VANILLAPLUS SURVEY SHOWS THAT OPERATORS NEED TO PICK UP THE PACE WITH THEIR B/OSS DIGITAL TRANSFORMATIONS
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INTRODUCTION The telecoms industry has transformed from a network hardware-based business, exclusively selling capacity on fixed and wireless networks, into a software-defined and serviceoriented business. This change has made it clear that the current software being utilised by operators to run their businesses, assure their revenues and services and service their customers effectively, is in need of an upgrade in line with network technology digital transformation. These tools and software, traditionally called operational support systems (OSS) and billing support systems (BSS), need to be digitally transformed to address the needs of virtualised networks and the vastly increased number of services that will run over them. B/OSS DIGITAL TRANSFORMATION With this is mind, we asked our respondents whether they have undertaken B/OSS digital transformation. Encouragingly, the vast majority – 84% – have identified the need to transform these systems. 28% said they have already undertaken B/OSS digital transformation, while 23.2% said they are currently undertaking it and 33% said, while they have not done so yet, they plan to. This leaves just 16% of respondents that have not and have no intention of digitally transforming their B/OSS. Figure 1: Have you undertaken B/OSS transformation? Yes, currently undertaking B/OSS transformation
23.17%
Yes, have already undertaken B/OSS transformation
28.05%
No, but planning to undertake B/OSS transformation No, and do not intend to undertake B/OSS transformation
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32.93% 15.85%
Digital transformation doesn’t necessarily mean complete B/OSS replacement. To avoid being swamped in a forklift upgrade attempt of their entire operational IT in one go, some operators are picking off single systems or small portfolios of adjacent systems in order to make progress. Neural Technologies' Optimus Portfolio will be able to assist operators in solving their digital transformation challenges by selectively transforming parts of their IT. This method will address specific B/OSS transformation objectives as they are identified.
To identify which areas are being prioritised, we provided a list of six objectives and asked respondents to rank their top three B/OSS digital transformation aims. 'Improving time to market' was highlighted as the top priority by respondents, selected by 36.6%, demonstrating operator awareness that offering new services will quickly enable them to either compete if a rival launches a new service, or to be the first to market and generate new service revenue faster. The second most popular priority at 17%, was 'effective resource management', illustrating the opex pressures that operators face and their need to maximise utilisation both of network capacity and their personnel. Total cost of ownership (TCO) was a consistent selection among respondents. It was chosen by almost 16% as their first choice, 19.5% as their second priority, and by 12.2% as their third priority. This suggests an openness among respondents to consider different software purchase models, provided that the TCO stacks up. To achieve a greater depth of understanding of the industry state, we asked our respondents which B/OSS components they have implemented within their networks. The table below lists the results in order of popularity.
Figure 2: Which B/OSS components have you implemented?
Convergent billing system
40.2%
Centralised provisioning system
37.08%
Campaign management system
34.13%
ESB (enterprise service bus)
28.0% 26.8%
Order orchestration platform
24.4%
Product eligibility and catalogue system Dunning and collections system
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15.8%
Unsurprisingly, a convergent billing system is the most implemented component because the capability to bill customers is critical to the success of any operator’s business. It was, however, also significant that operators have implemented centralised provisioning systems almost as widely. This illustrates the need that operators have recognised to be able to provision a far greater number of services than ever before from a centralised system rather than relying on systems within vertical stacks to support a patchwork of services. The concepts of convergent billing, coupled with centralised provisioning, demonstrate how operators’ digital transformations are enabling greater operational efficiency by breaking down the fragmented siloes that have required operators to manage complex integrations between disparate systems.
Figure 3: Have you implemented and IoT/Data Integration platform?
76.83%
No
Yes
23.17%
THE IOT OPPORTUNITY The ability to provide new services and new opportunities is widely regarded as the salvation of the industry as operators shift towards directly supporting the many services customers use on their networks, rather than simply providing the capacity. Among these emerging opportunities for monetisation is the Internet of Things (IoT), which operators can support with connectivity, billing and digitised data processing. We asked whether our respondents had implemented an IoT digitised data processing platform and 23.2% said that they had done so while 76.8% had not. It is encouraging to see that almost a quarter of respondents have already invested in IoT since it is very much the early stage of IoT service roll-out and we are well in advance of the mass-market, multi-billion endpoint IoT ecosystem that is to come.
Figure 4: Ratings on a scale of 1-5 for the importance of the following areas when considering an IoT/Data Integration platform Rated 1 %
Rated 2 %
Rated 3 %
Rated 4 %
a) Open Source
21.95%
19.51%
23.17%
18.29%
Rated 5 % 17.07%
b) Total Cost of Ownership
26.83%
14.63%
18.29%
19.51%
20.73%
c) Self-management/development
15.85%
29.27%
23.17%
12.20%
19.51%
d) Support virtualised environment
15.85%
21.95%
20.73%
26.83%
14.63%
e) Availability
25.61%
19.51%
14.63%
12.20%
28.05%
f) Performance
23.17%
20.73%
14.63%
12.20%
29.27%
g) Cloud base
17.07%
21.95%
21.95%
20.73%
18.29%
EXTRACTING VALUE FROM DIGITISED DATA It is now abundantly clear that operators are sitting on a potential goldmine, when considering the mammoth amount of digitised data they collect and hold. This digitised data holds huge value since it derives from user communication habits and data that can be gathered from the network concerning services, location and application performance. Managing the ever-increasing volume of digitised data, however, and extracting valuable insights from it, presents a significant challenge to operators. To dig deeper into the difficulties that operators face, we asked them what their biggest challenges were, asking respondents to select one challenge from the list in Figure 5, below. Figure 5: What are your biggest challenges with regard to data for the next year? (select one)
Obtaining high quality data Integrating data
18.29% 10.98%
Data regulation
18.29%
Utilising data productively within your business
25.61%
Monetising data
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Understanding the data
15.85% 10.98%
Figure 6: Do you have an employee or department within your organisation that is dedicated to data or big data?
