Sponsored by: Netcracker
As technology, services and experiences become increasingly digitalized, the role of the service provider has shifted dramatically. Across the fixed, wireless, cable/broadband and video landscapes, the growing competition from all sides is pressuring service providers to become more nimble and deliver more satisfying experiences. Specifically, customers expect transactions to be simple and intuitive via any channel. In short, digital experience demands have forced a technological, cultural and operational transformation that extends from the network core all the way to applications and content.
Interestingly, the call for this transformation is not new. A 2017 survey from ICT Intuition and Netcracker showed that service providers have embraced the move towards digitalization, with one-third stating that they have already implemented a technology and personnel strategy that embraces the digital experience. (For more information, click here.)
Yet, this metric also calls attention to the fact that many service providers are still in the roadmap or design stages of digitalization, with many likely taking a cautionary approach.
Becoming an enabler of the digital economy
As business models change and boundaries collapse, many service providers are finding themselves in the passenger’s seat in terms of value creation, meaning they must evolve to become true enablers of digital services and digital interactions. Rather than prioritizing the development and delivery of new services, operators should focus on enabling new business and service models that promise a better experience for all parties.
But turning into a DSP requires more than flipping a single switch. And while the transformation is unlikely to happen evenly across all lines of business or departments, a centralized strategy will ensure that the transition from physical to digital services results in increased efficiency. An example of this arises when a service provider wants to deliver connectivity and services for machine-to-machine (M2M) and Internet of Things (IoT) applications. Success in this venture requires embracing new infrastructure capabilities that support new service models consisting of partnerships with third-party vendors, such as over-the-top (OTT) content providers. A service provider that can successfully enable these functions can maximize their revenue potential across digital value chains, regardless of where services originate or how those services are delivered.
Digital transformation requires adopting a new set of business, cultural and technological best practices. If one looks at the big picture, changing an industry that has operated successfully for more than a century is no small task. As such, Netcracker’s digital transformation approach is based around six best practices that identify, revise and optimize critical business and technology functions.
1. Accelerate digital Interactions and experiences
Delivering digital services represents a new and unprecedented revenue opportunity for DSPs, although doing so means overcoming the challenges of managing a nearly incomprehensible competitive operating environment. In many cases, delivering digital services on top of either existing physical or emerging virtualized network infrastructure is hindered by existing operations support systems (OSS), customer-facing applications and the lack of integration across systems. In fact, 82 percent of service providers claim that less than half of their interactions with customers are digital.
Among the first steps of driving digital interactions is enabling omnichannel customer engagement. Service providers must look at the actual lifecycle of customers, from initial interactions to post-billing customer care interactions, and address any gaps or weaknesses. Is the interaction managed effectively? Is the data contained within each interaction reviewed and compared to other customers who are following a similar path? Fully understanding these processes is vital.
2. Enable agile service creation and delivery
Digital services must be easy to create and deliver, just like they are easy for customers to buy and consume. But the industry as a whole is struggling to achieve this level of simplicity. For example, many of today’s business applications are not available as connected services that can seamlessly support business users who work remotely and in the office. Often, current service offerings are complicated and require substantial after-market integrations to ensure interoperability, reliability and performance, increasing cost and configuration complexities. Yet, both consumer and business customers want a service provider that removes that complexity, bundles key elements into a service and bills accordingly. Currently, enterprises are often forced to bundle offerings from a variety of sources. That complexity impedes the adoption rates due to disparate points of entry for services.
Moving towards an agile service creation model requires:
- Implementation of a flexible and integrated product and service design function that allows for fast service and bundle development.
- Direct integration of OTT services from partners via onboarding and management functions.
- A centralized and flexible product catalog that can manage both internal service provider and third-party partner offerings.
Delivering a true digital experience means embracing a hybrid BSS/OSS model and supporting the delivery of carrier- and partner-based services. This creates a richer connection with customers and increases satisfaction at every point throughout their lifecycles. The best method for optimizing customers’ digital experience is to embrace high-value services from partners, many of whom will become critical players in helping service providers succeed in the new digital economy paradigm.
