It was early 2008 when Shanghai Mobile’s general manager of information technology, Xie Qin, realized that he would be facing some difficult times in the months ahead. The Chinese government had outlined plans to shake up the nation’s sprawling telecom industry—plans that included creating three integrated nationwide carriers and offering new third-generation (3G) licenses for high-speed mobile services. The upshot was that in early 2009, the existing fixed-line and wireless duopolies, which had divided up local markets, were set to disappear. At the time, Xie believed that competition would increase markedly. Soon after the new telecom regime was established, the offerings from the reconstituted rivals began to multiply, and Shanghai Mobile started seeing greater churn among its customers and rising threats of market share loss. With 20 million customers in China’s financial capital and most populous city, Shanghai Mobile is a key operating unit for the China Mobile group.

Even before the government’s plans took shape, Xie knew that Shanghai Mobile’s complex legacy architecture presented competitive problems that would create even greater stumbling blocks in the new era. First, the company’s IT systems were largely siloed by customer channels—local branch stores, call centers, and online stores—which had inconsistent business policies for common processes, such as approving a subscriber’s eligibility for new prices or services. That translated into costly duplication for writing and maintaining software applications and increased spending on IT infrastructure. Second, the complex IT systems were very challenging to maintain. Under the existing IT architecture, for example, it was difficult to monitor system performance issues and to diagnose root causes. IT normally took a long time to resolve service breaks.