Executive Summary Managed services projects have always been complex and are becoming even more so due to the evolution of Communication Service Providers (CSP) requirements and new business expectations. As a result, it is becoming increasingly challenging to fully achieve all the business objectives associated with managed services today. In order to ensure success, CSPs need to follow best practices for planning and implementing managed services. TM Forum Insights has identified a set of success factors for managed services projects: long-term business objectives, defining the scope for relevant services, a feasible and optimized implementation roadmap, customer-experience related business objectives, business objectives driven SLAs, alignment of commercial terms with business goals, proper vendor qualification, Business/Operations Support Systems (B/OSS) specific best practice implementation methodology, effective and efficient governance and leverage of market experience. The best practices that support the above success factors are described in this paper (see chapter 2). As proper managed services vendor qualification is probably the single most important success factor, TM Forum Insights has also analyzed the required Managed Services Provider (MSP) assets, capabilities and experience which are critical for success in B/OSS managed services (see chapter 3). Table Of Contents I. B/OSS Managed Services Evolution and Increasing Complexity a. B/OSS transformation b. Expanding managed services scope c. New CSPs Expectations II. B/OSS Managed Services Success Factors III. Managed Services Provider (MSP) Qualification: Assets, Capabilities and Experience Required For Success in Managed Services IV. Concluding Thoughts V. Amdocs Managed Services Assessment 1
I. B/OSS Managed Services Evolution and Increasing Complexity Recent years have seen a marked increase in the use of managed services for B/OSS, with many CSPs leveraging outsourcing to different degrees. With the current economic indicators as they are, TM Forum Insights expects to see B/OSS managed services increase in popularity thanks to several key industry trends: CSP focus on reducing in-house operational expenditures and improvement of operational efficiency and effectiveness Business re-focusing on dynamic customer facing activities and development of new growth engines, leaving much of the back office support to third party partners Increased demand for managed B/OSS modernization and transformation, involving the transfer of responsibility and risk to an MSP The increasing popularity of managed services is accompanied by an increase in project complexity that can be at tributed to three major factors: the need to handle B/OSS transformation as part of the managed services project, the expanding vertical and horizontal scope of managed services and new business expectations from managed services. a. B/OSS Transformation In recent years managed services started supporting Telecom IT transformations and buildups in two ways: Directly, by performing the required transformation or buildup under a managed services program, offering lower transformation costs, reduced transformation risk and attractive transformation financing options. Indirectly, by taking ownership over legacy operations and systems, enabling redirection of valuable resources to development and operation of new lines of business and new IT capabilities CSPs across the globe have been in the midst of technology transformations since the early part of the millennium. After the Internet services meltdown in 2001, Tier 1 and 2 CSPs began a close review of their existing legacy, custom built and COTS architected B/OSS infrastructures. Most North American Tier 1 CSPs are still in the midst of reviewing the efficacy of existing legacy systems and the viability of these systems in the long term. European operators are doing the same, and are now more closely evaluating the benefits of an outsourced B/OSS environment. Many however have already adopted managed services as their preferred way of supporting B/OSS needs for both enterprise and consumer customers. AT&T for example is in the process of eliminating between 30 percent and 40 percent of its IT systems over the next five years in an effort to reduce the cost of systems management, and increase its overall agility to offer a comprehensive service offering to its customers. AT&T also recently consolidated its outsourced billing contracts to simplify its existing business relationships with external vendor partners. Bell Canada began a substantial transformation effort in 2003 to consolidate over 200 billing systems and outsource the majority of its billing operations by 2010. North American wireless operators (Sprint and AT&T Mobility in particular) are in the midst of transforming their business operations through the consolidation of outsourced vendor contracts, to both unify all customer data and data processing into a single environment, but also to reduce the number of contracts they currently maintain with third party vendors. North America s MVNO market went through a surge of growth in 2004 followed by a rapid contraction shortly thereafter, but the remaining successful MVNOs (which include Boost, Virgin Mobile, Cricket, and others) all currently maintain outsourced B/OSS relationships with third party providers as a way to keep capital expenditures to a minimum. 2
