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Hawaiian Telcom

Hawaiian Telcom just lost $30.5 mil. Why are these guys smiling? They believe local leadership can save the struggling company.

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Since the cutover from the Verizon systems in April 2006, Hawaiian Telcom’s back-office problems have been well-documented. Customers have been double- and triple-billed; bills have been sent to the wrong addresses; service appointments have been lost; and parts orders have been bungled. “No doubt about it,” Dods says, “the company took a great big PR hit.” And the problems aren’t over. According to Yeaman, progress has been made, but there is still much work to do.

“Are there things within the system that are working? Yes,” he says. “Are there things within the system that aren’t working? Yes. Do we have plans yet to figure out how to fix it? We’re in the process of developing that. As you might expect, that’s one of the key areas coming in here. And we’re in the process of developing short-, medium- and long-term solutions to address each issue. Once we get through those solutions, we’ll make a decision and we’ll have a clearer path in terms of how much it’s going to cost and how long it’s going to take.”

“One thing we’re absolutely going to do,” Dods adds, “is under-promise and over-deliver. We don’t have the luxury of going out to the community and promising things we can’t do ever again.” To its credit, though, Carlyle didn’t undertake the cutover from Verizon on its own. Even before the purchase, Carlyle contracted with the global management and technology consulting firm BearingPoint to assess and develop new back-office systems to replace those of Verizon. As Dods puts it, “We got some of the most experienced people, the people with the best reputations, to handle that.” And Bearing Point didn’t scrimp. “I remember, at one point, BearingPoint had something like 500 people working on it,” Dods says. But, clearly, it didn’t go well. In the end, BearingPoint paid something like $90 million to get out of the contract. In February 2007, Hawaiian Telcom contracted with Accenture to finish the work.

It didn’t all go wrong, of course. “Let me tell you what went right,” Dods says. “Not only on the day we took over the company, but on the day of conversion, all the phones worked.” In addition, while the new Customer Care Center, on the seventh floor of the Hawaiian Telcom building, has been at the center of many of the recent problems, it still represents real opportunity for the phone company. Jim LaClair, the vice president of network operations, points out that, before, the only call center actually located in Hawaii was for local telephone service. Internet, wireless, enterprise and any special services were spread out in call centers around the country. Now, for the first time, they’re all gathered under one roof and can talk to each other—in theory, providing the company an opportunity to offer better, more integrated service to its customers. And, using new technology, its becoming better at finding and fixing problems before the customer does. Across the hall from the Customer Care Center, in a setting reminiscent of a war room, the new Network Operations Center monitors all aspects of the phone company’s network, offering similar opportunities for the phone company to find trouble before it gets out of hand. These kinds of system upgrades will be essential for Hawaiian Telcom to remain competitive.

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Hawaii Business,October