Next-generation networks (NGNs) are often discussed in terms of the latest multimedia service to hog the headlines. Operators running legacy systems need to get past the white noise of this topical spin, and understand why NGNs are fundamental to their future.
To do this, it’s helpful to regard NGNs simply as IP networks that support real-time applications – such as voice, with high-speed local access. There are lots of NGNs in the market already, creating an urgent transformational imperative for their competitors.
The Carphone Warehouse’s network in the UK is a good example of an NGN. Its subsidiary TalkTalk delivers 8Mbps broadband access in the local loop and transports voice across a private IP data network. Crucially, unlike established network operators, it isn’t saddled with the cultural and operational baggage of a business designed around providing analogue voice products, with many bespoke systems developed over the years to optimise those processes.
The cost of building and maintaining these complex, operational support systems was – and continues to be – high, although they are necessary to keep overall running costs as low as possible. Now network operators are stuck with inflexible, piecemeal provisioning and billing systems, and it is difficult to move from this heritage to new operational and business models.
Transformational imperative
Yet they must. The transformational imperative is driven by a new generation of service providers, characterised by much shorter times to market and the ability to target specific market segments with carefully tailored products. The separation of the services layer from the underlying IP transport shortens the product development cycle, but places much more varied demands on OSS and BSS.
The processes and systems, such as CRM, billing and provisioning, implemented a decade ago, are very different from what is needed today. If network operators aren’t prepared to move their businesses forward, they will find themselves relegated to the role of bit pipes, vulnerable to commoditisation.
Lack of OSS/BSS flexibility and a fiercely competitive market has driven operators towards offering products as cheaply as possible. What they really need is to put organisational structures and systems in place to support a raft of high-value, low-volume services – many of them as yet unthought of. In an ideal world there would be real innovation from everyone in the market, but in reality it is also necessary to respond to competitive products. With a typical incumbent set-up, it could easily take 12 months to get to market. There is no way round it: OSS/BSS need updating so that they can launch services within days, not months.
Meta-models
The good news is that there are ways of architecting OSS/BSS that provide flexibility as well as stability. It is not necessary to embed all the business rules for a service in software within the OSS/BSS, as many systems still do. The alternative is to build metamodels to define products and their associated business processes in data.
Business process integration tools such as TIBCO and WebMethods can be used to implement data driven processes rapidly. Databases built using meta-data structures support the rapid deployment of new products and processes that can be altered any time without retesting entire systems estates. Crucially, they can be changed dynamically without disrupting other products or services.
This is light years away from the traditional approach where processes inevitably ended up being coded into monolithic systems and even the smallest change can involve recompiling millions of lines of code. This is expensive, time-consuming and highly restrictive.
The meta-model approach gets rid of the disconnect that bedevils operators whereby the marketing department designs products based on market research and innovative ideas, which are then compromised by engineers hampered by previous attempts to solve similar problems. Put another way, it allows the operators to focus primarily on the customer, instead of what their systems will allow.
Invest now
Many operators are put off by the considerable effort and expense needed to rearchitect their systems and processes, which can easily cost tens of millions of pounds. However, this has to be seen in the light of the millions of pounds they spend each year tinkering with outdated systems that are no longer fit for purpose and that will make problems harder to solve in future. The incremental revenue generated from getting to market in half the time can often dwarf the transformation costs.
The ultimate cost of failure to act, though, is when the lack of innovation results in incumbents becoming a commoditised bit pipe and all the innovation takes place in companies that can bundle wholesale products quickly and cheaply. The time to act is now, before this new generation of service providers has a drastic effect on more mature operators’ bottom lines, and nervous shareholders refuse to sanction the capex needed to bring about the desperately needed transformation.
Once this situation has arisen, shareholders are highly likely to insist on more of the very tactics that brought the operator to this pass in the first place – indiscriminate cost-cutting and defence of market share. The transformational imperative means now.