BT Group plc is formerly known as British Telecom. It is also the privatized UK state telecommunications operator. It is the leading fixed line telecommunications and broadband Internet provider in the United Kingdom. BT operates in more than 170 countries and almost a third of its revenue now comes from its Global Services division. BT Group is the largest communications service provider in the United Kingdom. It is also one of the largest communication companies in the world (British Telecommunication, 2007). The Company is listed on the London Stock Exchange.
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At the present time, BT has become a multifaceted organisation offering general consumer goods and services through new sophisticated technologies but alongside this has created a commercial offering with consultancy and business solutions in order to ensure expansion and a long life secure for the company through differing markets. BT is very devoted in the acknowledgment of the primary source of its customer base within commercial outlets therefore the focus for the business falls within this function. However the domestic market retains a sizeable share of the total revenue generated thus the sector is carefully managed and invested in which enables the security of this sector.
In this report we will examine the mission statements of BT, key objectives, internal and external environmental factors and information systems with the levels of management.
The Mission Statement of British Telecommunication
Mission statement is unique purpose that differentiates an organisation from the other companies of the same type. A mission statement needs to communicate the essence of its organisation to its stakeholders and to the public. There are two kinds of mission statements:
In general it indicates how they do rather than where they would be. In other words journey rather than destination. They are always long term objectives. Usually, there are no closing stages on this kind of mission statement but it is always measured by its goals. For example: reduce output of waste or strengthen the loyalty of the constituents and so on.
BT chief executive Ben Verwaayen states the general objective of BT as follows:
“Our central purpose is to provide world-class telecommunications and information products and services, and to develop and exploit our networks, at home and overseas, so that we can:
- Meet the requirements of our customers,
- Sustain growth in the earnings of the group on behalf of our shareholders, and
- Make a fitting contribution to the community in which we conduct our business.”
( The Guardian, Wednesday 9 April 2008 )
They are irrefutable mission statements that contain principles and time periods in which all work should be achieved.
Mission statements should be answered following Drucker’s four questions: (E H Edersheim, P F Drucker (2007)
- ” What is our business?
- Who is the customer?
- What is the value to the customer?
- What should our business be/ what will our business be?
What business is the company in? BT is doing this by stating that it provides world-class telecommunications and informational products and services to its customers”. This really shows the involvement that BT is not in the mobile telecommunication service by at home and overseas”. But it also states that they offer landlines in abroad as well for instance in Hong Kong, India, Indonesia, Japan, Korea etc. Thus, the consumers would be the people who are using the BT landlines By developing and exploiting their network and meeting the requirements of customers, they mentioned increasing the value of the network. By telecommunication at home indicates their business where they are now and provide world-class telecommunication service in overseas indicates where their business will be. Lately mission statements are not about their customers and products and services, but shareholders. In last sentence they also mentioned what they will be doing in the future with the collaborated companies.
BT’s strategy and key objectives
BT strategy and key objectives can be stated today as followed: the speed to the market, customer experience and cost transformation. BT has a future-proof, flexible, intelligent network to enable the company to deliver communications services that will meet their customers ‘requirements in the coming decades. They have a very clear vision of where they want to be and they are now taking specific steps towards that goal. Their transformation program has three key objectives:
- to enhance the customer experience
- to accelerate product to market times
- to reduce BT’s cost base
And they are seeking to achieve these all at the same time. Therefore new means were set up in order to increase and improve their performances such as 21CN
21CN is designed to deliver a world class customer experience from end-to-end. It will drive a radical simplification of BT’s operations, increasing efficiency and the ability to launch new services to market faster than we can today. It will empower the customer with control, choice and flexibility like never before.
BT claimed that 21CN will deliver both enormous cost-savings and the most advanced network in the world for new services. They point to consolidation of equipment, the simplification resulting from the removal of numerous legacy networks, and the flexibility and degree of automation enabled by 21CN.
Its new network will make it more efficient, quicker to respond to market demand and more flexible. It claims it will be much easier to launch multimedia, converged services and that customers will have more control over their account management and greater flexibility in the way they interact with BT and its network. ( Financial Times June/15/2005 08:44 )
PEST ANALYSIS OF BT
With the economic globalization and the widespread application of information technology, enterprises are faced with dynamic and complex external environment which is increasingly important for survival and development of enterprises. With regard to political factor, BT was the vanguard of the reform of the telecommunication industry in Europe and the United States, and the success of the reform was owned much to the British government telecommunication policy, especial for the right choice for control policies. Economic factor refers to the macroeconomic situation, world economic situation and economic status of industries. For example, the current economic crisis leaded to the incline of BT’s economic benefits. Due to the economic pressure, BT was planning layoffs which showed that BT had dropped at the company’s lowest situation since the privatization in 1984. The social factor refers to the general factors which have indirect and potential impact such as population, income or purchasing power, national culture and national education level. Ecological factor essentially means that increasing depletion of natural resources and ecological environment forced the enterprises to adapt environmental protection policy. For example, BT’s goal is to reduce its carbon emission by 80 percent in 2020, at the same time, BT has also introduced a new model to measure and trace carbon emission, Carbon Disclosure Project (BT, 2008). Technological factor refers to the industry-related science and technology and the trend of development. As a veteran operator in Europe, BT had won the attracting results through introducing the 21st century network based on NGN technology, and adapting the industry-leading technologies and strategies to carry out the entire business operation
SWOT ANALYSIS OF BT
SWOT analysis is the analysis of organization’s strengths, weaknesses, opportunities, and threats in order to identify a strategic niche that the organization can exploit G Lancaster (2002).
