IoE

Moving BSS to the cloud – why would you?

Although moving business support systems into the cloud is not a strategic objective in itself for any communications service provider, it can certainly help them achieve many of their goals for digital transformation. Will they ever accomplish it? Mark Newman investigates.

The challenges of moving business support system (BSS) to the cloud is nicely summed up by a VP at one BSS supplier we interviewed for our latest research:

“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.”

But cloud BSS can, in fact, help operators achieve many of their objectives for digital transformation, and as communications service providers (CSPs) deliver more cloud-based products and services, enabling them with cloud-based support systems makes good business sense.

 Starting out slowly

Most CSPs keep the vast majority of their BSS on-premise and in their own data centers. Seventy-four percent of operators we surveyed in our research have less than 10 percent of their BSS in a cloud. However, they recognize that, over time, most BSS applications will move into a public, private or (most often) hybrid cloud.

Many operators who question the benefits of moving BSS to the cloud simply have a different definition of cloud BSS. For example, they may use a BSS vendor’s hosted cloud service (BSS as a service) or put their BSS in the same cloud that they use to deliver services to their own enterprise customers.

“Many operators who question the benefits of moving BSS to the cloud simply have a different definition of cloud BSS.”

Cloud-ready vs. native

All BSS suppliers offer services that are cloud-ready. Effectively this means products that can be (and in most cases are) deployed on-premise can also be deployed within a private or public cloud. However, such solutions lack many of the benefits associated with cloud services.

How to get there

Most CSPs do not have a roadmap for migrating BSS to the cloud, and as we’ve noted, in most cases the migration results from other strategic and commercial objectives rather than being the end goal.

Furthermore, issues around data privacy and latency mean that there is no medium-term prospect for migrating functions such as policy and charging into the cloud.

But despite the unanswered questions, operators are beginning to move some product, customer, order and revenue management functions into the cloud.

We surveyed 50 executives at 49 unique CSPs about their progress.The results show that we are very early in the migration but that operators are optimistic about making progress.

Growing confidence

Tier 1 CSPs are highly unlikely to rip out their BSS because of their size and complexity, but their familiarity and confidence with cloud is growing rapidly. Many have clear visions about the future of their networks migrating to the cloud in the next five years.

Tier 2 and 3 operators have less cloud experience than Tier 1s. If they offer cloud services to B2B customers, they are likely to be third-party, such as Microsoft 365, which they bundle with their core propositions. Only executives who have been given a strong mandate to transform and adopt customer-centric decision-making, are able to consider the merits of and deploy new cloud-based systems.

Tier 4 and 5 operators, mobile virtual network operators (MVNOs), and niche CSPs are the most likely to adopt cloud BSS. Software-as-a-service (SaaS) models are attractive because they require little up-front investment.

Here are some key strategic and commercial drivers that we believe will accelerate adoption:

  • Shifting to new commercial models with BSS vendors – the traditional approach to procuring BSS solutions is costly and disruptive for the buyer and seller, so most CSPs are looking to adopt a SaaS approach. Although this is associated with cloud, vendors could offer it with traditional on-premise models.As CSPs move to SaaS pricing for services such as Salesforce and platforms for new digital services, they will put pressure on their vendors to migrate to a similar pricing paradigm for their core BSS.
  • Faster time to market capabilities – reacting to competitors is difficult for most CSPs because of the time it takes to put in place the required support systems. A cloud-based BSS solution can be up and running within 30-60 months compared with an on-premise approach.
  • Setting up new lines of business with a dedicated BSS – CSPs are setting up new lines of business for internet of things (IoT), primarily for enterprises; others are moving into TV or are moving into the broader B2B market. Many of them are deploying dedicated cloud-based BSS/OSS systems, often from a new breed of specialized suppliers, which help them scale fast.
  • Moving to NPS as a driver of BSS strategy – with a growing focus on improving Net Promoter Score (NPS), BSS is moving into the domain of the chief marketing officer (CMO). Customer management is clearly the BSS category that can be most clearly tied to an impact on NPS, but it is not the only one. For example, product management and the creation of a single product catalog can have a huge impact customer experience when a potential customer first signs up for a new product.
  • Introducing personalized and context-aware offers – delivering personalized, context-aware services is an aspiration for every mobile operator. But until now, they have failed to exploit presence, location or previous usage or buying trends to achieve this. With growing investment in data analytics and the transition to IP-based services like messaging, this is a big focus for the next two to three years.
  • Launching ‘skinny’ services to cut IT costs – introducing attractively priced, stripped-down services for specific market segments – for example, younger people who tend to have less disposable income and are happier to make do with online-only support – is a growing trend. These services often have a separate independent brand from the parent company; they belong in a standalone business and are free to choose their own, ‘digital’ BSS.

