In IT transformations, the times they are a changin’

Written by on June 24, 2016 in Billing & Payments, Opinion with 1 Comment

BreakthroughWe know that big IT, and particularly BSS, transformations are expensive, risky and take far too long. We also know that, if we want to become a digital service provider, we are now being forced into looking at alternatives. It is no longer an option but to transform into an entity that resembles Amazon, Google or Apple. Even giants such as Vodafone are ‘wondering what Google would do if it owned the company’.

It is timely, then, that Openet has just published a recent survey among 112 operators from each major region on exactly what they think about transformations.

Among the respondents, there is no dispute over whether they should transform their business. And the reason for doing it is to have a platform to ‘develop, deliver and monetize new digital services; enable a faster time to market and achieve an agility’ that begins to look like Google or other digital service provider.

There are, of course, (increasingly rare) scenarios where the large transformation is the only possibility, but it is risky and costly. 68 percent of operators know of a large transformation failures. 40 percent of those surveyed have seen ones that cost over $20 million, and 10 percent know of failures that cost over $100 million (which equates to over a billion dollars, just among this group).

The main reasons cited for the failure is too much customized software development, over complicated requirements and ‘over promising’ by vendors.

The operators see the impact of failure in delayed product launches, opex increases, customer complaints increases and – in the worst cases – they find themselves being slated in the press.

Transformations also take too long. 39 percent say that they take one to two years, 28 percent say two to three years. This must obviously change, and 49 percent of the respondents say they should take between six months and a year.

So, what are the alternatives that deliver this speed and functionality? The most popular, and quite general one is the ‘addition of new solutions for new use cases (e.g. new solution for shared data, sponsored services, VoLTE, etc).’ Next was the adjunct system approach, implementing real-time charging as an adjunct to existing billing systems, followed by ‘moving BSS to cloud – gradually, system by system’.

Many operators favour a ‘use case’ approach to transformation, so that they can leverage what they see as immediate opportunities, and therefore presumably fund the on-going, gradual transformations of everything else. So, VoLTE and QoS charging are by far the most popular use cases, followed by real-time alerts and the ability to take advantage of intelligent upsell opportunities.

The advantage of the adjunct approach is clearly popular, with 46 percent seeing this approach taking six to 12 months, with 42 percent believing it will take just three to six months. And, of course, an adjunct approach can happen alongside a larger transformation, to deliver concrete results as soon as possible.

The discussion about using adjunct systems and separate solutions for use cases is not a new argument. It is, however, made more compelling when seen in the context and capability that virtualisation, openness and increased systems and process agility bring to the table. These ingredients now enable these implementations to happen very quickly.

And, if operators want to become digital service providers then they must move, and move now.

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About the Author

About the Author: Alex was Founder and CEO of the Global Billing Association (GBA), a trade body focused on the communications sector. He is a sought after speaker and chairman at leading industry conferences, and is widely published in communications magazines around the world. Until it closed, he was Contributing Editor, OSS/BSS for Connected Planet. He is publisher of DisruptiveViews and previously BillingViews. .

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  1. Avatar Michael Elling says:

    1) AGFA’s advantage over the edge ISPs is that they have complete view of demand. Edge ISPs need to invest capex and opex at all layers of the stack with only partial view of demand. Therefore they are at a disadvantage when it comes to estimating marginal cost ex ante.

    2) even if edge ISPs restructure horizontally, the “IP stack” lacks necessary settlements (east-west and north-south) for that model to generate sufficient ROI.

    3) the edge access market is easily 4-10x overpriced based on what we see with 802.11 and other core technologies. As a result the digital divide continues to get worse, but also the potential competitive arbitrage opportunity grows by 10-20% annually.

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