Old-school network operators clearly need new innovations to survive and thrive in the next-gen IP services environment. Ironically, one of the keys to that transition may be adopting a process straight out of the 19th century: the factory approach to product creation.
Emerging telco service factories won't bear much resemblance to their Industrial Age counterparts, but the basic underlying idea remains the same: to develop a creation environment that uses standardized, interchangeable and interoperable elements to create a wide range of "unique" products, all in one virtual facility.
As detailed in the latest edition of Light Reading's Services Software Insider, entitled Beyond SDP: Building a Telco Service Factory, the telco service factory also has a lot in common with the build-to-order model that now dominates the PC business. In the telco realm, the primary building block for the factory model is product data – all of the information that's needed to create, provision, maintain, and bill for telco services.
The technology that brings those building blocks together is the product data management system (PDMS), which provides a 360-degree view of product data from a management perspective. As detailed in our report, new telco products and services such as IPTV are becoming more complex to build, deliver, and manage. Most telcos expect the number of products in their portfolios to rise significantly – potentially into the tens of thousands. The trend is toward products that are actually bundles or blends of multiple products that have previously been sold separately, including products contributed by third parties.
With these factors in mind, operators want to improve access to product information that is today scattered across myriad different systems within their organizations. The dispersed nature of product data is stalling time to market, hampering their ability to deploy complex products, and preventing the reuse of products in different bundles and mash-up blends. Leading telcos are now pushing to centralize product data, as PDM is seen as the key to cost efficiencies, process automation, and next-generation service creation.
Until recently, if operators wanted to bring all their product information together, they had to build a PDMS themselves – and there have been plenty of abortive attempts to do so on top of CRM and billing systems, the most obvious "owners" of the product catalog. Such projects failed because any telco PDMS needs to either store or have pointers to all the technical information associated with each product, and this simply can't be shoehorned into a CRM system used to dealing with commercial product data like prices and subscription options.
There is a large integration effort involved in centralizing product data and a sure sign that the PDMS market is heating up is the interest major vendors are showing in it. Amdocs Ltd. (NYSE: DOX) and Accenture have both announced PDMSs and strategies in 2007 – Accenture has turned a capability it says it has built into every SDP since 2001 into a product, even though it is also partnering with the startups. Oracle Corp. (Nasdaq: ORCL) and SAP AG (NYSE/Frankfurt: SAP), old hands at the PDM game in other industry sectors, are showing interest in telco PDM as well. Oracle's plans to support telco PDM are well advanced and Oracle and SAP, together with systems integrators like Accenture and IBM Corp. (NYSE: IBM), have significant experience of how data can be extracted, normalized, and migrated to central systems, even if they need to overcome the hurdle that telco product data is very different and far more complex that product data in other industries. They also have the financial muscle and presence in telco accounts at a strategic level, as does Amdocs. PDM is rapidly becoming the domain of the large vendor, according to Accenture.
While the largest vendors are integrating PDM into SDP and OSS/BSS suites, fulfillment and inventory companies, the guardians of technical product data, are also stepping into the fray. However, if operators are to gain a 360-degree view of product data, fulfillment vendors' technical product data catalogs need to be extended, for example, with billing product data, as OSS/BSS consultancy Cadence Design Systems Inc. is doing for new mobile wholesale entrant Mobile Satellite Ventures LP and also with commercial (CRM) product data. For this reason, fulfillment companies should look closely at the vendors in these areas that operators are including in their next-gen OSS/BSS infrastructures and make sure they partner with the right suppliers.
PDM may also be a catalyst for further OSS/BSS consolidation. Over the next two years, more operators will follow the lead of France Telecom SA (NYSE: FTE) - its recent choice of Netcracker as a single supplier for all its inventory needs is a sign that the days of single product-oriented silos of information are coming to an end. Telstra Corp. (Pink Sheets: TLSYY), COLT Telecom Group SA (London: CTM.L), BT Group plc (NYSE: BT; London: BTA), KPN Telecom NV (NYSE: KPN), and many others are already moving in the same direction. This will put pressure on many of the smaller OSS/BSS players. Some of these smaller technical catalog vendors have the most innovative technology, but they have lacked the market presence or customer base to attract large players to buy them. Nevertheless, they do offer a shortcut into PDM for any OSS/BSS or SDP vendor interested in expanding its portfolios in the direction Amdocs and Oracle are taking and gaining the scale to remain in the OSS/BSS market.
— Caroline Chappell, Analyst, Light Reading's Services Software Insider
Beyond SDP: Building a Telco Service Factory, a 32-page report in PDF format, is available as part of an annual subscription (12 monthly issues) to Light Reading's Services Software Insider, priced at $1,295. Individual reports are available for $900.
