Last week Light Reading ran an article entitled Veon: When Transformation Goes Bad. Job losses, disappointing financial results and senior people finding themselves on the wrong end of a restructuring program. It was not a light-hearted Friday afternoon read. The article stated that “there is also a question mark over a $1 billion BSS deal that VEON struck” and that “project is understood to have fallen behind expectations”.
Is anyone surprised? Didn’t think so.
It’s not just telcos. In March this year Forbes ran an article that said that 70% of digital transformations fail and the cost of this failure is $900 billion worth of spend that won’t achieve its goals. This covers a range of enterprises, so it’s not just telcos who struggle with transformation.
CEOs and CIOs want to make their mark and turn around businesses and develop new revenue streams. Which helps the operator beat their KPIs, which in turn drives up the stock prices and everyone gets a bonus. Often the most obvious way to help transform a business is to enable new revenue streams. And in telco, this often means getting a new BSS. The large vendors are happy, the operators have a huge project which will transform the company and make everything better. Only, it doesn’t. It often goes horribly, horribly wrong.
For large scale BSS projects, the only thing higher than the price tag is the failure rate. In 2016 Openet ran a survey of 112 operators to get their views on BSS and Digital Transformation. 68% of the operators surveyed were aware of failed BSS implementations. The main reasons for failure were:
- too much customised software development
- vendor over promising on deliverables and timescale
- project is too large – too many systems involved
The research showed that projects that are too complex and too long are the ones most likely to fail. Knock on effects included product delays and opex increases.
5G: Here we go again….
TMF (TeleManagement Forum) recently produced a very good paper discussing 5G. For 5G to live up to its potential and generate the revenues that operators expect to see from all the new 5G use cases operators will need update their OSS /BSS. No surprises there. The report stated that:
- 67% of total revenue from 5G use cases beyond eMBB (enhanced mobile broadband) and FWA (fixed wireless access) is dependent of OSS/BSS transformation
- 63% of connectivity-related revenue for these use cases is dependent of OSS/BSS transformation
- 72% of revenue from service enablement and creation is dependent of OSS/BSS transformation
If 5G needs a BSS refresh, then there are other ways, more pragmatic ways to go about it rather than bet everything on a high price/risk big bang transformation project. Options include Rapid Renovation of BSS – by picking smaller, faster projects that provide the key functions needed to deliver most business impact. This way the operator quickly sees the value and payback. Start by reviewing all key customer journeys and supporting business processes that can be impacted by the move to Digital. We have seen sales, marketing and customer service domains being the areas delivering most customer impact. Therefore, the surgical renovation of real-time engagement enabling platforms, such as charging solutions will deliver considerable value. Then progress to self-care channels powered by best in class charging, CRM, and CPQ. The rapid renovation approach is increasingly favoured as it enables delivery of ‘quick win’ projects.
Another pragmatic approach is to set up a separate Digital BSS platform. This does not immediately replace the legacy BSS but will run in parallel to the existing system. All new subscribers or identified market segments go on this new platform and as existing subscribers sign up for new offers, then they get moved from legacy BSS over to the new Digital BSS platform. As it’s a new platform, and is not directly replacing the legacy infrastructure, there’s no huge and expensive integration projects with legacy infrastructure or large-scale data migration issues that traditionally hamper BSS installs. End to end Digital BSS platforms can go in pre-integrated and with pre-defined use cases. The use of Open Digital Architecture and Open APIs helps ensure interoperability. This approach is faster and a lot more cost effective than the traditional BSS implementation process. In operators who are embracing DevOps and Microservices, once they are up and running, we are seeing them deliver value through Continuous Value Sprints as part of a continuous support of the ever-changing demands of a Digital Services Provider ready for 5G. The common characteristics that these approaches have is reduced risk and delivering a faster time to value.
In short; Big ticket, big bang BSS transformation don’t have a great track record. Surely, we won’t see the same mistakes made again when 5G rolls up. There are some real alternatives that deliver better value, make more impact, are less risky, can be provided faster and, frankly, makes a lot more sense.
For another blog, is the importance of a well-defined set of strategic objectives driving the need to change, these feed into prioritising business process improvements. And I’ve not touched on the importance of Culture to support the change….