5 principles for continued simplification and agility of telecom operations

Posted by Mounir Ladki, President and CTO, MYCOM OSI on May 27, 2015 9:39:00 AM

Complexity of telecom operators' business models, offers, networks and systems has never been higher. The result of this increased complexity is higher costs and reduced operational margins, lengthy time to market and degraded customer experience. The reasons for the surge of complexity is partly rooted in the nature of the mobile industry and partly related to current business trends.

First, our industry and especially the mobile telecoms has evolved and continues to evolve at an incredibly fast pace with a major technology upgrade every 5 to 10 years. The scale of these evolutions is usually not well anticipated, leading to the creation of parallel organizations and deployment of additional patchy layers of network technologies and IT systems on top of the existing ones. In addition, intensifying competition amongst operators, threat from OTT Internet content providers and the ever increasing customer demands lead to sustained introduction of new products, services and tariff plans that have been growing at an average of 10% a year, while the older obsolete products are not being phased out because of the perceived risk of customer churn. To add to this the multiplicity of sales channels creates a compound complexity factor.

More recently, a wave of mergers and acquisitions has been reshaping the sector, with many mobile, fixed and cable operators coming together to grow in scale and offer full quad play services. The merged entity has then to deal with a duplication of disparate products, technologies, systems and organizations sometimes with very different cultures and business processes, especially when the telecom verticals are different (e.g. Mobile vs ISP).

Let’s take one concrete example. Service Assurance is the set of business processes and IT systems used by the operator to monitor its network, services and customers, maintain the network at peak performance, optimize the quality of services and maximize customer experience. It is obvious that this critical activity has a direct impact on an Operator’s business as it directly impacts customer satisfaction and churn, data services consumption and revenues as well as network efficiency (Capex) and productivity (Opex). Today it is not unusual to find in a typical Tier-1 operator more than 50 different IT Service Assurance systems organized across several silos and managed by various teams. Many of these systems use different information models, computation algorithms and data formats, and they are mostly restricted to the management of one domain, vendor or function. This then makes it extremely difficult to have an end-to-end view of network performance and service quality, MTTR becomes extremely long (sometimes days instead of minutes) and customer experience is degraded. In addition, the operators lose visibility and control over end-to-end quality of service and are inhibited from offering and managing SLAs and monetizing QoS as well as experience low productivity and Opex overspend.

All of the above is today introducing no less than 30% cost overspend, and there is a real threat that Operator’s EBITDA could go down from its current 30% to as low as 15% in the next few years if nothing is done to curb this complexity. That is why Operators are embarking on complexity reduction initiatives to streamline their product portfolio, simplify and automate their business process and rationalize their networks and IT systems. This is all good news and some of it has started producing positive results, but the most important objective is to maintain these good practices over the longer term. And this will not be easy to do given the next wave of technology upgrades that will happen in the next 5 years including the virtualization of networks (NFV/SDN) and the move to the cloud, the deployment of small cells and 5G, and the new ecosystem of IoT and digital experience offerings. And this is on top of new business models including QoS monetization, revenue sharing with OTT players and joint solution delivery with value added digital solution providers. This is why Operators will have to be very vigilant, and stick to a set of best practices to avoid periodic resurgences of even more complexity. These best practices should include:

  1. Always focus on the customer (Outside In), and streamline the product portfolio around real customer demands. Operators should systematically use Analytics to better understand their customers’ usage patterns and preferences which would enable them to strike the right balance between product portfolio diversity and customer needs as well as to phase out legacy products with limited risk.
  2. Ensure long term planning is always at the basis of short term decisions, and only allow the introduction of future proof solutions into the network
  3. Adopt Open APIs, and in particular RESTful APIs that leverage the network assets and expose the network as an open platform for 3rd party value added solution developers
  4. Avoid the deployment of point solutions and always favour the rationalization and simplification of IT systems and the adoption of future-proofed COTS solutions. With Service Assurance in particular, adopt simplified architectures that natively link customer, service and network layers, and adhere to umbrella platforms that are able to manage all vendors, technologies, domains, products and services. Always make sure to clean-up the existing systems and remove old, legacy and unused content. Enforce standardized processes across IT, IP and mobile networks, and manage them as one fully integrated vertical. Adopt unified service and data models in a unified enterprise data warehouse with the right expertise (e.g. analytics) layered on top
  5. Avoid creating parallel organizations, processes and systems when migrating towards NFV /SDN. Rather, build a strategy from day one to manage the hybrid network, and have organizations and systems that can manage both and maintain full visibility and Quality of Service control across the virtualized and physical parts of the network.

Finally operators should maintain strong governance of the above principles that should also be embraced and promoted at Executive Management level.  “Simplification Index” KPIs should be put in place and monitored, with a baseline established and regular reporting and steering actions enforced by management.

To hear more about this topic, join us at TM Forum Live! 2015 in Nice. Mounir Ladki, President & Chief Technology Officer, will join the discussion about Keeping complexity at bay: Vigilance and enforcement for continued agility during the Digital Operations Summit (June 3, 4:55 pm - 5:20 pm).

Topics: Service Assurance, Network Performance Management, TM Forum, CSP, Network Analytics

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