With the global economy still struggling and competition more fierce than ever, service provider executives are coming out of the corner suite and taking a greater interest in the day-to-day operations of their organizations.
The hands-on trend being adopted at the highest levels means that information and data pertaining to business performance need to be as relevant to executives as they are to employees focused on operations.Having a standard way of communicating about business performance can make it a lot easier for service providers to talk to their supplier partners.
Business Benchmarking Program ManagerTM Forum
To standardize and streamline the language of business performance metrics, TM Forum's Business Benchmarking program delivers information that executives need to make decisions across the organization. Our studies compare business performance across a variety of metrics, spanning revenue and margin, customer experience and operational efficiency. These metrics help service providers get a strong sense of how they stack up against the competition, as well as their strengths and weaknesses.
During the six years our Business Benchmarking program has been running, metrics have been expanded to cover the core performance measures of the business. We are now making our library of business metrics publicly available as standardized business performance metrics within the communications industry. These metrics are the foundation for benchmarking, but beyond that, we're seeing service providers incorporate them into their management systems, as well as vendors build them into their products. Tier 1 service providers are now incorporating them in to their data benchmarking models, and Tier 2 operators are using them to structure their business. Consultants are using them to recommend areas for improvement.
In this fashion, TM Forum Business Metrics are becoming the standard approach and common lexicon of business performance, much like TM Forum's Business Process Architecture has become an industry standard for common process architecture for both business and functional processes. The business metrics library will be online soon in document form. For now, those interested in access to the library can contact firstname.lastname@example.org, and registered TM Forum users can see an overview of the business performance metrics here.
Standardized business performance metrics introduce common language
Over the years, the Business Process Framework, which is also known as eTOM, has become a common process lexicon in the communications market. Even operators that weren't using it yet were aware of the process definitions and, in most cases, understood what they meant. Service providers could use these definitions as a way to communicate with suppliers and with each other, so everyone was speaking the same language.
Business performance metrics provide the same opportunity. Service providers have a lot of metrics, as well as sophisticated internal processes for looking at them and analyzing what they mean. Everything from how networks perform using different technologies to business issues will have metrics of some sort. We're not saying our metrics are better, but they are standard across the board, which provides a common way to talk about the subject.
Having a standard way of communicating about business performance can make it a lot easier for service providers to talk to their supplier partners, because if they understand the definitions, everyone means the same thing when discussing something as critical as improving overall performance. Many operators have found that having comparative data is meaningful as they move forward with new business and technical plans.
New business performance metrics include cost-per-bit transmitted
We're looking closely at our benchmarking results this year and evaluating what we can provide specifically to C-level executives without requiring them to pore through reams of data. We're also looking at CXO needs for any new business performance metrics we create. I don't mean we will only design metrics for senior executives going forward, but we will take a close look at what C-level executives need beyond what we have today.
A good example of this is "cost-per-bit transmitted," which comes up frequently in service provider investor calls. As revenues continue to decline and bandwidth requirements increase, one measurement of profitability is whether providers are containing their costs in order to transmit that bandwidth is a clear indicator of profitability. If cost-per-bit transmitted isn't going down, investors will leave in droves because you don't appear to have a plan to become profitable. TM Forum will add "cost per bit transmitted" will be added to its business performance metrics this year.
Bringing different ways of measuring business performance out of the shadows will help everyone within an organization -- from executives to those in the trenches -- to understand their importance in helping an organization get and stay competitive in an increasingly tough market.
TM Forum's Business Metrics Development Project will be discussed at the the Management World Forum in Orlando, Fla., from Nov. 9 through 11.
About the author: Tonia Graham is program manager of the TM Forum Business Benchmarking Program and has managed the program since its inception in 2004. She is also chairman of the TM Forum Advisory Board and has more than 30 years of experience in the telecom management, networking and computer industries and has served on the board of directors of several companies in the communications industry. She is also the chief executive officer of e*Tezeract, an independent software vendor (ISV) in the IP Infrastructure Management software area. Before launching e*Tezeract, Tonia held executive positions with Hewlett Packard and Vertel.
This was first published in October 2010