By Fred Dawson
November 25, 2013 – Has the long-awaited moment of transformation in big service providers’ back-office systems finally arrived?
Judging by major system overhauls revealed by mobile, wireline, cable and satellite operators at a recent Amdocs customers’ conference the answer is yes. Whether by increments or total replacement of legacy systems, Sprint, Comcast, Videotron, DirecTV, J.Com, Rogers, Vodaphone and many other players across the globe are biting the bullet on long-delayed efforts to converge the service and operations silos that are having a serious negative impact on bottom lines and customer service.
“We delivered 132 major projects in fiscal year 2013,” said Amdocs president and CEO Eli Gelman. Some of these, he added, confirm that IT transformation has reached parts of the world which historically haven’t been on the company’s radar.
One, involving a first phase of a seven-year transformation and managed-services engagement at Philippines carrier Globe Telecom, now has 265 Amdocs employees working on site. “We don’t do little stuff,” Gelman said, noting the company has opened a full-time operations center in Manila as part of ongoing expansion in Southeast Asia and Latin America. “Three to four years ago our business in these areas was in the tens of millions of dollars,” he said. “Now it’s over $400 million.”
Now operating in 21 time zones, Amdocs, which registered $3.3 billion in FY 2013 revenue following a record $845 million fourth quarter, is working with customers worldwide to implement next-generation capabilities embodied in its new CES9 BSS/OSS platform. Built at a cost of $180-$200 million CES9 is providing new and long-standing customers alike a way to deliver real-time integration across network control, business and operational support systems, Gelman said.
As Shimie Hortig, division president for Amdocs Broadband, Cable & Satellite, noted, the move to BSS/OSS modernization has been a long time coming. “In 2005, when Amdocs came to this industry [cable and satellite], we thought this would happen much sooner,” Hortig said. “Now, over the past 18 months, we’re seeing all our customer busy working on modernization.”
The biggest driver, and a primary focus of CES9, is the need to improve customer experience, which touches on many aspects of business processes and how the network works but starts with a complete revamp of customer care at both the CSR and self-care levels. Another driver, the need to harness and put to use massive amounts of raw data, is a core factor in customer care, where the goal is to apply big data analytics to enable real-time responses to customers’ needs across all service categories through online and care agent channels.
Big data analytics is a major growth area on Amdocs’ roadmap, Gelman said. But, noting market hype about big data often ignores the fact that carriers are steeped in knowledge about who their customers are, their payment histories and much else, he emphasized Amdocs’ approach is to focus on new areas where use of data contributes to monetization and better service. “We’re trying to address big data in a humble way with very specific use cases like customer care where we can make a difference,” he said.
Another driver to back-office and operations modernization, which came up repeatedly as service provider executives described their pursuit of modernization projects, is the need to stay ahead of the competition through faster time to market with new product launches, upsell incentives and price changes. There’s universal recognition that “you can’t spend nine months to support new products and offerings,” Hortig noted.
But getting where service providers need to go isn’t just a matter of putting new platforms to use like CES9. In a frank assessment of how IT departments operate, Sven Gerjets, senior vice president for IT solutions delivery at DirecTV, asserted, “We have to start thinking IT from a different lens. We have to change the culture around how we deliver our services.”
It’s an urgent matter, he said. “We have old technology that ties our hands. We have cumbersome workflows. Our call center agents need a degree to use our CRMs. If we don’t change we will be disrupted.”
For example, he observed, IT can no longer ignore the force of consumerization in how devices and apps are used both at the internal staff level and by customers generally. “Looking at the past, IT held the keys to the kingdom,” he said. “We had the best laptops; people came to us for the latest and greatest. Now we’re all scrambling to get consumerized devices into our business.”
Noting that 40 percent of the workforce will be Millennials within five years, he added, “They don’t understand getting old technology at work. We have old technology that ties our hands.”
Breaking with old ways means turning away from developing CRM, billing, order management and other systems tied to specific service categories. Although his own company’s IT team had recently succeeded in creating a user interface around a unified workflow that helps get sales agents up to prescribed performance levels within two days, Gerjets suggested the accomplish was marred by the fact that “we’re still using the same old silos.”
