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Internet Telephony: February 27, 2009 eNewsLetter
February 27, 2009

Best Practices for Communications Transformation: Transportation, Energy, and the Public Sector

By TMCnet Special Guest
Becky Watson, Program Manager Communications Infrastructure and Convergence, Stratecast

A Stratecast Whitepaper, sponsored By Alcatel-Lucent (News - Alert)

Executive Summary
Transportation, energy and government organizations have complex communications issues that are necessary to operate their businesses efficiently but are not part of their core business. Communications transformation projects within these industry segments have extensive regulatory, safety, technology, company and industry-specific requirements that necessitate industry expertise from their vendor partners. Companies within these industries typically rely on trusted partners to enable their communications infrastructures.
Companies within these industry segments have different business models and strategies to address their communications transformation projects. There is a spectrum of strategies that are potentially involved in engaging vendor partners to enable transformation projects. At one end of the spectrum, are individual, one-time engagements that can include design, planning, deployment and eventual hand-off to the customer or a subset. At the other end of the spectrum is complete outsourcing for short or very long-term intervals…20 years plus.
As with any business entity, the companies within this sector have their own threshold for adoption of new technologies, solutions and products with regard to their communications infrastructure; however, the bottom line is that the solutions deployed must be completely reliable and always available. In this regard, these large industries have similar requirements as those of the large communications service providers (CSPs). However, unlike the CSPs, communications services for transportation, energy, and the public sector must be available 100% of the time, whereas CSPs typically build networks with a 99.999% reliability level.
Although these industries are not selling communications services to their customers, their communications infrastructure is mission critical to the operation of the business itself. The safety of their employees, their clients and the public, adherence to specific domain regulatory requirements, and the nature of the business itself are all key characteristics of the communications requirements for these industries. An example in the transportation industry is a specific time requirement for response from a railway operator to its base operations center and back to the operator to support safe command of the railway operations and its passengers.
Internal communications of these companies are integral to their business but it is not their primary business and therefore companies typically look to experienced vendors to provide them with proven, tested and reliable communications solutions.
In this Alcatel-Lucent sponsored whitepaper, Stratecast will provide insight into:
1. The communications requirements of three specific industry segments (transportation, energy and the public sector),
2. Best practices to deliver the services and manage the projects efficiently, and
3. Innovative solutions and strategies deployed by these industry segments.
Finally, we will provide insight into, and analysis of, Alcatel-Lucent’s services and solutions it offers to the overall IPS market. Alcatel-Lucent defines IPS industries as transportation, energy, and the public sector. The public sector includes local and public safety agencies, (police, fire, etc.) and government entities.
The transportation, energy, and public sector segments, collectively Industry and Public Sector (IPS), have individual communications requirements, both within the segment itself as well as within each company within the segments. From a technology perspective, these industries and individual companies may not realize the full benefits of IP-based communications services and are conservative with regard to adopting newer technologies. The old adage, “if it ain’t broke, don’t fix it”, applies for the most part. However, in many instances the communications infrastructure of these companies is outdated and they must explore and transform their infrastructures to support their core business initiatives. Consideration of IP-based solutions is part of the process, but not the main consideration nor a foregone conclusion for the next step in communications infrastructure transformation. The first and foremost considerations are availability and reliability as communications are mission critical.
Transportation, energy, and the public sector typically do not have vast, internal resources with a breadth of communications knowledge or the time to focus on communications transformation initiatives. Ultimately, it is not their primary job function to enable communications infrastructure changes. For this reason, along with the criticality of success for communications transformation, these entities will typically look to their vendors for the expertise required to enable their communications infrastructures.
When contemplating communications transformation, there are a few key requirements that the IPS sectors need to consider when choosing communication vendor partners to enable communications transformation projects. Some of these are:
Specific industry domain knowledge – Within the transportation, energy, and public sector each have specific regulatory, safety, technological, and partner requirements and preferences.
Project Management Expertise – The communications infrastructure is important but is not part of the companies’ core business and competency; therefore, each company must be able to rely on vendors for complete project management so it can focus on its core business.
Project management can include a very diverse ecosystem of partners, including managing government and civic entities, construction companies, regulatory agencies and other communications and IT vendors.
Multi-Vendor Knowledge – No one vendor will supply an entire solution; multi-vendor solutions are inherent in complex communications infrastructures. Instead, vendors that understand and have in-depth knowledge of other vendors’ products and solutions are required to offer a best of breed solution.
Companies require one vendor partner to take the lead for an entire project which can include design, planning, procurement, deployment, maintenance, training, and complete project management.
