Nortel Buzzboard

Day 2 at Global Connect here in Grapevine Texas starts with an opening keynote from Nortel CEO Mike Zafirovski, as well as Tom Hughes, CIO of the U.S. Social Security Administration (SSA). After Tom spoke, Nortel CMO Lauren Flaherty and Gartner Group analyst Bob Hafner joined Mike and Tom on stage for a panel discussion.

For those of you wondering about the details behind why Tom Hughes of SSA is speaking, the U.S. Social Security Administration is just beginning a massive move of their 1,600 offices to VoIP using Nortel equipment. You can read more about that deployment here.

Here are my notes from the session. Updates below are in reverse chronological order, with the most recent updates at the top. Mike spoke first so he’s at the bottom of this list, then Tom Hughes of the SSA, then the panel discussion (on top):

• And the event has wrapped. Again, start from the bottom and read up.
• Question from the audience: Nortel’s ICA with Microsoft, what’s going to happen long-term with that relationship to ensure the success and tight integration with Microsoft? Mike Z: There is no such thing as a relationship forever, you have to continue to show customer value…and so far we have shown real benefits to customers with Microsoft. For us it’s about what we can do for the customers in this room.
• Related posts
  • Exhibit hall opens
  • User’s Open Forum
  • GC Awards Lunch
  • Hackney guest blog
  • Opening session live blog
  • Pics from set-up

  Lauren for Bob: When you looks at drivers for users making those business cases, how much is around CSAT versus productivity? Bob: It’s all important, but at the end of the day it always has to have hard numbers and cost reductions. It has to pay for itself. There is the one exception where there is a PBX at end-of-life and you have to do something.

• Lauren for Mike: Can you comment about how much of our business is software and where we are going? Mike: we have always incorporated software into our hardware. Our development used to be 50% focused on software, in the last few years that has grown to 70% or more.
• Question from the audience: We are a gov’t agency and we host a lot of critical applications, my question is around security with UC — to Tom, as you migrate to UC will you manage the devices or will a vendor manage? Tom: you can’t do everything yourself. So you have to build trusted environments with your partners. Then you create an audit trail. And you’re going to find problems, and then you fix them.
• Lauren for Bob: What are the benefits of UC? Bob: the problem is that when the IT department goes to the CIO and says they want to go to UC, they have a hard time showing hard numbers. Every single customer we talk to says they have to have a hard dollar benefit to get UC approved.
• Question from the audience to Tom: What’s your advice to the incoming President? Tom: trying to get me in trouble The President is trying to organize communications, and that’s happening. There are a lot of challenges around communicating across the federal government.
• Lauren for Tom: If you had to give lessons learned that you would change, what would those be? Tom: I think the lesson is to keep the execs engaged because of the macro investment you are making to your organization. If you don’t think about changing your business processes you won’t be successful. If you don’t engage execs up front, if they don’t see it, you are going to fail. Build at the highest possible level, because you are really talking about changing your business.
• Lauren for Mike Z: we see UC deployments from 100s of seats to 1000s of seats. How are big deployments like Tom’s evolving things? Z: Where SSA is different is that they are deploying VoIP to a contact center that is at the heart of their business. There are challenges that we expect, but you address those and then you can go to the next level. In the bigger scheme, we’ve had large UC deployments with a number of companies globally, and those examples need to be championed to drive the move to UC.
• Z for Bob: are there two or three best practices that you think businesses should take? Bob: Yes, first you want to find a business process that is very communications intensive — for instance a process that needs a lot of approvals. And then, don’t try to boil the ocean day one…look for very simple opportunities to start with. Lauren to Tom for more input. Tom: for all these items there are other things to think about, legal, HR, security. The issue is that you are going across different verticals of your organization — you have to work horizontally across those domains and that’s the hard part. So starting small on something that you agree to deploy is a good way to start. People are generally risk-averse.
• Lauren for Bob: we speak a lot about integrating comms into business processes, can you talk about that? Bob: we started thinking about this in 2003. In the past 40 years we have been computer-enabling business processes. But what happens when the computer spits something out and someone needs to make a decision? There is a delay in business process while someone eventually makes a decision. Now when we move to VoIP, that’s another application, so now you can integrate that communications application (and others like IM, email) into the business process. It makes sense and it’s the next step.

