A CIO's Cingular (M&A) Challenge

Jun 28, 2004

Jeanette James

When Telecommunications firms SBC and BellSouth launched the combined company's Cingular cell-phone brand with a splash in January 2001. The media blitz included the Super Bowl, NASCAR and an event hosted by comedian Dana Carvey.

But behind the scenes, there was work to be done at the new telecommunications provider, Cingular Wireless. Already, SBC and BellSouth was a conglomeration of merged companies -- and merged technologies.

"It was like integrating 11 companies," says Jeff Kagan, a telecom industry analyst based in Cingular's hometown of Atlanta. "Billing systems, databases ... that's a huge challenge all by itself. Add to that the network standards that were changing" as the company moved to GSM, a mobile-phone standard that is dominant in Europe.

Further, with some 1,400 enterprise applications in use, "it was hard to get things done," remembers, Thaddeus Arroyo who became the CIO at Cingular shortly after the brand was launched.

Added to the challenge of too many applications, it was an era of expansion -- meaning confusion and challenge for all telecom companies.

"During the growth period, we were rushing to keep the shelves stocked," Arroyo says. There was so much growth and network expansion at that time that "it exasperated the complex infrastructure we had to support. We had to interface with so many components."

Secret Sauce

But Arroyo had a plan for IT integration and market challenges based on his own success touchstones: team, business smarts and energy.

"First and foremost it's about the teams you build," Arroyo says.

With the help of a team of more than 3,000, Arroyo attacked the Cingular challenge through "a formal process of building a roadmap" of what IT systems Cingular had and what it needed.

As this unfolded, Arroyo gave free reign to his business sense, never letting the love of technology make decisions alone about what to keep and what to cut.

"It's not technology for the sake of technology," Arroyo says, summarizing his belief that IT should be a strategic tool that helps a company boost profits, rather than just a way to spend money.

This business focus, backed by Cingular's strong IT team, were topped off by Arroyo's nearly bottomless pit of stamina.

"All the skills and talent alone won't be enough" without the drive to succeed, Arroyo says. "Sometimes, moving a large organization on nimble footing can require a lot of energy."

Others certainly attest that Arroyo does not lack for energy. "He is notorious for sending colleagues e-mails and wireless text messages at all hours of the day and night, from the four corners of the globe," says one insider. "They joke that he must never sleep, as they get 'action' messages from him at night or while he's (supposedly) vacationing."


The results? Lots of strategic trimming and smooth operations. In all, Arroyo and his team reduced Cingular's IT systems by more than 75% in less than three years. For example, Cingular has consolidated 60 specialized call centers into 20 centers capable of handling multiple issues. Two billing systems now operate in place of the previous 11.

Validating Arroyo's focus on business results, all the changes and trimming have contributed to Cingular's successful merger.

"Cingular struggled with customer care issues but now they are in the process of improving that," says Kagan. "They have more work to do, but they have made leaps and bounds of progress."

"Integration is a huge challenge, but it is worth the effort," Kagan concludes. "Between voice, data and consumer and business customers, Cingular is extremely well positioned."


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