Communications, Media, andEntertainment IndustryViewpoint paper                             overcome                      ...
Table of contentsA clear consensus for transformation ..........................1HP viewpoint ...............................
Most communications service providers(CSPs) are talking and thinking about it,but few know what to do first. With the righ...
Siloed architecture—Another challenge is the siloed         Monolithic or nonstructured architecturearchitecture of many l...
could offset the costs of keeping up with network            No consensus on how to transformbandwidth demands. Transforma...
Clients around the globe are undertaking projects that      In this example, The Challenger hires only a handful ofrequire...
Additionally, HP estimates that start-up costs are only     The Incumbent’s commercial mobile division soughtabout 60% of ...
Map your own road to success                              Our Global Program Management Architecture                      ...
HP RightStep uses a patented method and process            Now, getting cash amounts to a quick stop at theset for enterpr...
A converged infrastructure requires enterprise-wide           payback typically needs to be short.” Unfortunately,integrat...
lowers labor costs but frees you from the time and           Do it now                                    expense of staff...
About the authors                                       Harry Hendrickx                                                   ...
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Achieving the optimal Business Support System and
Operations Support System transformation

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Viewpoint paper

  1. 1. Communications, Media, andEntertainment IndustryViewpoint paper overcome the hurdles to business transformation. Communications service providers worldwide are looking for ways to reduce costs and total cost of ownership, stimulate revenues, improve the customer experience, and increase customer loyalty. One solution is a business support and operations support systems transformation that yields a competitive advantage.
  2. 2. Table of contentsA clear consensus for transformation ..........................1HP viewpoint .........................................................1Why transform? ......................................................1No consensus on how to transform.............................3Two roads to transformation .....................................4Map your own road to success ..................................6Take an enterprise approach for the long term .............6Standardize requirements capture and communications .... 7Maintain control when mobilizing suppliers .................7Redefine your business model ....................................7Design with integration in mind..................................7Explore new investment strategies ..............................8Keep it COTS ..........................................................9Do it now ...............................................................9About the authors .................................................. 10
  3. 3. Most communications service providers(CSPs) are talking and thinking about it,but few know what to do first. With the rightapplications, information, and technology,CSPs can redefine their business model andundertake a transformation strategy that willlead to success. Communications service providers are facing a major HP viewpoint decision—how to transform their businesses to become more agile, grow market share, and reduce costs— Although there seems to be a clear consensus for while improving their customer experience and transformation, HP has found that many CSPs are satisfying the ever-increasing demand for bandwidth- hesitating, because transformation is a costly, lengthy, greedy applications, online entertainment, and and disruptive process. At HP, we know the risks. yet-to-be-developed services. Whether you are transforming your BSS/OSS or your entire business paradigm, transformation demands experience and maturity in developing large programs. A clear consensus for transformation It also requires strategic planning expertise to align with CSPs are nearly unanimous in their conviction that business goals and go-to-market strategies. they need to transform to grow and compete against This paper demonstrates how HP can bring to new challengers, such as Google and Apple. This bear its technological capabilities, expertise, and consensus for transformation is detailed in a Business decades of experience in the communications, media, Transformation Research Project carried out by Frost and entertainment (CME) industries—particularly & Sullivan on behalf of HP between May and August telephony—to help CSPs cope with the seemingly 2010. Frost & Sullivan interviewed 32 top-level CSP overwhelming, time-consuming, and risky process of executives from Europe, Asia Pacific, India, the United change and transformation. States, Canada, Latin America, and the Middle East. • 96% said transformation is needed now. Why transform? • 88% said they were either currently engaged in or had completed a transformation project in the past There are many reasons why CSPs are looking to 12 months. transform their BSS/OSS. The following sections examine how outdated, homegrown, and overly • 65% said they will institute a new transformation complex BSS/OSS are inhibiting CSP success. project within the next 12 months. Outdated BSS/OSS applications The CSP executives interviewed for the study were The successful convergence of telephony, computing/ also in solid agreement about the business segments IT, entertainment, gaming, media, and advertising are they would target first for transformation: information placing unprecedented demands on currently installed technology (IT) operations and maintenance and BSS/OSS—demands that many legacy systems were network infrastructure. Many respondents cited their never intended to meet. These include converged Business Support Systems (BSS) and underlying billing, customer self-service, fraud prevention, new Operations Support Systems (OSS) as a key privacy regulations, credit risk calculation, flexible focus of their transformation efforts. In particular, pricing strategies, and individual customer usage operators identified customer care, billing, customer allowances that can be adjusted in real time. management, and business intelligence/analytics as first-priority projects. 1