Integration Expertise – In-depth knowledge of other vendors’ products is one part of a network integration vendor’s (Network Integrator) value; other important qualities are the ability to bring global and local facilities, resources and labs to the table to pre-test and prove the solution prior to deployment, and to install and maintain the solution. These factors are critical for project success.
References – Strong references are very important, due to the criticality of the projects. IPS customers require references from peer companies who have engaged in similar network transformation projects. Due diligence with references is a key part of the vendor selection process. IPS customers realize that they do not have in-house expertise to transform their communications infrastructure, nor do they typically have budgets to hire additional staff to manage complex communications projects. For these projects, IPS entities look to communications equipment and services vendors, IT vendors and other integration and services vendors to provide the expertise, products, services, project management, partners, partner ecosystem management and, partial to complete outsourcing of the projects including ongoing maintenance, short and long term management and maintenance of their communications.
Communications Services Providers and IPS Entities: Similarities and Differences
For Communications Services Providers, time-to-market is a key requirement for network infrastructure enhancement and services rollout. In contrast, the IPS sector is not as concerned with time-to-market, per se, but does want a project brought in at budget and within the timeframe specified and, most importantly, one that meets the reliability and safety requirements necessary for each industry.
There are some similar features and requirements for communications among transportation, energy and the public sector.
Examples of similarities include:
1. The companies have multiple, widely distributed communications environments as part of their infrastructures. As a result, they are building private communications networks to support their core business;
2. Typically they have multiple, complex communications requirements that include high performance requirements, multiple technologies and multi-vendor products and solutions. Conversely, they are also conservative by nature and looking for tried and tested (vs. cutting edge/next generation) solutions;
3. Communications is not their core business but is mission critical to the operations of their core business;
4. Complex back-office infrastructures must be integrated with their communications infrastructures
What are the differences that add more complexity in the IPS sector? There are many, including:
1. Public financing – in many cases Public Private Partnerships (PPP) and Private Finance Initiatives (PFI) are required to procure services over a prescribed period (a typical period could be in excess of 20 years). PPI/PFI financial backing requirements, processes, timelines and accountability for public long-term projects put significant financial onus on vendors as well as adding complexity.
2. Project partner management — construction, technology, regulatory, government, IT vendors, contractors, and many others
3. Inter-agency interoperability, multiple government regulations, multiple technologies, multiple back-office requirements and public and internal safety requirements
4. Longevity of projects and outsourcing requirements; as these networks are not upgraded in response to consumer demands clients are often concerned about managing obsolescence
5. Specific industry requirements and business initiatives as described in subsequent sections
Transportation Sector
Transportation operators, such as metro and regional railways, highways, and airports, have key performance criteria that they must meet and constantly address. Key performance criteria include reliability; timely route expansion to meet increased demand; traffic growth forecasting and meeting the increasing demand for public transportation; punctuality and traffic control; regulatory issues associated with safety for customers and employees; environmental concerns; and meeting specific efficiency and cost parameters. Added to these performance requirements is the underlying fact that transportation companies must make improvements with little to no disruption in service. The services and operations mentioned above constitute transportation companies’ core business. Closely intermingled with these core business initiatives are communications related projects that are not the core business of transportation companies. Significant communications projects for transportation companies include:
• Closed-circuit television (CCTV) that can provide monitoring activities along the rail path, the highways, and other transportation entities for safety, protection and real-time and near real-time assessment of infrastructure occurrences
• CCTV data and other network data consolidation and updating of internal systems to provide the company and its clients with real-time information and alerts
• A network infrastructure including access and transport connectivity solutions (DSL, optical, Ethernet, and other technologies), multiple technology network infrastructure (PMR/LMR, GSM-R, WiMAX (News - Alert), IP, IP/MPLS and others) to support internal and external communications, signaling and voice, video and data services
• Customer facing services such as Internet access, entertainment solutions and content information services related to the transportation companies’ operations
• Operations management of the communications systems and services
• Design, testing, deployment and maintenance of communications systems and services
• Real estate development within the transport infrastructure that has the potential to drive new revenue streams from video advertising and public space targeted news and infomercials.
Energy Sector
Energy includes power utilities and oil and gas companies. The global energy sector is facing higher consumption demands, increased regulatory requirements, and has extensive pressure to reduce carbon footprints with alternative power sources. Internal resources are focusing on core business initiatives; enabling communications infrastructure enhancements to support the business initiatives is not a top priority, nor their expertise. For these reasons and others, energy companies look to their vendors for communications solutions and expertise, project management, outsourcing and other innovative business strategies.
