Posted: 12/1997
OSS Operations Support Systems
The Key to Getting and Keeping Customers
By Fredrik Winterlind
The Telecommunications Act of 1996 opened the door for increased competition at the local and long distance level. New companies are forming to take advantage of the opportunity to enter the market, but their challenge is a steep one. They'll be competing with incumbent providers that have up to a century of experience in the marketplace, as well as an established customer base, networks and processes. New competitors have a short time frame to build infrastructure and develop processes and name recognition.
The competition battle will be waged on several fronts, the most obvious of which is price. A new provider can gain customers just by promising lower rates. But any price advantage is likely to be short-lived. Incumbent providers can simply lower their rates. Larger companies have the stability to withstand lower profits from low rates in the short term, so if competition is all about low rates, a larger, established company could easily wait out a price war.
Another competitive battleground is customer service. Most residential and business customers only notice network quality if it is lacking--their calls aren't clear or don't go through. What they do notice is accurate billing, quick service connection and rapid response to service problems. Lower rates won't be enough to attract and keep customers if they have to wait weeks to have service connected, suffer computer-generated errors or experience long downtimes because their service order got lost in the system. Poor customer service will result in a high churn rate.
Infrastructure vs. Support Systems
When starting a telecommunications company from the ground up, it's easy to get lost in the details of network infrastructure. After all, without a central office, switches and cable or base stations, no calls can be completed. But a telecommunications network is more than cable and switches. The Federal Communications Commission (FCC) estimates that the annual cost of equipment and capital over a 10-year period for new PCS carriers is about 20 percent of all expenditures, while invoicing, administration and network maintenance accounts for about 41 percent of expenditures. The behind-the-scenes tasks that keep the network in peak service condition and to maintain customer interaction make up the bulk of the cost of running a phone company. These also are areas in which improvements can make a significant impact on cost efficiency, service quality and competitive strength.
To keep customers and generate maximum revenue, customer support services must be part of a phone company's business plan from the very beginning. A telecom company must consider how to handle provisioning, billing, service orders and network management. New telecommunications providers need to look at their business goals, then develop processes to meet those goals. Business plans also must be sufficiently flexible to keep pace with changing technology and market conditions.
Choosing support services is just as important as choosing transmission technology or infrastructure equipment. By incorporating business processes into the company plan at the beginning, a new provider can speed time to market and increase long-term cost efficiency. Because business processes can make or break a carrier, new players need to put extra effort into network management and support.
In addition to process and technology requirements, the team needed to carry out the processes also must be developed. That involves recruiting personnel with the necessary skills and experience, training them to work with specific technologies and processes and building them into a coherent team. In the early stages of building and managing a network, building and nurturing a team may be beyond the reach of a new company. Outsourcing telecommunications management services may be the answer to the services dilemma.
When deciding whether to outsource management services, telecom providers need to analyze their core strengths and weigh costs and benefits. If the new company's management team has expertise in marketing and finance, it might make sense to outsource network design and management, rather than trying to build a system from the ground up. Outsourcing frees the management team to focus on financing and marketing. Outsourcing can be more cost-effective, as well, because network management and consulting organizations will have established relationships with vendors. They can plan the most effective management system based on the best available products, and they may have special pricing agreements. They also can integrate products from a number of vendors and serve as a single point of contact for a multivendor network.
Outsourcing Options
Every aspect of a telecommunications network, from network design to actual operations and management, can be outsourced. A service provider can choose to outsource just one element or everything, to the point where the carrier provides the funding and collects the revenue. The decision of which services to outsource is much like the decision of whether to outsource in the first place: A telecom company must evaluate core strengths and weigh costs and benefits. Available outsourced services can include professional services, implementation and integration, maintenance and support, and training.
Professional services help network operators plan network and business operations. Consultants develop systems to handle billing, customer care, point of sale and fraud/churn management. They may recommend products that accomplish these tasks and integrate them into the telecommunication provider's network, then keep the systems upgraded to meet the needs of the growing network and to take advantage of improving technology. Consultants can develop an operations and management organization, procedures, tools and training paths. In the area of support systems, consultants can recommend maintenance management information systems to handle work orders and trouble reports, operations support systems and business support systems. Professional services consultants also can evaluate the performance of existing systems and make recommendations for optimization.
Implementation and integration services can get a network up and running, speeding time to market while reducing costs. Outsourced services can be used to implement a whole network or just to incorporate a new node into the network. Services in this area range from site installation engineering and equipment installation to turnkey projects that include project management, site engineering and civil construction.
Maintenance and support services take the day-to-day work out of running a telecommunications network, freeing the service provider to focus on customer interaction and marketing as well as optimizing the network's performance and quality. Outsourced services can provide hardware and software maintenance, fault identification and analysis and onsite operations support. Depending on the service provider's needs, the network operations control center can even be outsourced, either full-time or just for emergencies or off-hours. Using an outsourced network control center can lower expenses because the cost of building and staffing the center is shared with other companies.
Training services help managers and operations and engineering staff reach the optimum level of competency and maintain that competency as the network expands. Training also helps staff work at peak efficiency.
When making the outsourcing decision, a telecom company should know the difference between consulting, outsourced integration and management. Consultants analyze a service provider's business plans or processes, then make recommendations. An integrator implements these recommendations, and a management firm carries out the ongoing plans. Some organizations are capable of all services--to analyze needs and make recommendations, integrate and implement the plan, and conduct ongoing maintenance and management. Which level of service is needed depends on the goals and strengths of the service provider.
Integrating Business Processes
Although they appear to be separate systems that involve different people within a service provider's organization, all business support systems must work together as one to best serve customers. When a new customer signs up for service, that service must be provisioned, and the customer must be added into the billing system. If the customer has a problem, customer service must trouble-ticket the report, which then must get to maintenance. Any miscommunication along the way could lead to missed revenue or a lost customer. The sooner the customer is online and being billed, the sooner the service provider receives revenue.
That's where an integrator can make a difference. The service provider can purchase separate products, try to build them into a coherent system and, then, deal with a number of vendors for service. An integrator, on the other hand, can develop a plan that takes into consideration the rest of the network, choose the best products for the required tasks based on a broad familiarity with the industry, integrate the products into a working system with any necessary customization and provide a single point of contact for service or maintenance questions.
Non-technological business processes also need to be taken into consideration. The way employees interact with customers, with each other and with the systems affects the way support systems function. This is where an outside consultant can be valuable.
Fredrik A. Winterlind is director, customer services and telecom management solutions at Ericsson Inc. In his 13 years with Ericsson, he has worked in the areas of design, customer service and marketing. In his current assignment he is responsible for the customer services and telecom management product portfolios for Ericsson's wireline division in the United States.