  4. 4. Siloed architecture—Another challenge is the siloed Monolithic or nonstructured architecturearchitecture of many legacy systems. Typically, CSPs BSS/OSS that are running on outdated IT infrastructuresinstalled separate BSS for each new major product line. typically have a higher total cost of ownership (TCO)This resulted in a plethora of highly complex application when compared to more modern and nimblesilos, which contain redundant functionality and architectures. Most legacy IT does not incorporate arequire duplicate operational and network resources. service-oriented architecture (SOA), which enablesThese silos cannot interact with each other for lack of easy integration within the BSS/OSS stack, with thebuilt-in integration layers or an application programming network, and with external or third-party resources.interface. Plus, they cannot be integrated with other Without built-in integration layers and multidirectionalsystems for customer relationship management (CRM) interfaces, CSPs cannot leverage the standardizedor billing, for instance. and streamlined processes and services that generate efficiencies across the enterprise and reduce overall TCO.Home-grown solutions—Worse yet, sometimeslegacy systems are built on outdated, home-grown Older systems are frequently dependent onapplications that are fraught with complicated nonvirtualized servers or nonoptimized datasolutions. Layer after layer of customization has been centers that require expensive human resources tobuilt on top of applications that were written in-house operate and support, uneconomical storage, andmore than a decade ago. Out-of-control customization nonecological cooling systems. Outdated IT is usuallyhas not only made these systems complex and inefficient, nonredundant, duplicate, and inflexible.unwieldy but in some cases, has effectively buried the This is because it was rarely built specifically tooriginal source code. optimize BSS/OSS operations but was extended ad hoc over the years to accommodate additional BSSSome legacy in-house systems no longer comply with applications and updates.the CSP’s internal standards or government regulations.In situations where the BSS were built on commercial Data and bandwidth explosionpackages, pieced together from various vendors, Five years ago, no one in the telecommunicationslicenses have expired, many of the vendors have gone industry could have predicted the explosion of data thatout of business, and support is no longer available. is transported across every operator’s network today. Data proliferation has become such a concern thatInflexible and slow to market—As a result, Frost & Sullivan calls it a “major new business driver.”legacy systems are highly inflexible. Minor pricingor regulatory changes require expensive, time- Frost & Sullivan cites a study1 published in June 2009consuming, and manual coding efforts, because the showing that data traffic increased four-fold in lessbusiness logic and workflows are hard-coded into than a year, from 5 to 6 gigabytes per second (GBps)each application. Moreover, data must be maintained at the end of 2008 to 24 GBps in October 2009. Theacross multiple systems and checked for consistency study also noted that mobile data traffic is projected toacross the portfolio. Thus, legacy systems are double every year through 2013, which amounts to aexpensive to run, operate, and support. compound annual growth rate (CAGR) of 131%.Lack of business intelligence—Most legacy systems Network operators are struggling to keep up thiswere designed for batch processing, not real-time data explosion. They are worried about how they willbilling, charging, and business intelligence solutions. pay to build the networking infrastructure needed toConsequently, they lock CSPs into a flat-rate pricing handle the world’s increasingly voracious appetite forstructure. They do not support CSP needs to obtain bandwidth. And they are doing so amid a downwardand analyze critical customer data that is required for pricing trend that is evident around the globe.today’s pre- and post-paid charging models, pricing Some operators are looking at BSS/OSSflexibility, and product bundling. Legacy BSS also transformation as a way of bringing in new revenueeliminate the cost-saving potential of online customer to help pay for the next generation of networks.self-service options and the benefits of improved Implementing new BSS/OSS will enable the newcustomer intimacy and loyalty. Most importantly, services, revenue streams, and pricing structures thatlegacy systems impede the launch of new productsand services. 1 Published in the Frost & Sullivan Stratecast report of January 2010, entitled “OSS/BSS Global Competitive Strategies (OSSCS), Volume 11, Number 1. The study Stratecast cited is a Cisco report, “Cisco Visual Networking Index: Forecast and Methodology, 2008-2013”, June 2009. http://www. cisco.com/en/US/solutions/collateral/ns341/ns525/ns537/ns705/ ns827/white_paper_c11-481360_ns827_Networking_Solutions_White_ Paper.html 2
