 | Issue: | Asia-Pacific 2004 |
| Article no.: | 14 | |
| Topic: | Transition from OSS to Analytical Systems as Next Step in Evolution of IT for Telecom Operators. | |
| Author: | Andrey Morozov | |
| Title: | President and CEO | |
| Organisation: | CBOSS Association | |
| PDF size: | 368KB |
About author
Andrey Morozov is the President and CEO of the CBOSS Association. Mr Morozov is one of the founders of the CBOSS company and is one of those responsible for turning CBOSS, originally a small enterprise, into a respected international provider of IT solutions for the telecom business. Mr Morozov’s background and training is in analytical mathematics. He started his career in government-oriented information systems when he joined Moscow’s first mobile carrier, Moscow Cellular Communications, MCC. Mr Morozov began there as a lead programmer and, with time, was promoted to manage the Information Technology R&D department, where he led the in-house development of the MCC billing system.
Article abstract
Asia-Pacific is the world’s fastest growing ICT market. However, in the era of convergence it has to face new critical issues: the unprecedented increase in demand for services and technologies, growing amounts of information to process and a lack of adequate control and analysis tools. This creates an urgent need for IT to provide generic, integrated, decision support systems. The next step in IT telecom evolution will involve transition from traditional support systems to analytical Operation Support Systems.
Full Article
Operation support systems (OSS) and operational resource management systems (ORMS) have been important developments for the Asia-Pacific region’s telecom industry. Imagine information technology, IT, as a multi-storey building, with each floor representing an underlying technology. The basement and first floors belong to OLTP (on-line transaction processing): ORMS, billing systems (BS) and OSS. In Asia-Pacific, just a few years ago, in-house development of solutions – for instance, billing systems – was considered normal for operators. Today, however, this approach would be a throwback to earlier times. Today, most of these software services are handled successfully by powerful, ready to use, packages with enterprise-level solutions. These efficient packages are gradually replacing in-house systems. Of course, there is still much to be done regarding performance, reliability, scalability, and usability, etc., but the period of revolutionary breakthroughs in this field is in the past, and improvements and extensions are now developed in a stable and evolutionary environment. What remains is the question of how to further process the operational information being accumulated. This information can be analysed, evaluated, and re-used to guide business operations and decisions. To turn the operational data into information upon which management decisions can be based, systems such as TMN (Telecommunications Management System), MIS (Management Information System), and DSS (Decision Support Systems) are used. Upper-Level Technologies The use of these decision support systems brings telecom companies competitive advantage. Obviously, even the most comprehensive OSS or ORMS does not guarantee a carrier’s success. In the recent past, after a service roll-out, an operator could immediately build a fast-growing subscriber base. Basic technology was all that was needed to run a telecom business, and low airtime fees and broad coverage were enough to guarantee a competitive edge. Today’s heavy competition requires another level of services – advanced service packages, high-quality service and QoS guarantees, special terms of servicing and specially tailored tariffs are all needed to gain and maintain market share. In the past, operators used to advertise themselves. Now, they promote tariffs that target different groups of subscribers. Consequently, the need for information to manage the options being offered expanded considerably, as did the complexity of the systems to manage it. Excel spreadsheets were no longer enough; specialised solutions – analytic systems – are now needed. To remain competitive, carriers need to make operational decisions dynamically and need advanced information systems to do so intelligently. High-level decision support systems provide competitive advantages by allowing operators to identify and respond rapidly to changes in the market with updated strategy and tactics. Churn, the movement of customers from one operator to another in response to cheaper prices or special promotions – a major challenge for operators – provides an example of how these systems can help. Promotional packages make it easy for customers to move between operators. Standard OSS tools fail to identify the phenomenon. At best, they provide a much delayed, indirect, indication of churn. Analytical systems, though, can pinpoint churn trends in a timely manner and provide the information to fight it. A few years ago, for example, British mobile operators had churn levels of 25 per cent per year. A carrier used a high-level system to analyse the situation and discovered that a considerable number of customers left within three-months. Using this knowledge, a loyalty programme was devised to retain customers. The programme offered subscribers exclusive discounts and free services upon completion of their third month. Consequently, churn was reduced, customers were retained, the loyalty of customers migrating from other companies was obtained, and the subscriber base increased. Specialised Analytical Systems Naturally, the demand for accurate and timely solutions for everyday issues goes far beyond telecommunications; specialised analytical systems exist for many industries. However, when an enterprise seeks to purchase an analytical system, function/price ratio considerations are important. Most high-level systems, though, have a modular structure and are