet. Consequently, there was no way to gauge performance. Customer and product level business insight was very limited. There was no efficient mechanism to track and monitor Customer Churn (customer additions and losses) or Average Revenue per Unit (ARPU), and Penetration Percentages.
GVTC also lacked the ability to determine business unit and product profitability in the new deregulated business environment. It needed tools for cost structure analysis and the ability to identify operational issues that were affecting costs and profitability.
To solve these and other performance management problems, GVTC and Akili implemented a fully integrated multi-year, driver-based budgeting process using four OutlookSoft applications: Finance, Human Capital Management, Capital Expenditures, and Customer Churn. They also implemented an integrated Financial Reporting package emphasizing variance analysis and financial metrics.
As a result, Gitter says, management has timely, actionable data that enables the company to compete against much larger rivals. He says management now is able to:
· Turn tactical information into strategic advantage;
· Focus on data analysis and not data accumulation, and
· Predict and respond to changes in the competitive landscape.
In one of the first tests of the company's ability to compete, GVTC in the summer of 2007 went head-to-head against the competition, including Time Warner Cable, Verizon, and others in the fast-growing, up-scale San Antonio suburb of Boerne. The newly nimble GVTC formed a Competitive Local Exchange Carrier (CLEC), mounted an aggressive marketing campaign, offered state-of-the-art Fiber-to-the-Business technology (telephone, video, broad band), competitive rates, and locally based customer service.
In the Battle for Boerne, GVTC quickly captured one-third of the market before its competitors realized what was happening. It was a confidence builder, to say the least. The company's annual revenues have grown to $75 million.
"People used to think we were just a Podunk phone company," Gitter says with a smile. "They don't think that about us anymore."
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