The last 12 months have been characterised by continued consolidation in the back office sector, but the president and CEO of industry body TM Forum says 2011 will be remembered as the year operators finally realised that concrete changes had to be made.

According to Martin Creaner, operators have been happy to blame a lack of standards, vendors and themselves for a lack of professionalism in their back office systems over the past decade.

But times have changed. “Operators have finally understood that they can no longer carry on with back office systems that resemble a dog’s breakfast,” Creaner told European Communications.

“It’s insane that big operators have lived with them for the last 10 years, but I have spent a lot of time over the last two months talking with many of them and they know the world is moving on and that they have to act.”

Crucially, Creaner says that while he has heard this refrain before this is the first year he believes that they actually mean it.

The reason? “All conversations come round to threats provided by the OTT players,” replied Creaner.

As European Communications discovered in its most recent quarterly survey, senior telco managers believe the OTT providers will increasingly disrupt their business models over the next 12 months.

The battle will be fought in the back office. “From a business point of view it’s not about the app that sits on your phone,” said Creaner. “All the profitability will sit in the back office and will be determined by how you analyse customers, provide customer care and build new services.”

The president says several factors have come together to give him cause for optimism. On the standards front, which TM Forum advocates as the biggest challenge to implementing a professional back office, there has been continued uptake and collaboration over the year.

On the vendor side, 25 have now put their products up for certification and many are moving towards out-of-the-box capability – a key element in enabling operators to automate their systems and deliver new services more effectively.

As for operators, Creaner says they are leaving bad habits behind and taking a more long-term view: “At the final stage of the procurement process it was common for suppliers to drop their price by offering versions of their products that didn’t conform to industry standards or gave operators a short-term fix.”

Now, Creaner says, operators have admitted that their back office systems aren’t agile enough and that they must invest in long-term solutions.

This reflects a much more collegiate relationship between vendors and operators that can only be good for the industry as a whole. “The market has matured and both parties know they need the other to be successful if everyone is to survive and prosper,” said the president.

However, a maturing market brings its own challenges.

“Consolidation reduces choice and it is increasingly difficult for the smaller players to strike a deal,” warned Creaner. “There is probably less innovation as a result.”

Ultimately, the stakes for getting it right are high. Creaner predicts that operators have an 18-24 month window to ensure their back office systems are able to take advantage of the data revolution.

“Operators need to grasp that they will be taking a smaller slice of a much bigger pie,” concluded Creaner. “To do this they need to control the data and then provide the connectivity. The back office will be the hub for this.”

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