A DSP therefore needs partner management capabilities embedded across BSS and OSS infrastructure. This functionality must include the ability to onboard partners, set contracts and billing relationships, provide partner billing management support and offer revenue-sharing or billing on behalf of partners in cases where partners lack the necessary revenue collection and management systems.
This model will benefit digital service consumers by giving them a single point of contact. With service providers acting as the central point for service consumption, they can be the single provider of all services enabled through content delivery channels, making it easier for customers to consume, enjoy and experience digital offerings.
4. Foster growth and partner ecosystems
The days of service providers acting as the sole provider of standalone connectivity and services are over. Any provider that tries to go it alone in today’s communications market is setting themselves up to face massive challenges. Today’s digital ecosystem has demonstrated that customers are more than willing to go directly to the provider that delivers the right content and the best experience. A simple examination of the video service market shows that content providers like Netflix, Hulu and others have gone directly to customers to establish relationships. In this new, highly competitive world, the best option for service providers is to embrace a partner strategy that creates relationships that add value to the services they offer today. At a time when customers are cutting the cord and finding ways to reduce costs by going around the service provider’s “walled garden,” the best option is to expand the reach and realm of services by encouraging third parties to join the service provider’s ecosystem and become an integral part of a growing portfolio of digital offerings.
5. Prioritize data management
The data created and collected during the digital service lifecycle is substantial. Each data point contains valuable insights into service creation, delivery and consumption successes or failures, all of which can contribute to the continued evolution of a digital business. DSPs must embrace a data management strategy that creates consistent data flows, simplifies data sharing and enables continuous operational improvements. The digital experience can only be realized through end-to-end integration across all IT systems and the use of an analytics strategy that incorporates data aggregation and correlation, analysis, management and optimization. As the digital economy widens, customer and service journeys will spread across multiple points and companies, exposing service users to myriad partners. Managing data across this multifaceted customer experience will become even more convoluted without an effective strategy that runs parallel, if not integrated, to service delivery.
6. Improve agility of network and infrastructure management functions
True DSPs must embrace the next step in infrastructure evolution: virtualization. Similar to how data centers have virtualized storage and computing hardware, service providers see their own brand of virtualization as a means to enable greater scale and performance, bring new services to market faster and stay competitive in an environment that is welcoming entrants from outside traditional market boundaries. The technology rollout is well underway, and the most successful SDN/NFV deployments have centered around tangible services like virtualized customer premises equipment or virtualized evolved packet core services with next-generation hybrid operations management at their center.
These new services represent offerings that allow service providers to customize deliverables to meet specific requirements of individual businesses or consumers, mixing and matching network components as needed. These services also offer both capex and opex advantages by reducing the expense of specialized and/or proprietary hardware, while accelerating service delivery, allowing for on-demand scalability and enabling real-time responsiveness to network conditions or user needs.
The broader appeal of SDN/NFV expands well beyond services. DSPs must invest in network and infrastructure management capabilities that can support both physical and virtual networks, as doing so will ensure digital service success, reduced costs and greater competitive positioning in the digital service ecosystem.
As we look at 2018 and beyond, the market is moving, the customers have spoken and digital service and experiences are already in demand. Bringing together the right combination of tools, processes and best practices, alongside professional services offerings, helps put service providers on the best path to succeed with delivering digital services and the best possible experience. The end goal of any digital transformation should be to increase operational efficiency and reduce time-to-market by lowering integration costs; optimizing planning, deployment and usage; and using open source-based technologies. A business transformation using an open, data-centric approach and a partner-enabled ecosystem will bring a richer digital experience to the market faster.
About Netcracker Technology
Netcracker Technology, a wholly owned subsidiary of NEC Corporation, is a forward-looking software company, offering mission-critical solutions to service providers around the globe. Our comprehensive portfolio of software solutions and professional services enables large-scale digital transformations, unlocking the opportunities of the cloud, virtualization and the changing mobile ecosystem. With an unbroken service delivery track record of more than 20 years, our unique combination of technology, people and expertise helps companies transform their networks and enable better experiences for their customers.