European CSPs have also been in the midst of back office transformations for several years. While most B/OSS transformations across European fixed and mobile CSPs still remain in-house, some European incumbent fixed line a nd mobile operators have begun to explore outsourcing certain operations to a managed services partner over the past several years. BT is one of the early adopters of managed services in the European market, using Tech Mahindra for B/OSS and some network based services. Some regional European divisions of O2 and T-Mobile recently adopted a managed services billing/customer care business model to increase back office efficiency and reduce TCO for their IT systems. While significantly smaller in scale than typical North American managed services agreements, it should be seen as a significant paradigm shift for the region, which typically has followed a more traditional in-house model for B/OSS systems management. Latin America s recent wireless services explosion required quick action on the part of the regions operators to bring the services to market quickly, with Brasil Telecom and Telesp Cellular having outsourced their billing since 2000. Yet as other vertical markets have matured, operators in the region look to managed services as part of their cost cutting and operational efficiency transformation. Telefonica Brazil for example has outsourced its wireline network maintenance to a third party for over five years, seeing a 40 percent cost reduction due to fewer terminal errors. The Asia Pacific market has seen significant increases in demand for outsourcing/managed services, with over 100 percent growth over the past several years. Much of this increase is due to China Mobile alone, with its extensive growth plans to support China s potential 1+ billion subscriber population and the need for greater economies of scale around its service delivery infrastructure. Current economic conditions however do point to a potential slowdown over the short term, with leading outsourcers in the region showing decreased revenues in the first quarter of 2009. In summary, B/OSS transformation naturally adds an element of complexity to managed services projects that previously focused only on maintaining the existing operation and systems. Additional vendors might be involved in the implementation, business processes are usually changed and the migration from the legacy to the modernized environment is a critical process with multiple risks involved. b. Expanding the Scope of Managed Services One of the important trends in the managed services market in recent years is managed services scope expansion. Managed services scope has two dimensions (as seen in Figure 1 on the following page): Horizontal - B/OSS domains, systems and processes. A CSP can use managed services for specific activities (e.g. Bill QA), specific domains (e.g. billing, partner management, etc.) or for the entire B/OSS. For each component of the horizontal scope there s a vertical scope dimension as well. Vertical type of services: BPO (Business Process Operations), AM (Application Management) and ITO (IT Outsourcing) layers. A CSP can use managed services for one or more of those layers. 3
Figure 1: Common Managed Services Outsourcing Models Source: TM Forum Insights Most CSPs (mostly incumbents) who did not embrace full horizontal and vertical B/OSS managed services scope as a starting point are gradually increasing the scope of managed services, both horizontally and vertically. The main catalyst for this trend is cost reduction. This trend will continue in the years to come as well and TM Forum Insights expects to see a growing number of completely virtual (i.e. managed services based) B/OSS environments emerge over the next few years. The growing functional and domain scopes increase managed services complexity as they might require additional vendors to be involved or, alternatively, add new responsibilities to the incumbent vendors. In addition, the governance of a broader operation is more demanding and needs to consider cross domain performance to ensure the desired overall business performance. c. New CSP Expectations A fundamental shift has occurred in CSPs business expectations of managed services. If in the past, the main (and many times only) purpose of managed services was to reduce costs, a managed services project today is expected to yield, in addition to cost savings, improvements in operational efficiency and effectiveness, improvements in time-tomarket for new products and services, and is expected to support growth (new lines of business, new services, etc.). The requirements for improvement in operational efficiency and effectiveness are based on CSPs needs to improve their customers experience and on the understanding that operational efficiency and effectiveness gains translate into further direct and indirect cost reduction. The requirement for growth support is the result of CSPs need to support increasing numbers of subscribers, lines of business and services, and of the need to enhance business agility and provide better service to customers. In most cases, CSPs need to modernize and transform their B/OSS and their business processes in order to support those requirements. For CSPs who already outsource their B/OSS it is important to have the option to modernize and transform through their MSP, otherwise such transformation will cost more, will be riskier and will take more time. For CSPs who do not outsource their B/OSS, a managed transformation option is very compelling (even if they don t continue to operate the B/OSS under the managed services program), as it enables the transformation acceleration, reduction of associated risks and, of no less importance, transformation cost reduction and financial terms optimization. 4
