 | Issue: | Latin America III 2001 |
| Article no.: | 4 | |
| Topic: | Creating the Convergent Network | |
| Author: | Eduardo de Vasconcellos | |
| Title: | Vice-President of Business Development | |
| Organisation: | Operations Telecom, BMT – Bechtel Método Telecom Ltda | |
| PDF size: | 20KB |
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Article abstract
Convergence, the interaction between the telephony, broadcast and computer industries, is complex but, driven by the market, unavoidable. Convergence is multidisciplinary and will require companies with experience in diverse areas to join (acquisition, merger, co-operation) together and share their skills and infrastructure. The elevated investments and risks involved dictate the need for a well thought-out strategy. Integrated project management methodology and a project management partner are the key to on-time completion and to earlier return-on-investment.
Full Article
Framing Convergence In its broadest business sense, confirmed in the US by the Telecommunications Act of 1996, convergence can be defined as the interaction, and evolving relationship, of the telephony, television and computer industries. Convergence is significant in that the telecommunications industry is likely to transform itself over time through mechanisms such as: – increased merger and acquisition activity, fostering consolidation in domestic and international markets; – the strategic partnering of telecommunications service providers with content developers; and – strategic alliances and affiliations, in the form of bilateral and multilateral agreements between telephony, television and computer enterprises, that enhance their value-added capabilities. The dawn of convergence in the communications industry represents the tangible recognition that no firm can fully participate in all sectors of the industry-transmission services, content generation, value-added enhancement and hardware development-without acquiring, merging with or co-operating with complementary firms. The specific importance of software, as the enabling vehicle for convergence is also being increasingly recognized. At the present stage of development of the telecommunications industry, one also speaks of convergence when referring to various forms or levels of vertical and horizontal integration, consolidation and co-operative relation-ships in the industry. Regulatory-or rather deregulatory-and technological changes are probably the major current drivers of convergent initiatives on the part of telecommunications operators. Users should be the main beneficiaries of this, in terms of access to enhanced service levels and lower prices. For a great majority of today’s telecom executives, however, convergence is still such a new and fuzzy concept that few, if any, of their definitions of convergence would match. Convergence, though, does convey some common notions such as bundling, multi-service, resource sharing and optimisation and systems integration, among others. There also seems to be agreement that both users and operators can benefit from the gains that convergence can yield, however it is defined. In practice, one sees several facets of convergence being pursued today. Convergence is most evident in the move towards convergent networks and in attempts to explore and be the first to market the benefits that convergence can bring to both users and operators alike. The Convergent Network Looking at a telecommunications service provider, its network services and assets and the cloud of users that surround it, network convergence can be defined, for the sake of simplicity, along a network/user axis, by way of two boundary perspectives: – The user perspective, generally characterised by bundled services and invoicing, integrated end-device and network access and single point-of-contact customer care. The focus is on service and content, and the interface-the communications with the user-is defined by the IT systems’ capabilities. – The network perspective, generally characterised by integrated switching and/or transmission platforms, common or shared infrastructure, optimisation of network operations and management. The focus is on the cost-effective creation of next-generation packet-based (IP) networks, optimised for data and Internet traffic and variable-bandwidth services, both wireline and wireless. Intermediate forms or levels of convergence can be characterised by combinations of the above perspectives and attributes, corresponding to different points along the user-network axis. Deploying Convergent Networks A company’s decision to embark on a convergent network project is made on the basis of an overall strategy and specific business case analysis that justifies the allocation of necessary resources and management commitment. It is important to remember that building the network is only half of the puzzle. The other half is the creation or redesign of internal processes and the successful marketing of the services. Savings on operational costs that may come with the latest technologies for convergent networks are only realised if one is able to acquire and retain a significant customer base. This requires more than simply offering lower prices. One must educate the market, provide new features and excellent quality services. For whatever focus or level of convergence desired, there is a set of four major functional areas that should be carefully considered when planning, designing and implementing convergent networks and the associated service offerings. The proposed analysis seems, from our experience, to apply both to the construction and start-up of new networks and to the migration or expansion of existing networks. Network Plan A comprehensive approach to integrated network design and implementation should consider at least the following issues, the associated potential of gains and the boundary conditions: – legacy networks; – integrated backhaul and backbone network design; – location of major nodes, points-of-presence and data-centres; – site location and acquisition, sharing/co-locating to the degree possible; – design and construction of inter-connection-related facilities; – network management systems and Network Operations Centre (NOC) facilities; and – potential implications regarding network operations and maintenance. Service Provisioning Plan Starting from the overall business and marketing requirements, a careful analysis of the services to be offered is to be conducted, including a process ‘walk-through’ that includes the considerations below: – service plans, basic and advanced features; – marketing and sales plans, pricing, distribution channels; – capacity plan, desired SLA (service Level Agreement) characteristics; – numbering and addressing plans; – availability of user-sets, end-devices and Customer Premise Equipment (CPEs); – customer provisioning and activation processes; – billing and customer care processes and systems; – record management processes and systems; and – migration of existing customers to the new network/services. Environmental Interfaces One also needs to make sure that all the relationships with the external environment have been properly taken care of and implemented, including but not limited to : – licence, regulatory and other legal requirements fulfilled; – interconnection, roaming and settlement agreements executed; – dealership agreements and customer service contracts in place; and – permits and licences for construction obtained. Operations Readiness Because the implementation of any level of convergence will generally be associated with the need for new skills, processes and procedures, possibly integrating different ‘islands’ of culture within a company, one also has to give special attention to the following topics: – staff and organisational structure for sales, customer care and Organisation and Methods (O&M); – hiring, training and re-training programs; – development and maintenance of processes and procedures, Key Performance Indicators (KPIs); – corporate and back office Information Technology (IT) systems, security policies; and – compliance with service quality requirements-business plan, Service Level Agreements (SLAs). Managing Convergent Projects To develop the right vision for the future and to make appropriate choices as a telecommunications operator regarding the path to convergent networks is a tough and risky task. Early adoption of non-proven technologies could hit one’s market reputation and financial bottom-line, in addition to limiting future migrations. Late decisions could lead one to lose windows of opportunity or market share. But having the right strategy is not sufficient. One needs to be able to implement projects on time and according to business plans. To accomplish this, one needs people, processes and procedures that provide the experience, control tools and methodology to integrate multiple complex activities at multiple locations into an integrated, effective and successful project. In our view, this can be best done by bringing in an experienced project management partner, given the degree of specialisation required and the temporary character of such projects. In our experience, a consistent approach to project management should contain the elements for which the expansions below would apply. Leadership – Integrates customer and partner team into cohesive organisation – Outlines program objectives, sensitiv-ities, and goals – Defines plan to build relationships with customer and participants at all levels – Encourages reward and recognition Planning and organising – Establishment of program milestones and priorities with customer – Project Execution Plan – Optimisation and contingency studies – Implementation timetable and budgets. Corrective actions – Integrated work-around plans – Material and contract change orders – Management reviews – Training Monitoring and Reporting – Trending – Critical item action report – Rolling schedule reviews – Individual work plans – Contractor and supplier schedules – Procurement Tracking System – Change order control – Progress reports Conclusion Given the multidisciplinary and dynamic nature of convergent network initiatives, as well as the elevated investments and risks involved, a well thought-out strategy is essential. An integrated project management methodology and a project management partner are the key to on-time completion and to earlier revenue streams for the operators. This is also the way to mitigate risks and meet or better cost targets.
