Recently I came across the following definition of operational excellence: “It is the result of applying the scientific method to achieve the goal of a business.” That sounds simple enough, but what does it really mean in the context of discussing differentiation?
For communications service providers, this discussion is fundamentally about the transition from providing dumb pipes to the creation and delivery of high-margin services. High-margin services are another way of saying they are valued. There are many observable trends in the market for providing high-margin services, including application-aware networking, carrier Ethernet-based services like EPL and EPLAN, managed services of various flavors, and of course the cloud.
Ultimately, CSPs must find a way to deliver value to their customers in a manner that keeps them profitable. Although best practices for differentiation often focus on new lines of business and higher margin services, these represent the end state of the solution.
The other, perhaps less attractive component is the journey to get to that end state, driven by the engine of the CSP (News - Alert) – operations and IT. Here, operational excellence is required to support the survivable and profitable delivery of high-margin services. For example, if the CSP’s current operation is suffering from high costs of integration and customization (as many do) it becomes incredibly difficult to launch new services in a reasonable time frame. Additionally, the resulting cost of those services drives the pricing higher than what the market is willing to bear.
The term operational excellence has its roots in the manufacturing sector but has far broader consequence; the TM Forum (News - Alert) has done a good job at breaking down this concept into three aspects – tangible cost reduction, operational agility, and efficiency improvement – all concepts that help the CSP to differentiate. Cost reduction helps with the margin squeeze and enables some flexibility on pricing; operational agility enables the CSP to take advantage of market opportunities and rapidly adapt to the environment; and lastly, efficiency improvement helps the CSP do everything better and faster.
Perhaps because of the shared legacy of the telecommunications industry, there is a disparate share of proprietary processes and technologies within a CSP’s operation. These require costly customization and integration just to keep things up and running. Not only are there silos within the CSP, but they exist between service providers and their partners/vendors, making common strategies (such as outsourcing and partnering) a challenge with a commensurately large capital expenditure.
Many providers have embarked on various transformation projects to address their heavily siloed and proprietary technologies and processes. Examples include Telstra, BT, Orange, AT&T (News - Alert), and others. But, at the core, the common element is standardization to support the business goals and objectives including the implementation of a common OSS/BSS framework. The results are a reduction of tools, a shift from customization to configuration, and open interfaces that enable simplified integration and removal of silos. Effectively the OSS/BSS framework is the CSP’s engine, and in the communications services industry it’s a question of endurance. It’s not a drag race, it’s the Indy 500 – a 500-mile race that takes stamina. There’s no way to win that race without a fine-tuned engine built on operational excellence.
When looking at what works and what doesn’t, success always comes down to a common OSS/BSS architecture that enables repeatable processes that then drive automation. This automation results in both tangible cost reductions as well as efficiency improvements. Another key ingredient to this concept of a common architecture is that the CSP as a whole can make decisions based on the same information. Engineering, operations, product management, customer care, etc., all leverage a shared source of data for their needs so that decisions are more effective with faster implementation. The last ingredient is to empower the decision makers across the various organizational functions.
Last year I spoke about network service performance assurance with a senior level director of a mobile network operator who related the challenge of realizing a common, automated and collaborative model – namely, end-user adoption. The mechanism to accelerate adoption is to empower the users, the engineers, the operators, the service desk, etc. The toolset should be common, but it is equally important that it is heavily adopted and used by the CSP’s functional organizations. Therefore, it is essential to empower those organizations to be more efficient and effective; that is, not only doing things well but doing the right things.
Differentiation is the specific antidote to commoditization. As bandwidth demands soar and IP NGNs proliferate, costs of delivery keep rising. CSP’s must look for methods of providing value and avoiding commoditization. The concepts of automation, common and adaptable solution platforms, and user adoption and empowerment are critical when it comes to building an OSS/BSS framework that supports operational excellence. From there, the CSP can effectively differentiate since it is now able to provide real value in the eyes of their customers.
During large transformation projects, or even the smaller project-focused implementations, end user empowerment is at the heart of operational excellence, meaning people actually use the tools and processes. As simple as that sounds, it’s the foundation for success. For example, if a NOC (News - Alert) engineer creates a fantastic set of dashboards for real-time availability monitoring on an entire service chain with custom KPI-based thresholds, the engineer should be able to instantly share it with his or her colleague or boss. They should be able to access it remotely with a smartphone during off-hours. This empowerment can extend right to the CSP’s customers so that they, too, can understand, analyze, and troubleshoot their applications and infrastructure including those aspects provided by the CSP. This capability frees up the CSP’s service desk, provides greater provider-customer “stickiness,” and drives a partnership-based service model.
A solid CSP engine running a common, adaptable, automated OSS/BSS infrastructure that empowers the CSP’s stakeholders, both internal and external, will inherently accelerate the delivery of high-margin, high-value services and ensure the goals of the business are met.
Christopher Cullan is product marketing manager of business services solutions for InfoVista (www.infovista.com).
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Edited by Stefania Viscusi