PAETEC Leverages Oracle to Build a “Market of One”

PAETEC has resisted the call of proprietary integration technologies and big-ticket architecture projects. Its incremental approach, along with some good luck and smart bets on technologies like Java, XML, workflow and now SOA, have paid off. The company has a highly automated sales process that allows its sales force to create custom packages for every unique customer, determining the profitability of each one.

Enabling this “market of one” approach is an automated fulfillment process, built on Oracle Communications solutions, including Oracle E-Business Suite, Oracle Communications MetaSolv Solution, Oracle Fusion Middleware, Oracle Database, and Oracle’s Siebel applications. These technologies have been cultivated over the years and are now part of a comprehensive order management, customer service and ERP system that provides visibility across PAETEC in everything from HR and payroll, to the status of orders and trouble tickets, to a 360-degree view of the customer. This strong technology platform has also allowed the company to rapidly integrate with and consolidate US LEC’s operations. The merger of the two companies was announced in August 2006 and closed this past February. Bob Moore, PAETEC’s CIO, sat down with Billing World and OSS Today to discuss how PAETEC has made its technology work, why SOA isn’t the next integration dead end, and why IMS just isn’t foremost on the enterprise customer’s mind today.

Billing World: Bob, please give our audience some background on the relationship with Oracle that led up to this significant investment in its software and SOA technology.

Moore: PAETEC has always had a strategy involving Oracle technology and open systems. We always look for the best fit we can, and then staff internally to take ownership. We don’t take on a ton of consulting, and we want to own the platform at the end of the implementation.

Oracle Database technology was always our billing datastore of choice, and we stayed away from billing and OSS solutions that didn’t use Oracle. We also built the business on Oracle Financials. About four years ago we started to take our sales force automation (SFA) and CRM to the next level. At that time, Oracle was competing heavily against SAP and Siebel, so they had an all-you-can-eat E-Business Suite deal that we were able to buy for an extremely low price.

We turned-up Oracle Internet Expenses, more Oracle Financials applications, and Oracle Human Resources and Payroll. We invested in Oracle Sales, Oracle TeleSales, Oracle Customer Data Hub and others for our SFA and CRM processes over the last four years, and we started interfacing our applications with them. For example, our profitability application, which our sales force uses to determine the profitability of all orders, is tied into one seamless workflow with Oracle. As more and more was tied into the Oracle workflow process—everything from hiring to requests for purchase orders—we saw that most of the business was using that Oracle workflow. We decided to put the whole business on it. For example, we moved our supply chain for our CPE business onto it, so if a customer buys a T1, they get an IAD with it, and we can manage that whole process using Oracle E-Business Suite.

Billing World: What sold you on SOA being the right path, and specifically on Oracle’s SOA products?

Moore: SOA technology started becoming stable and the de facto way to integrate several years ago, and we invested a couple of years ago in Oracle’s BPEL Process Manager. We used it for our integration with NeuStar (a clearinghouse for changes like voicemail options or 800-number registrations) for LSR, ASRs, etc.

We have begun using it as a key technology in our paperless ordering project that starts with our CRM system. We’re a highly differentiated play, meaning that we give the sales force what they need on an a la carte basis to enable a collaborative sales process with our customers. If you look at our margin, it’s there because we enforce profitability at time-of-sale using these tools, but we also meet the customer head-on with exactly what they need. We’ve decomposed all the parts down so an order is very specific to a customer. This is the hardest problem to solve, from a provisioning standpoint, in an automated way.

Oracle has some sophisticated pieces under the hood that we’re leveraging into our back office using SOA. Oracle bought MetaSolv and Hyperion also, so this all came together in our back office as well. Now that we’ve begun integrating both company’s systems, we are about three weeks away from merging US LEC’s Oracle Communications MetaSolv Solution (MSS) with our MSS. It’s impressive how fast we’ve been able to do that, but many more still remain.

