Enabling Next-Generation Services in Communications
Integration technologies such as SOA and MDM can help bring speed and agility to the communications industry.
by Trevor Naidoo, July 2010
While the wireless market continues to grow, the year-over-year percentage growth is slowly declining, with net additions declining. Lower tariff plans are increasing the demand for wireless services while some players are offering unlimited plans. Broadband penetration is reaching high levels in mature economies, with the highest subscriptions in the U.S. DSL continues to be the most widespread broadband access technology, while fiber connections form a very low percentage of the overall broadband subscriptions in the U.S. and European Union. Going forward, industry players will boost fiber spend as part of their total broadband infrastructure spend.
The industry is becoming hyper-competitive due to factors such as deregulation, fixed mobile substitution, and Voice over Internet Protocol (VoIP). Integrated bundles of voice, data, content and mobility are the new standard. Providers will have to deploy new high-value services such as broadband, Internet Protocol television (IPTV) Video on Demand, etc. Service providers are moving from a network-centric to a customer-centric mindset. They are trying to maximize customer value so that customer churn can be reduced by having better information. Operators are deploying more efficient Internet Protocol (IP)-based networks to reduce costs and support delivery of multi-media services. Correspondingly, new service-oriented IT architectures are being deployed.
The need for business efficiency and service expansion is driving high levels of mergers and acquisitions. Existing carriers have a legacy of application infrastructure that will be costly to completely replace to enable the next generation services. The question for carriers is, “How can I enable the business for next-generation services, to drive profitable new revenue growth?”
In order to be competitive in today’s marketplace, companies need to have three key components or capabilities:
1. Streamlined operational and IT systems: It’s a challenge working with the huge number and diversity of systems that have grown in the traditional landscape over the years. IT design and development practices have grown up without any particular overall plan, leading to high development costs and inflexibility. There is a need to rationalize IT systems into reusable, general purpose functionality blocks, architected to better support products, services and business processes. To enable profitable growth, all providers need to manage operational costs. The cost of maintaining the existing IT infrastructure needs to be optimized; at the same time, that IT infrastructure needs to help streamline operational business processes.
2. Service agility and quick response to market changes: The task of seamlessly delivering services across platforms such as voice, data, and media without seeming disjointed is a major challenge. As services converge, customers expect a single bill and want to manage all their services from one interface. The current IT landscape needs to be agile and nimble to be able to accommodate these changes.
3. Accelerated time to market: Product development cycles need to be shorter to be able to introduce new, innovative products and services before competitors. Providing an IT landscape that is constituted of reusable software services will help the business roll out new products and services faster while maintaining lower development costs.
Recommendations to Leverage Integration Technology
There are four key technologies that will drive more flexible environments for new service creation:
Service-Oriented Architecture (SOA): increases the agility of your business processes by creating a service oriented-foundation on which these processes are run
Service Delivery Platform: delivers any service or content to any device over any network
Identity Management: improves security and protects privacy as customers and subscribers access the network to share and update content
Data Hub: unifies disparate data sources and shares master data across all systems, ensuring a single version of the truth
These technologies increase the agility of your business processes, especially in automating the end-to-end service fulfillment process without the need to completely overhaul the existing infrastructure.
The merging of different companies also creates heterogeneous IT environments. In the long term, these heterogeneous environments may be replaced by consolidation projects. In the short term, they create opportunities to execute end-to-end processes across disparate landscapes using integration technology. This will ensure faster and more efficient integrations of acquired or merged companies, allowing for quicker time to synergies.
The drive for customer centricity creates opportunities in any system that touches the customer (e.g. contact center, service, billing, self service), or affects the service providers’ ability to understand and serve their customers. In order to better serve customers, we have to completely understand them and all their interactions with us. Master Data Management (MDM) technology can play a significant role in being able to better understand the customer by:
unifying disparate data sources and sharing across all systems
accelerating convergence without replacing systems
improving process efficiency and accuracy
improving regulatory compliance and business control
Providing a Web-services-based architecture combined with Data Hubs helps provide a solid integration architecture. The hubs are the single source of truth, while the automated processes consume the data via Web services. By having visibility of all customer information, companies can better understand customer preferences, find opportunities for cross-sell and up-sell or personalized offers, and improve customer service.
In a highly competitive, very dynamic market, speed and agility are critical traits for an organization to possess. Traditional providers have significant investments in legacy technologies, potentially making speed and agility elusive. Integration technologies such as SOA, Identity Management and MDM can help bring much needed speed and agility to the communications industry.
Trevor Naidoo is a senior director in Industry Strategy and Insight at Oracle and leads the North American Insight Integration practice.