II. B/OSS Managed Services Success Factors It is not trivial to succeed with managed services. Looking at the current dynamic nature and complexity of managed services, and at the expected evolution of this domain, it seems that the challenges involved with managed services are constantly increasing. Although the rewards are growing as well, it is important to try and minimize the risk of failure while maximizing the potential business benefits. TM Forum Insights set to explore what makes a managed services engagement a successful one. Based on analysis of public information and independent research, TM Forum Insights identified a set of specific success factors for B/OSS managed services, as can be seen in Figure 2 Figure 2: Key Success Factors For IT Managed Services Source: TM Forum Insights Defining the long-term business objectives of outsourcing Defining the long term business objectives and clearly articulating the long term business expectations is really the first step in developing an effective outsourcing strategy. Each operator is unique in its environment and challenges and long term objectives of outsourcing can vary in range and include any combination of cost optimization, business transformation, operational performance and flexibility improvement, business growth support and maybe other goals as well. Having long term objectives will help achieve long term business optimization rather than short term business optimization, which might be sub-optimal in the long term. CSPs need to look at outsourcing from a strategic standpoint and should clearly define long-term objectives before embarking on the outsourcing journey. Long term objectives should reflect utilization of the full potential of managed services for cost reduction, operational quality improvement, systems and processes modernization, addition of new capabilities and facilitation of new business. 5
Defining the right services scope (what to outsource) Relevant scope definition is important because it influences the ability of the MSP to generate and maximize efficiencies, enable the required operational monitoring and control, and to support growth. There are multiple options for scope definition when considering the vertical and horizontal scope dimensions. Some of the important considerations in defining the optimal scope are the following: Minimization of operational, system and technical interfaces with the outsourced functional and systems scope. The more external interfaces an outsourced operation has, the more costly it will be to transition responsibility and later on more costly to maintain. Maximization of horizontal and vertical synergy potential. Some B/OSS domains and activities have strong relationships and interdependencies (e.g. billing and partner management). Putting together under the same scope such domains and activities would enable significant system, business process and operational optimizations. There are also vertical synergies to be found between the vertical layers (e.g. BPO and AM, or AM and ITO). Monitoring and control the business and technical output of the outsourced business processes, systems and infrastructure should be easy to define and measure. Outsourcing elements of the business that cannot be cost effectively tracked can either incur high monitoring costs or can underperform, leading to critical issues affecting the business. Business process based scoping. In order to enable the MSP to support modernization and business transformation, it is important to outsource complete business processes. If discrete systems are outsourced, it can happen that a business process which cuts across several systems - some outsourced and some not will be split. This kind of split can limit or complicate transformation and business process re-engineering (aimed at achieving optimization). Planning a feasible and optimal implementation roadmap It will not always work to have a single-cut transition to managed services, where the entire managed services scope is being transferred to the MSP at the same time. This is especially relevant when managed services involve a large horizontal scope or when a mission critical part of the operation is to be transferred. In some cases it would work better to use a piecemeal approach that reduces risk and allows for better testing and control of the MSP s performance, to make sure the MSP is up to handling the full, ultimate scope. Another important factor here is the timing of the process/application optimizations and transformations. In certain cases it would be best to start with a transformation phase in order to achieve maximum efficiency gains and enable new business options, but in other cases it would make more sense to wait until the current operation has been transitioned to the MSP and has been stabilized. Overall, there s a balance to strike between quick financial gain and smoothness of transition to managed services, with transformation an important milestone that needs to be factored in. Defining customer-experience driven business objectives It is important to make sure that the end-customer experience is not affected by the move to managed services; achieving the maximum cost reduction at the expense of the end-customer experience is clearly counterproductive. Managed services can actually be used to enhance the end-customer experience, resulting in increased customer satisfaction, greater customer loyalty, increased subscriber growth, and greater profitability per customer. As part of a managed services strategy, CSPs need to work with MSPs to identify the customer experiences or touch points that drive relationships at the transactional level and identify the relevant Key Performance Indicators (KPIs) that impact or influence that experience. CSPs can and should leverage MSPs broad industry knowledge and relevant tools to introduce application and business processes improvements that contribute to an enhanced customer experience. 6
