Despite the fact that time to market is growing in importance, service providers are finding it increasingly more difficult to improve their speed of introducing new products and services.
A recent survey commissioned by Amdocs shows that while 70 percent of service providers said time to market is very important, up from 59 percent in 2008 when Amdocs conducted a similar poll, the number of service providers able to bring a product to market within six months has actually fallen. In 2008, 67 percent of service providers said it took within six months to bring a new product to market, compared with 65 percent now.
Introducing new services quickly has a positive impact on customer churn/loyalty, revenue generation, customer experience and brand reputation, so it’s easy to understand why service providers would want to improve this aspect of their operations.
And yet this year’s survey shows that as many as one in three service providers failed to achieve their target of delivering new services within six months. While the majority of service providers would like to be able to introduce new services in less than three months, most of them find in reality that it takes between three to six months.
Inflexible systems hold service providers back, and increase costs
There are number of reasons for this failure to improve time to market and the survey clearly demonstrates that for most service providers (almost 60 percent of those polled), the main inhibitors to improving time to market are their complex technology environment and the inflexibility of existing systems and processes. Other issues include new market dynamics, which add more complexity as well as the time needed to ensure support for third-party services, such as app stores or IPTV and additional connected devices.
And on top of this, there are the costs, with 50 percent of service providers seeing their costs of providing new services increase by 15 percent. Again, this is directly linked to the complexity of their current systems and the key issue of B/OSS integration. Due to their numerous legacy systems and hard-coded spaghetti processes surrounding them from past changes, it simply takes service providers too long to change both the processes and systems for new projects. And any change also significantly impacts existing products as well.
But while the majority of service providers (67%) reported they had failed to improve their time to market, 33% reported an improvement, and by 20% on average an impressive number. When asked for the key factors enabling this improvement, service providers cited improving their organizational alignment; improved project management and control (providing a consolidated view of product, services and resources); B/OSS integration, and simplifying the changes to systems and processes for new products.
The lesson from the survey is that those service providers who invested in
Adopting a service factory approach
Like companies in other global industries that have grown and reached a point beyond which they are unable to compete efficiently and address the growing demand, these service providers have undergone a process of industrialization to become more agile, efficient, productive and innovative. And just as any other industry, the communications, media and entertainment industry needs to progress in terms of its operations and fully adopt this industrialized approach.
Car manufacturers, for example, face similar challenges to service providers in terms of trying to differentiate themselves in a very competitive and price-sensitive market. One automobile success story is the MINI Cooper, where each car is built precisely according to customer specifications, based on an extensive set of configuration and customization options. Out of every 1,000,000 MINIs, only 10 will be absolutely identical!
This is made possible by combining re-usable components and flexible assembly processes into a single production line, thereby allowing the factory to manufacture virtually any number of car variants out of a finite set of parts and components.
Service providers, too, can adopt an industrialized approach to service creation and execution, building a wide range of services out of standardized components. For service providers, operations is the -factory’ where products need to be put together in order to provision and fulfill them when customers place orders. A factory approach means that each product component already has standard processes for fulfillment associated with it.
When a factory approach is adopted, operations knows that for each product component there is a standard fulfillment process and system that is tested and ready to go. This means new products and services can be created by combining existing product components, secure in the knowledge that fulfillment systems are already in place to provision them. In this way, systems become an enabler for speedy time to market, rather than a barrier.
Standardization minimizes the complexity of the fulfillment process and its impact on underlying technology, as well as avoiding misalignment between the business and operational groups. It also reduces B/OSS integration challenges or endless changes in processes and systems for new projects.
In fact, this service factory approach creates a lean, effective, ready-to-go and automated operation, allowing customers to receive the services they want quickly, and enabling service providers to thrive and foster innovation in a competitive and dynamic environment.
By Anshoo Gaur, head, Amdocs