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OSS/BSS: a never easy, never-ending story |
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| Monday, 28 June 2004 | |
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Support systems add brain to the network brawn of modern telecom
operators. At last, their strategic importance is getting the respect
it deserves…
In the view of Martin Creaner, CTO of the TeleManagement Forum (TMF), the board-level management teams of established telecom service provider companies used to view operations support systems (OSSs) and business support systems (BSSs) as necessary - and mostly separate - evils. Likewise newer - and supposedly more savvy - wireless operators have not always accorded these sets of service support functions very much significance. "The boards of many mobile companies were obsessed with getting radio equipment out there and selling handsets. After that, the idea was that they'd make the billing systems and the network management systems and so on somehow work - something would happen", Creaner recalls. "It was very much an afterthought rather than part of a strategic move." Today, if you believe only half of what sections of the telecom management support industry claim, this mindset is being replaced by one in which senior management's commitment to the cause of better OSS/BSS borders on the devotional. Burn and slash Obviously the near-collapse of the global telecom business greatly helped concentrate executive attention on the need to cut costs in the face of declining, stagnant or uncertain revenue streams. Chopping capex was an obvious place to start and, as is witnessed by the recent and continuing business woes of some major players in the telecom manufacturing industry, service providers of all stripes have approached this with considerable gusto. Job elimination was another ready first response to the downturn in telco share prices. Again, this was pursued with some vigour by certain companies. However, although no two service providers face exactly the same commercial make-over challenges, it turns out that taking the axe to capex and shrinking the number of worker bees may not by themselves be sufficient to restore telco financial health. According to an estimate cited by JR Lowry, a partner at McKinsey & Co and the author of a keynote presentation at May's TeleManagement World conference in Nice, the US RBOCs will need to reduce unit costs by more than 25% by 2008 to preserve current margins. Doubt has been expressed whether reducing new capex - even to zero - would deliver cost savings of this magnitude. Nor is zero capex really a sustainable option. At the same time, TMF chairman Keith Willetts characterises telco capex freezes and job un-creation campaigns as simply 'eating the low hanging fruit' in the quest to cut costs and bolster efficiency. According to Willetts, all this easy fruit has now been munched. Awareness of the limitations of what long-term capex and job reductions can realistically achieve has pushed opex reduction into the spotlight. And improved OSS and BSS solutions and capabilities are now seen as fundamental to better control of opex. The low down In the current telecom climate, lowering a service provider's operating cost base is not a trivial exercise. As an example (and by its own account), former UK monopoly BT has latterly been quite good at ongoing incremental shrinkage of its cost base. However, according to Phil Holmes, CTO of BT's research, technology and IT operations arm BT Exact, gradual efficiency gains no longer cut the desired mustard. "What we have discovered… is that if you are looking for cost transformation, simply being more efficient and automating more isn't enough", says Holmes. In BT's case, more radical cost reduction hinges on a plan to flatten the UK's national wireline network. Already started, but with no publicly projected finishing date, the 21st Century (21C) network transformation programme involves reducing BT's present network of 170 core switches, 1,000 voice switches and data cross connects, 100,000 remote concentrators, DSLAMs and data muxes, and 80,000 primary connection points (PCPs) to a much leaner arrangement of 10 core routers, 100 metro routers and 30,000 multi-service access devices. AT&T is likewise contemplating some heavy-duty legacy network system change-outs. AT&T Labs CTO/CIO/President Hossein Eslambolchi was last year reported to be looking to retire up to 320 legacy systems (or 95% of the total AT&T inventory) by the end of 2005. But concentration on cost-cutting to the exclusion of all else has its own dangers. In Nice, Willetts noted that in the recent telecom past many service providers have looked seriously at improved customer satisfaction and getting new services to market more quickly as possible means of re-energising their businesses. Subsequently, though, the emphasis has been all about cutting operating costs. "Lately, slashing operating cost has become the dominant leg of that 'three-legged stool' and that's meant that customer service levels have, in many cases, deteriorated badly. And new services are still very difficult to bring to market quickly - at least in a scaleable and sustainable way", he contends. "Some companies are now in a dangerous cost-cutting 'death spiral' where cuts lead to poorer services; customers desert to the competition and that increases the pressure to cut more cost. And that can be a very difficult spiral to get out of." All change As well as the need to fix the bottom line in the face of the industry-wide downturn, any new service provider enthusiasm for slicker OSS/BSS capabilities is a reflection of the changing systemic nature of the telecommunications industry. Although there hasn't been enough in the way of successful competition to please everyone, everywhere - and although many incumbents still rule their national roosts - today there's patently much more contention for the available telecom market 'pie'. Competition is increasing within sectors and across sector boundaries, and within geographies and across geographic boundaries. Ongoing regional and national regulatory initiatives look likely to continue to lower barriers to market entry and circumscribe the future options of