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Deutsche Telekom moves part of T-Systems into German domestic business

Adel Al-Saleh.jpg

Deutsche Telekom is moving a substantial part of its T-Systems business into its German domestic business, but is also carving out two new units inside the remains of T-Systems.

The move comes nearly a year after T-Systems, which specialises in IT outsourcing, said it would lose 10,000 of its 37,000 global staff, and seven months after it said it was offloading part of the remaining German business to IBM.

Now the company says that “no additional personnel reduction is planned” for the latest change, which sees a large part of T-Systems’ activities moved into Telekom Deutschland, the group’s domestic operation.

The move will “significantly improve our effectiveness for our clients”, said T-Systems CEO Adel Al-Saleh (pictured). “Our clients want us to be easy to do business with and to have access to a team that manages the entire value chain.”

Among the services that will move from T-Systems to Telekom Deutschland is the group’s provision of networks to government bodies.

Subject to the agreement of the group’s September board meeting, the former T-Systems operations will be integrated with Telekom Deutschland’s business-to-business services.

At the same time, T-Systems wants to create what it calls two independent companies, one covering security and the other the internet of things (IoT). Both of those companies will continue to be part of T-Systems.

Al-Saleh said: “In this set-up, we create a unit that is responsible for product development, service delivery management, product management and product technical sales expertise, all in one unit. We will also eliminate internal charging across different legal units, which will help us remove unnecessary complexity and will allow us to be more competitive in the market.”

Dirk Wössner, managing director of Telekom Deutschland, said the moves will help “standardise production and give sales a boost”. He added: “Our medium-sized enterprise business will also benefit.”

Al-Saleh said: “With standardised production, we can better address growth areas such as SD-WAN, SD-LAN and cloud connect.”

He said the new security and IoT companies would allow T-Systems to compete with “independent companies [that] act in a more agile way”. He added: “They’re more self-reliant in the market and help open up new opportunities, facilitating for example partnerships, or even cooperation with competitors – so-called coopetition.”

The two new integrated, agile units will emerge with end-to-end responsibility, from expert sales, to solution design, through to production and delivery of services. “These agile units will help enable faster growth for T-Systems, beyond what we see today.”

Al-Saleh said: “The ongoing transformation resolves our weaknesses, boosting revenue, order entry and profits. We’ll further develop all T-Systems’ business areas, and as such, remain an attractive employer.”

 

 

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