Never before in telecommunications has so much change been attempted so quickly. The shift to IP networks for both fixed and mobile service providers, and the opportunities and threats brought by service convergence, are rapidly changing the structure of the market. Barriers to entry are being eroded quickly by new technologies.
New business models are beginning to emerge: for example, Blyk, a highly targeted mobile service aimed at 16 - 24 year olds, is largely funded by advertising revenues rather than service charges. Mobile operators are moving into broadband markets, fixed operators are launching TV services and media companies are using the strength of their brand to offer complete media and communications packages. These pose a real threat to established operators and some are struggling to keep up.
While much of the focus has been on the technologies that will deliver new services, the systems that will enable the services are being overlooked. Operational and business support systems (OSS/BSS) are critical to the commercial success of service providers. Unfortunately, while the core and access networks are undergoing radical change, OSS and BSS modernisation is being delayed.
Legacy systems
The problem caused by legacy systems is huge for the majority of operators. Systems that were designed to support voice businesses have evolved piecemeal to support new technologies, but they are far from optimal. Implementing a new billing system involves great risk to an established business, so that often the decision is delayed as long as possible. Systems designed for services that were charged for on a per-minute basis are simply not sufficiently sophisticated for the next generation of services, but largescale replacement is costly and beyond the capabilities of most inhouse staff who have been operating them.
On the other hand, new entrants in their various forms are not hampered by legacy systems. They build OSS/BSS systems to support their businesses within the competitive landscape at launch. They are not endangering existing revenues by technology transformation, instead they benefit from the recent achievements of organisations such as the TeleManagement Forum. New entrants have much lower cost bases and do not have lengthy product launch cycles imposed on them by their legacy OSS/BSS systems. Unless established service providers can rise to the challenges of this new competitive environment, they will be relegated to wholesale providers of minutes and megabytes
Poorly documented
The problem should not be understated. Legacy OSS/BSS estates are highly coupled, poorly documented and reach into parts of the organisation that they should not. Marketing and finance departments routinely use low-level network data, and product designers have to think about the impacts a new addition will have on dozens of systems. Product development is as much about internal politics as it is about design and customer experience. As a result it takes many months to launch a product during which time competitive advantage can be lost.
Re-architecting OSS/BSS estates is one of the most difficult things a service provider can attempt. It is unlikely that legacy systems will have the clear well defined boundaries that the enhanced Telecom Operations Map (eTOM) advocates and unless a so-called Big Bang replacement is attempted - which is often infeasible because of the level of risk - it involves separate areas of functionality being migrated to a new architecture bit by bit. The common trap then is to replace the old system with one that is just as unmanageable.
Often the solution of last resort is to ask a systems integrator to solve the problem and execute a replacement programme. Unlike service providers themselves, systems integrators have people on their payroll with highly specialised skills, such as business transformation consultants, solutions architects, procurement specialists and programme managers who have experience in running complex IT transformation programmes of this nature. So why do so many of these programmes not deliver the intended benefits? A large portion of them fail altogether or are abandoned half way through at huge costs to the service provider.
Part of the problem is that systems integrators tend to deliver exactly what they are asked to. The commercial models that they deploy are highly dependent on knowing the scope of the problem they are solving in advance. They charge a fee for the work itself plus a premium for any risks that remain at the outset.
If requirements change during delivery, it can be expensive if not properly managed and can threaten to undermine the original aims of the programme. Systems integrators are highly skilled at distancing themselves contractually from the intended business benefits once complexity and change creep in.
Responsibility
Service providers should not relinquish responsibility for programmes of this nature to a third party. At the very least, they need their own staff to understand the problem, the strategic direction of the business and the full solution space. They need architects who understand the network, existing systems and the proposed transformation. They must have internal business consultants who can track benefits against the business case and programme managers who can co-ordinate the transformation programme across the business.
When service providers lack these skills, they go to the contract market, but this too is problematic. Assembling a team to manage any large programme takes time. When the stakes are so high, it is a recipe for disaster, which is where Mason Communications comes in, instantly providing specialist consulting teams to support operators throughout their OSS/BSS transformation.
Time is running out for operators. In a rapidly growing market, high costs and long product roll-out cycles are tolerable. When the traditional market starts to become saturated and new businesses with lower costs enter the market aggressively, then a transformation is imperative. Revenues will soon start to decline, as investors lose confidence and the capital needed to carry out the transformation will start to dry up. Stockholders push for lower operating costs, leading to high-value staff looking elsewhere for pay rises. OSS/BSS transformation takes time - up to two years, even with the right skills and strategic commitment. It should not be delayed just because it is difficult, but embarked on as soon as possible because it is fundamental to the business remaining viable.