Telecommunications:<br>Tight Budget Drives Project Selection

The IT department at BellSouth Corp. isn't standing still just because of telecom troubles. The worst downturn in the industry's history has BellSouth concentrating on projects that improve efficiency and help generate revenue, without cutting its commitment to IT.

"The business really drives our IT spending," CIO Fran Dramis says. That means large IT budget increases some years, small increases in others. In the past several years, BellSouth increased the budget for its 1,500-person IT department only slightly year over year, he says.

In 2001, BellSouth spent 8% of its $24.1 billion in revenue on IT and is on track to spend the same percentage this year. In 2002, 70% of the IT budget is earmarked for operational expenses, and the rest will be spent on assets such as equipment and software. BellSouth's IT group has pursued a handful of projects expected to produce the greatest return on investment, Dramis says.

To help the projects succeed, Dramis makes sure they're closely aligned with business priorities, as was the case when BellSouth launched an order-processing system last year for its digital subscriber line services and reengineered the network-management system used to turn on service for new DSL orders.

Both projects supported BellSouth's goal to surpass the 600,000-subscriber mark for its FastAccess DSL services by the end of 2001. BellSouth met that goal, cut provisioning and support costs in half, and improved its on-time DSL service delivery rate by 23%. Since the end of 2001, DSL subscribership climbed further to 800,000.

The DSL support system lets BellSouth representatives and technicians use the Web to access the status of orders and process them. An updated order-handling system automates the process of submitting service change and disconnect orders. Changes to BellSouth's network-management system increased its order-processing capacity 400% by converting a labor-intensive system for assigning ports on BellSouth's switches for new DSL circuits into an electronic process. "The provisioning system contributed significantly to reducing our costs of getting DSL implemented and servicing customers by over 50%," Dramis says.

The company's strides in E-business also have paid off. Its E-business operations are profitable and account for 21% of BellSouth's U.S. revenue. A full 90% of its suppliers and 60% of its business partners are tied into BellSouth's supply-chain system.

BellSouth's Web sites let customers preview and pay bills and give them access to product catalogs. Customers also can access trouble-shooting guides and report service problems. The company records 2.5 million unique visits to its sites each month, and more than 190,000 customers view or pay bills online every month.

In supply-chain management, BellSouth looked at and decided against building a full-blown online exchange, Dramis says. Instead, it uses fairly basic Web interfaces to let suppliers access its systems and so far has set up about 60 of those interfaces for individual suppliers -- all part of its quest to leverage technology to make the business run better.

Photo of Fran Dramis by Stan Kaady