Defining SLAs according to business objectives SLAs can be defined in a multitude of ways. It is important to align SLAs to bottom line business objectives and to make sure that every business or operational process has a specific SLA. In addition to being aligned with the business needs, business objectives-based SLAs are easier to monitor (from the MSP s perspective) and are not open to different business impact interpretations, so governance is made easier. The measures that are used in the current state to manage the operation will not always be the right ones to use for an outsourced operation. For example, SLAs that are based solely on a host of technical performance parameters will not necessarily guarantee the required business outcome. Below are examples of the types of KPIs that should be tracked in a business outcome- oriented SLA for a fully outsourced DSL provisioning operation: Average time from provisioning request to successful fulfillment (customer can use the service) Percentage of provisioning processes that exceeded a certain duration threshold Percentage of failed provisioning attempts (overall, due to all possible reasons) Measurements of the discrete performance of each element in the provisioning process chain will not reflect properly the overall business performance. Aligning commercial terms with business goals If the only goal of the managed services engagement is cost reduction, then it s easy: the CSP should look for the minimum cost MSP that can handle the required SLA. But managed services engagements can have several goals beyond cost reduction, goals such as operational effectiveness and efficiency improvement, customer experience improvement, business innovation support, growth support and modernization. The additional goals can sometimes mean additional cost for the MSP. The commercial terms should reflect proper pricing for all the requirements and should provide incentives for constant improvement and penalties for breaching SLAs. The incentives and penalties should be tied to the direct and indirect business impacts of excellent/poor performance. Proper vendor qualification Choosing the right vendor is definitely the most important single success factor. A CSP can have a good managed services plan in terms of scope, implementation plan, SLAs and commercial terms that can still fail because of the MSP s inability to deliver according to this plan. CSPs should qualify B/OSS MSP s according to the assets, capabilities and experience relevant to managed services. This subject is covered in detail in the next chapter. Following a B/OSS specific best practice implementation methodology The telecom industry is unique in many aspects and B/OSS specifically have unique characteristics. The implementation of managed services for B/OSS should follow B/OSS specific best practices for the due diligence, transition, operation and optimization stages of a managed services lifecycle. The B/OSS specific best practices will ensure that risk is minimized and that the project yields maximum business benefits in every stage of its lifecycle. B/OSS specific best practices (versus generic IT best practices) have the greatest impact on business process optimization. For example, when it comes to bill cycle management, a well designed and well operated bill cycle process duration can be reduced to less than two days and bill accuracy can be increased to more than 99.9%. 7
Establishing and implementing effective and efficient governance There should be no surprises. A managed services operation has to be constantly monitored and controlled by the CSP to make sure it delivers all required business outcomes. In addition to passive governance, the CSP needs to apply active management to provide the MSP with pertinent strategic and tactical information that will allow the MSP to prepare and accommodate expected changes and requirements. An effective and efficient managed services governance model (seen in Figure 3) is comprised of the following three components: Governance structures: the organizational structure and set of teams steering and controlling the managed services. Governance processes: the set of processes, methods and procedures needed to manage the day-to-day ongoing operations Governance tools: a set of tools and reports that empower the CSP with monitoring and control capabilities over the services it has transferred to the MSP Figure 3: Expectations for Managed Services Governance Structure Source: TM Forum Insights An effective governance model will incur minimal time investment whereas a lacking model will incur considerable additional time investment (reducing cost savings) and even then will not guarantee success. In some cases, governance related problems are not the result of a lacking governance model, but rather the result of neglect in the implementation of the model. Governance does require the attention of relevant people in different managerial levels of the CSP to ensure the MSP delivers according to the SLA, that new developments and optimizations are on track and that risk is being managed overall ensuring that the CSP s short and long term interests are served. 8
