Streamlining Order Delivery of Next-Generation Business Services

Transcription

1 Streamlining Order Delivery of Next-Generation Business Services Prepared by Caroline Chappell, Principal Analyst, NFV & Cloud Sarah Wallace, Analyst Heavy Reading White Paper March 2015

2 Monetizing Next-Generation Business Services Competition in the communications industry is intense, and service providers are looking for the next big thing to differentiate themselves from their competitors. As traditional communications service revenues decline, service providers are seeking new revenue streams by focusing on innovative applications, cloud-centric strategies, interactive video-centric services, machine-tomachine (M2M) services, network functions virtualization (NFV) and software-defined networking (SDN). Another trend that service providers see as a potential growth engine is delivering business services for their enterprise and small to midsize business (SMB) customers. Technology evolutions such as SDN and NFV are being adopted by global operators, with an initial focus on business services. Since enterprise and SMB are currently viewed as the strongest potential growth engine for operators, it is easier to prove the business case on newer virtualization technologies such as NFV and SDN, where these technologies can be used to reduce time to market and lower opex and capex in order to launch services for their most profitable segment. The current industry attention being paid to SDN and NFV stems from the promise of hardware vendor independence, improved operational efficiency, standardized and open interfaces and the dynamic chaining of network and IT functions to create new integrated services. In a recent Heavy Reading survey, service providers cited reducing opex, new services monetization and improved resource utilization as the leading benefits of NFV implementation to their networks (Figure 1). Figure 1: Ranking the Benefits of NFV Implementation 2 STREAMLINING ORDER DELIVERY OF NEXT-GENERATION BUSINESS SERVICES

3 Virtualization implies the design and use of centralized orchestration and management solutions. However, as service portfolios grow in complexity and combine data center-based capabilities with features activated in the network, an orchestration system that seamlessly bridges both legacy and virtualized systems is required. Virtualization also brings the promise of new and more flexible business models, increased revenue from new services, network efficiency and control and lowering overall capex and opex. As communications service providers continue seeking alternative revenue streams, one customer segment they are trying to better serve is the business segment (i.e., their enterprise and SMB customers). Forwardthinking operators are marrying the capabilities of cloud and mobility to offer more enhanced service to this segment. As customers today want services 24/7 from anywhere, on any device, service providers are becoming increasingly aware that cloud mobility will be essential in serving the changing demands of their enterprise and SMB customers. Cloud services defined as services provided by operators to customers across the Web from a cloudbased platform are becoming more popular among service providers today as they realize it helps them meet the changing market demands of their business customers by providing a service environment that is more scalable and agile, to help meet business customers demands of lower costs and shorter time-tomarket for new products or services. Business customers also want cloud services that support or enhance mobility, which allows for a more flexible work environment and allows for productivity on the move. This notion of cloud mobility is becoming more popular, as the saturation of smart devices means customers want access to their information anytime and anywhere. Figure 2 looks at the evolution of service providers cloud offerings as it relates to the enterprise and SMB segment. Figure 2: Evolution of Cloud Service Portfolio 3 STREAMLINING ORDER DELIVERY OF NEXT-GENERATION BUSINESS SERVICES