  5. 5. could offset the costs of keeping up with network No consensus on how to transformbandwidth demands. Transformation will also helpdecrease telecom operators’ IT footprint, maximize Although there are innumerable reasons to transformefficiencies across the enterprise, and wring out IT legacy BSS/OSS—and the Frost & Sullivan study showscosts wherever possible. Smart operators will refunnel that the desire to transform is nearly unanimous—there isthe savings derived from lower cost operations to no consensus on how to make transformation happen.network expansion. The following sections highlight some of the more typical approaches deployed in the market today.Equally important, transformed BSS will enableoperators to make sense of the massive amount of The “greenfield” approach for new-market entrantsdata crossing their networks. Business intelligence In many ways, deciding how to proceed is easiest forapplications will enable CSPs to track customer usage new entrants into the field, particularly in Asia Pacificpatterns and institute new, multitiered charging plans or the Middle East, where the average revenue perbased on those patterns. Customers who want faster user (ARPU) rates are among the lowest. Greenfielddownloads will pay a premium, and heavy users will operators must build from the ground up and canbe charged more than those increasingly rare take advantage of the most recent technologicalindividuals who use their mobile telephones solely developments to build highly integrated, converged,to make calls. and agile infrastructures that will deliver the lowest- cost services for years to come.Complacency and the fear of changeTwo of the biggest inhibitors to transformation are the A range of approaches for well-established CSPshuman frailties of complacency and fear of change. Although well-established CSPs don’t have such anThere is widespread reluctance to re-evaluate business obvious choice as newcomers, they do have a widerprocesses. All too often, CSPs use the complexity range of options. Here are the three most common:of their BSS/OSS as an excuse to delay or forego • Band-aid fixes, the most inexpensive approach—transformation. Quick fixes may mitigate issues resulting from structural complexity but will result in an increase inIntroducing a new system often can be seen as too complexity and costs in the long term.risky and expensive to contemplate. Customers mayopt to stay with a stable—but less flexible—system • Application modernization, an important first step onthat will only grow more complex and expensive to the road to business transformation—If undertakenoperate in the coming decade. HP would suggest as individual projects, however, modernization“leapfrogging” the legacy system, bit by bit, to a can result in isolated efforts that don’t resolve thefuture-state platform that would remove much of the structural issues of legacy systems.risk from the situation. • BSS/OSS transformation, a comprehensive approach—Transformation yields the most effectiveIf employees are accustomed to complex and long-term benefits and enables the new businessunwieldy systems, they assume they will always models that are necessary for future competitiveness.be that way. So change seems unnecessary, andprocrastination comes easy. End users want their Some HP Tier 1 CSP customers in Europe currently aresystems to look and work like their legacy systems. funding studies to weigh the efficacy of completelyProduct managers fear they will lose customers if abandoning their complex, inflexible, and expensive-they drop one or two services—although they will be to-operate legacy systems and replacing them withreplaced by services that have the potential to grow new BSS/OSS. The data migration this approachrevenue and market share. requires can be done in a controlled way. So CSPs are justified in their belief that this greenfield approachThus, emotions can prevent both change and business is worth the risk and expense, because it will enablegrowth. A highly controlled and well-organized them to launch new products and services quickly,transformation process is the best antidote for gut generate new revenue streams, and stay ahead offeelings and fear. Such a transformation process starts the competition.with an enterprise architecture, which provides anoutline of the strategic direction, takes into account thechallenges that will be encountered, and puts specificsteps in place to mitigate potential risks. 3
  6. 6. Clients around the globe are undertaking projects that In this example, The Challenger hires only a handful ofrequire the migration of massive amounts of data. Two executives by the time it schedules its first meeting withsuch projects involving HP include a human resources HP. The client has no offices and no infrastructure—migration for a large telecom operator in Western just know-how and a clear vision of how it wanted toEurope entailing 150,000 entries; and a new billing proceed.system for a North American telecommunications From the start, The Challenger and HP determine thatcompany involving 450,000 accounts. the only viable strategy for meeting the project’sThe total transformation approach differs considerably extremely tight deadline and budget is to achieve thefrom the choice popular with many North American lowest possible TCO by using the following components:operators whose budgets are constrained by fallout • A fully outsourced modelfrom the global recession. Many North American • Commercial off-the-shelf (COTS) applicationsCSPs applied all the quick, inexpensive band-aid fixesthat were financially feasible over the past two years, • A service-oriented integration architecturebut yielded limited results. Naturally, the infrastructure has to be carrier grade,Now the forward-looking ones are seeking a use the TM Forum’s frameworks, and comply with allcomprehensive, step-by-step approach that will government-mandated regulatory standards.enable them to: The Challenger supports HP’s approach to a BSS/• Offer converged, IP-based services OSS stack that is as generic as possible to keep costs• Achieve customer intimacy down and speed implementation. Customization is kept to an absolute minimum. HP estimates a• Leverage regional and consumer offerings substantial amount (conservatively estimated between• Deliver more comprehensive network- and platform- 5% and 10%) of the COTS code is rewritten, primarily based services to their enterprise accounts to create interfaces for security, banking, and otherThey are also using BSS/OSS transformation as a way