| QUESTION & ANSWER |
Next-gen OSS may include revenue operations centers (ROCs) to monitor business processes |
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By Kate Gerwig
04 Apr 2008 | SearchTelecom |
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In an environment where change is the only constant, service providers are faced with consolidating operations from a variety of acquisitions while they're reinventing themselves as visionary "next-gen" providers, even though the successful business model is far from clear. Not only do providers have to consolidate their networks and roll out new services, but they must somehow manage to have effective operations support systems (OSS) in place to keep track of how the whole business is functioning.
From the macro to the micro challenges facing the telecom industry, OSS expert Mark Nicholson, chief technology officer of Subex, has heard it all from service providers around the world. Nicholson talked to SearchTelecom.com's site editor Kate Gerwig about how providers are evolving and changing their business processes as they go through a network transformation.
At the Billing and OSS conference this month, Nicholson will take part in a panel discussion about the value of providers building a revenue operations centers (ROCs) that would enable operators to monitor network operations and correlate their impact on revenue, costs and financial statements, much as their network operations centers (NOCs) measure the health of their networks. What are service providers' main concerns in transitioning from their legacy operations support systems to the systems they'll need in the future?
Mark Nicholson: The biggest challenge is that the telecommunications business is going through an evolution that's not finished. When you're going through that, it's hard to understand what your target state would look like, so it's hard to come up with the business processes and the OSS systems you'll need.
From your position, do you know what next-gen OSS will look like?
Mark Nicholson: Everyone is talking about the "adaptive enterprise," and not just for telecom. That's the one constant. So the solution is to create an environment that can adapt more readily to change when it comes up, because who knows what the target state of service providers will look like in three, five or 10 years.
Is telecom any different from any other industry going through change?
Mark Nicholson: What regulators and service providers are struggling with is that you have a business going through rapid technology change, and yet the magnitude of the challenge is radical because you're talking about national infrastructure. You don't want to make rash decisions. Somehow the industry has to find billions or trillions of dollars to reinvent itself. Where is it going to find that? Who's going to pay for it?
Since the end result is uncertain, what kind of OSS choices do service providers have?
Mark Nicholson: The question for providers to answer is what aspects of their businesses they should change now. They need to decide whether to invest large amounts of human and financial capital in making a wholesale transformation now, or wait until there's more stability when they know what the business model might be. The group that wants to make wholesale changes now wants to make sure that their systems are adaptable. The other model is not to spend billions now but make incremental changes until there is some clarity.
How does industry consolidation affect business transformation?
Mark Nicholson: Lots of consolidation has already happened in the U.S., and now providers have three of everything, and thousands of operations. Most executives see the incremental approach as more pragmatic because you don't want to go through wholesale transformation when you're in the middle of consolidation. But we have customers doing it both ways. Those using the hybrid approach are trying to make new services like video work with processes existing for voice, for example. The good thing is that you can put a toe in the water and see how it works.
When you take a micro look at the service provider environment, what's going on?
Mark Nicholson: They're offering new products and services all based on a new technology, the IP protocol and digital media, which goes beyond video. Software is now content, and managed applications can be offered by traditional telecom operators, but this is a new model for them. In terms of network engineering, the challenge is to serve a multitude of market segments with different quality levels all on one network.
Serving the enlightened customer is another challenge. They don't want to hear all about the technical stuff. They want the provider to make things work, and they have a vision of what they want their services to look like. Video is a good example. Customers don't want to hear about latency and jitter. They want it to work like the cable they're used to.
You've been evangelizing the idea that service providers establish a revenue operations center (ROC), a similar concept to their network operations centers (NOCs). Can you explain your vision of a ROC?
Mark Nicholson: Revenue operations centers, or ROCs, are something providers are beginning to think about. If a NOC shows the health of the network, a near-real-time ROC would show the health of service provider operations. This is still a new concept for service providers, but one of the things driving it is the focus on the company's financial performance vs. the network. There's a shift in the value of the brand, not just the network.
You can think of a ROC as the equivalent of a big screen with dashboards to show the health of operations. So you'd see orders coming in for certain types of services, see when trucks go out to a customer's location, see people calling in about video services, that sort of thing. A ROC could focus the impact of different departments on a product, the profitability of a service, and tie in all of the costs associated with a product. It would help service providers focus on operational efficiency across the board, not just department by department.
Does the technology to create a ROC exist?
Mark Nicholson: We're pretty close to having the technology. Fifteen to 20 years ago, we had systems to do audits that did spot checks on revenue operations. Now you have the tools to check the health of the revenue chain all the way from events in the network to booked revenue.
The evolution of checking the revenue chain is the ability to check the other huge chains in the telco – engineering and planning, ordering equipment, figuring out where to upgrade. Monitoring the service assurance chain is part of post-fulfillment, and it's all assuring that the customer is getting what they're supposed to get.
What's driving the acceleration of the ROC concept?
Mark Nicholson: It goes back to the strategy of adaptability. Providers use a lot of third-party resources, but from a business point of view, services are supposed to be seamless. So a ROC comes in here, too, not just to monitor functions and resources within your control, but those included in your supply chain.
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