4 Basically, what we are seeing from service providers is a market shift toward more innovative, flexible and value-added cloud services in order to meet the demands of their business customers today. The Holy Grail for service providers is the ability to provide enterprise customers with a combination of communications-centric services, bundled with basic cloud services such as infrastructure as a service (IaaS), and innovative platform as a service (PaaS) and software as a service (SaaS) offers, by working with third-party partners under a revenue-sharing arrangement. Since every operator has similar networks and services today, they can only differentiate themselves from the pack by offering a superior customer experience. The company that manages to do so can be more efficient, more proactive and ultimately more innovative than its competitors. Moreover, service providers today have the added burden of competing with over-the-top (OTT) players, which are increasingly becoming end users providers of choice for value-added services. Forward-thinking operators have realized that to succeed in this cutthroat, competitive milieu, they need to focus on streamlining their service delivery mechanism, as that will impact the customer experience. New metrics such as Net Promoter Score (NPS) have been gaining traction for measuring brand loyalty and advocacy among service providers. The concept of NPS is used to determine how customers feel about the services they are receiving from a brand, in a bid to turn potential detractors into promoters and brand advocates. NPS is becoming an important metric for measuring customer experience by most service providers, and many CMOs are being measured internally with respect to their organizations NPS scores. While customer satisfaction, first contact resolution and brand awareness continue to be critical key performance indicators (KPIs) used by service providers to measure customer satisfaction, they are also looking at metrics such as channel transaction value, channel gross margin, channel sales conversion, customer channel shopping frequency, etc., as crucial KPIs for measuring crosschannel customer experience. As the central nervous system of operators order service delivery strategy, order orchestration plays a pivotal role. As operators try to make up for lost revenue on traditional services and there is growing demand for nextgeneration services and increase in service bundles such as quad-play, order orchestration becomes an increasing challenge for operators due to order complexity. A comprehensive order orchestration and fulfillment solution should have the ability to capture and process these new types of orders without fallout or errors. In this context, an end-to-end order service delivery system that traverses all aspects of a service provider s operation from order generation, to order capture, to fulfillment across different channels and customer touch points order orchestration will play a pivotal role in enabling operators to transition from today s bundled services to tomorrow s more personalized services. 4 STREAMLINING ORDER DELIVERY OF NEXT-GENERATION BUSINESS SERVICES

5 The Time to Revamp Order Orchestration is Now Operators are under constant pressure to raise customer service levels and reduce order processing costs and cycle times. These are among the key factors driving service providers to invest in a streamlined end-to-end order orchestration system, with the expectation that such flexible, workflow-based solutions will decompose each order, interact with multiple systems to fulfill the order and monitor the end-to-end service delivery process for complex orders, from order submission to cash. Heavy Reading recently conducted a survey of 54 global service providers, asking about their perceptions and plans around order orchestration. The survey asked about current order orchestration capabilities, KPIs, challenges in order delivery, and plans for future order orchestration investments in terms of specific components, customer segments and NFV/SDN. The survey results indicate that nearly half of respondents are dissatisfied with their current order orchestration capabilities and are willing to make further investments. Respondents investment priorities include capabilities such as lead order to process, activate to cash process and order to activate process. When choosing an endto-end order orchestration supplier, respondents are particularly looking for the ability to integrate with thirdparty applications, price and capability/expertise. The majority of respondents find that most order orchestration elements for residential operations will need improvement at some point, as opposed to immediately. In terms of areas needing immediate improvement, they are focused on service orchestration, KPI measurement and proactive monitoring. The majority of global respondents find that most order orchestration elements for SMB and enterprise operations will need improvement at some point, as opposed to immediately. But for this customer segment service providers identified service orchestration, proactive monitoring and order management and decomposition as key areas requiring immediate improvement. When respondents were asked if their company plans to use NFV and/or SDN to deliver services to its enterprise/ SMB customers, about a quarter said they are currently making investments in NFV and SDN, while 20 percent plan to use these technologies in the next 6 to 12 months, and 22 percent plan to use them in the next 12 to 24 months. Almost half of respondents say they will use a combination of existing and new systems to manage hybrid service fulfillment scenarios, followed by a third that expect to have a separate orchestration for NFV. Further, a quarter of respondents report that a centralized catalog should take a broader role and manage all virtualized network functions (VNFs) and physical network functions (PNF). As operators try to serve their various customer segments with new services, it is clear that order orchestration will play a critical role in providing superior service and overall customer experience. A comprehensive order orchestration and fulfillment solution should enable the proper capture and handling of the order without fallout, which will help service providers meet customers expectations while reducing order management costs through efficiency and ultimately ensuring profitability. 5 STREAMLINING ORDER DELIVERY OF NEXT-GENERATION BUSINESS SERVICES

