How to implement an effective transformation from TDM to IP services

In my last post we looked at the factors slowing TDM to IP transformation. However, despite these challenges, implementing effective transformation programs will become a necessity for communications service providers (CSPs).

The need to move from TDM to IP has a certain inevitability about it which cannot be ignored indefinitely. If you’re ready to take the leap, here are some tips to get you started on an effective TDM to IP transformation.

Perform a precursor analysis

Addressing the profitability of legacy services is a particularly important priority. What is required is a business case that overcomes the naturally conservative nature of CSPs and addresses the issue of touching services that are working, reliable and generating significant (but declining) revenue at high profit margins.

I believe that the best approach to strengthen the business case and provide an immediate trigger is to do a precursor analytics project to specifically examine the incoming TDM service orders. The purpose of the analytics project is to show the financial implications and number of incoming orders for TDM services that will be impacted by a transformation.

By performing the precursor analytics project the CSP gets a measure of the financial impact transforming will have on their actual orders.

In addition, value-added services and cross-sell possibilities for new IP service features can also be suggested to increase ARPU and customer retention. If built correctly, the analytics project to quantify the business case can suggest which services to do first and can be done as a precursor to a strategic redirection solution which will be used to address the need for a non-disruptive migration strategy.

Notice that the analytics project does not consider the current install base of TDM customers and services. This is deliberate since the strategic redirection migration strategy first looks to substitute incoming TDM orders with IP equivalents before going back and attempting to migrate existing customers and services over.

Identify the Total Cost of Ownership (TCO) to maintain legacy equipment

The next step to strengthen the business case is to reflect the total cost of ownership (TCO). It has been pointed out that some CSPs built TDM to IP transformation business cases that did not show the full cost of maintaining legacy equipment and services. The cost of maintaining legacy applications supporting a handful of services with high levels of manual effort (including swivel chair) need to be considered to make the business case compelling.

Another factor that is rarely considered is the cost of service disruption in the event of failure. When legacy equipment eventually fails, it will take time to find and install replacements, the cost and risks of service disruption should not be ignored when producing the business case to transform now. This TCO analysis should be used in conjunction with the previously mentioned analytics project to more accurately measure the financial impact of the TDM to IP transformation project.

The next challenge is how to create a migration strategy that mitigates the risk of churn during the migration. I believe this requires a new approach called strategic redirection. The decision to cannibalize a profitable service is always difficult and can slow a transformation initiative as it demands diligent analysis and review.

Currently, most CSPs implement some version of a “cap and grow” approach when transforming from one service to another which has significant risk. Cap and grow is a process where a new (replacement) service is built that implements the features of the old service. The new service is then tested or a limited trial conducted, followed by a “cut over”.

After the cut over, all orders are fulfilled on the new service. This approach is expensive since it requires a significant up-front cost to implement the replacement service before any workload is migrated. Cap and grow is also high risk since cut over is usually an all-or-nothing event rather than a gradual move to the new service as features, coverage and functionality become available.

The alternative to ‘cap and grow’ is strategic redirection. Strategic redirection works by intercepting the incoming service orders and making an on-the-fly decision if the order can be fulfilled by the new service as it is currently built. If there is no coverage or some features are not yet available, the order will flow through to the legacy service as before. If the order can be fulfilled using the new service in its current state, then the order is redirected. The incoming order analysis can also be used to guide feature implementation and coverage priorities whether the order is redirected or not.

The strategic redirection approach offers an effective alternative that mitigates both the up-front costs and inherent risk associated with the cap and grow approach.

Develop comprehensive education programs

A solution to the cultural issues of moving from TDM to IP for network staff is more difficult. It has been said that there is no substitute for experience and clearly any resolution to this issue will involve education, learning and gaining experience with how to manage, deploy and maintain IP services. Some operators have already implemented comprehensive education programs as part of their preparations for TDM to IP migration.

Smart with small projects

Telecommunications service providers are conservative by nature so shifting from a fast follower culture will be particularly difficult.

I believe that one of the best ways to address this issue is for CSPs to look for small projects or geographies where the TDM to IP migration can be done as individual “contained” projects.

Some examples have been projects to just migrate a small region or a specific technology only from TDM to an IP equivalent. Although this was the approach used for some of the TDM to IP trails, I believe that introducing strategic redirection with this approach will help mitigate some of the issues that occurred during the initial TDM to IP trails and produce better results for the transformation.

What does the future hold?

The move from TDM to IP has a certain inevitability associated with it and simply can’t be ignored forever. That said, the migration from TDM to IP services has been effectively slowed by a handful of factors.

For the most part my suggestions are a combination of starting with a precursor analytics project, making sure the business case included the full TCO and highlighting any potential opportunities for cross selling and up-selling new IP features.

For the culture issues the solution lies in education and gaining experience and familiarity with the new IP services which unfortunately will take time.

For the fast follower business strategy, we suggest using small geographically contained or limited technologies projects done as part of an overall transformation program.