unavoidable system personalization.to amortize the capital expenditures (CAPEX) required Serving as the system integrator for the project,to institute these new offerings over a period of time, HP works to assess requirements; draw up theand to lower their TCO to lower their pricing structures implementation road map; set and manage theinto the future. budget; and configure, test, deploy, and run the system on a multiyear maintenance agreement.Two roads to transformation HP also recommends to develop target enterpriseThe following examples show two companies’ architecture that will help ensure the CSP can meetdistinctly different routes to transformation success. We future requirements.refer to the profiled companies as “The Challenger” Because The Challenger has not yet established aand “The Incumbent” in the examples. physical location, HP has to work on many aspectsThe Challenger example focuses on a hypothetical of the projects remotely. Data centers in one countrypartnership between HP and a new company, formed were used to temporarily support development andby a large mobile telecommunication provider. testing until a new center was established in theWorking together at amazing speed, HP and The company’s home country. Hardware is configured andChallenger can build an entire telecommunications tested in a third country and transferred to the newinfrastructure and deliver dependable voice and data center, while it is still being built—only two weeksmultimedia mobile services in about six months—a before user acceptance tests begin. HP also runsremarkable feat. testing phases in parallel with other implementation processes, because time limitations preclude HP’sFrom greenfield to challenger in six months standard testing cycles.When The Challenger’s global parent company winsthe license to start a new mobile telephone company In all, the HP and The Challenger project achievesin an emerging market, it knows it has its work cut out remarkable results. Not only does the project meet thefor it. Not only will it be challenging the market’s only six-month activation deadline, but it also meets all costmobile provider, but it will have to guarantee service objectives. At the end of the first year of operation,delivery within six months. And when HP signs on to HP has already reduced CAPEX of the BSS/OSSdevelop, deploy, and run the entire operation, HP environment to near 2% of revenue, well ahead ofagrees to cap CAPEX for the BSS/OSS environment at schedule. That’s a considerable savings, becausea very ambitious percentage of the company’s revenue comparable BSS/OSS environments run an estimatedafter the second year of operation. 4% to 6% of revenue. 4
  7. 7. Additionally, HP estimates that start-up costs are only The Incumbent’s commercial mobile division soughtabout 60% of the typical greenfield venture. And a new billing solution to facilitate the launch of newwhen The Challenger launches new start-ups, the high-speed wireless offerings as part of a marketCAPEX costs for each new venture are expected to expansion strategy. They were convinced that a newdrop by about another 40%, because the company billing solution would help them compete againstcan leverage the existing infrastructure and human low-cost competitors that recently entered the market.resources that HP already has in place. It could also provide the business intelligence and analytical capabilities needed to target specificThe Challenger is on target to capture significant customer groups with new services, product bundles,market share from the incumbent provider. Customers flexible payment plans, and less expensive customercan set up prepaid, postpaid, and flexible charging self-care options.plans and pay their bills online. Some plans evenreplenish used minutes automatically to guarantee Although exact figures are not available at this time,service continuity. Additionally, customers can the HP-managed billing system is expected to save Thepurchase from a range of mobile phones and Incumbent many millions over the projected 10-yearaccessories from an online store and a growing life cycle. For starters, HP reduced operating servicesnumber of retail operations. run rates to one-fourth of The Incumbent’s previous annual outlay for similar outsourced services.The real rewards come when The Challenger launchesmore start-ups, leveraging HP’s industry best practices. Other savings resulted from the new platform, whichIn fact, HP standardized these best practices in a new replaced more expensive mid-range server andoffering, Telco Express. The offering will provide a mainframe components with a Linux/Open Systemsrepeatable and cost-effective IT infrastructure model for architecture that uses less expensive hardware anddeploying new telecommunications companies in embedded third-party products. Storage costs weremarkets across the globe. reduced by adding a locally attached SAN solution and eliminating third-party services that were previouslyThis approach is not limited to greenfield launches; it engaged to maintain tape and system back-ups.also makes sense for incumbent Tier I operators willingto build a single, new, strategic platform. The platform More importantly, the converged SOA has enabledthen would be shared and exploited by multiple The Incumbent to rethink its outsourcing strategy andsubsidiary operating companies, reducing global squeeze out costs in the process. Instead of trying tooperational costs substantially. reduce outsourcing costs by consolidating services, it now focuses on consolidating the platform. WithBilling transformation through step-by-step converged IP, the commercial mobile group is ablemodernization to bill for multiple services such as VoIP, IPTV, InternetThe next example is an HP case study that focuses access, and wireless, using a common billing platform,on a long-established telecommunications provider in a single mediation and rating solution, and a commonNorth America—The Incumbent. This case represents order-entry application. They are also able toan