Learning from market experience CSPs should draw on industry resources and play an active role with industry associations, particularly those where managed services are a key area of technology development and focus. These associations play an important role in standardization, provide product/service support and industry trends information, and drive CSP-MSP collaboration and idea sharing. TM Forum Insights believes that the sharing of best practices and ideas around success factors for managed services will not just benefit the carrier community, but will help the technology service provider community to deliver a better service overall. III. Managed Services Provider (MSP) Qualification: Assets, Capabilities and Experience Required For Success in Managed Services CSPs expect the same, if not better, levels of quality and service from a managed services operation than they would get from an efficient in-house operation. CSPs that shift mission critical back office operations to a third party do so for a reason: to reduce operational costs, transform business operations and create stricter rules around the overall efficiency of business operations. In order to succeed with their managed services, CSPs need to turn to an MSP that has the potential to be a trusted partner and has the dedicated assets, capabilities and experience relevant for B/OSS managed services. An MSP must support a complex operation with complete IT systems and business process operation and monitoring; and systems (proprietary, 3rd party and legacy) development, maintenance and support - all with guaranteed results. Providing sophisticated and reliable managed services requires relevant personnel, technical and domain expertise, business understanding and flexibility, financial resources, and marketplace accepted ethics necessary to keep the client happy, as seen in Figure 4. Figure 4: Overview of Key MSP Requirements for Managed Services Success Source: TM Forum Insights 9
CSPs should qualify B/OSS MSPs according to the assets, capabilities and experience relevant to managed services: Domain expertise broad and deep Telecom industry knowledge, and specifically B/OSS and related business processes knowhow, is key to smooth operations and smooth transition of application management responsibility, as well as to efficient and effective operations and to potential optimization and maximization. B/OSS consulting, B/OSS product implementation and customization and B/OSS business process engineering experience are the main sources of this expertise. The domain expertise should be measured both at the corporate level and at the specific implementation team level (e.g. average years of OSS managed services experience for the team of people assigned to handle OSS managed services) Managed services experience - a proven track record for the specific services required is important as it contributes to faster implementation and reduced risk. Many MSPs don t have experience in all relevant aspects of B/OSS managed services - a vendor might have experience in certain areas (e.g. Application Management) but might lack experience in other areas (e.g. Bill Cycle management). B/OSS transformation experience (consulting and products/solutions implementation) is also becoming more and more important as many managed services projects include a transformation element at a certain point of the project lifecycle. Technology and product base ownership of B/OSS technology and products is contributory to the enablement of business process improvements and to driving a cost effective B/OSS transformation. Without a product base, improvements can only be introduced through customized software or through ISVs products. In both cases, the cost of improvement or transformation will probably be higher than in the case of an MSP which leverages its own technology and products. In addition to B/OSS technology and products, it s important to evaluate the specific tools that an MSP has for managed services operations monitoring and control, process optimization, application development, etc. Those tools enable more effective and efficient governance, and facilitate automation and improvement of business processes and application management. Global delivery model with off-shoring capabilities in order to create efficiencies and shorten development and problem handling durations, a global delivery operation capability is needed. A global delivery operation includes regional data and operation centers, and several globally dispersed development and support centers that can provide round the clock development and support continuity. It also enables leveraging lower cost labor where relevant and feasible. Standards compliance ITIL, CMMI, ISO and Sarbanes Oxley concepts, policies and best practices should be level setting points for technology development processes, operations support, regulatory compliance and other related areas. MSPs should be certified and should follow and implement the standards that are mandated by the regulator or that are required to achieve the most efficient development and operations. Methodologies B/OSS managed services methodologies are based on generic IT methodologies and include B/OSS specific elements. Those methodologies facilitate higher quality and lower risk implementation planning and execution, and enable more efficient governance due to higher transparency and predictability. It is important that the MSP has detailed methodologies for each stage of the managed services lifecycle. Specifically for B/OSS, it is important to have business process optimization methodologies that are based on broad business processes knowledge and to have business process optimization tools that facilitate the implementation of those methodologies. 10
