The telco search for new BSS suppliers and skills

As CSPs change their spending on BSS, they may also choose to change suppliers, as we explore in this extract from our recent report BSS for B2B: operators diverge on the path to cloud.

In the current market, operators are reevaluating BSS applications based on factors such as cost, whether the technology aligns with cloud and software development plans, and whether a supplier brings a robust ecosystem of partners to the mix. CSPs also need to acquire new skills as they target the ICT solutions market, and they face fierce competition for talent.

Our survey data shows that cost continues to be the most common reason CSPs cite for changing BSS suppliers. But even CSPs that rank cost reduction first do not necessarily expect to spend less on BSS. In fact, 38% of these respondents expect to spend more on billing, while 62% expect to spend more on CRM. By comparison, 44% of the respondents that rate technology as the top reason to change BSS suppliers anticipate spending more on billing, and 70% expect to spend more on CRM. So, it is more relevant to analyze how spending will shift if it is not devoted to sustaining legacy BSS and associated processes.

Low-code or custom?

CSPs are divided over how they will spend BSS budget. One area where this disparity is obvious relates to whether a CSP embraces low-code / no-code BSS or values BSS customization as a differentiator. Our survey shows that respondents are split evenly on this question.

At one extreme, some operators are seeking to avoid customization and ownership of IT infrastructure entirely in favor of low-code and software-as-a-service (SaaS) solutions hosted in public clouds. At the other end of the spectrum are respondents who want to continue using customization as a differentiator as they shift to cloud-native BSS running in their own private clouds. The infographic above explains the difference between public and private clouds.

“We have a public cloud-first strategy for BSS,” says Javier Garcia, Head of Core IT Architecture, Global Systems and Network, Telefónica Group. “But we aren’t only using that because we are moving to SaaS approaches, which bring us more efficiency because we don’t have to run our suppliers’ applications.” A public cloud-first policy instructs IT and technology teams to prioritize solutions that are hosted in public clouds when buying new applications or migrating applications.

But if a CSP simply hosts BSS in a public cloud, it may not cede responsibility to application vendors for managing the cloud environment and all the components that underpin the cloud-based BSS applications. When possible, Garcia’s team will seek to migrate BSS capabilities to SaaS platforms but will move some functions to a public cloud if SaaS is not an option.

Custom and DIY

BSS customization has been the norm for decades. Service providers’ marketing organizations often use tariffs and promotions coded into billing systems to win market share. Deals such as “best rate guaranteed” and “half off your current bill” are delivered through billing system add-ons. When this customization is tied to legacy processes that result in revenue, it can be hard for organizations to discard them, making the choice to move to low-code harder than it might seem.

Today, this kind of customization may take the form of do-ityourself (DIY) transformation: migrating and enhancing BSS to implement a new cloud-native stack that is hosted in a CSP’s own private cloud, likely with help from the supplier to operate it. Regulation is a major reason for some CSPs to choose this path. In countries like Germany, for example, data privacy laws can rule out using public clouds for customer and billing data, limiting an operator’s choice regarding public cloud-based SaaS.

Skills competition

Improving BSS and winning in ICT markets is not only about changing technology or suppliers. CSPs must also acquire new skills throughout the organization. But the competition for ICT skills across high-tech sectors is fierce. When asked to rank the trends that will have the biggest impact on their BSS choices going forward, respondents’ top picks all require new skillsets (see graphic above). Automation of process and development pipelines and adopting cloud-native platforms top the list. These require changing BSS processes and adding new developer skillsets and methodologies, such as moving away from waterfall development practices and embracing Agile methodologies and DevOps practices.

But every company that is digitizing its business is searching for these skills, and finding them takes more than a little training and hiring. “Addressing the skills gap in 5G and ICT requires a multifaceted approach,” says Luqman Shantal, CEO, Makman Consulting, pointing to a combination of partnerships, greenfield projects and strategic acquisitions.

Shantal recommends collaboration in proofs of concept such as TM Forum Catalyst projects as a good way for CSPs to experiment in a sandbox setting without the pressure of overhauling or interrupting production BSS. Operators can then use what they’ve learned and apply it to greenfield BSS projects. “It’s much easier to foster a new culture and adopt modern practices in a greenfield environment rather than trying to retrofit them into established systems,” he says.

Mergers and acquisitions are also important tools for acquiring new talent and transforming culture. “Embedding freshly hired engineers into centers of excellence…helps cultivate the necessary skills and mindset,” Shantal explains. “The hands-on exposure to Agile, scrum and DevOps, away from traditional SDLC [software development lifecycle] models, has proven to boost efficiency substantially.”

Read the report BSS for B2B: operators diverge on the path to cloud to find out more.