approach that takes a middle ground between BSS seamlessly interface with the CRM solution to producetransformation and applications modernization. The a consolidated bill by customer.Incumbent partnered with HP to develop an enterprise-wide approach that would govern numerous but The new billing system, running on a convergedseparate modernization projects. This would eventually HP platform, will enable The Incumbent to replaceresult in a total transformation of the company’s billing call centers with less expensive, self-service options,capabilities over a number of years. institute usage caps, offer different rate structures based on consumption patterns, and offer pre- andThe Incumbent started the process by hiring HP to post-paid billing plans—none of which were possibleimplement a new billing system for its commercial with The Incumbent’s previous BSS/OSS.mobile segment, which would deliver packaged-basedbilling services and identify an enterprise-wide BSS/ Equally important, The Incumbent’s new outsourcingOSS applications architecture. Next, the client plans to policies have also helped it formulate investmentleverage lessons learned from the first implementation strategies for funding future projects. By outsourcingto deploy integrated billing systems in the wireline, billing systems management, our client was able tobroadband, TV, IPTV, IP Centrex, Voice over IP, and shift a significant portion of the project’s CAPEX toenterprise segments. The ultimate goal is an integrated OPEX, making the cost structure more manageable forbilling solution that delivers a single view of each the company’s year-end balance sheet.customer across all offerings and business units. 5
  8. 8. Map your own road to success Our Global Program Management Architecture (GPMA) uses state-of-the-art tools and techniques toKey concepts Because many CSPs will undertake a BSS/OSS assess, prioritize, design, and implement processes.for a successful transformation project in the coming year, the time has This gives clients high-level visibility into program andtransformation come to decide how to proceed. To be successful, you project essentials such as value, quality, and risk. must have a clear vision of the desired end result. Any• Take an enterprise approach transformation project must be explicitly aligned with GPMA provides a consistent methodology across all for the long term. the company’s business objectives and IT goals. programs by using common definitions, processes,• Redefine your business model. tools, templates, and best practices. This ensures the• Standardize requirements To gain consensus, all stakeholders must be consulted smooth interaction of interdependent projects and capture and communications. and convinced that the change will benefit them. the realization of prioritized business goals. Most• Maintain control when Funding must be found, risk must be minimized, and a importantly, HP is adept at modifying our tried and mobilizing suppliers. solid plan with phased deliverables must be carefully true approaches to ensure that clients transform their• Design with integration defined and articulated. business paradigm, as well as their BSS/OSS and IT. in mind. It doesn’t have to be that hard• Keep it COTS. The prospect of undertaking a transformative initiative Take an enterprise approach for the• Do it now. seems overwhelmingly complex to some. In fact, long term 54% of the executives interviewed by Frost & Sullivan Band-aids, quick fixes, and siloed projects do not indicated that executing such programs was one of work in today’s climate of converged technologies, their organization’s weakest talents. Even those CSP merged companies, and consolidated resources. CSPs executives who felt confident that program execution are accustomed to taking the long view. No carrier was one of their strong points (43%) said they would would build a network if it wasn’t convinced it would rely on external consulting and outsourcing services to produce revenue for years to come. help them define and implement the project plan. In fact, 36% of all CSPs interviewed said that outsourced It’s time to transform the way you think about your implementation and delivery consultation services BSS/OSS stack. It’s no longer a bunch of applications were “critical” to their success. but a long-term investment that is as necessary as the network. And like the network, it’s how you use your What does it take to find a partner with proven BSS that keeps the revenue flowing. resources to achieve transformation? Look for a vendor with applications development and Before implementing another tool or updating another maintenance expertise, as well as experience application, take the opportunity to review your transforming portfolios specifically for the company’s BSS requirements from a global, enterprise communications industry. You need a provider that perspective. One-off projects, although less expensive has developed program implementation, mobilization, in the short run, will not deliver the interconnectivity or and execution methodologies that has proved to be system-wide capabilities needed to deliver business successful for Tier I and Tier II CSPs in major and intelligence—the true source of tomorrow’s competitive emerging markets. That vendor’s methodology should edge. Even if you can’t afford a large-scale establish an effective governance process that delivers transformation project right now, spend your resources the best IT, enables multisupplier management, on a road map that will help you prioritize projects and manages change, and controls costs. ensure that they work together to deliver efficiencies and capabilities across the entire enterprise. Whether you decide to go it alone or rely on external resources to help transform your BSS/OSS, HP offers HP RightStep some carefully considered suggestions for developing Our proven methodology, HP RightStep, takes an a successful transformation strategy. enterprise approach to transformation planning. This helps clients identify and prioritize initiatives and Global program management optimize IT investments in a manner that best supports HP uses a proven approach to transformation. Our the enterprise’s business goals. methodology provides the structure and governance needed to successfully develop and run a client’s enterprise programs portfolio and individual programs for a maximum return on investment. 6