IV. Concluding Thoughts TM Forum Insights believes that regardless of geographic region, CSPs will continue to look for efficient and cost effective ways to transform their back office operations. Both established Tier 1 and emerging Tier 2 and Tier 3 CSPs have made the business decision to outsource mission critical B/OSS operations to a trusted third party in order to streamline onsite business operations and focus on customer facing business issues and leave the day to day operations to the experts. IT managed services will be cost effective when the CSP and the managed services provider (MSP) are aligned around a common goal of cost reductions, technology transformation or operational efficiency improvements that will be of benefit to the CSP s long term business strategy. CSPs should understand the telecommunications-specific success factors needed to guarantee a successful outcome, and subsequently in our opinion, should work with a managed services provider that can provide the correct balance of telecommunications domain expertise, technology and human resource assets to achieve such an outcome. V. TM Forum Insights MSP Assessment Case Study: Amdocs Global Strategic Sourcing (GSS) TM Forum Insights recently completed a technical assessment of Amdocs Global Strategic Sourcing division to assess the company s B/OSS managed services related assets, capabilities and experience with industry best practices. TM Forum Insights spent time on-site with Amdocs at its Champaign, Illinois, 20,000 sq foot data and operations center facility and spoke with executives from some of the company s other Global Strategic Sourcing facilities in the US, India and Canada to get a hands-on view of Amdocs current capabilities in B/OSS managed services. Through organic growth and through acquisition, Amdocs has built the capability to support fixed, mobile and next generation service providers through a combination of onshore and offshore systems and support, and has demonstrated that its managed services capabilities are well mapped to the needs of the industry. Amdocs is known mostly for its Tier 1 B/OSS solutions, but became an MSP (Managed Services Provider) after the September 1999 acquisition of ITDS, a Connecticut and Illinois based billing service bureau operation with several Tier 1 and 2 wireless carrier customers, including NEXTEL (now integrated with Sprint, and managed from Champaign). Amdocs managed services operation has since expanded to become a global operation, with data centers and related support available in Canada, the Netherlands, Austria, India and Australia. 11
Amdocs Current Managed Services Offering Figure 5 highlights Amdocs managed services offering, which includes Business Process Operations (BPO), Application Management (AM), IT and Infrastructure management (ITO), service delivery management, and managed systems modernization/transformation services. Figure 5: The Amdocs Global Strategic Sourcing Offering Source: Amdocs 12
Assessment of Amdocs Managed Services Assets, Capabilities and Experience Amdocs Global Strategic Sourcing delivery model is designed to work in three tiers: Customer premises services approach, where Amdocs works closely with customers on site, allowing better interaction, and giving the customer increased control over complex operations Near shore development, operations and support centers that enable leveraging scale, lower cost locations and regional level expertise Off-shore managed services centers that facilitate 24X7 continuous development, operations and support, along with a lower cost workforce Amdocs Champaign operations center is an example of near shore support, with support for telecommunications clients exclusively, and offering end to end managed services for B/OSS. Amdocs runs virtually every company-sourced software application within the facility, including: Ensemble, Amdocs 6, Cramer 6, Qpass, CES 7.0 and CES 7.5. In addition, some carrier legacy applications that include non-amdocs 3rd party applications are being managed as well. Currently the Champaign data center processes over 42 billion event records each month and supports 28 billing cycles per month for its CSP clients. All processes in Champaign have full redundancy with Amdocs offshore facility in Pune, thus guaranteeing up-time as well as the ability to offer 24X7 support for any client issues. Amdocs Global Strategic Sourcing operation in India is the group s largest ISO 9001 and ISO 27001 certified operational center, with state of the art facility in Pune. This facility provides 24 by 7 operations management and support, allowing for non-stop coverage of Amdocs global managed services customers. It supports the entire spectrum of Amdocs products and business process operations alongside non-amdocs technologies (legacy applications and some third party solutions). TM Forum Insights assessment of Amdocs managed services business shows that the company has adopted industry best practices with adherence to industry standards such as ITIL and the Forum s own Business Process Framework standard to help create internal business efficiencies as well as a more straightforward approach with its carrier customers. Business process libraries are readily available and enable quick business processes reengineering according to industry best practices in order to achieve the highest efficiencies. A corresponding set of process automation and monitoring tools can be used to reduce operation costs and enable straightforward and low-effort governance. Each managed services facility also adheres to telecommunications and business-specific industry standards including ISO and CMMI. Amdocs global presence for managed services support should give CSPs a sense of confidence in the scale of operations that are on offer. Amdocs may be one of the more recent telecom software suppliers to offer a focused B/OSS managed services offering to the telecommunications industry, but its current offering gives CSPs a broad range of capabilities above and beyond traditional service bureau billing. Amdocs currently supports Tier 1 CSPs globally with its in-house solutions and products, and the company s managed services offer similar scalability, along with the ability to offer virtually all of its B/OSS and digital commerce management solutions in a hosted environment. Amdocs global managed services presence and three-tier approach also assist in offering competitive prices and meeting very challenging cost-saving requirements through: Creating economies of scale, while keeping local presence, through data, operations and development centers in the US, Canada, Europe, India and Australia. Off shoring of applications management and operations, which reduces costs through the use of emerging markets talent Flexible support coverage models: full range from traditional 9 to 5 to full 24 by 7 support services, based on carrier needs and/or cost requirements. 13
