Major Operations Support System (OSS) provider Amdocs (News - Alert) has released the results of a global survey, done for it by research firm Telesperience.  The survey, “OSS Transformation? No longer just about operation benefits,” showed that, despite fears that communications service providers are not keeping up with their customers’ needs or competition from over-the-top (OTT) providers, they are, in fact, accelerating investment in OSS transformations in order to be relevant and profitable going forward.

In an article on July 13, 2011, I highlighted the somewhat discouraging report, “Bringing Dexter­ity to Subscriber Complexity™,"  produced by The Chief Marketing Officer (CMO) Council in conjunction with Openet (News - Alert). That study’s findings were that companies’ investments in next gen OSS and Business Support System (BSS) software might be a case of too little and too late. Fears cited included cultural issues preventing fast enough internal change even if there were awareness and appreciation of the urgency of OSS/BSS transformation.    

Amdocs, like Openet an interested party to operator needs, commissioned its survey also to provide a “state of the industry” assessment. The focus was to enable service providers to rate their OSS transformation initiatives against peers. The study looked at the factors driving OSS transformation, the different transformation approaches undertaken and the progress made to date.

The good news is that Amdocs found good news, clearly counter-balancing the Openet study.

Key findings include:

• Seventy percent of service providers started OSS transformations from 2009 to 2011: One-quarter began OSS transformation this year. Early adopters report being 75 percent complete. Late adopters typically are less than 25 percent.
• Operational factors are still the number one priority: Operational drivers such as improved OSS efficiencies and reduced operating expenses are still the strongest immediate drivers for OSS transformation. However, as IT becomes more aligned to the business, transformation projects are increasingly driven by customer experience and commercial goals.
• Thirty-three percent of service providers are already gaining quantifiable benefits from OSS transformation: 33 percent of those polled, despite many just getting started, said they are already seeing the benefits of their OSS optimization. Benefits include:
  • Faster time to market for new products
  • Ability to roll out niche products
  • Faster order-to-cash cycle
  • Lower operational costs
  • Support of more customers and low-margin services like machine-to-machine (M2M)
  • Fewer customer complaints
  • Lower churn rates
• Different regions are taking different approaches to OSS transformation: While the survey revealed some variations as to priorities between global regions, the top reasons for transformation were almost identical, reflecting the benefits list: modernization, new service enablement, lowering costs and generally creating a better customer experience and more customer intimacy through better alignment between IT, marketing and sales.

This global survey identified three main types of service providers:

1. Operationally focused —driven by achieving greater efficiencies
2. Commercially focused — intent on creating new revenue streams and diversified products
3. Customer focused — driven by customer-centricity and personalization

As noted by Teresa Cottam, research and publications director at Telesperience, “Regardless of service providers’ identified type, all (operators) have a strong need to transform -- now.”

In the press release accompanying the study, Rebecca Prudhomme, vice president of product and solutions marketing at Amdocs stated that, “Although operational cost savings remain paramount, stronger IT and OSS alignment with service providers’ top-level business and customer experience goals is a trend we’ve been noticing for some time.” She added that, “With Amdocs’ breadth and depth of experience in OSS transformation, we enable service providers to tie their OSS transformation to specific business goals and to quantify return on investment at each step of the process.”

In an interview with TMCnet, Guy Maidan, Product Marketing Manager, OSS at Amdocs, made a cogent point as to why transformation OSS is critical future service provider success. He stated that:

“Service providers have a major role going forward because they have a relationship with the customer…Customers are looking for simplicity and one company to interact with when they have issues. They will pay for a trustworthy entity that can assure reliable experiences through all of their touch points... OSS transformation enables the delivery of that trustworthy and coherent customer experience…It also enables better alignment of disparate parts of service provider organizations to provide that experience, and with OTT providers, applications developers and other members of the converging communications markets.”

 Maidan did not disagree with the urgency the Openet study put on the need for OSS transformation. In fact, it is clear from both studies that OSS transformation needs to happen quickly or service providers stand a real risk of being relegated to less dominant and profitable places in evolving ecosystems. This is true not just in the mass markets but in enterprises as well.

It will be interesting to see how fast and far the OSS/BSS transformation needle moves in the next year, and whether the trend identified in the Amdocs study will be sustained. In the meantime, we invite you to click below for our recent interview with Yossi Zohar, marketing director of Amdocs.

Peter Bernstein is a technology industry veteran, having worked in multiple capacities with several of the industry's biggest brands, including Avaya, Alcatel-Lucent, Telcordia, HP, Siemens (News - Alert), Nortel, France Telecom, and others, and having served on the Advisory Boards of 15 technology startups. To read more of Peter's work, please visit his columnist page.