41.46%
58.54%
NO
YES
The biggest challenge that respondents say they face (25.6%) is utilising digitised data productively within their businesses. This suggests that the plumbing methods of digitised data collection and storage have been addressed but operators are still challenged by the analytics to derive actionable insights and other useful information to either enable them to run their businesses more efficiently or to open up new cross-sell and up-sell opportunities. This was borne out by a further 15.8% of respondents identifying monetising digitised data as their biggest challenge, and almost 11% stating that understanding the digitised data they collect is their biggest obstacle. To discover the extent to which operators are dedicating resources to managing, analysing and acting upon their digitised data, we asked whether respondents have an employee or department within their organisation that is dedicated to digitised data or big data. Encouragingly 58.5% already have this function within their business, however, alarmingly over 41% do not. This suggests that many of the concerns aired throughout this article could be addressed with proper professional and departmental attention.
REVENUE LEAKAGE Effective digitised data analytics also feeds into revenue assurance and fraud prevention because it enables operators to understand where revenue can be lost and where frauds can be perpetrated. We explored this area further by asking whether respondents expect increased revenue losses in the next 12 months from six key areas. They were asked to respond yes or no to each area and the responses are shown in the table below (Figure 7). Figure 7: Areas in which respondents expect to see increased revenue losses in the next 12 months
Poor processes/procedures
YES NO
Applying new products/prices
YES NO
Rating/pre-paid charging failure
YES NO
Credit management
YES NO
Interconnect/partner payment errors
YES NO
Internal fraud
YES NO
Other
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YES NO
59.76% 40.24% 47.56%
52.44% 39.02% 60.98% 36.59% 63.41% 39.02% 60.98% 31.71% 68.29% 37.80% 62.20%
The area that respondents predicted would cause the most revenue loss was ‘poor processes and procedures’, selected by 59.8% of respondents, demonstrating that organisational gaps allows revenue to leak in an unmeasured and uncontrolled manner. It is encouraging to see, however, that internal fraud is not seen as a highrisk area for revenue loss, with 68.3% of respondents being the largest percentage of negative responses across all categories. When asked what percentage of total company revenue they think is lost from fraud, bad revenue (from fraud), bad debt and revenue leakage, the respondents’ answers suggests a degree of complacency in this space. Figure 8: What percentage of your company’s total revenue do you think is lost to fraud?
Percentage of respondents
25 20 15 10 5 0 0%
1%
2% 3% 4% 5% Percentage of revenue lost to fraud
6%
7%+
Clearly there is much work to be done on awareness of revenue leakage to stem these losses, even if one accepts a 3% loss of operator revenue. That figure, however, still runs into the tens of millions per year for most operators.
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We then asked our respondents what they consider to be an acceptable level of loss as a percentage of total revenues. The majority (48.8%) said less than 1% would be acceptable supporting the assertion that much work remains to be done here. However, a small outlying group (3.6%) felt that an acceptable level of revenue loss would be 10% or more of total revenues. That may illustrate a small group of respondents from markets in which revenue leakage is higher than the industry standard or a fear that the costs of deploying revenue assurance systems could outweigh the revenue recovered.
CONCLUSION Our survey paints a picture of an industry in the midst of digital transformation. There are no standard best practices established for operators to follow across B/OSS digital transformation, IoT opportunities, data analytics, monetisation and revenue assurance. The traditional foundation of our industry is constantly evolving as it moves away from function-specific hardware, and toward software defined network functions that run on commodity hardware to handle a service portfolio that is now offering far more than merely voice and data services. These survey responses reveal that some operators are moving at speed into the new era and engaging in technological and business model digital transformations, while others are targeting specific areas to transform in a more measured process. There is, however, a final group of operators that have yet to engage with the need to transform at any level, perhaps because they operate in markets where growth still exists and therefore do not see the value in digital transformation. The telecoms industry, without question, faces huge challenges as it realigns itself with the new service arena. It is very apparent from our findings that too much money is still being left on the table by operators because their systems and processes are inefficient, their total cost of operation is too high, and their revenue assurance allows far greater loss/leakage than is acceptable. Many have undertaken movements to address these issues but the digital revolution is not slowing down and the transformation pace needs to pick up as virtualisation and new services are brought to market in greater volume.
www.neuralt.com
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Neural Technologies has the skills, experience, services and products necessary to help operators maximise the benefits of B/OSS digital transformation, while mitigating any limitations that are inherent to digital integration efforts.