XO Shares 3-Year Plan with Partners

XO Communications Inc. is kicking off a three-year strategic plan in 2012 that involves streamlining its product offering, including eliminating most TDM services, and shoring up its service delivery with better tools and processes, according to Ernie Ortega, the company’s executive vice president of sales and marketing.

Ortega and other top XO executives shared the CLEC’s strategic plan with about 20 PlanetOne agents in a meeting at XO’s offices in Phoenix Thursday, the first stop in a multi-city road show targeting the company’s indirect sales partners. Since XO became a private company in fall 2011, few details about the new direction have been shared.

Ortega was joined by Mike Cromwell, senior vice president — business services; XO’s channel chief Shane McNamara, vice president of indirect sales; Jim Ferguson, vice president — West region;  Rich Gannon, national channel manager; and Cheryl Vick, national director of operations for the channel.

In an interview following the presentation Ortega told Channel Partners that XO already has begun shedding its TDM services with the October shutdown of all wholesale long distance services. No other services have been turned off, but executives are discussing those plans and timelines with an end date at the close of 2014, he said.

Ortega explained that some products like dialup Internet access and DSL will go dark while some will sunset, meaning the company will not terminate the service but will no longer sell it. In addition, there are a few non-core services, like PRIs and private lines, that the company will continue to offer.

Cromwell noted that new products were being developed that specifically target the small and medium business. He added that one of five vice presidents will be focused on that target market. The others are McNamara for indirect channels and three regional vice presidents, including Ferguson.

Ortega said the changes impact north of $300 million in revenue, so where possible XO will attempt to migrate affected customers to other IP-based products. Meanwhile, he said the strategic products will grow in revenue (presently tracking $100 million year over year), so the company performance will remain somewhat flat through the transition.

Meanwhile, XO is working to address acknowledged problems with the quote-to-provisioning processes that Ortega attributes in part to a product catalog resembling Leo Tolstoy’s lengthy tome, “War and Peace.” The resulting layers of processes and people have slowed response times. Taking a page from XO’s wholesale business, which Ortega ran for many years before it and he were integrated into the commercial business, XO is working to eliminate the bureaucracy and invest in automation.

Specifically, he said the approach will be threefold:

  • One, new tools for quote to contract are being developed; the company already has modified the quoting tool used for years by the wholesale division.  
  • Two, XO’s three service centers are going to specialize on product types to create greater efficiencies.
  • Three, the CLEC will improve its self-service tools for customers and partners.

Channel chief McNamara said the new quoting tool will roll out to the partner channel during first quarter along with training. As a result, he said the company will eliminate all ICBs, noting indirect sales accounted for nearly half of all the ICBs in 2011. The partner portal also is expected to have visibility into trouble-ticketing and commissioning, but McNamara said prioritizing those additions is still in the works, but not likely to happen until 2013.

McNamara also said XO will roll out its 2012 partner program at the end of January, specifying requirements for the new Platinum and Gold level partner tiers, which were announced in December.

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