  9. 9. HP RightStep uses a patented method and process Now, getting cash amounts to a quick stop at theset for enterprise architecture definition and strategic corner ATM whenever it’s convenient. Foot traffic wastechnology transformation planning. It enables so reduced that banks were able to pare down theHP to work with clients to define a strategic IT teller staff, leaving a lot of empty real estate in thedirection, future-state enterprise architecture, and lobby. In the United States, some enterprising bankersa transformation plan so they know where they’re subleased the space to become coffee shops, insuranceheading and where they should be at every step of agencies, flower stalls, and even art galleries. Othersthe process. closed branches and created tiny ones in supermarkets and malls. Recently, some European bankers haveStandardize requirements capture transformed their lobbies to look more like living rooms,and communications furnished with comfortable chairs and computer terminals that are configured solely for online banking.An HP transformation plan standardizes requirements If you want to talk to a teller, you need to make ancapture and communications. This type of standardization appointment and pay for the privilege.ensures traceability and inclusive communication to allstakeholders during the transformation process. After It’s time to transform your identity. You’re obviouslydeployment, it will ensure sustainable maintenance of not a telephone company anymore. Most CSPs havethe business and IT services. moved beyond wireline and are offering a variety of services that range from wireless to cable TV toOne of the major challenges while seeking to VoIP. But many are still focused on transmission andmodernize the application landscape is understanding reception. The CSPs that can bundle entertainment,the business value of the IT services. HP’s enterprise gaming, and information assets in ways that offerarchitecture approach—based on open standards exciting new services and capabilities to theirarchitecture, industry standards, and best practices— customers will dominate their markets.provides a controlled language and method to conveyand maintain requirements. Similarly, CSPs that attempt transformation with yesterday’s thinking and tools will wind up with yesterday’s results. Have you thought about cafés orMaintain control when mobilizing art galleries lately? Or instead of the same old long-suppliers distance plans, have you considered transformingSome CSPs do not possess the insight required for a cell phones into credit cards? Dramatic changes insuccessful integration of OSS and BSS applications; your strategic direction require a comprehensiveothers lack the resources to cope with enterprise understanding of the properties of the new operationsarchitecture complexity. In both cases, CSP will often and a think-through of its implications.rely on the solutioning and costing of suppliers—asituation that can be exploited by commercial vendors. Design with integration in mindWhen working with a supplier, you should have a clear With the convergence of communications, media,understanding of an explicit integration framework, so and entertainment driving innovation and customeryou can maintain control over every phase—particularly demands, CSPs need to ensure their IT is built forthe project definition and vendor selection. You should convergence. This means a lean, agile, and highlyalso have access to all the major BSS/OSS vendors to integrated enterprise. As demonstrated in Thehelp you select the solution providers and applications Challenger case study, a BSS/OSS transformationthat work best within your framework. can simultaneously take advantage of three cost- containment elements:Redefine your business model 1. A fully outsourced model, using IT outsourcingSmart phones, the iPhone, iPad, DROID, and other servicesnew products are transforming the communications, 2. Commercial off-the-shelf applicationsmedia, and entertainment industries today—muchlike the ATM up-ended the banking industry decades 3. A well-designed, -deployed, and -executedago. Before the ATM, wage earners rushed to the service-oriented integration architecturebank before it closed at 3 p.m. on Friday to cash theirpaychecks and make sure they had enough moneyfor the weekend. The result? Long lines of impatientpatrons waiting for their turn with the teller. 7
  10. 10. A converged infrastructure requires enterprise-wide payback typically needs to be short.” Unfortunately,integration planning and building interfaces at every step: most BSS/OSS projects will not deliver a decent ROI1. Choose a system integrator that takes an in a year or even two. enterprise-wide, SOA approach and has the In this case, savvy managers are trying to steer their flexibility and capability to integrate all the internal customers away from using rapid ROI as products you select for your BSS/OSS stack. the only measure of success. Growing market share,2. Select BSS/OSS applications that offer prebuilt improving competitiveness, and launching new integration. The applications should not only be revenue streams are more accurate metrics. CSPs that architected as preintegrated product stacks; they forego transformation projects because of delayed should also have predefined business processes payback are in danger of losing market share to new, and preintegrated information out of the box. more agile entrants.3. Make sure your OSS architecture has multiple For certain, these new competitors will offer cheaper integration layers. Your OSS/BSS stack should rates or better services to churn through your be able to interface