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Project Management

High-level analysis of “Debacle & possible revival” of BSNL (PSU)

“Debacle & Revival of BSNL”

In fast-developing countries like India, it is always a challenge to run Public Sector Units (PSU) in profit consistently on a longer run. They are more efficient and have better productivity metrics in the initial stages. But unfortunately, it is found that usually, things don’t remain the same after a certain span of operation. There are multiple reasons behind these type of typical debacles such as –

1. Failure in planning and implementing organizational change management processes. It is recommended by project management best practices that, when the organization reaches a certain level (extreme change) of revenue generation by capturing a noticeable market share, it must start planning and implementing change management processes to survive competition, globalization effect, and continue to grow , remain ahead in the world of ever-changing technology-based supremacy.

2. PSU management officers get defocused or lose concentration on organizational objectives and goals as they start getting involved more in engagement activities with semi-government officers or the similar non updated governing bodies.

3. Limitations of management’s capability of decision making at higher revenue levels. Especially in the case of PSU’s the senior management officers do not accept or fail to understand that, at higher stakes, they need better professional management team and up-gradation of business processes to take the organization at next level.

The rise and fall of Bharat Sanchar Nigam Limited (BSNL) are very much analogous to what is observed in the past. 

BSNL once a highly profitable company, (PSU) has seen a high rising graph in its first 4-5 years of establishment. In 2002/03 it was in profit by approx. Rs. 1400 Cr. which increased sharply to approx. Rs. 10000 Cr. in 2004/05. It was amazing and really creditable towards its management and employees considering that by this time major private telecom organizations were almost established in the market for 6-8 years. BSNL made its brand of mobile phone most hunted mobile phone and its network coverage was almost throughout the country. Although the competition at that time was reasonably intense, it was driven by BSNL rather than being driven.

By 2005-06 BSNL reached the point of ‘extreme change’ but for unknown reasons, it did not act upon it. Revenue and profit margins started to fall down. Management involvement was more in financial adjustments and probably resulted in neglecting the areas of “timely introducing new services, employee skill set enhancements, continuous improvements in the expected quality of services and last but not the least, acquiring professional management approach”. They come out with ‘excuses of out of proportion resources, rather than enhancing internal resource competencies started outsourcing at higher pricing to compete with private players’. The decline was so severe and continuous that by 2009-10 it went into losses approx. Rs. 1800 Cr. & over a decade by 2018-19 it was almost a few kilometers under the ground at losses of approx. Rs. 12000 Cr.

In order to create the possibilities of reviving, BSNL may have to adapt the approach explained by the Organizational project management maturity model which explains this phenomenon as a synchronized enhancement approach in three pillars of growth, “Resources – Business Processes – Management”.

1. Resources who has the impending capacity to deliver by improving the operational efficiency of BSNL should enhance their capability through massive advanced technical and professional management training, handholding, mentoring programs. Other overflow resources to be accommodated in other PSU or should be compensated and released. 

2. Management to take strategic decisions about focusing on those selected services where private competitors are yet to concentrate like (FTH) Fiber to Home and FTH with Wi-Fi services. Reduce efforts on generalized services having lesser margins. 

3. Top management is to be switched to deal with the disaster of credibility and increased competence at the decision-making level. Top management should start reflecting its new image on the employees and the end-users creating, injecting more confidence. These type of constructive actions results in a significant rise in the overall performance.

In the nutshell, the BSNL revival requires the following action plan described at a very high level, “Dynamic and dependable visionaries, influencing by their own strengths with the concentration on strategic services of the latest requirements of the stakeholders.”

Author – Nitin Shende, PMP®, PBA®, PRINCE2®, QPMP®
Sr. VP Project management Consulting & Knowledge Transfer

Declaration: The contents of the article are basic management expert judgment of the author with the objectives of understanding overall “progress – decline – probable revival” of India’s popular PSU BSNL.

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