• Lauren for Bob Hafner: Share with us the greatest opportunities across enterprise. Bob: So most everybody believe UC is going to happen, and it makes a lot of sense. The whole point of businesses is to collaborate. In Gartner we talk to enterprises, but none of them really has a full UC strategy. They had individual email, conferencing and voice strategies. We need to start thinking at a higher level, and that’s an opportunity. It’s not about UC, but about how we communicate. Are you email centric as a business, voice centric, etc. Those things help you drive how to drive your UC strategy.
• Lauren is moderating a Q&A session now with Tom Hughes, CIO of SSA, Bob Hafner, analyst at Gartner, and Mike Z, CEO of Nortel.
• Tom has closed…Mike Z comes back on the stage with Tom….Mike introduces next speakers, Bob Hafner of Gartner Group and Nortel CMO Lauren Flaherty join Z and Tom on stage.
• Tom: with that I will thank you.
• Tom: for us our biggest challenge is getting our executives to understand and think about this. You’ve got to start educating people at the top level, and putting it in the strategic planning effort. This is around better serving our customers. You need to be thinking about UC.
• Tom: Why VoIP? The future isn’t this year or next year. We have to budget years out with the gov’t. So we’re in this debate right now (with VoIP) that we are winning, we realize that there is also a road to UC. We’re not quite in that debate yet (for budget approval) but it’s coming. With VoIP, we figured out a way to lower our overall costs. We think in the long run it will be better customer service, better business continuity. Also the amount of information being collected is enormous, and it’s all being transformed into an IP environment. We have to prepare to build that infrastructure to move forward. So for us it’s really a transformation of our agency.
• Tom: the biggest challenge is IT security. You can’t plan all of the possible risks that you may have with privacy, with people trying to break into your environment. We’ve had to find a way to mitigate those risks. For us it’s a voice over Intranet solution…so we’re not completely out there in the wild.
• Tom: SSA’s long-term goal - consolidating fax, voice, email, video, mobile, etc. The challenge is having the vision to understand unified communications and what that means. We collect about 1.5 million medical records a day. What does that mean in the future…I’m not exactly sure. The business side knows, and we have to be prepared to work with them on a business vision.
• Tom: SSA challenges - 45 million checks per month. 80 million Americans will receive SS in 2030. We had an aging telephone infrastructure…we had a mixture of technologies from Nortel, Avaya, Fujitsu, Executone…and we have 1600 Social Security Offices.
• Tom: Today 1.5 billion people are walking around with computers in their pockets (cell phones). My point is around the idea of reaching everybody, everywhere at super high connectivity speeds. It’s not here yet but it’s coming. You have to be prepared.
• Tom: What’s driving your IT strategy? A lot of the top execs don’t quite get it. Your IT strategy is tied to you business strategy. Think about the SSA - we have 1600 offices. We have to find ways to get greater productivity.
• Tom: What I want to talk about today is about “shift” - about transformation. For us it’s a matter of survival. We realize we need to start looking into the future, and when you are in the federal gov’t you really need to plan ahead.
• Tom had an opening video that focused on the changing communications environment globally. One cool stat…the top 10 in demand jobs for 2010 did not exist in 2004. Another, the number of text messages sent every day exceeds the population of the planet…47M laptops shipped last year…
• 9:40am ET - Tom: I’m not here just to talk about Nortel, but to share some ideas I have for you. This isn’t about Social Security or Nortel, but about some reasons why we chose VoIP.
• Mike Z is now introducing Tom Hughes, CIO of the Social Security Administration as the next speaker.
• Z: I’ll wrap with these comments. Thank you for your business and more importantly thank you for your support. We are putting all our efforts into taking all this technology to really make Business Made Simple for you. It’s not just a tag-line, it’s a mission. We are really working to live up to this.
• Z: #5 what’s your plan to recover Nortel’s luster? We have Lauren Flaherty our CMO here because of the opportunity we see in transforming Nortel’s image.  We are also focusing on our customers.
• Z: #4 Is enterprise core to Nortel? I hope there is not a person in this room that has this question anymore. We have a strong leadership team with Joel Hackney. There is a passion and commitment to driving results. 50-70% of Joel’s time is in the field talking to customers.
• Z: #3 Will POR be more accurate? We have shows a 4X improvement in POR predictability, 70% gain in on-time delivery of product features, with a goal of 90% delivery here. We have improved and this is only going to continue.
• Z: #2, How will we improve quality? We are deploying Lean Six Sigma, we are reducing our supply chain complexity, and we are increasing our focus on channels and CSAT.
• Z: Now to the progress we’ve made against the five big questions that you’ve asked me here a few years ago: 1) what will you do to regain Nortel tech leadership?  We have build a strong R&D leadership team, We had 20 locations that were doing various R&D activities. We recently announced Centers of Excellence to drive our R&D activities. Also investments in software capabilities and partnerships.
• Z: I was thrilled to see the customers that were recognized yesterday [in the customer awards lunch]. I always say there is no greater pleasure in business than being recognized by your peers.
• Z: So where is Nortel today? We have the right people, we have a strong customer base, committed to quality. I also think we have a unique position across enterprise and carrier. I do believe are becoming much better leveraging partners. Specifically our JV with LG has shown tremendous growth. I also think we are making the right bets in the future.
• Z: Our financials: good improvement here over the last 18 months. Our revenues have grown, operating margin has improved.
• Z: 12,000 R&D employees, 150 major new products last year, 5,200 patents, participate in 80 standards bodies.
• Z: Nortel’s investment strategy - we’ve evolved from having 55% of our innovation investment in Legacy products to 20%. We have now doubled our investments in emerging technologies to 20%. John Roese is now putting 3% of R&D investment into incubation.
• Z: Nortel’s focus areas on the supply side are enabling true broadband, and on the demand side with creating communications-enabled applications.
• Z: Nortel’s strategy has three premises: 1) transformed enterprise — TDM to VoIP to UC, 2) Next generation mobility and convergence with technologies like 4G, FMC, through applications and with IP transport….
• Mike Zafirovski: Hyperconnectivity is happening today: 1.6 million new mobile phones are added to the network every day. 10 billion microprocessors will be sold this year.