built, or extensively configured and modified, individually for every customer. The challenge of embedding an analytical system into an existing information infrastructure is very demanding. Consequently, developing an affordable, universal, and serialisable solution is difficult. The price of constituent blocks, and the traditionally expensive cost of system tuning, combine to significantly raise the price of the solution. Experience shows that the prices of the final, installed, versions of these literally hand-made systems are sky-high. In Asia-Pacific, the situation is aggravated as the market is dominated by imported solutions that are costly to adapt to local needs. Because of this, most high-level system developers do not regard most telecom operators as potential customers. Even large operators are, in fact, medium-scale businesses. The cost of analytical systems is still prohibitive for regional operators. Integrated Analytical Systems High-level systems only become affordable when they are standardised and can be implemented in a way that does not require customised integration to work with existing systems. In the fast-paced IT world, when standardisation of interfaces lags significantly, analytical systems must initially be embedded into serialisable integrated solutions. The advantages of integrated solutions, compared to individual components, have won them an expanding share of the market. Typically, unrelated systems components have the following characteristics compared to integrated solutions. Interacting Unrelated Systems Potentially lower reliability: The more providers, the greater the risk of errors; Bridging different versions of heterogeneous systems can be a constant source of crashes and it is often difficult to determine which system, which supplier, is at fault. Higher price of solution: The price paid for the full solution includes the sum of the costs incurred by several providers – advertising campaigns, administration, etc.– there are few economies of scale; The total cost includes the expense of customised integration; Often, the interfaces required for integration are commercially available, at a price. Higher risk of being dependent upon a specific IT integrator or developer Insufficient overall system functionality: Lack of standard interfaces makes true integration of heterogeneous solutions impossible. Serialisable Integrated Systems A unified concept gives direction to the constant evolution of a system that fully supports previous versions. Lower cost of maintenance – one provider, one system to administer, one technical support, etc. Superior functionality provided by the fundamental integration of single-provider subsystems. Single responsibility for modules, links and interfaces. Integrated solutions, in most cases, simply provide the user with better value. They tend to be better technically and conceptually, have greater functionality, are more reliable, and are more cost-effective. With a general decline in ARPU in recent years, the cost-effectiveness of underlying technologies has become a crucial factor for survival in an extremely competitive environment. Running solutions from different providers increases the risk of crashes. The bridges between unrelated systems components also cause errors so, in real-life circumstances, it is often impossible to determine responsibility for system downtime. No provider will admit that his system is prone to errors. With integrated solutions, a single developer bears 100 per cent of the responsibility for his product. Integrated solutions often provide both horizontal integration with OSS, billing systems and external resource systems as well as vertical integration with high-level systems. Vertical integration consists of tuning a system’s constituent modules to meet the operator’s requirements and adapting it to lower-level systems and their interfaces; it should be the primary goal of the on-site deployment of analytical system. The cost of integration is borne entirely by the company that opts for in-house solutions. The developer of an integrated solution factors the one-time integration cost into the overall development budget; this allows the integrated solution to be attractively priced. In-house Solutions When high-level solutions are not available, some operators develop in-house systems. This often happened before quality OSS solutions were widely available. Users justified in-house development because of the unique character of their business, the inability of a universal solution to meet the operator’s special requirements and similar arguments. Nevertheless, in-house development cost must be borne exclusively by the developer and the resulting system has the same drawbacks as solutions resulting from the integration of separate components. The appearance of enterprise level, universal and serialisable, analytical systems change the situation dramatically. The transition from in-house to enterprise solutions should be considered a landmark in IT evolution. At first, these systems appeared as in-house developments of major software corporations, which later evolved into serialisable universal systems; or disappeared, giving way to the enterprise solutions. There is no evidence to believe that the evolution of analytical systems will be different. Conclusion Efficient solutions for an operator’s information/decision support systems tend to be complex, but provide both horizontal and vertical integration with the full range of operational systems. High-level analytical technologies are still only available to telecom operators within a complex, integrated solution. Integrated analytical systems offer a quality change, contributing to the evolution of the telecom industry. These systems are still pioneering, innovative, efforts. They are yet not risk-free, but can put daring companies one-step ahead of the competition, both in Asia-Pacific and worldwide.
