Digital Transformation & Maturity

Moving BSS to the cloud: What’s the problem?

Some of the communication service providers (CSPs) we surveyed recently wonder how they’ll ever accomplish moving their business support systems (BSS) into the cloud. The challenges were nicely summed up by a VP at one BSS supplier we interviewed:

“If I go to an operator and offer them a BSS cloud service or capability, the customer says, ‘That’s lovely – I have 130 systems, some of which are mission critical, some need to respond within milliseconds and I have auditors breathing down my neck.’ It’s difficult then to make the case.”

We surveyed 50 professionals from 49 unique CSPs. Our respondents included CIOs, CTOs, chief compliance officers, chief architects, vice presidents in transformation and IT architects. We asked them to rate key factors preventing them from adopting cloud BSS, on a scale of one to five where one is not a concern and five is an important concern. Privacy and security came out on top with more than 70 percent ranking this as a key challenge (a rating of four or five):

 

Many of these barriers reflect that most telcos tend to be averse to risk, which isn’t surprising. They manage tens, and in some cases hundreds of millions of customers generating hundreds of millions or billions of dollars in revenue and have shareholders who expect solid, reliable financial performance. Taking a major risk with charging or billing systems – especially given that the potential business benefits are not proven – is simply not an option.

1. Privacy and security

Rules and regulations around privacy and data security were cited as the single biggest barrier to the deployment of BSS in the public cloud. New legislation is often complex and many of the CIOs we spoke to said they were struggling to understand precisely what they are allowed and not allowed to do with their customer data.

One executive  we spoke to, for example, was looking to procure a new cloud-based system for calculating sales commission payments but was struggling to understand whether this was possible because the sales commission information contained some customer data. CIOs are not accustomed to – or comfortable with – the idea of having to factor in issues around security, regulatory or finance in addition to IT.

Many also struggle to understand some of the legal and compliance issues around the adoption of cloud-based solutions. National rules and regulations are not always explicit about what data needs to be kept within national borders. On a global basis laws around the storage of citizen data varies country by country (see graphic below).

 

2. Resistance to change

CSPs have built expertise and capabilities over a long period of time based on traditional on-premise BSS solutions. Bringing in new suppliers can represent a threat to many IT functions and divisions. In some cases, there is a lack of knowledge around new systems, while in others new platforms can result in existing functions and roles becoming redundant.

3. Lack of internal skills

A relatively small percentage of people working in IT teams come from a cloud background which is why nearly half (45 percent) of operators rated a scarcity in internal skills as a main barrier. Many have worked in telecoms for ten to 20 years or more and have specific domain (and traditional BSS vendor-centric) IT expertise. They do not work on cloud based systems on a day-to-day basis and may lack up-to-date knowledge that would enable them to make a proper, sound evaluation of the merits of cloud versus on-premise solution.

4. Concerns about vendor lock-in

The adoption of cloud BSS does not lock a CSP into a supplier any more than a traditional on-premise solution, but there is a bigger concern about hosted services (BSS as a service) that require a CSP to store its customers’ data in a vendor cloud and, in many cases, another country. This reverts to issues of security and privacy.

5. Performance issues

Performance issues ranked low in the survey (29 percent), but our post-survey interviews revealed that latency ranks with privacy as being one of the two biggest barriers to BSS cloud adoption. Several BSS vendors we spoke to said that getting their policy and charging applications to work in cloud environments with acceptable levels of latency was a challenge that took from several months to a year to address.

This is particularly true of public cloud where the data center is in another country, or in large countries where the data center is a long way from the network. A ‘charge’ request needs to elicit a response of around 10 milliseconds for the operator to provide a good experience to the end user.

As an executive from an Indian CSP put it, “If our data center is in Bangalore and our NOC (network operations center) is in Mumbai, which is 2,000km away, you will have latency whatever fiber you use to connect the data center to the NOC.”

6. Inability to manage costs

Managing costs was a concern to the extent that those operators who put different BSS functions into the cloud and are paying on a software-as-a-service (SaaS) model still need to maintain legacy systems with legacy cost structures. This is especially an issue for operators who are taking a ‘vertical’ approach to migrating BSS functions to the cloud.

For example, the preferred approach for the Internet of Things (IoT) is to launch the service with a dedicated IT stack. In practice, however, many of CSPs’ IoT customers are also likely to buy other ICT services from them. Ultimately it may make more sense to have a single BSS for a range of ICT services including IoT.

7. Immaturity of cloud

Cloud maturity was the least important barrier to adoption for BSS (20 percent). The only real concern around performance again relates to latency. However, Amazon Web Services (AWS) now has data centers in 12 countries with a strong concentration in North America and western Europe. Furthermore, a number of CSPs are now joining Amazon’s Partner Network, which allows them to provide high-speed connections via IP/MPLS into the AWS cloud.

Despite the challenges, cloud BSS can, in fact, help operators achieve many of their objectives for digital transformation; indeed understanding these challenges is one of the keys steps in ensuring all bases are covered when it comes to considering risk. As CSPs deliver more cloud-based products and services, enabling them with cloud-based support systems makes good business sense. Read more about the benefits here.

Read the full report, Cloud BSS: The migration beginsto learn more about the challenges and how to overcome them. The report is available to download free to all employees of TM Forum member companies. The report also can be purchased by non-members by contacting Annie Turner, or an executive summary is available here.



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About The Author

Chief Analyst

Mark Newman is an analyst with 25 years of experience delivering insights on the future of the telecoms sector to senior level executives and audiences. Mark’s recent research has focussed on telecoms operator business models, digital transformation, service provider diversification, and the intersection between Internet and telecoms. He delivers analysis, presentations, strategy sessions and workshops to global audiences, helping them to plan for the changes that technology and disruptive new business models that will fundamentally transform their businesses. Mark was Chief Research Officer at Informa Telecoms & Media and Ovum before leaving to set up his own research firm, ConnectivityX, in 2016. He joined the TM Forum as Chief Analyst in February 2017.

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