6 Order Orchestration Perceptions and Challenges The Heavy Reading survey asked respondents their current perceptions of their order orchestration process, along with which components and which vendors they are willing to invest in. In our survey, 44 percent of operators stated they are willing to invest in their order orchestration capability in order to improve it (Figure 3). Figure 3: How satisfied is your company with the current level of its order orchestration capability? When asked the top order orchestration capabilities respondents are willing to invest in, simple integration to all relevant systems at the process, end-to-end visibility of orchestration process by monitoring and managing different task information from underlying systems, and unified orchestration tool executing the whole process were the top order orchestration investment priorities for respondents (Figure 4). Figure 4: What are the top five order orchestration capabilities that your company is most willing to invest in? 6 STREAMLINING ORDER DELIVERY OF NEXT-GENERATION BUSINESS SERVICES

7 Respondents see complete end-to-end visibility (85 percent), order to activate process (83 percent) and activate to cash process (79 percent) as the most important (critical and very important) components of end-to-end order orchestration (Figure 5). Figure 5: How important are the following components of end-to-end order orchestration for your company? The ability to integrate with third-party applications, price, capability/expertise and ease of product integration with existing infrastructure are respondents most important factors in selecting an end-to-end order orchestration supplier (Figure 6). Figure 6: What are the most important factors in selecting an end-to-end order orchestration supplier? 7 STREAMLINING ORDER DELIVERY OF NEXT-GENERATION BUSINESS SERVICES

8 Most Common Order Orchestration Complaints Heavy Reading also asked survey respondents what the most common order-related complaints were from their companies enterprise/smb customers during the fulfillment process and within seven days of activation (Figure 7). Figure 7: What are the most common order-related complaints from your company s enterprise/smb customers during the fulfillment process and within seven days of activation? The leading complaints were missed installation/activation SLA (45 percent), billing-related issues (42 percent), service not working (36 percent), complaint about service quality (34 percent) and misalignment between expected services and actual service received (32 percent). These complaints indicate that service issues are a top priority among customers. 8 STREAMLINING ORDER DELIVERY OF NEXT-GENERATION BUSINESS SERVICES

9 Order Orchestration Strategies and Plans Heavy Reading also asked respondents their order orchestration plans in terms of customer segments. Order orchestration is an area of critical interest for communications service providers as they continue their focus on residential segment but also take special interest in serving their business customers better. The majority of global respondents stated that most of the order orchestration elements they use for residential operations will need improvement at some point, as opposed to immediately. In terms of the areas that are in need of immediate improvement, they are most focused on service orchestration, KPI measurement and proactive monitoring (Figure 8). Figure 8: What level of improvement is needed for the order orchestration elements used by your company for its residential operations? 9 STREAMLINING ORDER DELIVERY OF NEXT-GENERATION BUSINESS SERVICES

10 The majority of global respondents also stated that most of the order orchestration elements they use for SMB and enterprise operations will need improvement at some point, as opposed to immediately. But for this customer segment, service providers identified service orchestration, proactive monitoring and order management and decomposition as the key areas that require immediate improvement (Figure 9). Figure 9: What level of improvement is needed for the order orchestration elements used by your company for its SMB and enterprise operations? 10 STREAMLINING ORDER DELIVERY OF NEXT-GENERATION BUSINESS SERVICES

11 The Role of Self-Service When it comes to business services delivery to enterprise and SMB customers, the role of self-service becomes paramount. Operators spend a vast amount of time, resources and budget dollars automating the order-to-cash-tocare lifecycle through improved enterprise self-service portals. These self-service portals enable enterprise customers to order new services, monitor the network, report maintenance issues, bill for services and analyze usage against specific service-level agreements (SLAs). The portal capabilities align with a typical customer lifecycle for traditional enterprise communications services such as IP, Frame Relay, MPLS/VPN and wireless, among others. When asked the key self-service functions or capabilities that their company thinks needs immediate improvement (in the next 12 months), respondents cited constant visibility of order process at any point, improving offer design and delivery process, enterprise product catalog, automatically managing in-flight order changes and improving the service design process as the areas most in need of immediate help/ improvement to enable enterprise customers to place their own orders via Web portals, where enterprise services constitute virtualized and non-virtualized services (Figure 10). Figure 10: What are the key self-service functions or capabilities that your company believes need immediate improvement to enable enterprise customers to place their own orders via the web portal where enterprise services constitute virtualized and non-virtualized services? 11 STREAMLINING ORDER DELIVERY OF NEXT-GENERATION BUSINESS SERVICES