Communications projects within the energy industry include:
• Communications infrastructure builds to connect sites that are both numerous and remote to enable efficient operation of energy grids
• Enabling internal monitoring and maintenance of communications infrastructure from centralized operations centers
• Providing communications infrastructure for smart metering
• Building communications infrastructure to provide operational support systems that allow the operator to ensure energy availability in high demand periods in order to protect the overall system and its customers
• Design and planning strategy projects to migrate from legacy infrastructure to next-generation infrastructure
Public Sector
With increased security requirements, as well as, the need for coordinated efforts between local, regional and national authorities, aging internal communications infrastructure and budget constraints, the public sector faces serious challenges in regards to its communications infrastructure. However, the need for sophisticated communications services to meet the complex requirements for public safety and security is a common requirement for these entities. Projects within this sector can include:
• First responder mobile infrastructure deployments with individual agency and inter-agency security communications requirements
• Communications infrastructure enhancements and deployments to enable data sharing between and among agencies and regions and interoperability of technologies.
• Video camera operations for public safety in common areas, border areas with remote monitoring and support operations
• E-government initiatives
• Bridging the digital divide
A Critical Key to Success – A Strong Business Partner
The transportation, energy, and public sectors require partners with extensive communications knowledge, domain-specific experience, strong and proven expertise in project management, and a record of industry-specific, successful communications transformation projects. Prior experience is particularly important due to the inter-relational nature of industry-specific core business initiatives along with the requirement for mission critical communications services.
Beyond the natural need for experts in communications is the increased need for a company that can bring forward new business models to assist public bodies struggling to finance new infrastructure and services. This has become even more critical with the current instability in the world economy. In particular, the need for a partner that can sufficiently absorb the risks of Public Private Finance Initiative/Public Private Partnerships (PFI/PPP) and very long-term contracting responsibilities. To finance these large-scale multi-million Euro projects, clients look to collaborate with companies that have strong balance sheets
to ensure that:
1. They can raise the initial financing required,
2. They have a high probability of being around in the long term to deliver the project, and,
3. They have the experience of major project management utilizing the PFI/PPP model.
Experienced network equipment vendors have developed distinct core competencies with CSPs that can be leveraged in other complex industries such as transportation, energy, and the public sector (police, government, etc.). CSP (News - Alert) networks are similar to those of transportation, energy, and the public sector networks as they are multi-site, distance networks, have multi-technology solutions and have critical communications requirements such as reliability and availability.
These competencies include successful and timely multi-vendor procurement, project management, network design and deployment, a deep understanding of multiple communications technologies and experience in providing end-to-end solutions and services that are both standardized and customized to meet individual requirements. Network equipment vendors have key strengths that differentiate them from their competition of IT vendors, CSPs, and other network integrators. These key strengths include:
Expertise in Technology – Network equipment vendors not only invent the new technology, they spearhead the industry technology associations and provide end-to-end design, planning and proving of new technologies.
Strong Program Management Capabilities – Supporting all of the critical network elements including existing infrastructure, those of other vendors, and parties involved in the projects.
Enabling Proven Solutions — Establishing accurate trial and test frameworks to enable objective and thorough evaluation of operational processes, interoperability, feature readiness and assessing readiness for commercial service is a core competency.
Outsourcing – Outsourcing, whether partial or complete, of communications services, operations and maintenance can be enabled by the majority of network equipment manufacturers.
Alcatel-Lucent Customer Successes and Case Study Highlights
Transportation: Highways Agency, UK
In many transportation projects a group of vendors, contractors and subject matter experts perform against a contract that has been outsourced to one public, private or combined entity, known as a Special Purpose Vehicle (SPV). This entity, more often than not, does not have the technological expertise with complex IP-based projects. For this reason, these entities must rely on partners that have multiple successes, extensive references with similar transportation projects, and have the organizational resources to successfully support and enable the project.
Alcatel-Lucent has many deployments and successful project completions in the transportation segment including the Gotthard Base Tunnel and the Swiss Railway (SBB) in Switzerland, the S-Bahn in Berlin, Germany, and the Paris Metro in Paris, France. These projects include both network and Operational Support System (OSS) IP transformation and integration. Some notable facets of these projects include extensive route mile and multiple node, multiple technology, network infrastructure deployment, Web-based network monitoring, closed-circuit television (CCTV) monitoring, and data storage and management of the video images.
As indicated, Alcatel-Lucent possesses many notable references and successes and for these reasons and others, was chosen as the design authority and active equipment integrator on the Highways Agency NRTS (National Roads Telecommunications Services Contract) project. The Highways Agency contracted Alcatel-Lucent, through a consortium that was responsible for implementing NRTS via a performance-based PFI contract for the Highways Agency and its network IP transformation project.
