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Innovation Osmosis & the Return of D&R

There were many "firsts" at this year's Management World conference. Firstly, the change in venue: The relocation from the south of France to Ireland was welcomed by a few, but not by most. However, there was consensus that the swanky new Convention Centre Dublin was very impressive, and a step up from the Nice Acropolis. For the first time, we had an overwhelming presence at the show, with ten representatives from Light Reading and Heavy Reading in attendance. And for the first time, the show focused on innovation -- a particularly sticky subject for telcos. There were many discussions, breakouts and panels about how communications service providers can incubate and innovate on service offerings, with the intention of having a leg up on their over-the-top competition.

In one of the panels I participated in with Netcracker Technology Corp. and Telus Corp. (NYSE: TU; Toronto: T), called "Monetizing 3G and 4G: Making Content, Commerce, and Connectivity Real," we heard from Shane Logan about some interesting initiatives at Telus around network abstraction and open ecosystem, which is provided to outside developers to develop applications and work with Telus in profit-sharing mode. Obviously, for this model to work effectively the implications for payment, contract management, settlement, and how easy it is for the developer or partner to come on board are profound. The bottom line here is that a back-office support fabric is required to catalyze and monetize innovation.

Customer experience management was another key theme at the event. The subject seemed to be on the tip of every vendor's tongue, be it Amdocs Ltd. (NYSE: DOX), Comptel Corp. (Nasdaq, Helsinki: CTL1V), ConceptWave Software Inc. , Connectiva Systems , NetScout Systems Inc. (Nasdaq: NTCT), Nokia Networks , Subex Ltd. or Tektronix Inc. . In another panel I participated in with Amdocs, NetScout, and Tata Communications Ltd. , the topic of discussion was "Creating Customer Loyalty." The panel members brought in different perspectives about implementing and measuring the customer experience. The obvious inference was how superior customer experience can enhance customer loyalty.

Based on my discussions in Dublin with service providers as well as vendors such as Nakina Systems Inc. and Subex, it seems obvious that the market is ready for a resurgence of D&R (discovery and reconciliation) as a separate solutions category. In the past, D&R did exist as a separate OSS category. Over time, because of mergers and acquisitions -- such as Subex buying CoManage, Amdocs buying T-Soft, and so on -- D&R got merged into the category of service fulfillment.

So what is D&R? For people not familiar with the category, communications service providers spend inordinate time, money and effort attempting to keep an accurate account of their physical and logical network resources. Many service providers employ multiple inventory systems with varying levels of accuracy, and conduct audit and accounting exercises to reconcile differences between the network "as-designed," "as-built," and "as-is." Service providers source, collect and cleanse data that contains information about location, configuration, deployment and the use of network equipment, so that the service provider can activate and efficiently provision services.

With service providers paying more attention to their data quality and integrity problems, the importance of D&R has increased tremendously in the last few years. But what was once a specific operations solutions and core component of OSS is now viewed in a much broader context by service providers. With the focus on customer experience and operational excellence, service providers have realized that data quality problems are not just restricted to OSS, but also exist on the BSS side. Hence we are seeing D&R being not restricted to fixing just operational inefficiencies, but going beyond that to fix revenue optimization problems.

Most BSS vendors talked about how they can ensure service providers' profitability by arming them with the tools to comprehend and capitalize on customer insight in real time. BSS vendors discussed the need for prepaid and postpaid convergence as a key mechanism to drive adoption of next-generation network-based, value-added services. The effective use of analytics, coupled with online charging, is viewed as a critical requirement for most carriers looking to roll out more innovative and personalized service offerings. A dynamic real-time or near-real-time offer management capability, based on subscriber network usage and traffic-based promotion, loyalty points, event-based promotion and rules-based promotion will be critical for BSS vendors.

There was also lot of discussion around growth in data traffic and what operators need to do to optimize their revenue stream. It is well understood that established operators must reconsider how they manage network traffic, move beyond flat-rate service models to tiered and personalized services, and reconsider their core revenue streams. Not surprisingly, the congruence of policy management with real-time convergent charging solutions was discussed at length at the show. Key vendor messaging came from Amdocs, Openet Telecom Ltd. and Telcordia Technologies Inc. around this topic.

Cloud-based services and video anywhere was also discussed at length. Vendors such as Sigma Systems and Oracle Corp. (Nasdaq: ORCL) discussed ways to streamline the service delivery value chain so that these services can be delivered, provisioned and maintained across different device touch points with high automation and expected QoS.

Overall this was an impressive show, where critical issues impacting communications service providers were discussed at length. Though TM Forum did try to address how other verticals -- such as utility, defense, enterprises, etc. -- can work with service providers, I felt those initiatives lacked momentum. TM Forum needs to do more work in order to be relevant beyond the communications marketplace.

— Ari Banerjee, Senior Analyst, Heavy Reading

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