OSS and BSS transformation - Its role in Driving Customer Growth

Transcription

1 Global Business Service Whitepaper Communications Behind the successful CSP: Transforming operations to support greater agility

2 2 Behind the successful CSP: Transforming operations to support greater agility Executive summary In today s tumultuous marketplace, communications service providers (CSPs) face unprecedented challenges as they struggle to generate more revenue and improve operational efficiency. Network demands continue to multiply, and rapidly growing media content strains resources. Over-the-top service providers also threaten the future prosperity of CSPs, as mobile revenue growth is not commensurate with the increasing cost of delivering data services. Furthermore, new service offerings are becoming more exclusively data based and are relying more on Internet protocol (IP) delivery, while operations and billing support is relying less and less on traditional network systems. In response to these challenges, service providers need to revise their strategies to deliver smarter services that: Are personalized for each customer Embrace a larger ecosystem of partners to appeal to new customers and markets Can be market tested, adapted and scaled easily and quickly In order to be competitive, it is important that providers explore opportunities to service and support these new offerings at significantly lower costs. They must also build smarter networks that optimize and monetize current and next-generation networks to reduce or defer capital investment while still delivering a superior quality of service. Vital to delivering smarter services and building networks successfully are the Operations Support Systems (OSS) and Business Support Systems (BSS). To keep pace with the business strategy, unprecedented depth and breadth of change in back-office processes are required to make them more agile and cost efficient. Although OSS/BSS transformation can be a monumental task, especially for businesses that are burdened with legacy systems and processes, it is an essential one. CSPs must be able to respond quickly to changes in the marketplace and reduce the cost of delivering and supporting services if they are to succeed. By implementing an approach that integrates and optimizes services across multiple sources, geographies and network environments, CSPs can transform their costly, inflexible operational infrastructures into lower-cost, increasingly agile systems. This paper examines the operational challenges CSPs face today and discusses the competencies required to address these challenges. Drawing on real-world examples, it also examines the benefits that CSPs can realize from transforming their operations. Forces driving OSS and BSS transformation In just the past few years, the communications industry has had to redefine itself quickly in response to numerous market changes. Three trends in particular have had a tremendous impact on the OSS and BSS environments: Empowered consumers have come to expect more flexibility to choose services on any device, anywhere and at any time. As a result, CSPs are moving toward becoming more customer-centric and better able to offer varied service bundles on demand. Disruptive over-the-top service providers have threatened traditional CSP revenue streams and margins. In their search for new revenue streams, smarter CSPs are looking to source premium content from new partners and support a growing ecosystem of application developers. In addition, they are beginning to create new offerings that monetize the network and to expand into vertical industry services, such as government, healthcare, banking and insurance.

3 IBM Business Unit Identifier 3 The explosion in mobility and data services has placed an enormous strain on networks and the supporting OSS/BSS infrastructure. To address this trend, carriers have had to invest in upgrading network infrastructures and introducing new network technologies, such as long term evolution (LTE) service, to provide greater bandwidth for video and growing data consumption. Similarly, they have had to invest in more agile OSS/BSS systems to meet customer needs at lower cost points. In just the past few years, the communications industry has had to redefine itself quickly in response to numerous market changes. The legacy operational and business support systems at many CSPs are not well positioned to keep up with the range of demands being placed on them. As service providers broaden their markets and engage in new business models, they must be able to support the execution of their strategy across nearly every department, from marketing and customer care to billing and the network. The suite of OSS and BSS systems remains at the center of these departments and plays an instrumental role in executing the essential processes that drive business growth for the entire enterprise. Every contact with the customer care department for support or to order new services triggers processes across service and order management, which then cascade through a dozen or more systems before the request can be completed. In many cases, these legacy OSS and BSS systems represent a portfolio of overlapping and often duplicate systems, many of which have been developed in house and are not well understood or supported. Numerous systems are the result of business unit acquisitions with long-standing roles in mission-critical revenue flows where the teams that operate them are reluctant to modify working systems. Data is fragmented and divided among multiple systems, making a single view of the customer impractical or impossible. Faced with such significant market changes and system challenges, it is no surprise that chief information officers, chief network officers and chief technology officers among other decision makers find themselves under enormous pressure to consolidate back-office operations to make them more agile while controlling costs and mitigating business risk. These often-contradictory goals add significant challenges for operations teams. Operational agility makes it possible for CSPs to adapt when market demands change. BSS challenges The domain of BSS focuses mainly on the customer-facing aspects of the business. Customer care, order entry, billing and support all revolve around the business needs defined by the customers. The CSP s relationship to its customers and the way that customers perceive their experience with the CSP are heavily influenced by the BSS systems. A customer-centric focus places more control in the hands of the user. Processes are designed to respond directly to the consumer in near real time and to help them take advantage of offers and services immediately. This can be beneficial for both CSPs and customers. CSPs can dynamically offer tailored upgrades and services based on the customer behavior patterns they discover through analytics. The customers benefit because they are empowered to make choices and access on-demand services. Traditional BSS systems typically lack the ability to support these new processes.