The NRTS project entailed building an IP Ethernet over Wave-Division-Multiplexing (WDM) network and providing a customized OSS that met specific requirements for video monitoring for base operations to remote communications across all of England’s motorways.
The NRTS project required Alcatel-Lucent to design and build a system that enabled web-based communications between a diverse partner ecosystem including partner contractors, internal network operators and the UK’s external customers, and the travelers using the highways system. Key attributes that Alcatel-Lucent possesses that the Highways Agency found favorable were Alcatel-Lucent’s extensive references from other transportation projects such as the Network Rail and the Paris RATP network. Representatives from the partner consortium that was engaged with the project mentioned in an interview that they felt Alcatel-Lucent has the experience, the technological expertise and the capabilities and solutions to meet today’s communications challenges as well as tomorrow’s unknown requirements.
Alcatel-Lucent has also contributed to the SPV and has been recognized for more than one million “safe working” hours on the project demonstrating their expertise in operating in hazardous environments.
Energy: Transpower, New Zealand
Alcatel-Lucent has many successful deployments in the energy sector including Transpower, New Zealand. Transpower owns and runs the national electricity grid in New Zealand. Transpower New Zealand represents a multi-faceted network transformation project that highlights Alcatel-Lucent’s strengths in technology, project and partner management skills, industry-specific knowledge, and its long-term commitment to IPS customers. Transpower recognized that its aging transmission infrastructure posed a threat to its ability to provide its core services, supplying New Zealand with its power. Transpower also recognized it needed a more efficient and cost-effective method of operating, monitoring and maintaining its communications infrastructure that connected to its power infrastructure. Transpower’s transformation encompassed both legacy and next-generation infrastructure requirements. Transpower required a vendor that could support many technologies including Synchronous Digital Hierarchy (SDH) for some of its existing communications applications and network elements, and IP-based technologies for the newer applications.
The criticality of Transpower’s core business coupled with the need to be able to seamlessly control power resources during peak periods brought Transpower to the realization that it needed a long-term, committed partner to transform its communications infrastructure. Transpower needed a partner to consult with, and to design and deploy an advanced communications infrastructure and, when complete, operate the network so Transpower could concentrate on the business of supplying power to its customers. Transpower contracted with Alcatel-Lucent to enable an IP/MPLS network to connect its sites and enable 192 new sites with IP network connectivity. Additionally, Transpower contracted with Alcatel-Lucent to provide and enable an outsourced solution for network management and monitoring; and enabling operational support system (OSS) for fault notification, inventory management, and provide a future-proof OSS infrastructure that would allow Transpower New Zealand to bring new services to both its internal and external customers.
For the Transpower project, Alcatel-Lucent combined many company strengths such as its deep knowledge of IP/MPLS technologies and networks, its project management and industry-specific expertise. These attributes provide the foundation to bring this project to fruition within the timeframe specified, following strict safety and utility regulations and enabling a multi-
vendor environment to meet customer requirements.
In addition to the network requirements, Alcatel-Lucent leveraged its service provider OSS knowledge and its Network Operations Centers (NOCs) to enable and integrate a system that allows Transpower to reduce its operational costs by outsourcing the entire network, and the monitoring and maintenance of its multi-vendor infrastructure. These capabilities provide Transpower with a partner that manages its mission-critical network so that Transpower can focus on its core business…providing power to its customers all across New Zealand when power loads are both stable as well as during times when power loads are extremely high.
Public Sector: Federal Ministry of the Interior, Austria
A typical strategy for the public sector is to have a blueprint or plan designed by reliable consultants that have previous experience with similar projects. An example of a public sector project is inter- and intra-agency (local authorities, public safety, etc.) communications strategies and technologies. Although the overriding goal of these projects is to enable quick, efficient and secure communications, each project has custom requirements based on existing infrastructure, funding, and safety and security requirements. When the design blueprint is complete, the public sector agency or its designer typically bids out the project based on requirements, pricing, and timeline guidelines.
These public sector projects can include sourcing, design, installation, configuration, operations and maintenance of the infrastructure. First responder mobile networks are a key trend in the public sector with regards to efficient communications.
An example of Alcatel-Lucent’s success in this sector is with the Federal Ministry of the Interior (BMI) in Austria. Through a public private partnership, the Austrian BMI selected TETRON, a joint venture between Motorola (News - Alert) and Alcatel-Lucent formed to oversee the nationwide project, to deliver a single network infrastructure that serves as the communications backbone for Austria’s police, fire, ambulance and other rescue and first responder agencies. This project will utilize TETRA technology (Terrestrial Trunked Radio, an ETSI standard), and provide a digital radio communications system that allows inter- and intra-agency communications.
