It is clear and no longer a surprise that the world of networked services is changing all around the folks who brought us networked services: the telecom service providers. The big question is: Are service providers changing along with it? In many ways, the answer is yes. But in very important ways that affect their ability to compete, perhaps not.
Subex and Heavy Reading conducted a Webinar late last week on service delivery that, if the listener didn’t know better, could have been a recording from 1998. This is not to take away from the content of the Webinar, which smartly addresses serious market dynamics for service providers, but instead to drive home the idea that despite their best efforts over the last decade to become more automated, efficient and customer focused, service providers have at best treaded water and need to redouble their efforts.
“Yes, the industry has been doing transformations for 10 years, but in most cases have ended up with just another set of systems because we never turned off the legacy systems,” said Mark Nicholson, chief technology officer at Subex.
Nicholson said that service providers have succeeded in lowering their total cost of ownership, but now that the market has been largely commoditized, what were reasonable costs of delivering services five or 10 years ago is no longer reasonable and can’t be sustained.
“We have [reached] inertia in terms of delivering new services and at the same time have higher TCO. We need to address that,” Nicholson said.
Many long-standing issues and inefficiencies have been addressed and improved, but the bar has been raised higher. Ari Banerjee, senior analyst at Heavy Reading, said the industry transformation in the past few years has been dramatic, primarily because of the shift from network- to customer-centricity and the emergence of new competitors whose fulfillment and service delivery process time frames are much smaller.
While incumbent service providers are now launching five to 25 new services each year, it is still taking them anywhere from six to 18 months to launch. Most of the delay, he said, is directly related to the back office systems.
“There needs to be more congruence between the commercial products being launched and the underlying network resources that support them,” Banerjee said. “They must make sure that products launched are well aligned with their product catalog to make sure the customer experience at all levels is maintained.”
And it’s not just the product catalog. “Most service providers suffer from a lack of integration between core back office systems, particularly order management, customer care, service activation, monitoring and high volume service management,” Banerjee said.