Similarly, while his and other IT groups had mastered use of data analytics to help with churn reduction and cost of customer retention, “when you look at big-data capabilities, the volumes of data we’re really not using effectively are vast,” he said. To get to where they need to go requires developing new ideas about how to use data, not just how to use it more effectively for solving old problems, he added.
As service providers tackle these and other issues tied to BSS/OSS modernization the managers of these initiatives fall into two camps: those who are undertaking the process incrementally and those who are engaged in forklift overhaul of the entire apparatus. Incremental approaches take many forms, such as focusing on implementing next-generation fixes for high-priority issues that will be integral to the revamped infrastructure over time or introducing a completely new end-to-end BSS, OSS or combination of both associated with new types of services or in conjunction with bringing new classes of customers on board. The forklift approaches vary as well, mostly as a matter of how much time is consumed and how the transformation process is phased.
Accounts from Amdocs customers at the conference offered strong evidence that the company has achieved the versatility with CES9 to support whatever approaches to transformation works best for them. By modularizing the platform so that whichever parts are implemented first become foundation stones to the eventual next-generation back office the company fulfilled a dream, Gelman said. “Everything is in real time,” he noted. “Everything is virtualized.”
Gerjets belongs in the incremental camp. “We have to shift our architectures to be more flexible, but we have to pick one or two things, whether it involves technologies or processes that allow us to move farther over time,” he said, noting that, in DirecTV’s case, this involves work now underway on CRM and middleware replacements.
Legacy systems are big monolithic but very fragile beasts entangling the existing customer base. “Fragile and agile don’t mix,” Gerjets said. “None of us have time to get rid of the legacy stuff. We have to figure out how to wrap it, extract and work with what we need. We can’t deliver perfection out the door. We have to deliver value out the door.”
But, for some players, incremental just won’t work anymore. A case in point is Canadian cable operator Videotron, a provider of quad-play services generating $2.6 billion from 49 revenue-generating units that is in the midst of a total transformation of its BSS and OSS infrastructure.
“The systems we have were born in the ‘80s to support analog cable,” said Serge Delisle, CIO and vice president of IT at Videotron. “Over the years we’ve modified and added things to the point where we’re incurring very high back-office costs to keep pace.”
Moreover, “our lead times on new products are too long,” Delisle said. “We were looking at things that would take six month to add and had a life expectancy of 12 more months.”
As complexities grew, it was taking years for new people to learn all the ins and outs of the system. With ten percent of IT expenditures going down the drain just to cover the costs of all this complexity, the company became convinced it would be better off investing that money in a complete transformation.
The straw that really broke the back of resistance to an overhaul was the company’s move into mobile services in 2010, which added another layer of complexity in a business where time to market with new offers and pricing strategies is mission critical. “Our owners believe everything is going to mobile,” Delisle said. “That’s really helped me to leverage the point that we need to transform.”
Another, largely completed forklift transformation involves the revamping of OSS and related business processes within Comcast’s Business Services division. As related byTom Principato, distinguished enterprise architect at Comcast Cable, the transformation was necessary to allow Comcast to embark on the expansion in business services that has taken it from the lower end of the SMB scale to selling Ethernet, cellular backhaul and other advanced services to much larger companies.
“Now we’re getting into small-cell backhaul,” Principato said. “We’ll be scaling quite a bit in that area. We have to offer more complex Ethernet services and assure the customer experience. We have to be able to introduce new products and services and do that more cost effectively.”
The contributions of Amdocs have been instrumental to making the process a success, he noted. “Amdocs has been with us on this journey for about six years,” he said. “They brought an understanding of our strategic plan and functionalities with the resources to allow us to grow at the speed we needed to grow.”
Noting Comcast has “a complicated, comprehensive network with multiple vendors and technologies, he said the first step in undertaking the OSS transformation was to establish a comprehensive network inventory involving all components across the backbone, metro core and access elements of the MSO’s infrastructure. With that inventory in place, the goal was to build a single platform that could tap into the layer 2 and 3 technology base to quickly provision and activate any service.
“We’re now turning up over 1,100 Ethernet end points per month,” Principato said. “The rate has been doubling and tripling over the past two years.”
Automation has been a big factor, he added. “Amdocs service management allows us to take out a lot of the human manual intervention. We’re in a good place now with a service-ready network integrated into an assurance platform that gives us the awareness to respond to customers when they need help.”