Reforming IT

01 Feb 2006

Telcos are struggling with the last frontier of business competitiveness and efficiency - their OSS. They are transforming their back-office to cut costs and increase flexibility. But it's a long haul

Reforming IT
The problem:
Too many silos, too many systems
Expensive, inflexible, slow to market

The solution‾
NGOSS & Web services
But experts divided on slow & steady vs. Big Bang approach

Telecom operators have slashed headcount, bought new technology and outsourced processes to cut costs and improve efficiency. Now as competition continues to ratchet up they are trying to fix the last domain of inefficiency and complexity - their IT platforms, or OSS.

Major carriers have in some cases hundreds of IT systems for billing, provisioning and other functions. They've grown topsy-turvy in stovepipe fashion over the years.

James Warner, president of TeleManagement Forum (TMF), a global industry body that promotes best practice in telco OSS and BSS, says telcos are probably the world's biggest commercial users of technology - yet they use it so inefficiently.

He wrote recently that telecom operators 'have missed the boat' on IT. 'It's kind of like the cobbler's kids that have no shoes. They have not looked inward to their own systems in search of ways to improve their bottom line and grow their companies.'

TMF chairman Keith Willetts says economic conditions are compelling carriers to simplify their IT and OSS.

'To be honest, the conditions haven't been there until recently,' he said. Now both fixed and mobile operators are feeling the competitive pinch, and are focusing on issues like cost reduction and customer retention, he says. The recovery in investment in recent years also means telcos are spending again on IT, but are looking to get the biggest bang for the buck.

Richard Howie, head of Australian-based consultant GRASP, who specializes in IT in telecoms, says carrier OSS are by their nature increasingly complex.

Telcos suffer from silo-based deployments, multiple vendors and the continued proliferation of fresh systems, he says.

'There is difficulty in understanding the full IT impacts on the business program. Complexity is driving complexity and costs,' he said.

Howie and other experts agree efficient IT deployment can massively cut costs and complexity, shorten the product cycle and improve the carrier view of the customer.

'Carriers have built up a lot of redundant architecture - basically silo architecture - typically to address a single market or technology,' says Damien Harte, head of Asia-Pacific presales for billing firm Intec Telecom. 'When they rush to market to introduce a new mobile product, rather than build on their existing architecture, they choose to implement a whole new separate IT system.'

He says Australian carriers Telstra and Optus are typical examples. Optus recently chose a fresh mediation solution for a new service, rather than impact its existing platform, Harte said.

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