Operator Business Challenges
The global economic downturn has put pressure on many businesses, and Communications Service Providers (CSPs) are no exception. At the same time, the exponential growth in data usage, driven by video, has resulted in rising network investment to cater to the increased bandwidth demands, while revenues are decreasing as services from “over the top” (OTT) players compete for traditional CSP revenue.
At the same time, end user expectations are growing, making subscriber growth more difficult, so operators need to provide a superior customer experience as a way of attracting and retaining customers. Coverage, speed, and capacity are no longer enough to ensure this and provide differentiation. Quality of Experience is becoming an important new way for operators to differentiate, and has been identified as an important influence in subscriber churn.
So operators need to find a new operating approach to bring a service quality focus to their networks while continuously increasing network efficiency - and outsourcing their operations offers them an opportunity to do this. Beyond this, top line growth through the launch of new services or simply the reduction of churn is imperative to retaining reasonable margins. They need to transform their business to reach new markets and new subscribers to increase revenues and preserve margins.
The new approach
In response to this changing business environment, the Managed Services business worldwide has begun to change from a network centric to a service centric operational focus which addresses the economic realities. Huawei is leading this change with an MS proposition that focuses on not only OpEx reductions, but how the Operator can improve margin and revenues. As a result of this, Huawei is redefining Managed Services. We have developed an approach which we call Managed Services for TVO, “Total Value of Ownership”, because by doing this we show our customers how our Managed Services offer contributes to both Revenue and Margin improvement by impacting operational efficiency and customer experience, and by doing this delivers genuine business value.
Huawei MS for TVO
In developing this approach, we have taken the best of our existing Managed Services portfolio, and within that both highlighting innovative new solutions and ideas and then adding the next generation of end-user service-focused solutions - which have all been incubated and hatched from the Huawei Service R&D organization.
1. Centralized, Standardized & Secure Network Operation
Classic MS operational outsourcing is predicated on the need to reduce OpEx. This reduction is still a top priority for Operators, and so any MS offer must be laid on the foundation of a sound Network Operations solution which applies the latest best practices.
Key objectives must be to improve network quality and efficiency, to give the operator a competitive advantage in the market.
Huawei achieves this in a number of ways:
By allowing converged operations across Fixed, Mobile and IT networks. This combined capability is a differentiator in our industry
The use of innovative process KPIs within our network lifecycle process to measure and quantify operational efficiency.
Proactive network performance taskforces such as Huawei’s global Monitor, Analyse, and Improve (MAI) team allow us to measure, benchmark, compare and analyze across the organization’s infrastructure and processes for continuous improvement, anticipating rather than reacting to performance issues.
Advanced in-house field maintenance solutions such as Workforce Management and Site Intelligent Management System make a direct contribution to operational efficiency.
The maximisation of efficiency is possible only when there is a free flow of information between the relevant stakeholders; efficiency and transparency go hand-in-hand. To this end Huawei have developed a unique customer portal which offers high visibility in real time, 24/7 of the network performance and capacity, and the operational performance metrics.
2. Transforming to Service Focus
Operators need to transform from network-centric to user-centric management practices. A user-centric approach ultimately focuses on the end user’s emotional experience, so so as to deliver on the promise of a better experience, and hence tangibly and positively impact top line growth; everything we do in the MS context must ultimately improve this. And while Service Quality Management (SQM) has been accepted for the past decade with positive results in measuring and managing the quality of network service, today’s end-users are more sophisticated. They expect not only higher service quality, but also a differentiated, consistent and transparent end-to-end customer experience.
To enable this, at Huawei we are implementing our live Services Operation Centre (SOC). The SOC houses the expertise and resources that enable us to improve end-user service quality, and it does this by influencing our day-to-day operations based on a new hierarchy; that of the service performance driving the network performance. This allows operators to quickly and effectively address end-user bad experience such as slow data connection, network congestion or other issues affecting service quality. The integration of NOC and SOC processes is a vital part of this capability.
Crucially, this ensures that true Service Quality is understood by Network Operations. With the SOC we address SQM by extending the focus from a pure “Per Service (PS)” or “Per User (PU)” concept to a “Per Service Per User (PSPU)” model, an approach which is widely recognized as the right way to transform operations and one which Huawei is leading.
3. Enhancing revenue with Business Operations Support
The challenges currently being faced by our customers require us to offer more than cost reduction possibilities. To allow us to directly impact our customer’s revenue, Huawei has developed a series of solutions which enable us to support Business Operations, and represents the third part of our MS for TVO approach.
Launching new VAS quickly and easily is of utmost importance to operators in this context. Huawei enables this, amongst other things, via our Hosting service - which not only allows our customers to access the International market for Applications and Services, in our case over 500 content and service providers and 1200 Applications, but also to launch new market-appropriate services with fast time to market and a low investment profile in terms of both solutions and processes.
Within an operator’s existing service delivery environment for VAS there are significant opportunities for revenue enhancement, which can be exploited via our Managed VAS solution. We do this by analysing existing data to allow improvements in areas such as:
Revenue leakage, using data to optimise tariff strategy in order to maximise revenue
Tariff optimisation, using innovation in flexible charging policy to increase revenue
Channel selection. By analysing the conversion rates of promotions on a per channel basis, the best channels can be identified to improve the overall conversion rate.
Additionally this data analysis opens up new opportunities such as greater precision in the targeting of user groups with the highest revenue potential.
So today’s MSP must be seen to be actively investing in solutions that promote top line growth. These are just some examples how Huawei is rising to that challenge.
The changing relationship
Just as we acknowledge the fundamental changes that must take place to allow the Managed Services ecosystem to thrive, we must all be ready to take action in the redesign of the way we work together. MS for TVO is such a development, and the approach described here can be the beginning of a new way of working. MS for TVO defines the behaviour of today’s MS player, and represents a significant commitment to our customers and the future of our business. For example to support this framework Huawei already has a significant proportion of its 1,200 dedicated managed services R&D staff working on TVO orientated solutions and will continue to invest like this, while other MSPs in many cases are reducing investment in their MS portfolios.
The way forward
Our industry faces a period of change, with Operators’ costs growing faster than revenues and the need to move to a Service oriented operation. At Huawei we believe that there is a growing realization amongst MS industry stakeholders that we must work more closely together and allow MSPs to bring their creativity to the table in more open and flexible discussions about the future of our mutual business.
The Huawei MS for TVO approach, we believe, sets the perfect foundation for this kind of relationship. Not only does it directly address the business challenges of today’s operator, but it permits and facilitates the maximum amount of value to be offered from the creative depths of the MSP.
By bringing to bear all of our unique strengths in a perfect convergence of skills, talent, experience and innovation we will be responding to these challenges in a way which benefits all parties and hence protects our evolving MS ecosystem.
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