Transforming to compete

Nicolas Mercouroff
05 Feb 2007

With fierce competition at all levels, increasing consumer demand for a seamless user experience and Internet technology providing a constant stream of disruption, service providers face a business situation that's forcing them to transform their operations. This transformation means shifting the service mix toward innovative, sticky services and end-to-end service control to lower costs and lock in network value.

Service providers realize that their business will be completely different in five years and that their networks must be transformed to drive new business directions. Service transformation will change the relationship they have with their residential customers, from service transaction-based (phone, Internet and TV) to a relationship where the service provider manages the communications and entertainment experience residential users have at home and away.

Until recently, service providers have met the service challenge by overlaying individual stovepipe services onto their IP infrastructure. It's now time to change the game. Today's service providers are looking at creating new services and the vast and growing opportunities with fixed and mobile broadband services for a combinational service perspective - to push the end-user experience even further.

In doing so, service providers face the challenge of deploying, using and valorizing these new services within an optimized and cost-effective architecture and, at the same time, making the services able to communicate and interact seamlessly with one another and with other services, including third parties.

More agile approach

Service providers need a strategy for competitive transformation to evolve their services gradually toward convergence and become more agile competitors. This strategy will enable them to deliver a better user experience with converged services, locking more end-user value to their assets that can't be easily copied by competitors.

Competitive transformation is achieved by leveraging three key components: service transformation, network transformation and business transformation.
Service transformation leverages service creation: creating new service categories and revenue, as well as, innovating to defend these new and traditional revenues.

Network transformation leverages service control: using operator resources to differentiate services based on QoS, security, bandwidth and other provisioning features while delivering more valuable service innovations than competitors.

Business transformation leverages service integration: to manage risk linked to operator needs for growth by outsourcing network and service integration tasks. This includes E2E integration, turn-key capabilities as well as whole-network transformations.

Delivering such new and composite services requires a strong services strategy and sharing of common information (e.g. user profiles, IP infrastructure resources, and so on) and management capabilities across services, increasing beyond IMS, the concept of a shared service delivery environment (SDE).

It's good enough to say service providers need to focus on agile service creation. But, how do they mitigate risk in new service introductions‾ How do they create new service categories without losing focus on customer retention‾

The answer is a three-pronged approach (each prong increasingly risky):

  • Enhance the existing service portfolio by extending the features current services. For example, a presence enabled address book where a user can see if a contact is already on the phone before they call.

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