4 4 Behind the successful CSP: Transforming operations to support greater agility CSPs that want to implement a model based on a customercentric services philosophy would need to work toward developing a set of customer-centric business processes whereby services would not be ordered, billed or even paid for in the traditional way. Services would be discovered and requested in new ways. Customers would no longer request all their services in advance through the customer care center or through a self-care website. In addition, customers would be able to discover which services were available and relevant to their current use. For example, while browsing information on a topic, the customer may discover that media content is available that is directly relevant to his or her interest. Rather than having to agree to a new subscription to access the content, the user would have the option of finding and accessing specific content on a single-item transaction basis. The CSP would also offer the opportunity to activate services like the one in this example on demand, even midsession, in order to retain a competitive advantage. Otherwise, the CSP would lose the opportunity for the immediate up-sell and may even lose the customer if the customer had to stop his or her current activity to place an order for a service and then wait for an activation process to complete hours later. Near-real-time controls are essential to placing more personalization capabilities and control into the hands of the customer. In addition to opening immediate up-sell opportunities, near-real-time controls can determine a customer s privileges as he or she is accessing the network. CSPs also must be able to determine the available capacity of the network at the moment services are consumed so that bandwidth can be moderated based on congestion, load and the subscription level of the customer. At the same time, customers need control over their use of the network so that they can enforce preferences, such as parental controls for content, time-of-day blocking and personalized spending limits. All of these controls require the ability to enforce policies and entitlements, as well as make service decisions, in near real time. Services would be billed in new ways. Billing flexibility is a critical need that can be offered in near real time and outside of traditional telecommunications billing methods. For example, a customer may wish to access premium content for a single instance or for a limited time and charge the additional fees directly to a credit card for immediate access. Another example might be if a customer wants to temporarily increase network download speed to a premium-service level in order to view a high-definition movie without changing his or her monthly subscription level. CSPs need the flexibility to monetize these opportunities and not be constrained by existing processes. Services would be paid for in new ways. As services become more immediate and alternate billing methods become more available, the need to broaden payment options also increases. Many new service offerings are structured as single transactions for individual services, which are independent of a customer s monthly subscription. CSPs must be able to support alternate payment methods, such as credit cards or promotional codes, which can be executed almost immediately to authorize the activation of a requested service in near real time. They must also be able to coordinate payments among multiple systems and align them to legacy billing systems so that customer records are kept up to date across both new and traditional service offerings.

5 IBM Business Unit Identifier 5 As these examples demonstrate, the trend toward being more customer-centric has created a need to incorporate billing and provisioning into various offerings. Passive service support is inadequate when, more and more, CSPs are providing services and offerings that can be highly personalized for each plan member and for each device within the household. In addition, immediate provisioning of services in near real time provides opportunities to up-sell content and services that are directly relevant to customers current usage and consumption pattern. A service provider in France is engaged in a multichannel transformation initiative that is having a tremendous impact on the customer experience, as well as on operational costs. One of the elements of the program is a global campaign to expand use of the customer portal. When new customers join, the company sends a welcome on day one, a portal introduction on day seven and various follow-up communications based on customer responses (whether they open an , click a link, call the help desk, etc.). For instance, a call to the help desk regarding self service will trigger an message promoting self-service capabilities. This segmented, action-based automation contributes to a higher open rate and a stronger conversion rate. Results have included a 700-percent increase in campaign volume (without team expansion), a 60-percent reduction in campaign production and analysis time, and a 30-percent increase in viable leads harvested from the company s multichannel marketing program. 1 OSS challenges OSS issues can also have a broad impact across many departments of the enterprise, especially network operations. CSPs that are unable to align their operational processes to the services they wish to offer may face much higher costs or may ultimately not adopt these new services. As with the business side, many OSS issues are caused by having disparate, overlapping legacy systems functioning in silos. These systems can be inflexible and slow and may require significant investments in customization, maintenance and support, as well as regular enhancements to keep up with new technologies. Silo systems also mean that data may be only partially integrated or not at all, leaving room for errors, discrepancies and data duplication. This inability to understand customer behavior and experience from an OSS perspective limits the CSP s desire for a customer-centric operating model. CSPs need their OSS to measure the complete end-to-end quality of the services that are being consumed. Providing service management and customer experience management solutions is part of executing more customer-centric services. As new technologies are deployed in the network, such as IP expansion from network core to access plane, 3G and 4G networks, individualized devices with cross-network connectivity and cloud, it is increasingly difficult and expensive for CSPs to understand each customer s experience with their network. Adding more third-party applications such as gaming and entertainment, business enablement, books, education, sports, finance and mobile commerce only adds to the already-complex OSS environment. Finally, OSS must keep pace with frequent regulatory changes. Government policies on net neutrality, data retention, competitive play and mobile banking regulations are among the compliance areas that operations must be able to support.

