 | Issue: | Europe I 2008 |
| Article no.: | 7 | |
| Topic: | Next-generation services for next-generation customers | |
| Author: | Andrew Feinberg | |
| Title: | President and CEO | |
| Organisation: | NetCracker Technology | |
| PDF size: | 213KB |
About author
Andrew Feinberg is President and CEO of NetCracker Technology; he is responsible for NetCracker’s corporate strategy and worldwide business operations. Prior to joining NetCracker, Mr Feinberg worked at Bain & Company Private Equity Group, where he oversaw transactions in the telecommunications, software and hardware industries. Before Bain, Mr Feinberg was a strategy consultant for the telecommunications, cable and software industries advising customers on corporate strategy in the US, Europe and Latin America. Andrew Feinberg holds an MBA from the Wharton School and a B.S. from Bentley College.
Article abstract
The changes in the industry brought by new technology, by convergence and digitalisation, are surpassed only by the changes in the user expectations and demands they have engendered. Customer demands, the changing face of the market, calls for fundamental changes in communications service providers’ (CSP) attitude and approach. CSPs must position themselves to add value, build an organisation centred upon customer needs, engineer a fully converged IP-based fixed/mobile network and merge information and communication technology to enable next-generation services.
Full Article
In telecommunications, ‘transformation’ is a much-used, and abused, term. It often describes only relatively minor changes. In truth, however, transformation has an important and specific meaning in our industry, and Communications Service Providers (CSPs) need to understand its implications. Simply put, transformation is the process of changing from the old network-focused ethos and business model to a new service and customer-focused model, necessary for survival. In the 21st century’s world of converged communications, competitors will be many and will appear from unexpected directions, and change will continue to be swift and merciless. This transformation involves much more than an investment in technology. It is, in fact, a broad cultural and business transformation that requires a fundamental change in attitude and approach. There are four transformation areas that are vital to a CSP’s ultimate survival. A CSP that commits to transformation must Position, Build, Engineer and Merge: • Position the organisation so it adds value in a fast-changing, complex environment; • Build an organisation that understands its customers, interacts with them and, most importantly, provides them with a quality experience; • Engineer its core technology into a seamless, converged, fixed and mobile network based on IP; and, • Merge the power of Network and IT to enable converged services. All four transformation areas focus on next generation customers and next-generation services – not just next-generation technology – because customers and their preferences have changed radically. Legacy service customers were conditioned to be network subscribers who accepted simple, unchanging services. Next-generation customers are their polar opposites. They compare services and exercise choice; they demand the ability to select and tailor services to meet their exact needs. They have high expectations because communications services are now crucial to their work and their play. They are also tremendously diverse, highly brand-aware, fashion-conscious and fickle. Then, too, while next-generation customers are cost-sensitive, they will pay a premium for an exciting service or the most fashionable brand, as shown by the iPod’s remarkable success. The new CSP will meet the needs of its next-generation customers – and ensure its own survival – by transforming itself in the following ways. Position for value – CSPs need to be more than dumb pipes. They receive little or no revenue from today’s content services if all they provide is connectivity. A service like iTunes, for example, practically eliminates CSPs from the revenue stream. Out of every dollar spent, the CSP receives about 1p. Moving forward, CSPs need to become meaningful facilitators, coordinators and enablers of content delivery for the benefit of all players – customers, content providers, and, of course, themselves. Then they can create a revenue share based on the value they provide. To become essential players in the value chain, CSPs must leverage the wealth of information to which they have unique access. They know what devices customers are using, they know customers’ downloading habits, and they know customer locations. Through network monitoring and management, they can also analyse and impact customers’ quality of service. By delivering the right quality at the right time at the right location on the right device, CSPs can build a rich customer experience and become essential links in the content value chain. Build customer relationships – Transformation also involves understanding and getting closer to the customer. It’s not just the network or the service that needs to be managed; the customer’s quality of service experience must be managed as well. CSPs must understand exactly what the customer is experiencing – whether they are listening to music, surfing a website, or making a phone call. Then they have to ensure that service quality actually matches what the customer has been promised. A sports fan, for example, who has the big game streamed to his handheld, will expect specific quality parameters to be met – in particular, he will expect the game to be streamed in real time, not lagged by 30 seconds. Giving the customer control over services is also important: CSPs must invest in technologies that enable users to interact with their services any way they want to – in person, on the phone, or over the web. Engineer convergence – Managing network transformation and the migration from legacy to next-generation converged infrastructure is critical. In the past, CSPs have been network specialists: specialists in the fixed network, mobile network, or cable network. They must now become service specialists and network technology agnostics. Today, pure mobile or pure wireline providers are disappearing because CSPs must deliver converged services. To do so may require that a wireline company buy or partner with a mobile company or vice versa. No matter what their starting-point, CSPs are beginning to deliver converged services that run transparently across multiple network types. The end-to-end network will continue to transition from IP at the core with a multi-service edge to an all-IP, fully converged network. Merge the power of network and IT at the service layer – Services are now dependent on IT components such as email and voicemail servers, content servers, and video servers, and are responsible for an increasing portion of the service value. A transformed CSP, therefore, needs to engineer and manage IT components – just as it currently engineers and manages network components – so that IT and network work together seamlessly to provide converged services. This requires a fundamentally different approach from the past, when the network was the service. Services are delivered and monitored at the service layer, which is where the OSS (operational support system) and the BSS (business support system) reside. The service layer has received the least amount of attention and investment, and is currently old, siloed, and un-integrated. It must be transformed into tightly integrated logical clusters capable of merging the power of network and IT and becoming the crucial interface between the next-generation infrastructure and the next-generation customer. Survival to those who transform If CSPs are to survive the vast number of changes that are on the way, they will need to provide next-generation services to next-generation customers. As they embark on this transformation, they will do well to remember the point Charles Darwin made in On the Origin of Species (1859): it is not the strongest or the most intelligent who survive, but those who adapt fastest to the changing environment.
