Stiff competition led to Globe Telecom's dramatic growth

The Ayala-owned Globe Telecom said yesterday that intense competition has greatly contributed to its dramatic growth since it forced the company to work harder and provide better service to customers.

Gil B. Genio, Globe senior vice president and chief finance officer, said that they have to keep working to increase efficiency and productivity so as to attract more subscribers and prevent existing ones from shifting to other providers.

"In a competitive environment, you have to always be doing something. The minute you stop, you lose ground," he pointed out.

From being in the red a few years back, Globe's revenues suddenly jumped by 75 percent in 1999 and subscribers increased more than four times to 916,000.

Ironically, Globe achieved a positive turnaround in its operations on the same year that its stiffest competitor, Smart Communications Inc. introduced the GSM cellular phone service, a digital technology which is the same as that being used by Globe.

Aside from embarking on various marketing strategies, Genio said that without advanced business systems and processes, Globe could not have supported last year's robust growth.

To ensure that everything is kept in pace with its planned network expansion, he said that Globe invested millions of pesos in SAP's enterprise solution to integrate information across business units and streamline business processes.

"The investment was not meant just to cut costs but to provide the capacity to manage our cost structure. Our previous systems just would not fit in Globe's expanding scale," he explained.

In the past, Genio said, they did not even dream of automation in some areas.

With the SAP backbone, though, he said that they now know how much it costs the company to talk to a customer, thereby, allowing management to continuously explore ways to lower distribution and transactions costs which would translate to cheaper calls.

"Despite the fear of everybody, we decided to go for a big bang implementation," Genio said as he noted that decision yielded intangible but important benefits.

A big bang implementation is a large-scale implementation of multiple SAP modules that replaces many systems or processes at one time.

"First, we demonstrated that management was prepared to do whatever it takes to achieve our goals. Second, people always underestimate their capabilities. The human spirit rises to great challenge," he said.

The third intangible benefit for Globe, according to Genio, is that top management realized how life would be different if the firm has not gone ahead.

People, he said, are more supportive now of investing in technology because it solves problems.

The benefits of the SAP implementation -- a second phase providing additional functionality and support for Human Resources processes is now underway -- will help guarantee the successful implementation of new value-added services for Globe customers, and at affordable rates, he said.