Key requirements of the project were to:
1. Improve coordination between multiple public safety agencies
2. Enhance the reliability and security of communications
3. Enable new functionality for first responders and public safety agencies to improve efficiency and enhance public safety overall
Alcatel-Lucent has engaged with its technology partner Motorola for the TETRA solution and Alcatel-Lucent is responsible for a turnkey network rollout within a 5-year deployment term and maintenance of the multi-vendor solution for 25 years.
Meeting the Challenge: Why Alcatel-Lucent?
Stratecast provides extensive analysis of Managed and Professional Services (M&PS) solutions offered by network equipment providers (NEPs) in its M&PS Module. Stratecast believes NEPs are uniquely qualified to offer complete outsourced services for IP transformation including turnkey design, deployment, maintenance and monitoring solutions, and complete outsourcing utilizing NEP facilities, personnel, and incorporating their technology expertise. In its recent study, “NEP Outsourcing for Communications Service Providers and Large Industry”, Stratecast provides insight and rational into NEP abilities to provide world-class outsourced services. Alcatel-Lucent possesses the infrastructure, services and expertise that Stratecast believes is necessary to provide these valuable outsourced services.
Alcatel-Lucent has a long and respected history of inventing, designing, planning, implementing and maintaining complex communications infrastructure.
Alcatel-Lucent features expertise in multiple domains, multiple, successful IP and diverse technology network transformation projects, with long-term contracts, and numerous client references. Alcatel-Lucent brings a proven best of breed, flexible solution and service strategy that enables the IPS market segment to architect customized and standards-based solutions to address individual financial models, technologies and services.
From initial infrastructure design through to project completion and to ongoing operational support, Alcatel-Lucent IPS Services draws on many years of experience architecting and delivering customized, standards-based solutions. Alcatel-Lucent brings this experience, along with its extensive understanding of technologies and IP services, program management skills, planning, engineering, deployment, and operations expertise, to its IPS Services Practice to provide a full solution for its IPS clients.
What differentiates Alcatel-Lucent from its network equipment vendor, IT vendor and network integrator competitors? In a nutshell, technological expertise, experience, a long list of references, expertise in project management, and a compelling commitment to serve the transportation, energy, and public sector. For total outsourced solutions, Alcatel-Lucent provides strong planning, procurement, project management, solutions, and end-to-end testing capabilities.
It may be perceived that Alcatel-Lucent would have a tendency to provide its own products and solutions for outsourced projects. However, Alcatel-Lucent has repeatedly shown that it is very adept and open towards enabling multi-vendor solutions and working with other vendors’ equipment. Alcatel-Lucent has strong buying power that makes it an asset for procurement and overall vendor management.
From a scale perspective, the Alcatel-Lucent organization can leverage existing organizational resources to provide the IPS sector with the services it requires. It does not need to build a new organization and for this reason, Alcatel-Lucent is uniquely qualified to provide IPS services and outsourced solutions.
Alcatel-Lucent has the banking relationships and credibility in the financial markets to raise capital for PFI/PPP contracts. Critically, it is willing to step up to performance-based contracts for government-backed entities in transportation, energy and government projects.
Alcatel-Lucent personnel resources for network transformation projects include industry domain experts, project management experts, other vendor product experts, technology experts, and individual expert consultants that are assigned to specific projects. Additionally, the IPS organization within Alcatel-Lucent has the technological resources of the entire company to draw upon when designing and building a communications transformation solution.
From a physical facility perspective, Alcatel-Lucent is a global organization and provides support to its IPS customers with its local, regional, national, and global operations. Local and regional support and maintenance facilities (network operations centers) for complete network outsourcing provides superior customer support and assumes the risk for complex communications solutions.
Stratecast believes that Alcatel-Lucent’s commitment to, and proven expertise in the IPS segment, along with its core technological, project management, and operations and outsourcing expertise, makes it a leader in network transformation. Finally, the single most compelling reason that Stratecast believes Alcatel-Lucent provides a valuable solution for network transformation is its commitment to each individual customer. Alcatel-Lucent is the provider of services and solutions and is not just another vendor. It takes the responsibility not only for its primary IPS customer, but also to each of their customers.
IPS clients have chosen Alcatel-Lucent repeatedly, as their Network Integrator for large, complex communications and IT projects and, Alcatel-Lucent has proven its network integration expertise by continually meeting and exceeding its clients’ expectations.
Becky Watson is Program Manager – Communications Infrastructure and Convergence, Stratecast (a Division of Frost & Sullivan (News - Alert)).

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