We’re now tying more of the front office into the back office with SOA workflows, and what we expect to have done mid next year is completely paperless ordering. In most paperless ordering systems, you see a GUI that lets you choose an ordering bucket with certain fixed processes. Someone in the background does the human interfacing of that to decipher what each order really translates into for the customer.

In our new architecture, we’re taking the order, breaking it into SOA-based workflows and then we can automatically provision a lot of things right off the order prior to OSS and other systems. The reason we went “all in” with Oracle was that its BPEL engine is good enough. It’s not where BEA and IBM WebSphere are in terms of transaction time, but it doesn’t need to be in our domain. Now that Oracle owns MetaSolv and is building connectors, it works well for us.

Billing World: What do you mean by paperless ordering? This is a term that’s often used incorrectly. How are you different?

Moore: Traditionally, if you look at systems such as Siebel, they did a great job initially with a very nice UI you can do things with. You can create a bucket of services or a bundle, so you click that standard bundle and it kicks off a process through the organization where it gets to someone who has to connect the dots a bit about the order itself.

What’s different with us is that you can take our 80-plus products and mix and match them in any way. We joke that the first time someone sells the same order twice, they’re getting a Rolex, because every one of our orders is customized. We have a profitability application that lets the salesperson immediately determine whether a contract is profitable or not. If it is, he can go ahead with the contract and the order. If it does not meet our guidelines, it is automatically escalated using Oracle workflow to sales management. This is the same workflow as all other applications. One of the nice advantages of using a common workflow is the ability to take advantage of technologies such as PDA or handheld approvals as they are added to the core Oracle functionality.

We will then kick off individual workflows from there. If it’s a T1, it kicks off to downstream systems such as NeuStar, and to an engineer who does the channel assignments. You take our standard order for seven or so products, and you have asynchronous workflows that kick off from that and the pieces that can automatically be turned up are. It means the customer gets their services faster and our ordering is much more efficient. That briefcase time goes to zero. Everyone from the salesperson to the customer service group can see exactly where that order sits.

What’s unique is, when you look at our competitors who claim to be paperless today, they offer only very specific, limited packages. We can create custom packages at any level for any customer today. And because of our investments in SOA, those workflows are expected to be automated and tied into our various back-ends in the near future.

Billing World: What is so convincing about SOA, as opposed to previous generations of integration solutions, that convinces a company like PAETEC to commit so significantly to it in the long term?

Moore: We’ve always stayed away from the proprietary integration technologies of the dot-com era, like Vitria. It was a million-plus for the software, multi-millions to implement it. So you spent millions for the billing system to talk to the OSS to talk to the front-end customer management tool. We took a look at it at the time and said that it’s too proprietary, too expensive, and you still have to maintain these interfaces anyway. So we passed.

We invested back then in simplifying our processes, so our order entry system on the legacy side was ordering everything in MetaSolv and then flowing through into the billing system. We did it with a product-aware connector so we could enter in one system and have it flow through into the others. We’ve always wrapped and abstracted the interface our vendors had so we could use Java and XML to integrate with it, and if we need to go through a CORBA interface to communicate, that’s fine. We can do that in the integration.

We tend to let things work their kinks out before we jump on, and the same goes for SOA. SOA though has workflow, and we believe in workflow from a process efficiency standpoint. XML and Java are there in SOA also, so SOA development is becoming a commodity skill. I could move people to any SOA platform and it isn’t proprietary. You’re also getting more GUI interfaces and more business process metric controls. So SOA has really become an evolution of where integration technologies have been.

Most importantly though, think about why Java is the de facto standard today. Java was similar to C++. It used dynamic binding, but its object model was sound and it became a commodity skill. That’s where SOA is going. We thought it was okay when we bonded with NeuStar. We started doing other interfaces with it and became very comfortable with it. Three or five years from now there will be something newer, better and faster, but SOA’s design will allow for that transition to happen, unlike the proprietary technologies.