6 6 Behind the successful CSP: Transforming operations to support greater agility An Eastern European CSP needed to reduce costs and streamline processes to react to competitive threats more quickly. Specifically, the company wanted to launch new products and services in days, not weeks or months, unconstrained by its order management system, which was both manually intensive and error prone. Results were astounding: 40 percent reduction in total cost of ownership 40 percent expenditure decrease for professional services 80 percent savings for artifact reuse 45 percent shortened delivery cycle for maintenance and new releases 2 The path to value Transforming operations is a vast undertaking. Although some CSPs have successfully progressed through various pieces of this task, they continue to lag in others. To establish a fully transformed operational environment requires a smarter approach that includes in-depth competencies in the following areas: Integrating all sources of process-related data (both network and business data) using master data management. Advanced CSPs make customer, usage and network data widely available throughout the organization so that everyone from sales, to customer care, to network operations has one single, holistic view of the data. However, this can be particularly difficult in the complex world of operations because the various data are housed in stand-alone systems that were not designed for information sharing. In addition, it requires that OSS and BSS data be converged with business processes. Implementing more flexible and dynamic data-and catalog-driven business processes. These processes must be able to accept, validate, manage and provision customer orders for all service and bundle offerings. For converged operators, this is a complex proposition and entails upgrading or replacing systems and implementing process best practices to reduce inefficiencies. Optimizing service-management systems with zerotouch near-real-time information. With the application of advanced analytics, service assurance systems are becoming increasingly automated and predictive. Smarter CSPs are extending service assurance beyond network and service performance; they are also applying these systems to individual customer experience management based on measured quality of service for each subscriber. The goal is to move from reactive to proactive service quality management. Helping to improve revenue and billing management by integrating customer relationship management (CRM) and billing systems. Forward-thinking CSPs integrate these systems across regions, acquisitions and lines of business and further invest in advanced BSS, revenue management and mediation capabilities. A key initiative among them is the drive toward customer self management and choice of billing method. These improvements can not only help boost operational efficiencies and reduce costs, they can also enhance the experience of the increasingly empowered customer. Leveraging managed service consumption. Smarter CSPs implement charging and policy controls that are based on customer preferences, service terms, offers and discounts, and near-real-time network utilization. The option of personalization for service consumption is an important aspect of a customer-centric approach to delivering value. These controls also provide opportunities to up-sell services to the customer at the time when they are most likely to make a consumption decision.

7 IBM Business Unit Identifier 7 Adopting cloud technologies to dramatically change internal cost structures. Among the workloads for which the cloud is ideally suited are CRM, enterprise resource planning (ERP), desktop-as-a-service, and development and testing activities. Some CSPs are outsourcing these functions in alignment with their company s selected business strategy to further reduce the costs of network, IT and application management. By radically changing their operational model, CSPs can optimize their responsiveness to business changes, take advantage of economies of scale and focus on other key business initiatives. Three keys to successfully transforming operations: Prioritize needs; start with low-risk areas. Leverage early cost savings to fund the later, higher-risk changes. Develop an open framework that encompasses industry standards and data models. The IBM solutions IBM offers a range of solutions designed to integrate and optimize your OSS/BSS processes. These solutions can help transform your operational infrastructure into a reduced-cost, more agile environment, supporting enhanced flexibility and greater responsiveness to market changes. Order management This integrated solution spans the order-to-cash process for a communications service, from product information and order processing to availability and financial information. It can transform the order experience by helping to improve cross-channel efficiencies and streamlining complex business processes across disparate internal systems. Order management can orchestrate global product and service fulfillment across the extended enterprise. Digital channel transformation This solution is designed to augment call-center and people contact with digital channels, such as interactive voice response, web and applications. CSPs can integrate customer contact capabilities across any channel of interaction and address cost take out. Digital channel transformation focuses on cost reduction and the ability to scale business transactions while offering more opportunities for customer self management and control. Service assurance transformation In the face of growing consumer demands, efficiency and responsiveness are more critical than ever. This solution portfolio is designed to monitor and manage network fault and event information for network outages, network performance, quality of services delivered over the network and service-level agreement compliance in a multivendor, multinetwork environment.

