la Carte Outsourcing: A Model For The
BY JASON MORSE
At its inception the ASP sector was focused on the enterprise market,
ranging from small businesses to the Fortune 1000. The essential value
proposition of ASPs was that they offered applications such as word
processing or image editing, on an as-needed basis, essentially a business
of just-in-time, or just-for-a-period-of-time software distribution. The ASP
concept was quickly applied to other industries. CLECs, ISPs, and wireless
carriers recognized they could gain substantial benefits by partnering with
next-generation communication services to develop complimentary and
auxiliary voice services.
Within the communications ASP space, there are several segments of
service providers that specialize in specific core competencies including
billing, customer care, operations support systems, and voice applications.
The voice ASP space presents a unique opportunity and challenge. Because the
application or service will most likely be used directly by the consumer,
the quality of integration must be superior. The benefits for established
telecom carriers in partnering with a voice ASP fall into three main
categories. First, the financial savings for adding new product offerings is
drastically improved. Second, time-to-market, and more importantly
time-to-profitability, is greatly reduced. Third, the level of reliability
is immediately on par with mature services. However, not all ASPs are
created equal. The decision-making criteria used when choosing a partner is
key for insuring success.
THE BENEFITS OF PARTNERING
At the close of 2000, traditional telecom carriers came under enormous
pressure by investors and analysts to reduce costs and focus on growth
markets. AT&T (www.att.com), WorldCom (www.wcom.com)
and Sprint (www.sprint.com) have seen
their valuations tumble, with some companies looking for ways to divest
certain costly business units, even if they provide a healthy revenue
stream. Voice ASPs are ideally suited to help with these companies' growth
strategies. ASPs' services by nature require zero upfront capital expense
associated with equipment purchases. System capacity is purchased as usage
thresholds require. Carriers are ultimately interested in offering
value-added services to their customers and the ASP model is the
lowest-risk, highest-reward option. An easy analogy would be a deli
interested in providing sandwiches to customers. Buying an entire farm to
produce the meats and cheeses served would be an option, but it would be an
incredibly inefficient one.
In addition, there is no new training required for existing employees nor
is there a need to hire additional workers to deploy, maintain, or support
the service. In most cases, the communications ASP willingly accepts
responsibility while maintaining its core competencies. No additional
hosting real estate is required, nor do any additional OAMP or OSS systems
need to be developed.
Once the service is deployed with an ASP, the carrier transfers the risk
of buyers' remorse and obviates the concern that the technology will be
obsolete by the time the first service patch is released. The second key
benefit offered by ASPs to telecom carriers and ISPs is the tremendous
reduction in time to market. The architecture of the ASP business model
mandates that flexibility and custom branding are quick to develop,
implement, and launch. This highlights the ability to seize market
opportunities while telecom carriers and ISPs are in their infancy, creating
greater differentiation and market penetration. Shorter time to market
translates into immediate incremental revenue and reduction in churn.
Top-tier ASPs structure their offerings to blend seamlessly with existing
services in a natural and architecturally pure manner -- similar in concept
to an la carte menu. Whether it is adding voice mail to a long-distance
offer, or dial-by-name speech-recognition service to a wireless company,
ASPs can graft the adjunct service quickly and efficiently.
Finally, the platform and software that drive the ASP service will have
proven scalability, capacity, and reliability. For the carrier, this results
in deployment with zero beta testing required -- only functional areas
require testing -- as well as peace of mind knowing that there will be no
system downtime which would certainly result in customer dissatisfaction and
lost revenue. System and capacity limits are constantly being forecasted by,
and in conjunction with, the ASP, enabling carriers to add customers when
wanted without worrying about licensing issues or availability of equipment.
All of this is bundled with mandatory operational excellence.
Once the decision to work with a voice or communications ASP has been made,
there are several factors to consider when selecting a partner. Whether or
not the provider has a core background and understanding of the market
segment is paramount. Other key questions to consider: Have they deployed
similar systems in the past? Have they successfully marketed the same or a
similar type of service under their own brand? These issues must be
addressed before any contract is signed or finalized.
Another vital area for the provider to consider is selecting experienced
personnel and management with a history of proven success. The review must
extend not only to the general management of the company -- which points to
viability of the business -- but also to the background of the operations
and support personnel who will ultimately be responsible for handling the
The capability of the ASP to customize their system quickly to meet the
demands of the carrier is key. One aspect of this evaluation is to determine
how much of the system is off-the-shelf software and hardware versus custom,
internally developed technology. The greater the amount of custom software
and proprietary technology, the greater the likelihood the ASP will have the
ability and understanding to implement minor or major tweaks required to
meet the needs of the carriers' customers.
Another factor to consider is the ability of the ASP to blend with the
telecom carrier's existing technology. Understanding carrier business
practices and operation support systems should be matched with a willingness
to listen to the needs of the customer and ability to adapt the platform and
systems accordingly. The inherent flexibility of the platform should cover
most integration scenarios.
The final point to consider is the viability of the partner. Has the ASP
clearly distinguished itself and the niche it serves broadly enough to
remain in business but not so broadly that it tries to serve every customer
in every market? The best partner will have a solid business model but also
remain flexible to market conditions, taking advantage of new adjunct
opportunities as they arise.
Partnering with a voice or communication ASP can bring valuable rewards
for established telecommunication companies in every market segment. The
right partner can help lower the costs associated with developing new
products and services. This adds new revenue streams to increase customer
retention and differentiation in the marketplace as well as provide peace of
mind associated with deploying tried and true reliable systems. Selecting an
ASP by using the described criteria will ensure the relationship starts and
continues with the least amount of effort and maximum benefit. A partner
that understands your business' potential will assure fruitful, long-term
satisfaction for both parties.
Jason Morse is the director of product management at eVoice, Inc.
eVoice, based in Menlo Park, CA, is a provider of enhanced
telecommunications services to CLECs, IXCs, ISPs, and wireless carriers.
eVoice's nationwide distributed voice messaging infrastructure is built on
the firm's patent-pending extensible and scalable network technology.
Additional information is available at www.evoice.com.
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