Billing World: What has this architectural approach allowed you to do in terms of bringing new capabilities to market and moving the new US LEC assets through the post-merger phase?

Moore: This is an evolution where we are starting to plug in more pieces. If you look at our integration with US LEC, within 30 days we had their employees on our Oracle Human Resources system; we had a common view of customers across all OSS and billing systems with Oracle Customer Data Hub. We had a 360-degree view of the customer, both PAETEC and USLEC, tied into trouble tickets, OSS, billing and other relevant systems.

So, when you called the NOC just 30 days in, you got a common view of the customer on both [the PAETEC and US LEC] sides. We now have a unified product catalog where we took the best of each company and brought them together. It is expected that within roughly the first six months post-close everyone will be on the same ordering platform and process. If you take a look at both MetaSolv Solution instances, it’s about 40 to 50 million records to bring together. We’re able to do a lot of this because we have common infrastructure and workflow built on Oracle E-Business Suite and Oracle Communications MetaSolv Solution. The main reason we didn’t tackle billing consolidation along with the rest is only because we didn’t want to mess around with the customer experience in the first year. We want to take our time deciding which legacy vendor (Comverse’s Kenan FX or FTS’ RevChain) will be our strategic billing platform going forward.

With the architecture that we are building, the OSS or billing system of the next company we acquire will be irrelevant. You do a customer load and bring it into Oracle, then you build the connectors to those systems, then as you change a customer, the customer data hub has the smarts to know which systems need to be touched. If we acquired ABC Telecom and moved them into Oracle, it would know it had to touch their inventory system and billing platform, but sales and service are all the same within Oracle. So we don’t have to do massive migrations to have whole views of the customer. If we buy a carrier and they have a Microsoft SQL Server based inventory system, I’ll probably just move that to Oracle’s MetaSolv Solution, because I have so much in MetaSolv now—but that’s a business reason, not something the technology would force me to do.

Billing World: Everyone is talking about “transformation” being the key to success these days, but what does that actually mean to your customers, most of which are large businesses?

Moore: PAETEC and Time Warner are constantly being compared to each other. Every one else struggled. There just aren’t many top-tier CLECs out there anymore. But our business model is no different now than it was at the beginning. We sell multiple, profitable T1 business with enterprise customers. People don’t talk about it because they want to talk about VoIP and other IP applications.

There’s no question the future of this business is in IP, but we built our VoIP platform on top of MPLS, and it only goes through session border controllers. We’re the only ones who do that. We only go after high-value customers. We won’t tell our customers you can run things over the Internet and have extensions everywhere. We layer-in security and quality. We do what makes sense and make the right investments. So, VoIP is 10 to 15 percent of our business now, but we don’t flag-wave it, because it’s an evolution. We have one of the best MPLS backbones in the industry because we’ve been doing it longer and one of our VPs was on the original IETF committee responsible for the spec. We target everything to that high-value customer—but no one talks about it, because it isn’t sexy anymore.

At the end of the day our business is taking care of a customer who trusts us with their business. You’re going to have issues in telecom whether you own your fiber or not. We don’t let trouble tickets go unless the customer is taken care of, where others will close tickets if the problem is solved on their side.

Billing World: Given that point of view, how important is IMS to your customers?

Moore: IMS has its place, like everything else. But in the space we play in, we don’t have people asking us for it. You have a balancing act where you only have so much capital, and with that you’re going to place bets. Is this the future? Yes. We have key verticals in health care and schools—campus environments that are interested in what IMS might do. But if it’s tough getting a cutting-edge campus to know exactly what they want us to do for them, it will be very difficult to take it to market in an organized manner. This isn’t driving our business right now. It was originally the Wi-Fi to cellular roaming application that was hot for IMS, and I think we’ll have applications like that in campus environments, and that will be interesting. But look how long it has taken people to get comfortable with SIP, and to go to SIP trunks from TDM trunks. Even our high-end customers aren’t asking for IMS right now.