BT is the world’s oldest communication company which was established in 1846 and still serves over 20 million business and residential customers with more than 29 million exchange lines. It has a good reputation of being part of the European leading telecommunication service provider. For instance, it extends its market in other countries, it is a global company and Over 60% of Fortune Global 500 companies and over 65% of FTSE 100 companies are part of the BT customer database. It makes BT has a strong brand image and until now BT is still the only UK telecom operator to have a universal service obligation (USO). Its strong base of long term customers makes BT financially successful due to its innovative and flexible organization and its competitive price.
The weakness of BT is inflexible. BT is a big company, so it should work by step and step, it cannot change quickly when meat the problem. But however today, BT’s reputation is going down because its internet service usually crashed for long hours and therefore takes a great deal of time to reconnect. BT Home Hub WI-FI security easy to crack (Router manufacturers use algorithm to generate WEP (wired equivalent privacy) and WPA (WI-FI protected access) default keys. BT Home Hub ships with default encryption keys to encrypt wireless network traffic using either WEP or WPA. But the algorithm is predictable and only creates a limited number of easily-hacked keys). It is also obvious that BT’s own success makes it difficult to recruit and train staff quickly enough.
Experts predict great potential for future growth in next 10 years. And the current recession is favorable as people more specifically the customers and businesses are more cost-conscious. It is also important to note that lots of threat to new entries to the market which gives opportunity to grow even bigger nationally and internationally. BT’s well known in Europe can bring new co-operating companies all over the world. Internet user growing quickly, it means BT have opportunity to get more market share. In 1994 only $1billion market for BT and MCI but now it grows unbelievable. Global telecommunication market is grow 20% in 2008 compared to 12% in 2003 which will have a good chance for BT to create a new record. With the technology of internet, BT also can develop new product, for example: it can increase the speed of cell phone to use internet
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BT was established in 1846, at that time it was the only telecommunication company in Britain until 1982 Mercury communications entries this market. It means BT should competitive with Mercury communications and BT market share decreased. It leads to BT cannot make price easily; it should compare with other company price and then make a competitive price. BT also should improve their products, make it have more competitive, because BT should keep their old customers and create some new customers or take customers from Mercury communications, but it should cost more. In addition, BT starts to lose the customers trust and the introduction of mobile phones decreases the usage of landlines. The treats get worse as big brands enter the market with new technology and low prices. The internet coverage of areas that do not need landlines and new companies such as Virgin affect badly BT’s expansion.
Critical success factors
Since the invention of the telephone by Alexander Graham Bell, new era of communication has started. In United Kingdom General Post Office’s Postal Telegraph department which became BT group was providing telephone services. BT group is the largest communication service provider in United Kingdom. Throughout history BT had numerous advantages which influenced its success.
BT had a monopoly in the industry till the duopoly sharer Mercury came out. These two telecommunication operators had an exclusive right to provide telecom services. This duopoly ended in 1990s, and market was open to be shared. But BT had already reached an attitude which is much stronger and unbeatable by competitors.
Many of BT’s customers are based in the UK. BT Global Services deliver solutions inmore than 170different countries, connecting installations, communities and value chains that are essential to organizations. Currently BT is responsible for approximately 28 million telephone lines. Furthermore the company is the only UK telecommunications operator obliged to deliver fixed telephone line to any UK address. In addition BT operates most public telephone boxes all-over the UK.
With high technology BT delivers significantly good service of telephone, internet and cable TV. Current BT’s most dominant product on the market is BT Home Hub which includes telephone internet broadband and cable TV. Furthermore BT has launched many more successful products throughout decades.
INFORMATION SYSTEMS FOR BT
The operation control is the stage that shows and determines how the performing of specific tasks that are set by strategic and middle management decision makers. Usually, most of the tasks in operational level are structured.
This stage evaluates new ideas for products and services, the ways to communicate new knowledge in other words the interaction, and finally the ways to distribute information.