As far as experience is concerned, Amdocs is known for its multi-vertical capabilities in B/OSS. Amdocs has broad communications expertise with over 25 years of sourcing experience and thousands of employees within its Global Strategic Sourcing division dedicated to supporting its B/OSS managed services business. Dozens of managed services engagements around the world provide a robust and rich experience base, with projects covering different vertical and horizontal B/OSS scopes, tier 1 to tier 3 customers, various delivery models, Amdocs and non-amdocs platforms management and operation, and in some cases, platforms and business processes transformation. Amdocs Managed Services Positioning: Strengths and Differentiators Amdocs has a few data points to justify the cost benefits of its managed services offering. Amdocs managed services offering was highlighted by several carriers as helping provide cost savings over the traditional in-house B/OSS support method. One carrier cited a $25 million dollar saving during a file collections process that was subsequently capped using strict SLAs, while another highlighted the improvement in bill run accuracy, which subsequently reduced the number of trouble tickets by 85 percent. Over the last several years, Amdocs has made a shift to become more of a product oriented company in order to position itself as a leading B/OSS solutions provider for Tier 1 and Tier 2 service providers. At a time when budgets for end-to-end back office solutions are few and far between, Amdocs, like many other companies in the space, has had to retool quickly and effectively to meet the new market requirements. Smaller managed services players who had the flexibility to offer standalone components at competitive price points were gaining traction. Amdocs, as well as other B/OSS vendors, have responded by adopting a stronger product approach that allowed for a more modular and lower cost managed service offerings to meet the needs of the smaller CSP. This has also made Amdocs more competitive in the Tier 2 market, something not seen until recently. Amdocs provides a single point of accountability for CSPs that have Amdocs platforms and use Amdocs managed services. This combination can help in reducing application management costs, maximizing operations efficiency and enabling cost-effective growth and modernization. Amdocs unique capabilities and experience in B/OSS transformation projects are an asset when it comes to managed services, as many of the B/OSS managed services projects include a systems and business processes consolidation and modernization aspect. In addition, Amdocs offers the unique ability to bundle its Interactive (Qpass, Changing Worlds and other related original Amdocs products) technology as part of the offering to create a content/media/applications support solution that allows for back office billing, online/mobile payment, content management, and digital supply chain and app store management. Managed Services Opportunities that Fit Amdocs Capabilities Based on TM Forum s assessment of all managed services capabilities, Amdocs has demonstrated that it has the ability to support virtually any CSP that wishes to outsource its B/OSS technology and processes. Amdocs managed service capability fits with the needs of a broad range of CSPs (see Figure 6) looking to take back-office complexity out of their day to day business operations. 14
Figure 6: Amdocs Managed Services Offering Can Support Various Carrier Requirements Source: TM Forum Insights Beyond the traditional B/OSS managed services that are relevant to all types of CSPs, Amdocs Global Strategic Sourcing is a source for Tier 1 and Tier 2 operators looking to create a more robust app store type service that integrates third party content and application providers with the carrier s existing B/OSS back office requirements and allows for content and application service integration with billing/payment services. It can also work effectively to help Tier 1 fixed line operators who wish to shift less strategic legacy back office applications out of the overall operation and refocus on new, emerging services, complex customer demands and next generation market requirements. Amdocs can and does work with virtual network operators focused on fast time to market and minimal capital expenditures in B/OSS infrastructure. Lastly, the current climate is driving CSPs to reduce the number of vendor relationships to gain an upper hand in operational efficiency. In this case, economically-driven multi-service operators looking to simplify their business relationships can leverage Amdocs consolidation and modernization experience and capabilities to minimize transformation risk, improve performance levels and ensure scalability all in addition to maximizing efficiencies. In conclusion, Amdocs global presence, geographically diverse operations, support and development centers, proven B/OSS technology assets and capabilities, B/OSS transformation experience, dedication to managed services and its demonstrable commitment to meeting TM Forum s expectations for managed services best practices, provide ample data to any CSP that the company will be a valued partner in any managed service initiative. 15