8 8 Behind the successful CSP: Transforming operations to support greater agility Revenue assurance Automating billing and collection helps to reduce errors and significantly improve cost efficiency. This solution is designed to help manage the process from a customer s first interaction (phone call, message, download, etc.) to customer billing to help ensure that the CSP does not lose money. CRM and business process optimization (BPO) CRM Integration and BPO help improve productivity and quality by bringing together all the information that the customer-facing agents need to effectively support customer interaction across all the disparate data sources and systems. It further enables business scaling and cost reduction by providing business process outsourcing, along with the supporting IT infrastructure and management controls. OSS and BSS transformation This solution addresses the need to transform the processes, systems and supporting infrastructure to enable enhanced business agility and new business models with high quality and high productivity. The CSP is better positioned to offer new services at higher margins, reduce the cost of existing services and provide a business infrastructure that enables effective competition in a converging marketplace. For rapid-growth services, this solution can help you more quickly and cost-effectively scale support. The productivity it affords for established services enables the CSP to reduce costs across the entire life cycle of the product, from order taking, to processing, to activation and billing of the service portfolio. In addition, it can help reduce long lead times and the unpredictable costs that are common with traditional approaches. IBM s cloud approach can apply the benefits of workload management and cloud to help increase the profitability of the CSP as an enterprise. IT transformation With or without cloud, this solution can help transform the entire IT infrastructure to be more cost effective and agile. This includes the ability to consolidate and align data sources with a common data management strategy, implement data warehousing across organizations to share operational data and reduce silos of isolated data. The IBM solutions deliver an array of benefits that can help transform the OSS/BSS environment. To meet the future needs of the communications industry, we can help CSPs: Improve productivity Reduce operational costs Manage service-level agreement (SLA) compliance Expand offerings across multiple devices (voice, media, data, wireline, mobile, TV, etc.) Enable more rapid market launches of new services Reduce costs through customer self care, self management and self provisioning Increase service quality Improve process automation rates Increase customer satisfaction Cloud for communication enterprise providers Whatever cloud solution is selected (private, hybrid or third party), this solution has the ability to incrementally and more rapidly scale workloads and storage to support the business.

9 IBM Business Unit Identifier 9 Why IBM? IBM offers a comprehensive portfolio of hardware, software, services and research designed for the OSS and BSS environments. Our solutions are designed to adhere to industry standards, particularly TM Forum Business Process Framework (etom). In addition, the IBM Service Provider Delivery Environment (SPDE) is a 10-year-old industry framework that provides a blueprint for enabling smarter communications. SPDE offers guiding principles, best practices and standards-based solutions that help accelerate OSS/BSS transformation. It offers multiple entry points to help CSPs get started while enabling a more rapid return on investment. With our extensive OSS expertise and large portfolio of software and supporting assets, IBM is a recognized leader in OSS. Gartner has positioned IBM as a leader in its Magic Quadrant for Operations Support Systems report 3, and Analysys Mason has consistently ranked us number one in service assurance. 4 IBM is also a market leader in multichannel order management. Conclusion With external spending for OSS and billing expected to reach US$29.7 billion by 2016 up from US$25.4 billion in it is evident that forward-thinking CSPs realize the tremendous importance of transforming their operations. Despite the challenges, the potential rewards of such a transformation are huge: reduced costs, greater agility and faster response time to market changes. About the Magic Quadrant Gartner does not endorse any vendor, product or service depicted in its research publications, and does not advise technology users to select only those vendors with the highest ratings. Gartner research publications consist of the opinions of Gartner s research organization and should not be construed as statements of fact. Gartner disclaims all warranties, expressed or implied, with respect to this research, including any warranties of merchantability or fitness for a particular purpose. For BSS, IBM takes a business case-based approach that focuses on benefits realization and strong financial control. Because BSS products are becoming commoditized, choosing the system is not the most important decision. Rather, how these systems align and integrate into a CSP s overall OSS and BSS transformation is what is key. IBM core capabilities are critical factors for successful transformation and include: Organizational change management Business process management Project and architectural governance Scope management Integration, testing and data migration Preconfigured software assets and tools

10 Copyright IBM Corporation 2012 IBM Global Services Route 100 Somers, NY U.S.A. Produced in the United States of America May 2012 All Rights Reserved IBM, the IBM logo and ibm.com are trademarks or registered trademarks of International Business Machines Corporation in the United States, other countries, or both. If these and other IBM trademarked terms are marked on their first occurrence in this information with a trademark symbol ( or ), these symbols indicate U.S. registered or common law trademarks owned by IBM at the time this information was published. Such trademarks may also be registered or common law trademarks in other countries. A current list of IBM trademarks is available on the Web at Copyright and trademark information at ibm.com/legal/copytrade.shtml Other company, product and service names may be trademarks or service marks of others. References in this publication to IBM products and services do not imply that IBM intends to make them available in all countries in which IBM operates. 1 IBM client case study, September TM Forum, Case study handbook: Your guide to achieving a better bottom line, Spring Gartner, Magic Quadrant for operations support systems, October Analysys Mason, IBM: Service assurance, February IDC, IDC Worldwide OSS and billing forecast, doc #232471, January Please Recycle GBW03179-USEN-00