12 Plans for SDN and NFV Initial use cases for SDN and NFV revolve around services that are focused on business customers. Figure 11 shows service providers interest in leading SDN-centric use cases. A closer look will point to the fact that most of the use cases on operators wish lists are requested with business customers in mind. Figure 11: How important are the following SDN use cases to your company? An SDN/NFV framework allows network resources to be allocated in a highly elastic manner, allowing service providers to respond more quickly to changing business requirements and not be constrained by network limitations, proprietary hardware or various service silos. It stands to reason that self-service/self-provisioning has great appeal for service providers that want to enable a more agile environment, while at the same time reducing cost. 12 STREAMLINING ORDER DELIVERY OF NEXT-GENERATION BUSINESS SERVICES

13 When we asked their plans for order orchestration in terms of SDN and NFV, 24 percent of respondents said they are currently making investments in NFV and SDN, while another 20 percent plan to use these technologies in the next 6 to 12 months and 22 percent plan to use them in the next 12 to 24 months (Figure 12). Figure 12: Does your company plan to use NFV and/or SDN to deliver services to its enterprise/smb customers? Regarding the management of hybrid service fulfillment scenarios, 41 percent of respondents said they will use a combination of existing systems and new systems, while 30 percent report they will have a separate orchestration for NFV (Figure 13). Figure 13: How does your company plan to manage hybrid service fulfilment scenarios in the world of NFV/SDN and legacy infrastructure? 13 STREAMLINING ORDER DELIVERY OF NEXT-GENERATION BUSINESS SERVICES

14 Meanwhile, 24 percent of respondents report that a centralized catalog should take a broader role and manage all VNFs and PNFs, followed by 22 percent that feel it will help in commercial bundling and pricing of VNFs and PNFs (Figure 14). Figure 14: What role will enterprise product catalog-driven order management play in NFV/SDN service fulfillment? 14 STREAMLINING ORDER DELIVERY OF NEXT-GENERATION BUSINESS SERVICES

15 Conclusion As communications service providers continue seeking alternative revenue streams to make up for the loss of revenue from traditional services, they are realizing they must revamp their legacy back-office systems in order to provide next-generation services in a timely manner. As demand increases for next-generation services, along with various service bundles and offerings such as self-service, order orchestration becomes increasingly challenging, due to the rising complexity of the order. A comprehensive order orchestration and fulfillment solution should have the ability to capture and process these new types of orders without fallout or errors. The solution must also be flexible and able to handle orders for various customer segment types, and be efficient enough that the order process is deemed profitable. Further, it must be able to integrate into new NFV and SDN frameworks that service providers are exploring as a means of rolling out new, innovative services in a more agile, efficient environment. Heavy Reading s survey indicates that nearly half of respondents are dissatisfied with their current order orchestration capabilities and willing to make further investments in these systems. Investments in both residential/smb and enterprise are in respondents future plans, and the focus is on areas such as service orchestration, KPI measurement, proactive monitoring, and order management and decomposition. With a quarter of respondents already making order orchestration investments in terms of SDN and NFV, it is clear that service providers are also looking toward new technologies to enhance their order orchestration capabilities to provide a superior customer experience. Successful order orchestration vendors need to not only provide a robust solution, but also have the services and integration capabilities to help service providers streamline their order-to-cash processes. Ordering processes need to focus on end-user experience and be able to address the purchasing experience of end users and the people who serve them. 15 STREAMLINING ORDER DELIVERY OF NEXT-GENERATION BUSINESS SERVICES