The service layer must be seen as the key focus area for any service provider keen to make a major impact in the delivery of next generation services, says Sanjay Mewada
As Communications Service Providers prepare the ground for their move into next-generation IP/IMS-based services, they should spare an urgent thought for the back office: the operational and business ‘support’ systems that oil the network machinery and choreograph the connection of customers. These systems define and assign customers’ services, activate and provision their phones and connections, generate their bills, track the rectification of their reported faults and much more. In fact, acting in concert, it’s the business and operational support systems that define, deliver and manage the service experienced by the customer.
Strange then that this critical 'service layer' is still not getting the attention it deserves from telecom operators. Instead of seeing it as the centrepiece of their transformation efforts, and the real key to the agility, cost reductions and increasing automation that operators know they must develop to compete in the 21st century, it is still too often seen as an afterthought: a collection of systems reluctantly purchased and plugged in once the network is up and running and the urgency of the real requirements become apparent. The industry can no longer afford this approach. The service layer must be seen as the key focus area for any service providers keen to make a major impact in the delivery of next generation services.
There are some unique characteristics of the service layer, (where the back office and Operations Support Systems (OSS) reside), that makes it deserving of the attention. New services get created, delivered and managed at the service layer, which orchestrates resources from layers 1 through 7 across both network and IT domains. Its ability to manage these resources across the layers of the OSI stack is critical when CSPs are attempting to deliver content-rich services from a multitude of sources.
The service layer also has the most complex interplay of processes, applications and data, so the cost of integrating and customising software and systems is considerable. On top of this it tends to comprise a high number of 'legacy' systems and processes, making interoperability a challenge. The service layer is also considered the 'back office' and therefore suffers from the perception of not being strategic to the CSP's success.
All that is about to change. Currently, CSPs are facing an interesting paradox. They have deployed their next generation networks to deliver cutting edge services, but their service layer is a legacy environment originally built to deliver voice to black mechanical rotary phones that today exist only in museums.
Transforming the services layer is therefore, as important as transforming the network, and probably more so. For one thing the network alone can no longer (if it ever could) provide the basis of a sustained competitive advantage. True, achieving acceptable network performance will be critical given the non-deterministic nature of IP, but a high-quality network will only be the foundation for differentiation, not a differentiating quality in its own right.
Real differentiation based on unique services and service bundles can only be engineered at the service layer, so it's vital that CSPs move on from the idea of developing the 'best network' to embrace, instead, the concept of developing the 'best services', not from a network-centric point of view, but from a customer-centric point of view. That means focusing on the 'customer experience' which can be defined as the aggregate view a customer will form of a provider as he or she is 'touched' (or not) by its quality and relevance of the services offered.
The 'Service Experience' is a subset of the Customer Experience and is formed by day-to-day service quality and reliability. The Service experience is optimised through the CSP's use of Network and Service Assurance systems and processes. To really manage and improve the overall service experience, a CSP must understand how well it is delivering specific services to customers against the commitments it's made to them, and it must try to understand – and maximise – the subjective experience of the service.
In the long run, transforming the service layer has value as an end in itself. Over the short term however, this transformation has to assist a CSP in achieving its key business goals and objectives.
Key business goals
There are three key business goals that a CSP must seek to achieve in today's environment. First, to increase revenues by quickly introducing content-rich converged services. Second, to squeeze costs out of operations and to build operational excellence. Last but not the least, to build closer and more profitable customer relationships by understanding and managing the services experience and delivering personalised service bundles.
NetCracker's core value proposition of Service Layer Transformation is closely aligned to these business needs.
Revenue-driven Service Layer Transformation allows service providers to quickly introduce new technologies and services and generate additional revenue streams. CSPs can use pre-configured technology and service templates for IPTV, triple-play services, FTTx, IPVPNs, MPLS, VoIP, xDSL and IMS/SDP deployment. They can do this without wholesale replacement of existing OSS, which can be time-consuming and expensive. The revenue-driven approach focuses on fast introduction of new services and then replacing the legacy OSS at a time and in a manner that is appropriate for each CSP's circumstances.
For those CSPs that are focused on building operational excellence and squeezing costs out of their operations, NetCracker recommends using the cost-optimised approach to Service Layer Transformation. This approach is designed to maximise the utilisation of the network and IT assets.
This approach provides key information and analytics to understand the cost of delivering a service. It aligns network and IT resources to deliver the most optimised service mix. This maximisation of network and IT infrastructure assets significantly reduces the cost of operations and contributes towards higher efficiency.
This approach also provides the capability to maximise the design and planning function to reduce deployment cycles and increase asset utilisation by discovering stranded assets, and results in higher levels of capacity utilisation.
Finally, the customer centric approach is tailored for CSPs that want to build closer customer relationships and deliver a higher level of service. It implements systems which can help CSPs understand customer impacts from service outages; enables them to create personalised services bundles on-the-fly; and generally increases provisioning speed and accuracy, all helping to reduce customer churn.
So the service layer is important, not just because it can monetise the network investment and create and deliver new services, but because it is the foundation on which the customer-facing interfaces and interactions are built. In the emerging hyper-competitive market, winners will be those that are able understand and manage the service experience.
But the service layer is also of fundamental importance to the very business of being a CSP. Without the ability to deliver services ever more reliably and at ever-lowering real cost, traditional CSPs are in danger of being edged out of their own markets by new entrants who aren't encumbered with legacy support systems.
As the underlying cost of voice minutes and bandwidth continues to plummet, the other costs of delivering services assume a higher proportion of the whole – especially those costs related to human intervention, such as the cost of telephone 'help' when services don't work first time, every time. Service providers who find ways of automating customer acquisition (say through web self-service) and minimising human support are therefore in a strong position to thrive in a world of razor-thin margins. Those who can't are in danger of being trapped in a death spiral of frantic cost-cutting leading to lower service levels, leading to loss of market share and lowering revenues, leading to more cost cutting.
To compound this problem, the sheer range and complexity of services is set to rocket as CSPs move into IP and IMS alongside a growing customer demand for various sorts of service customisation. As the average CSP currently finds that close to 60 per cent of its customer orders need 'special treatment' – in other words can't be processed without some form of intervention – the projected rise in service types coupled to the multiplier effect of customisation looks ominous. Without a real transformation of the service layer, service providers encumbered by legacy support systems are going to struggle.
So why is there such a lack of recognition of this problem? Partly this is due to the old perception that the back office is about 'support' systems – 'nice-to-have' components that just help people get on with their jobs. With telecom industry 'thought leaders' always focused on the network, the IT domain in telecom has yet to be elevated to its rightful position.
Vendors are also to blame for not stepping up and pushing for a systematic approach to solve the service layer problem. Instead, vendors are still too often providing solutions to isolated 'point' problems.
Most of all though, there must be a recognition that real competitive differentiation in telecoms must involve an agile, transparent and optimised service layer that creates, delivers and manages services, and that maximises network investments and delivers on customer needs.
CSPs have to ensure that their service layer doesn't become a bottleneck to the delivery of next generation services. A successful service layer transformation needs a deep understanding of the strategic nature of the back office and CSPs must work with vendors such as NetCracker who can address the systemic requirements of Service Layer Transformation.
• Sanjay Mewada is vice president of strategy at NetCracker Technology www.netcracker.com