This article appears in Perspectives 2017: Digital transformation opens new markets. Download the full report free 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.

2 Comments

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    Emmanuel Amamoo-Otchere on

    Thanks for the perspective. There are many reasons to move BSS to the cloud, and the key most prevalent reason to any business are first and foremost costs, reliability, RA and capability. The combined value of these reasons is the business model options it offers to Telcos. Back in 2004 I had part of my charging, rating and billing (C-R-B) functions for my Interconnect business moved to the cloud (WebCDR Inc.). It was a smart decision then as it mitigated cost of establishing the infrastructure, dealing with vendor licensing, something that is one of the key headaches CSPs have with BSS and impacts on their agility as well, and also the overall capability that I needed to have – people, processes, tools etc. to meet and maintain my Interconnect business.
    Back then I was managing the IT & Billing for a Second National Operators environment, where access to backhaul internet services wasn’t difficult, and rationalizing that cost with the cloud charging model was pretty much still well below having to run the operations from in-house. The ease of being able to do that was also the fact that, while my cloud provider was doing all the “heavy-lifting” by way of providing the C-R-B services, I didn’t have to divulge my customer information. I could anonymize the Interconnect Partners (customer) information using trunk groups and arbitrary trunk pseudo names and produce invoices which I could then later have run though simple in-house processes to have them identified to my customers. This way I was able to avoid any regulatory “land mine” and as well to assure the business any exposure Interconnect partners. I run this model successfully for four years until that business got acquired. It was full Cloud BSS, but for a B2B space.
    In this model with Interconnect partners, who number just about a few — in my case ranging between 50 – 100 partners with services contracted over a long term with fixed offers, pricing packages and billing cycles, the requirement by way of fulfilling demand from my business folks and of course for lawful intervention, RA and credit control weren’t that huge. This was pseudo-realtime Interconnect billing environment which provided me up to 15 minutes view of my Interconnect revenues and traffic. The cost benefit of having that pseudo-realtime visibility combined with the revenues from Interconnect made the business case super justified. In this case, a typical B2B scenario.
    BSS-as-a-Service is a no-brainer as multinational corporations can be able to rely on multinational Telcos to engage business models that offer the best of public Cloud. The flipside is that BSS is a mix of many parts, and in the mass or consumer space with millions of customers directly connected to a high speed switching center, the impact on a public Cloud space by way of connectivity to deliver C-B-R and as well support personalization of customers by way of changing offers, billing cycles can only be sustained with a low subscriber volume – at least based on today’s technology. Beyond a low threshold scale, the technology that will enable complete move to Cloud BSS solution is still in the nascent stages and I believe will also require a transformation of the way the complete Telecom Operations Management core is architected. So for the business, while Cloud is a laudable business model, CTIO’s are looking into the technical deliverability and the cost implications of that technical feat on the business bottom line, and so far it’s not fully adding up.
    But, I will have to say also that, while the technology is nascent with regards to its usability in hybrid high-data streaming environment like that between the Telco and public internet spaces, we are not far off with a solution to a full and trustable BSS solution in Cloud. In Today’s space, private Cloud options for BSS-as-a-Service based on regional regulatory domains is possible, albeit not 100% reasonable. While Cloud as a business model offers a better financial narrative to the business, the BSS conundrum is more about having the capability to offer technology that puts to rest the top issues around regulatory demand for privacy and security as well as flexibility to change the public Cloud BSS offerings to meet the needs of a Telco customer. One of the easiest sub-functions of BSS in the cloud is CRM and it’s case has been proven by todays leading CRM vendors. In regions where there is some caveat for customer information domains, I bet the opportunity to have Telco CRM offered in Cloud can yield multifaceted opportunities – like interworking with payment companies, other CRM solutions, working with other Enterprises for joint offers, cross-selling, deep partnership etc. can be accrued.
    Cloud BSS will happen, it’s only a matter of time but it won’t happen alone. It will have to happen with the core of the Telcos infrastructure becoming transformed also. The traditional approach to nodes, services, xDRs will need to change. OSS will require a rethink and the advent of Big Data in its current forms with Hadoop will also require revised architectures in order to enable BSS take full advantage of Cloud architecture. While virtualization, as touted by many with regards to their products is a stepping stone to offering agility in infrastructure management, it isn’t Cloud, but one of the capabilities with Cloud. A cloud BSS architecture will look far simpler in the future and yet be at the core a lot more integrated with the other abstractions in the network. We are in an IP era, and it took a long time for Telcos to see the value of IP, albeit adopted in small pieces and then eventually seen as a key modernization requirement. The case will be similar with full Cloud BSS and as consolidation in the industry as well as specialization begins to shape the space, it will have positive ramifications on BSS architecture as Telcos become open and platform oriented.

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