MANAGED NETWORKS - The right tools for the job
Telcos are good at ‘factory’ service provision but it’s an ethos that doesn’t fit with enterprise 
demands for highly complex ICT outsourcing. To tap that market, telcos will have to up their game and invest, says Leo McCloskey
The number of enterprises looking to outsource converged information and communications technology (ICT) solutions is growing rapidly and should be providing a handy new market for European telcos as other parts of the wireline network business continue to be squeezed. But the problem is that telcos need to equip themselves properly if they’re to tap this increasingly competitive market profitably, or they’ll be relegated to the dreaded role of providing low-value ‘factory’ service components to other players - such as Virtual Network Operators or IT outsourcers - who manage to tap it first. This means equipping themselves with the right tools to efficiently meet enterprise needs in what is a highly competitive market for complex, multi-provider, converged services, because the old way of ad hoc, manually intensive processes is simply not profitable. Selling services to enterprises isn’t what it used to be. Back when enterprise technologies tended to be managed in separate silos - separate networks and separate IT domains for voice, corporate data and desktop LANs, for instance - telcos were apt to look forward to a more rational, profitable time when their infrastructure and intellectual resources could meet all those disparate technology and application requirements. That would enable the enterprise to outsource the ICT environment to a single entity, reducing cost, hiding complexity and enabling new applications. As the natural provider of the network glue, telcos judged they could and should be considered viable providers of those outsourced services involving both communications services and IT. ‘Bring on the revolution’, they chorused. Indeed the converged network eventually happened, albeit based on IP rather than the ISDN and then ATM that telcos initially envisaged. In addition, as the converged enterprise network concept has gathered pace, the conventional business wisdom around business ownership and control has changed too. Whereas 10 or 20 years ago many enterprises (obviously depending on their sector) would have seen communications solution ownership and control as strategic and their communications performance as crucial to competitiveness, today many enterprises regard ICT as ‘non-core’ and therefore a prime candidate for outsourcing, with the emphasis on performance increasingly focused on the end-to-end user experience. So, by rights, telcos should be in the hot seat ready to intercept a brave new lucrative business market involving network convergence and outsourcing - playing straight to their strengths.
Not quite. A single enterprise IP network infrastructure certainly irons out communications infrastructure issues. But, of course, it’s not the monolithic network it appears, as it is constructed of multiple service components, each bringing their own complexity problem. Previously, enterprises managed ICT islands with a single source (or just a few sources) of technology - such as might formerly have been found in an intranet or a voice network. This island approach may have been expensive, certainly required multiple management systems, and inevitably meant that it was difficult to build features or applications that crossed networks. But, by having the environment broken up into homogenous chunks of technology, it at least kept things simple and enabled radical change (say the replacement of a voice switch) to take place without impacting the rest of the technology estate.
Today, however, enterprises are building large complex and integrated service environments that must be able to integrate multiple applications and service components. Converged enterprise services such as LANs, storage, mobility and voice-over-IP - which make contrary performance demands of the network – are highly distributed and must operate consistently throughout the enterprise. That makes these ICT environments hugely more complex to design, integrate, and, above all, to manage on an ongoing basis. So there has been a slight change to the script - the converged enterprise network has actually brought with it, not an across-the-board reduction in complexity, but a complexity migration - in effect, the problems have scurried up the protocol stack. The problem for telcos is that serving this market segment by building a powerful single managed service provider capability - pulling together IP-based ICT services in the traditional telco way - is no longer an option.
The complexity of each individual ICT project is such that service delivery doesn’t scale. The germ of the problem lies in the telcos’ ‘factory’ approach to the service delivery. For most of their history, and indeed for most of their activities today, the factory approach has worked well. It’s about defining, managing and monitoring tight processes and procedures to suit the delivery of high numbers of standard product/service combinations, all within their own service delivery environment. A good example today is ADSL-based broadband service deployment where OSS standards and vendor solutions concentrate on automating as much of the ordering/provisioning/fulfilment process as possible. The objective here is to get service delivery ‘right first time’, because market competition will not permit extra costs in terms of telephone help desk time or even truck rolls to sort out problems.
Now consider the requirements of complex ICT service delivery in the enterprise market. In complete contrast to ADSL delivery, where the service is uniform, complex ICT deployments are highly bespoke collections of products and services delivered from different service providers, with each component requiring modification to suit the enterprise ICT requirement. An ICT enterprise solution needs its constituent elements ‘decomposed’ into specific requirements and then ordered as components from the right provider and delivered in the right sequence. As things currently stand it is typical practice for providers to devote large numbers of staff - complex bid and project teams - to designing and then stitching together these solutions. Being human and dealing with high degrees of interdependency and complexity, they make mistakes. The inevitable upshot is botched configurations, missing components and delay as the stricken solution is troubleshot, project profitability plummets, and the enterprise that depends on it becomes increasingly frustrated. But the problems don’t stop there. Once a hand-crafted solution is successfully running there will be ongoing changes, sometimes as high as five per cent per month. Since the initial design was produced by groups of people using ad hoc processes and no centralised tooling, all adds and changes are implemented on an ad hoc basis too. In these circumstances, service problems are very difficult to isolate, leading to yet lower profits and higher customer frustration. Ironically it’s been the nirvana of the homogenous, converged network - the development that was supposed to enable telcos to move up the value chain to offer network outsourcing services to enterprises - which has exposed the limitations of the repeatable ‘factory’ approach to complex ICT solution delivery.
So what to do? What’s required is centralised tooling which acts as an abstraction layer above a single OSS to organise and correctly sequence the planning and implementation activities for complex projects that are sourced from multiple OSS ‘factory’ stacks. Such a centralised approach must complement the information received from the existing OSS that manages each ‘factory’ service component, enabling a comprehensive end-to-end managed solution. Nexagent has implemented such an approach within its Nexagent System. The Nexagent System guides the provider through the complete solution lifecycle. It provides a centralised solution design and modeling capability, enabling the MSP to efficiently capture requirements from a potential customer and to model and validate a network design based on the ICT requirements. It then takes the model and generates an implementation procedure to take the solution through to fulfilment. Once the solution is up and running, it complements the ‘factory’ OSS by monitoring the actual end-to-end user experience across all network service components to ensure that the solution is delivering against the design requirements. This replaces the hand-tooling that currently takes place to create the enterprise solution. It standardises design and integration processes, greatly reducing the time and number of people required to design, transition and operate the solution.
Obviously there are other benefits too: revenue is accelerated, the time taken to undertake the project is reduced and the number of mistakes in implementation is reduced - each leading to enhanced solution profitability. In effect the Nexagent System creates a standard, automated process for integrating and sequencing ICT services from multiple service providers’ ‘factories’. The Nexagent System is aligned with the ITIL Service Lifecycle as well as conforming with the TeleManagement Forum’s eTOM (Enhanced Telecommunications Operations Map) process model. As the telco business model changes radically - with traditional voice call charge revenue contracting and even, in some territories, voice lines shrinking as subscribers turn to mobile replacement - telcos are keen to tap new revenues, especially in high growth, high profit areas.
Leveraging their network expertise to win combined Communications/IT converged network and applications outsourcing business has always been on the radar. But if telcos are to make good in this area there must be a recognition that custom enterprise ICT managed solutions are no longer winnable using ad hoc, hand stitching. Telcos must apply the same focus on process automation to complex ICT solutions as they currently are to the ‘factory’ parts of their business. If they don’t, then there are plenty of competitors in the IT and outsourcing spaces to step in and take the business. Telcos need to invest now in the right tools to secure their competitive edge in this growing market.
Leo McCloskey is VP Marketing and Business Development at Nexagent
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