the still-dominant market players. The message is: service providers have just got to be better and quicker and more cost-effective at what they do and what they deliver. On the technology front, IP is now seen both as a facilitating and a disruptive force in the industry and, as McKinsey & Co notes, technology shifts imply complementary changes to processes and systems. "New services - IP services, DSL, optical and more advanced wireless data services - have really driven the business case for much more flexible and powerful management platforms", agrees Matt Desch, CEO of Telcordia Technologies; "and we think that's going to happen a lot more in the next couple of years." In part, as Lowry observes, the introduction of new services is driven by the need to mitigate the commoditisation of basic transport. Detailing the build-up of one major telco's new service launch regime, Saverio Orlando, Head of the OSS Department at Telecom Italia Information Technology, has observed that in the early 1990s his company used to add one or two services per year. In the late 1990s, the total went up to four or five. At the end of 2003 Saverio reported that Telecom Italia was then adding more than 20 new offers per year. In the meantime, the tempo of the market is shifting into a higher gear, particularly in the wireless sector. As Creaner points out, telecom product lifecycles - development, marketing, introduction and shelf-life - have traditionally been multi-year affairs. The lifecycles of some products can now be measured in months or weeks. Again, the implication is that OSS/BSS competencies need to beome much more nimble. Makes progress The TMF and other organisations currently articulate a vision of the 'lean operator'. Realising the TMF version of this vision will entail some ruthless root and branch changes to a telco's business philosophy and methods, along with some very significant investment in new support systems. "Out will have to go all of those ineffective and costly service-specific networks, which will be replaced by massive common, multi-service IP networks", argues Willetts. "Out will have to go all of those replicated and fragmented order handling, service assurance and billing stove-pipes. Out will have to go organisations built around the network in favour of structures built to service the customer." As business role models for the new trimmer telco, Willetts cites Dell, EasyJet, Toyota and Tesco and, maintaining that commodity businesses can be extremely successful if they have the right business formula and that good profits can be made from razor-thin margins, BP and WalMart The key technology element in the TMF's 'Lean Operator' initiative is the 'New Generation Operations Support and Software' (NGOSS) programme. This is an integrated framework for developing, procuring and deploying operational and business support systems and software. NGOSS is delivered as a toolkit of industry-agreed specifications and guidelines, and packaged as follow-on 'Releases' approximately once every six months. NGOSS includes four main components: the definition of the next generation Business Process Map for analysis of current and planned business processes delivered as the 'Enhanced Telecom Operations Map' (eTOM); the definition of the Information Model to provide a foundation for solution analysis and design, delivered as the 'Shared Information and Data' model (SID); the specification of a Contract Interface and 'Technology Neutral Architecture' (TNA) for common solution architecture, delivered as the TNA suite of documents; and development of a compliance programme to certify solutions and products for conformance to the NGOSS specifications. The NGOSS initiative is informing the transformational strategies of both BT and AT&T. Telecom Italia's company-wide DSL provisioning system is also NGOSS-compliant. Roll-out of this system, which included TIBCO bus-integrated COTS products from Granite Systems, Syndesis Limited, Micromuse Inc, Concord Communications Inc and Opnet Technologies Inc, was completed in 2003. The system allows Telecom Italia's Domestic Wireline Division to provision some 25 separate DSL-based services, processing - according to some reports - service peaks of 21,500 orders per day. Telecom Italia is extending the NGOSS platform to new network domains, including switched voice, transport, and intelligent networks. Endless game The number of testimonials to the value of the NGOSS approach is growing steadily and the applicability of the TMF's work is being strengthened by the growing roster of industry groups and standards bodies with which it liases and collaborates. Earlier this year the eTOM was formally approved by the International Telecommunications Union as an ITU-T recommendation, the first TMF standard to be so elevated. The expectation is that more will follow, beginning with the TMF's body of work on the human machine interface (HMI) of management systems. With all this stuff already available and more coming down the OSS/BSS turnpike, is there a possibility that we are approaching the beginning of the end of telecom management history? No chance, say the experts. From the OSS/BSS user perspective, weight loss will need to be maintained, although whether many service providers have yet grasped this verity is questionable. "I speak to many executives who realise that they have to make a step change in their operating efficiency, but very few who seem to understand that it's going to be a permanent way of life", observes Willetts. From the standpoint of both users and developers, technological and service innovation is not likely to come to a full stop - and neither is the attendant requirement for new OSS/BSS solutions. "There is never any end. Maybe we can solve all the problems today that relate to the challenges of ten years ago. But then you look at the next ten years - we haven't even thought of some of the problems that will need to be solved", concludes Creaner. On a flippant level, this implies that a career in the OSS/BSS arena is truly a 'job for life'. More seriously, it is of vital importance as the telecom industry renews its efforts to move into a more profitable modus operandi. John Williamson |
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