FRAMINGHAM (11/11/2003) - The recent news in the telecom industry has seemed like a litany of despair with cutbacks, layoffs, bankruptcies, retrenchment and spending freezes. And make no mistake, all those have occurred. But as 2004 appears over the horizon, there are indications of green shoots sprouting.
What to Expect in 2004
While there is activity in every sector, three areas stand out as being foremost in the minds of most service providers. Broadband is certainly an area destined to receive a lot of attention and investment. Verizon Communications Inc., BellSouth Corp. and SBC Communications Inc. are poised to make a major push with their fiber to the premises collaboration. Wireless is also hot and a wide range of mobile services from Wi-Fi to 3G-like applications are rapidly gaining momentum, even though the US still lags mobile leaders such as Japan and Scandinavia. A new raft of handheld devices promises to expand the service envelope even farther. And last, but certainly not least, management is being recognized as a key enabler of business success and profitability which is key given the relentless pressures operators face in today's competitive market.
Constant Pressure - the New Reality for Service Providers
One lasting impact of the downturn is that the telecom business will never be the same. Service providers today face continual downward pressure on price and continual upward pressure on customer service and business flexibility. The traditional approach to solving this has been simple cost cutting. But this has limitations because many times, these cuts impact an operator's ability to deliver quality services. This leads to declining profits, which then leads to more cuts, and a death spiral ensues.
Learning From Other Industries
Other industries such as manufacturing, banking and retail have all had to react to these same pressures and changes and remake their operational practices and infrastructure. Remember when Toyota re-invented auto manufacturing in the 80's and almost put Detroit under? The bad news is that telecom is decades behind these industries productivity-wise. The good news is that the means for them to do it is at hand. But it won't happen with cosmetic surgery.
Fundamental Business Transformation is Key
If telecom operators are to return to financial health and offer the kind of world-class service a competitive market demands, they must fundamentally change how they manage their businesses. They have to adopt a "lean operations" approach in order to increase their efficiency by an order of magnitude. This streamlined approach to cost savings and increased ROI is critical to reducing operating costs and driving up revenues
Only by completely transforming their key business processes and the management systems that underpin them can a service provider remain profitable and grow. But this is easier said than done mainly because of the huge legacy base.
The Nasty Bit
Today's Operational and Business Support Systems (OSS/BSS) were developed for a different environment. They are largely stand-alone "silos" that don't interoperate or share data. And if they do, it's only by spending an inordinate amount of time on money on custom integration. This 'integration tax' siphons money that should be applied in other more worthwhile ways.
Add to that the problem that from an organizational perspective, most operators are structured around internal departments and not the customer. Almost all key business processes cross departmental lines which means no one owns it end-to-end. This makes it all the more difficult to streamline the process so that it's performing at maximum efficiency.
Enter the Lean Operator
There are answers emerging under the leadership of the TeleManagement Forum, a not-for-profit global consortium focused on providing strategic guidance and practical solutions for improving telecom management. For the past several years, the Forum has worked on a comprehensive program for the industry known as NGOSS - New Generation Operations Systems and Software.
NGOSS provides a framework for developing, procuring and deploying OSS/BSS and includes a business process map, an enterprise data model and integration architecture - the key infrastructure components. It uses modern IT and Business Process Management techniques to enable telecom service providers to rapidly respond to market opportunities to deliver high quality, innovative services to their customers. In short, it enables them to better manage their business assets.
It All Starts at the Top
The key to transformation is a willingness to change and that has to come from the top down. If an operator is serious about becoming lean and agile, the tools are there. If they think all they have to do is wait for the good old days to return, they may find those green shoots are nothing but weeds and moss.