Jean-Hervé Jenn looks at the telecommunications industry
with a banker's wary eye and spots trouble ahead. As the
afternoon sun shines on him in his office a few miles outside
Cambridge, England, he runs through some of the challenges that
are facing the operators that are the clients of Convergys,
which he joined in 2003.
The money set aside for third generation mobile doesn't take
long to say: "There's $100 billion on infrastructure, and $110
billion on licences," says Jenn, shaking his head in disbelief.
"What have they got to show for it?" he asks.
He turns to the fixed operators, cutting the cost of
broadband, and seeing voice over IP competitors eating into
their revenues. If they cap the monthly fee, "then they cap
their growth", he says. "The population in Europe and the US
isn't growing, so where will the growth come from?"
They're trying bundling, taking on the cable industry and
the entertainment industry, but telcos are not good at
bundling. "Who are the great bundlers?" he asks, offering his
own answer for the UK market: Sky, the Rupert
Murdoch-controlled digital satellite broadcaster, and Tesco,
the country's leading supermarket chain. Their revenues are
going up. "That's where the telecom companies are going to
It means telcos have to get new skills at the top. "They
need to be much better at attracting talent into the industry,"
he says — giving as an example of the sort of boss
they should be hiring Pierre Danon, the CEO of BT Retail who is
a former Xerox executive.
The industry needs an injection of people with a consumer
background, he adds, "and then it needs to empower them", he
adds. "Look who's running the industry now: technologists,
Jenn joined Convergys in October last year from Goldman
Sachs, where he led a team handling strategic dialogues with
clients — not specifically in telecoms. However,
before that he was European head of telecommunications,
technology and media at KPMG.
He trained at the École Spéciale des Travaux
Publics, du Bâtiment et de l'Industrie on the Left Bank
in Paris — a university specializing in training
construction engineers. Intriguingly, over at BT, Danon was
trained at another French civil engineering school, the
École Nationale des Ponts et Chaussées. It makes
an amusing thought: business meetings between senior executives
of BT and Convergys starting off with a friendly chat in French
about motorway bridges and railway tunnels.
Jenn's role at Convergys is president of the company's
information management group for Europe, the Middle East and
Africa. And his task is to help boost the company's non-US
business over the next five years. "The global operation should
be 30% of our sales," he says. "We're not at 30% today. I've
got a growth challenge."
Convergys has been international for only about three years.
The company, which emerged from the in-house billing operation
of independent operator Cincinnati Bell, started its worldwide
strategy by buying a UK billing software company, Geneva
Technology, based in Cambridge.
The stock-for-stock deal was completed in April 2001, but two
years later as far as many people in the industry were
concerned Geneva was still a separate organization. "My role is
to consolidate," says Jenn. "Geneva got incorporated into
Convergys pretty quickly," he says, but he makes it clear that
he means the technology of the billing and rating engine. "From
a marketing point of view the entities were left independent
for a while."
How does he plan to grow the non-US operations? "It's got to
be a five-year objective, and to me that's going to be a
combination of organic and acquisitive growth," he says.
Organic growth means more emphasis on systems integration,
consulting and outsourcing. That will require some new
alliances to be formed with potential competitors. "Are we
going to compete with Accenture and Cap Gemini?" Jenn asks. "I
don't think so." Indeed, Convergys will need to work with such
partners. "We're not just a supplier of the Geneva
On buying other companies he is, understandably, reluctant to
say more than "probably some tactical acquisitions at the
European level". What sort of deals? "We're a cash rich company
but we know how to do a deal," he smiles. And he was at Goldman
What areas would he look? The OSS/BSS industry is big: "We
don't do it all. No one does it all, but our emphasis is more
on BSS. We're not deep into network management, OSS. Does that
mean that's where we want to go?" he asks himself. Jenn is good
as asking the questions, though his answer is not very
revealing: "Not necessarily." And "it's too early to have a
budget" for potential acquisitions, he adds.
There is a third aspect to the challenge Convergys has set
Jenn, in addition to integration and building the business. In
the US, in addition to billing, the company provides outsourced
customer care and employee care operations. "We want to start
implementing that with telecoms operators in Europe," says
Convergys is one of the biggest operators of call centres in
the world, he says, with 22,000 seats, including some in the
Philippines and Indonesia. "It's an end-to-end solution", that
covers billing and other functions, he says, but he admits that
"it's a very Anglo-Saxon product". Different countries react
differently to the idea of outsourcing, he adds: "The UK is
very advanced in outsourcing, and Germany is going to be next.
France is being left behind."
There is a lot of interest "at the CEO level" but he admits
there are also many challenges. These are large, successful
companies that have whole departments handling these
operations. "We are realistic. This is an infrastructure
industry and it takes time to build."
But Convergys has major interests outside the telecoms
industry, and it is wanting to bring these offers to telcos:
employee care, for example, where Convergys takes over a
client's human resources function, including access to
benefits, training and so on. "We're one of the leading players
in the industry, and most of our clients are global
It's a two-way street: the billing systems that Convergys
now offers the telecommunications business are "very
sophisticated transaction engines" that can also be used for
banking, health care and other businesses. "We'll be able to
expand way beyond telecom," says Jenn.
Which all sounds as though he has some challenges ahead of