British Telecom

British Telecom: Mapping the Internet trajectory
Telecommunications giant British Telecom saw the Internet coming. It was the early 90s and farsighted leaders at BT predicted that, down the line, the Worldwide Web would have the power to make or break telecom companies. Fortunately, they spotted the Internet meteor early in its trajectory and strategically planned for the consequences.

On the other side of the Atlantic, Tom Malone and Michael Scott Morton at MIT Sloan were inventing the organizations of the next century. MIT's Worldwide Web Consortium (W3C) was a central force in the development of the Internet, and MIT Sloan was gauging the impact the Web would have on the workplace and its repercussions in global markets.

BT's visionaries heard about the work of Morton and Malone, which centered on innovations in the basic structure of large organizations and the ways in which technology could facilitate decentralization.

"A company like BT can't afford to juggle strategic relationships with 22 different university partners," notes Dan Moorhead, Director of Organizational Research, BT Group. "You want a small handful of the highest quality relationships, and you want a sense of assurance that each partnership will deliver the highest value."

Moorhead says that BT was attracted to MIT Sloan's international reputation for building strong partnerships and for understanding the full ramifications of new technologies. "The beauty of MIT Sloan is exactly that MIT and Sloan are intermeshed. The MIT Sloan faculty is well versed in technology. The simple fact is that MIT Sloan has street credibility with my target audiences. Management groups want to know that they'll be working with, learning from people who understand the technology and the intersection of technology and management."

British Telecom first joined MIT Sloan as a sponsor from the point of view of strategic marketing, but Moorhead remembers that it soon turned into an intellectual smorgasbord. "MIT Sloan presents a veritable feast to a corporation like BT. We find change management and digital productivity tools, solid vision about where the workplace is headed, research on the full economic picture of these advanced industries and how the economics of high tech are taking shape."

From 2000 to 2003, British Telecom was one of the sponsors of the Matrix of Change, a joint research project of MIT Sloan's Center for Coordination Science and Center for eBusiness. Engineered by MIT Sloan professor Erik Brynjolfsson, the Matrix of Change allows organizations to look at existing business practice and evaluate the transition from where they are now to where they hope to go.

Moorhead says that BT is actively exploiting the Matrix of Change in strategizing company direction and helping its customers make smart decisions about the future of their own organizations. "With the Matrix of Change, a room full of bright people will very often find that answer for themselves — inexpensively. That's one example of how British Telecom and its customers get value from MIT."

In fact, British Telecom works closely with MIT Sloan on a number of key projects aimed at mapping the future of business. A founding sponsor of MIT Sloan's pathbreaking Center for eBusiness, BT finds its own interests intersecting with MIT Sloan research on many fronts. "At MIT, I am in touch with the latest, most rigorous, most provocative thinking," Moorhead notes. "Leading edge research, not just text book stuff. I come to MIT and consult with Erik Brynjolfsson at the Center for eBusiness about the Matrix of Change. I talk to John de Figueiredo, also with the Center for eBusiness, on general strategy, and non-market competitive strategy. Working with Dave Clark and Sharon Gillett, I can get insight on telecom industry structure issues and differential pricing for Internet ‘quality of service.’ Then there are the resources of the Communications Futures Program, extremely pertinent to a telcom provider such as BT."

BT has just joined the MIT Sloan Center for Information Systems Research as a patron, which entitles it to define a research project. "A case study of IT productivity within BT represents a lot of value to the company — not to mention having access to the comparative research of other corporations," Moorhead says. "Sloan faculty and researchers such as Erik Brynjolfsson and Chuck Gibson get the enthusiastic cooperation of BT's IT gurus. Everybody involved gets a lot of good comparative data back. It's really a competitive advantage for BT to be seen in the European marketplace constructing these broad data sets. The faculty at MIT Sloan helps us look for lessons in our own data and in our customers' data. We need guidance and experience to make sense of it, and MIT Sloan experts work side by side with us to do that. It's a good, strong marriage — we have the data and MIT Sloan helps us to get the most from it."

Moorhead reflects that the biggest challenge for British Telecom in its relationship with MIT Sloan is to focus, find the most pertinent ideas for BT, and build fruitful, enduring connections. "The value of the MIT Sloan/British Telecom relationship," he says, "is rich, multifaceted, and nearly impossible to quantify."

A popular teacher and widely respected international economist, MIT Sloan Professor Kristin Forbes is also a member of the Congressional Budget Office's Panel of Economic Advisers.