Transformation of IT companies to cater to business challenges of today’s Telecom operators
by Dhananjay Pavgi, director, Product Management and IT
Applications, Tech Mahindra.
Applications, Tech Mahindra.
Today’s telecom world has gone much beyond the wireline and wireless voice business. The landscape has widened its horizons by expanding the portfolio of services with Data and VAS being bundled with voice services. This has narrowed the boundaries between media, entertainment and telecom service providers, merging them all under one umbrella of Communication Services Providers. Besides the large incumbent telecom operators, the current times are witnessing top service providers who are expanding the range of their telecom service offerings. This undoubtedly intensifies the business complexities for a telecom operator. With the fiercest competitive environment experienced ever, a telecom operator in today’s time expects its IT partner to roll up its sleeves and step up a notch above.
Looking back, telecom operators approached the IT companies to assist them in getting their IT budgets under check so that the CAPEX could be better utilized for network expansion or upgradation to stay ahead of the curve. This worked well until the telecom operators started moving towards all IP networks. With this movement, there has been an obvious need to monetize an investment done in the network transformation. Sales and Marketing departments swiftly started segmentation the subscriber base and developed niche product offerings which were bundled to meet the growing demands of their subscribers for internet, voice and interactive services rather than the traditional voice and data services. Traditional monolithic IT system estate thus became an impediment and operators had no option but to align their IT system estate to cater to this changing business demand. This paved the way for System Integrators whose role was not limited to supply the IT stack and build solutions for providing cost arbitration advantages. The IT suppliers were expected to transform themselves as IT solutions providers with the additional capability of managing the entire partner ecosystem of telecom operator. It became imperative for the IT companies to adapt quickly to the new role and build best program management and governance skills for managing a versatile partner telecom eco-system. Some of the IT providers soon grasped this changing landscape and outlines a new business models, building in parallel their repositories of reusable artifacts such as program governance templates, reusable business processes and market intelligence in order to stay ahead of the curve. They realized that innovation is the key to success and invested in designing solution accelerators that helped them compliment their partner/vendor eco system.
While this transformation of IT system estate was happening where IT organizations stepped up to be an IT partner than a supplier, regulatory changes and auction of wireless spectrum made telecom landscape even more competing. With voice APRU on a decline or fairly keeping constant and data ARPU not helping to attain expected business yield; telecom operators have started expecting more from their IT partners. They now look for strategic IT partners who have the ability to take risks along with them. And these strategic IT partnerships can be defined in terms of having a business agreement with pay-as-you-grow commercial model or taking the responsibility of managing the entire operations post the build phase, ensuring enhanced revenue and profit growth. Such partnerships are governed by predefined Service Level Agreements, mutually agreed upon by both the parties. This also necessitates for an IT partner to have a very healthy and matured relationship within their ecosystem, that is, with hardware and software product vendors who, to some extent, also get to share the associated risks of running the business operations for the telecom players.
The best case studies in which IT partners have ensured success of telecom service providers would be large IT transformation programs or enablement of a Greenfield service launch in emerging economies. There are a handful of such case studies where in IT companies have partnered with the operators to support them, guide them to achieve mutual success. For example IT partners for telecom operators like Tech Mahindra, who have successfully delivered large programs or Greenfield enablements in the emerging economies.
Time to Market being a key in this fierce competitive environment, the agility of the solution accelerators from the IT partner enables the operator’s marketing and sales team to launch differentiated offerings and flood the market with new campaigns, and all this is achieved within a few hours from concept to launch! Some leading telecom IT partners are not only enabling their customers with faster Time to Market but have also have innovated solutions to arrive at a Platform-as-a-Service or PaaS offering that also guarantees bare minimal or almost negligible operational expenditure (OPEX). Some IT partners have also innovated pre-integrated solutions that support multi-tenant architecture and a shared service model while others, who also have a capability, competence and footprint in network technology and services domain have arrived at vendor agnostic LTE stack for quick realization of Lead to Cash prototype.
With 3G roll outs across the globe, data services will soon become a commodity on wireless handsets. This demands for a solution that gives an insight in to end to-end performance of 3G services. Challenge with 3G is that the data sources or touch points that are to be considered for KPIs/KQIs get proliferated for example, Active Probes (call setup, abnormal call release), transmission (congestion, blocked calls), SGSN/GGSN (PDP Context activation failures, Drop Rates), IP Backbone (Latency, Jitter, Throughput), VAS (Server & Application Performance) etc. Laying out active or passive probes across the network is CAPEX intensive and also not a full proof solution. This calls for a hybrid approach (combination of probes & IT Solution) that helps an operator to get this insight and an ability to drill down from Customer Impact to Service Impact to the Root Cause. Innovative solution thus, lies in the way modeling of objects or entities is done in the IT solution.
In today’s flat world, horizontal collaboration is the key to success. Such collaborations would effectively lead to co-creation of value for the telecom industry on the whole. This ideally means an IT partner of telecom operator collaborating with ISV or COTs vendor to arrive at a pre-integrated solution stack or an IT partner, ISV or COTs vendor along with a telecom infrastructure provider working together for building an offering that helps telecom operator attain substantial OPEX improvement, for long term business sustainability. IT partners are also diversing in their scope of services by building competencies around handset testing to ensure technology readiness. Customer experience being driven largely by a consumer behavior, leading telecom IT partners have invested in innovating screen design templates for smart phones as well as handsets to give consistent user experience across various display mediums. This demands intense understanding of Usability Engineering discipline. Intuitive web-self care portals have also been designed keeping in mind smart phones and handsets than relatively larger display mediums be it laptop, desktop or television.
With the surge of growth in the wireless subscriber base in the emerging economies, it is imperative for the operators here is to have a system that is able to handle economies of scale, enables the quick launch of differentiated service offerings which are both compelling and attractive to customers from all the socio-economic groups. They need IT solutions that can be treated as cookie cutter solutions and rolled out quickly at the cost of functional enrichment than a typical solution that is built grounds up. An ideal solution for the operators in these regions could also be the bureau model for service provisioning, subscriber invoice preparation and billing, interconnect settlements with various operators as well as entering into multiyear contracts with the IT partners to manage their operations while they concentrate fully on their core competency of marketing and customer acquisition.
Thus, it is interesting to note that the changing telecom landscape over the years has not only brought about a change in the way operators approach their customers for business sustainability, but has also transformed their relationships with the IT companies. From being an IT Supplier to an IT partner, these relationships have become more and more symbiotic. The IT companies are investing in understanding the environment in which a telecom operator functions and their associated challenges. They are transforming themselves to cater to the growing needs of the industry and building competencies and innovations within as well as through horizontal collaborations for ensuring a strong IT backbone on which a telecom operator’s business flourishes.