Management Control-tactical level
The management control tactical level monitors effective or efficient ways of resources and performance of operational units. Most of the tasks in that level are semi-structured.
Strategic Decision Making
It determines long-term objectives, resources and policies. In general, a good number of the tasks in strategic level are unstructured.
Major types of System
The major types of system we can notice today are the Executive Support System (ESS), the Decision Support System (DSS), the Management Information System (MIS), the Knowledge Work System (KWS), and the Transaction Processing System (TPS).
Executive Support systems
Chief Managers use executive support systems (ESS) to make strategic planning about sales forecasting, budget, profit and personal planning. ESS serves the strategic level of the organizations. They address non-routine decisions requiring judgment, evaluation, and insight because there is no agreed-on procedure for arriving at solutions. ESS create a generalised computing and communication environment rather than providing any fixed application or specific capability. Furthermore, they are designed to incorporate data about external events such as new tax laws or competitors. They employ the most advanced graphics software and can deliver graphs and data from many sources immediately to a senior executive office or to a boardroom.
“Unlike the other types of informational systems, ESS is not designed primarily to solve specific problems. Instead, ESS provides a generalized computing and communications capacity that can be applied to a changing array of problems”. J F. Rockart (1988). At this stage such matters like the business aims and competitors influences are indeed revised carefully. Therefore, senior managers are trying to maintain a good relationship with partners and existing customers. However to gain high reputation, they must be concerned about the role of customer social responsibility and have to create a flexible strategy planning that suits to the charges of economical factors.
Decision support systems
The decision support systems (DSS) help managers in making decisions that are unique, rapidly changing, and not easily specified in advance. They provide both problem-solving information and a communication capability for solving semi-structured problems. DSS have more analytical power than the other systems. They are built explicitly with variety of models to analyze data, or they condense large amounts of data into a form where they can be analyzed by decision makers. “DSS are also designed so that users can with them directly; these systems explicitly include user-friendly software”. F Buytendijk (2008). Relating to British telecom, the DSS study generally the options of maximisation profit and determine whether prices are suitable in the marketplace.
Managerial Information Systems.
Management information systems (MIS) are used mostly in management level system, management need information in different sectors like sale management control, annual budgeting, about investment analysis. On average, they are oriented almost exclusively to internal, not environmental or external, events. MIS mainly serve the functions of planning, controlling, and decision making at the management level.
MIS review and report on the company’s basic operations. The basic transaction data from TPS are compressed and are usually presented in long reports that are produced on a regular schedule. MIS usually serve managers interested in weekly, monthly, and yearly results-not day-to-day activities. MIS generally provide answers to routine questions that have been specified an advance and have a predefined procedure for answering them. Most MIS use simple routines such as summaries and comparisons, as opposed to sophisticated mathematical models or statistical techniques. Ross Malaga, (2003).
Knowledge Work and Office Systems
Knowledge Work System ( KWS) is very important because BT has different workstations like engineering workstations ,graphics workstations and managerial workstations ,on the other hand Office systems do in BT different work like word processor , document imaging , design for the company , electronic calendars.
This system can involve a combination of work practices, information, structures, people, and technologies organized to accomplish objectives in an organisation. BT use information system in different level of management, there are a relationship between systems. Mostly, BT uses three information systems: management system, information system, and computer system.
Transaction Processing Systems
Transaction processing systems are the basic business systems that monitor the operational level of companies. A transaction processing system is a computerized system that performs and records daily routine transactions necessary to the conduct of the business. For example it’s like special force in the army, any operation need to be check and secure for example: machine control, securities trading, material movement, and cash control management. They also study the decision to grant credit to a customer for instance, this is made by lower level supervisor according to predefined criteria. “All that must be determined is whether the customer meets the criteria. The master file is composed of discrete pieces of information (such as name, address or employee number) called data elements. Data are keyed into the system, updating the data and elements. The elements on master file are combined in different ways to make a report of interest to management and government agencies and to send paychecks to employees. These TPS can generate other report combinations of existing data elements”. J Gray, A Reuter (1993)
- Modern Public Information Technology Systems: Issues and Challenges by G. David Garson, 2007
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- Information Systems Technology by Ross Malaga, 2003
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- The Guardian, Wednesday 9 April 2008
- The Definitive Drucker: The Final Word from the Father of Modern Management – Page 48 by Elizabeth Haas Edersheim, Peter Ferdinand Drucker – 2007 – 289 pages
- Financial Times June/15/2005 08:44
- Transaction Processing: Concepts and Techniques – Page 3 by Jim Gray, Andreas Reuter – 1993 – 1070 pages
- Strategic Planning for Information Systems by John. L. Ward and Joe Peppard, 2002
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- Introduction to Business Information Systems by Peter Mertens, Rolf. T. Wigand, 2003
- Business Dynamics in Information Technology by Peter Gottschalk, 2007
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