with your company’s other customers. Do you or your internal customers really BSS systems, plus the CRM and ERP solutions, want to take that chance? e-business portals, and more. Transformation is necessaryBy building integration capabilities into a converged Although the recession may have slowed progress, itenterprise, you will be able to consolidate siloed BSS, has not mitigated the need for transformation. In fact,reduce your IT footprint, and lower overall TCO. 43% of the executives surveyed by Frost & SullivanConvergence begins with an enterprise architecture say that the recession did not alter their view thatthat’s designed with integration in mind. The basis transformation is necessary. Another 43% say theof this is a modern data center with an automated, recession accelerated the need to transform.virtualized architecture. This architecture will reduce According to one respondent, “Our network platformsserver and storage hardware requirements, make and business process systems are getting outdated andmanagement easier, and reduce risk. are no longer capable of catering to the increasingThe data center should incorporate a comprehensive demand for wireless technology and mobility. This hasand cohesive monitoring and management framework caused the urgency for us to transform.”that is automated to respond quickly to requests and Consequently, CFOs and IT managers must work evenincidents. This not only speeds up critical decision- harder to get the funding they need for transformation.making but reduces operating and maintenance costs. Many are turning to clever schemes to convert CAPEXThe data center should be hardened with lights-out into OPEX. As shown in the previous case studies,operations, plus efficient, standardized tools and converting capital outlays into operating expensesprocesses to deliver high availability and accommodate generally involves turning over the day-to-day operationsnew business growth. Finally, convergence requires a of your BSS/OSS or IT infrastructure to outsourcedmultilayer network architecture that accommodates services—whether onshore, nearshore, or offshore.different types of traffic (applications, data, and coreoperations) and enables each network to be sized HP has found that the greatest opportunity forappropriately to avoid congestion, provide security, converting CAPEX into OPEX is through a multiyearand facilitate management. vendor contract in which the total project cost is divided by the number of years in the contract. This converts CAPEX into OPEX and also provides aExplore new investment strategies predictable, flattened monthly payment. HP frequentlyAlthough some regions bounced back from the global brings its leasing and financial services subsidiary,economic recession of 2008/2009, the 2010 credit HP Financial Services, into the opportunity to furthercrisis in Europe and the tepid overall global recovery reduce the initial CAPEX.continue to keep capital constrained through 2011.Generally, IT budgets remain tight and often are blamed Outsourcing can deliver further cost reductions.for delaying or resizing transformation projects. Allowing a third party to host your operations eliminates the need to build and maintain expensiveAnother reason why many transformation projects infrastructures. HP Enterprise Services estimateshave not moved forward is the growing demand that outsourcing the management of your BSS/OSSfor faster payback. According to one CSP executive can lower the TCO up to 30% over the life of yourinterviewed by Frost & Sullivan, “Increasingly, we applications by maximizing application performanceneed to show that an investment has a ROI, and and operating efficiency. Using Best Shore® not only 8
  11. 11. lowers labor costs but frees you from the time and Do it now expense of staffing and training technical staff. A fullyHP: Proven expertise, outsourced model was a key success component for The 30 CSP executives interviewed for the Frost &solutions, and quality The Incumbent and The Challenger and holds the Sullivan Transformation Study identified a wide range potential of similar success for you. of business imperatives for the coming year. BelowHP has 35-plus yearsof telecommunications is a synopsis of the internal and external drivers they cited for wanting to transform their IT and BSS/experience serving over Keep it COTS OSS environments.130 clients in more than 40countries. Our experience CSPs are old hands at innovation. The industry is • Reduce costs/TCO: Consolidate IT resources,serving more than 100 responsible for developing more than its share of optimize assets, and lower both unit costs andmillion subscribers with BSS/ remarkable new technology over the past 20 years.OSS is based on our ability overall TCO to compete on price. So the urge to develop home-grown solutions andto maximize the telecom • Stimulate revenues: Improve time to market of new tinker with generic applications is irresistible to manyoperating environment. HP products and services and generate new revenueoffers integrated business technologists. This is especially the case when end streams; offer more favorable and flexible pricingsolutions backed by the users balk at learning new systems and beg the structures to improve profitability; identify and createexpertise of thousands of technicians to customize them so they work “like they premium pricing plans for poor credit risks andCME professionals. used to.” bandwidth hogs.HP is unique in the depth and Technology, however, has become highly specialized. • Improve the customer experience: Implement newbreadth of its hardware,software, and services portfolio. Generally, the major BSS/OSS/CRM producers are business intelligence capabilities and analytics toWe deliver quality solutions capable of delivering a superior product at a lower create new product bundles and pricing structuresdesigned to lower total cost cost than any developed in-house. BSS/OSS are based on customer usage patterns; create specialof ownership and reduce becoming more akin to