 | Issue: | Europe I 2013 |
| Article no.: | 6 | |
| Topic: | Evolution of the service delivery process | |
| Author: | Danny Bottoms | |
| Title: | CEO | |
| Organisation: | GTS Central Europe | |
| PDF size: | 252KB |
About author
Danny Bottoms is CEO for GTS Central Europe. Mr Bottoms has 20 years’ experience in the telecommunications and media industries.
Article abstract
The service delivery process has improved dramatically over the years but heterogeneous networks and transitions between service providers still present challenges. However, Ethernet adoption rates have begun to break down the traditional platform silos which prevented efficient service delivery processes. In the future, service orchestration functionality will make service delivery over different networks and platforms faster and easier.
Full Article
Within the telecommunications industry, customers typically have three touch points with their service provider. The first is the sales process where we try to match needs to services and produce a solution. The second interaction is service delivery, and just as it sounds, it is the installation of new services which often also involves the transition from another provider. The final touch point is around operations and how customers interact with the carrier during events like billing questions or service outages.
Each touch point is crucial for a service provider because the customer experience determines their satisfaction level and ultimately their longevity as a customer. With increasing competition and traditional industry barriers coming down, keeping your customers is one of a few major activities where a service provider can have a direct and near term impact on results. While acquisition costs and sales productivity are intensely measured and analysed for return, few question the impact of churn. The correlation between churn and each customer touch point is poorly understood in most carriers, but I believe you must get two of the three right to have any chance of creating a loyal customer.
Whether it is IP, Ethernet, or expanding networks as the underlying driver, the service delivery process has improved dramatically over the years. Both customer experience and resource efficiency has increased as the industry has automated more steps in the process. The mobile industry has not only made service activation smooth, but in many countries the porting of numbers from one provider to another is now seamless for customers. Using centralized provisioning systems with established (or regulated) links between mobile carriers has enabled this progress. One of the key elements for these carriers though has been a homogenous network that is controlled end-to-end by them.
Considering the fixed side of the industry, incumbent carriers have the advantage of large networks which allow them to provide the service fully end-to-end. However, they are challenged by many different service platforms with legacy services and high capital costs to upgrade. Competitive carriers are not typically burdened with as many legacy systems, but often do not have sufficient network scale to provision the services completely on-net. As a result, heterogeneous networks are a primary obstacle to significant changes in the service delivery process.
Flow through provisioning
As an example, a carrier may have invested in an Ethernet network using new technology which provides web-based provisioning that can be done in a matter of minutes instead of days. Advanced carriers in Europe deployed flow through provisioning systems some time ago. With flow through provisioning they can provision just by pointing and clicking over a graphical web interface. As simple as selecting the B-end of a service, the A-end of the service and the service profile from a menu and then the service is provisioned automatically across networks and across countries. The service delivery process is efficient and creates a great customer experience – provided all of the service locations are on this network. If one of the locations requires a network extension, capacity upgrade or swap of customer premises equipment then a truck roll is required and the speed by which a service can be delivered is impacted. While service providers have invested heavily in operational support systems to make these different activities flow efficiently, the process gets quite complicated when another carrier or service platform is involved. The competitive challenges of the telecommunications industry have forced carriers to optimize their internal service delivery processes, but it tends to break down when service providers go off-net.
The good news is that Ethernet adoption rates have begun to break down the traditional platform silos which prevented efficient service delivery processes. Ethernet network-to-network interfaces (NNIs) are replacing legacy interconnects in Europe. With more standards-based carrier ‘peering’ the ability to connect provisioning platforms across different services has increased. Provided service providers continue the investment to extend Ethernet from the core to the edge, and more importantly, merge the various network element provisioning systems, the traditional barriers to fixed service delivery can and will be overcome in the near term.
Access remains the largest part of a carrier’s heterogeneous network, thus the biggest challenge when it comes to service delivery. Just as we have seen fixed telephony services in the consumer market continue to melt away in favour of mobile, the potential that 4G services could replace a segment of the fixed access network for business customers is a promising, yet threatening, development. With a completely new network, the mobile network operators will of course ensure the service delivery process is smooth and provided other carriers can easily interconnect through NNIs, we may see the next step forward on making the service delivery process for businesses as seamless as it has become for consumers.
Managed services
Aside from the downward pressure on costs and the need to control the customer touch point, the introduction of managed services into carrier product portfolios is turning out to be a positive disruption. The provisioning of a traditional fixed service for a business customer is radically different than what the customer expects when it comes to cloud services. Customers demand automated provisioning processes that they control, which then requires that service delivery is done through web-based systems. I believe this is accelerating the need for change within service providers and as we have seen the demand for simplified pricing models, we see that the carriers who embrace the challenge will be able to differentiate their services. Since managed services are much more of a solution than a typical service, the up and downstream effects on the other customer touch points of sales and operations are also seeing this need for change.
The evolution of the service delivery process has picked up pace in the last few years. The needs to be agile to customer demands, to dynamically control network capacity and to be as operationally efficient as possible are the primary drivers. We have the building blocks to make service delivery more automated and seamless to customers, but more investment in our networks is required. Service Orchestration is a future area of systems investment where engines will make service delivery over different networks and platforms faster and easier. As a result, customers will be able to provision or modify service parameters in almost real time through a web interface. This functionality is particularly important in on-demand and cloud computing environments. Just a few carriers in Europe include this functionality today, where customers can provision or make service changes in their virtualized environments for CPU, memory, storage and back up parameters through a web interface.
The crossover between the IT and telecom industries should generate more revenues for carriers to warrant the investment and push the ‘industrialization’ of the service delivery process further. In the end, I believe the investment is necessary to control that second customer touch point. With long term customers who appreciate (and pay for) a better experience, we can then focus on the other challenges within the telecommunications industry.