table stakes in a game of offers for high-churn candidates.risk by incorporating agile cards. It’s the investment you have to make to play thearchitectures, governance, • Increase customer loyalty: Offer lower-cost, game, and the smart player will keep that investmentconsistent quality, and security multichannel and self-service options to enhance as low as possible. COTS packages typically cost less,standards—from strategy customer access to support, boost customer are cheaper to run, and require fewer maintenancedefinition through convenience; increase customer loyalty andimplementation and and support resources than in-house systems. reduce churn.management. Customization is a sure-fire trigger for increasing costs,We use a proven, global Transforming BSS/OSS is the only way to achieve slowing implementation, and impeding time to marketdelivery methodology and these goals. What are you waiting for? If 96% of the for new products and services. By keeping customizationtools based on industry CSPs interviewed by Frost & Sullivan are planning to a minimum, rollouts, routine upgrades, andstandards and best practices. to start their own transformation initiatives this year,These include The Open maintenance all take less time and, consequently, cost there’s a strong probability that your competition isGroup and TM Forum less money. Some COTS packages have integration planning a transformation project, too.management standards and prebuilt into the entire solution stack. This furtherthe experience of our 3,700 reduces the complexity and expenditures associated Meanwhile, consumers aren’t waiting for you toCME Best Shore resources. with the platform’s integration layers by between 20% transform. They’ll switch to the company that offersThese include certifications and 55% during the application life cycle. them the best price and the coolest apps. And your(CMMI Level 5 Certifications, enterprise customers will defect to the CSPs that willISO 9000, Oracle certifications) COTS packages also simplify and speed up the help them generate new business and cut costs. Theand HP professionals process of making pricing or regulatory changes and time to transform is now.(including solution architects, launching new products. Changes no longer requireproject managers, and developing and writing code. The newer packagesMicrosoft technologists). provide a GUI that allows users to input changes orHP has long-term partnerships requests into a preformed table or template. Manywith the best BSS/OSS, CRM, don’t require a systems developer and allow lessand providers. expensive, nontechnical resources to make changes. New products can be launched in days instead of months, because today’s generic COTS only require users to model the new product in a test environment and then roll it out. 9
  12. 12. About the authors Harry Hendrickx Paul R. Voelker Harry Hendrickx is chief technology officer and Paul R. Voelker is director of communications solutions enterprise architect in the Communications, Media, at HP. His role in the Communications, Media, and and Entertainment (CME) industry unit at HP. In this Entertainment (CME) industry segment is to develop role, he is responsible for architecture management strategic solutions and facilitate relationships with the and support of large transformation programs. communications service providers and industry partners. Since joining EDS (now HP) in August 2007, Hendrickx Voelker joined HP in 1983 and has held various had several assignments as member of the Chief business development, sales, and marketing management Technology Office CME industry team. His approach positions. His systems and solution sales have been in is based on enterprise architecture with emphasis on the oil, defense, and telecommunications industries. business IT alignment. Voelker was the Americas marketing manager for the Hendrickx’s focus currently is on enhancing the CME industry, responsible for business development and architecture capability in outsourcing relationships, managing the CME solution center. He was director of as well as within organizational boundaries. One of business development for service providers in the his specialties is exploiting open standards such as southwest United States, responsible for developing The Open Group Architecture Framework and the go-to-market strategies and qualifying companies for TeleManagement Forum framework. strategic alliances and investment. He also was the HP global client business manager for MCI and has Hendrickx has more than 20 years’ experience in managed teams responsible for the entire range of business IT alignment and has held roles as business HP’s computer products, services, and solutions. consultant, business architect, and enterprise architect. Before joining HP, he obtained the highest certification Voelker has been a presenter at GLOBALCOMM and degree for enterprise architects at Capgemini. He also TM Forum’s Management World and has served on has published numerous articles and two books on the Texas Governor’s IT Cluster Committee. architecture and governance. Paul Voelker earned a bachelor’s degree in business Harry Hendrickx earned his master’s degree in administration from William Penn College. economics and a philosopher’s degree on governance from the University of Tilburg in The Netherlands. Share with colleagues Get connected www.hp.com/go/getconnected Get the insider view on tech trends, alerts, and HP solutions for better business outcomes© Copyright 2010-2011 Hewlett-Packard Development Company, L.P. The information contained herein is subject to change without notice. The onlywarranties for HP products and services are set forth in the express warranty statements accompanying such products and services. Nothing hereinshould be construed as constituting an additional warranty. HP shall not be liable for technical or editorial errors or omissions contained herein.4AA0-9713ENW, Created December 2010; Updated June 2011, Rev. 1

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