Migration lessons for modernizing CSP IT
Technology will change our lives drastically over next 15 years but CSPs are transforming too slowly. A rapid and radical shift to an open, modern, software-based technology architecture is needed.
Migration lessons for modernizing CSP IT
The author of this article, Bain’s Brendan O’Rourke was part of a panel of experts who spoke about IT migration at TM Forum’s Digital Transformation World Series. Read some of his insights below. Facing a potentially toxic set of challenges, the telecoms industry is going through a profound transformation. Market saturation, technical and business legacy created during years of rapid growth, and fast-changing customer expectations have placed continuous pressure on operating costs and operational agility. At the same time, communication service providers (CSPs) find themselves caught in a paradox: demand for the core product of connectivity is growing exponentially, yet hyper-competition, saturated customer wallets and the continuous investment required to satisfy that demand means organic growth options are limited. The next 15 years will bring a fundamental change in the way we live, work and relate to one another; and the COVID-19 pandemic will only accelerate this change. For the consumer market, this will of course mean faster internet speeds and universal high-speed access through services such as fixed mobile broadband, but these opportunities hold limited growth potential for CSPs.
CSPs are transforming too slowly to capture the new value they are helping to create. Legacy processes and technologies are a systemic part of the problem. Progress to address these challenges is so slow that Gartner predicts that by 2025, technical debt will consume more than 40% of operators’ current IT budgets. CSPs often struggle to balance ‘quick fix’ changes to meet short-term business needs (which only increase their technical debt) with investing in sustainable long-term transformation of the business and the software that runs it.
A rapid and radical shift to an open, modern, software-based technology architecture that enables new operating and business models is therefore needed; one which is loosely coupled, cloud native, data and AI-driven; made up of standard components which can be easily procured and deployed, without the need for customization. Achieving these goals will require a fundamental, holistic change in how software is architected, built, procured, licensed, and maintained. Pivoting towards a ‘software-first’ solution will not be easy – it creates significant changes for both buyers and sellers.
To address these challenges, TM Forum members are leading an industry initiative to build the Open Digital Framework (ODF). ODF includes the target Open Digital Architecture (ODA); incorporating a modern, flexible integration fabric (Open APIs), together with the infrastructure for binary testing of conformance for interoperability and end-to-end management. ODF also provides tools to support migration from legacy systems to ODA’s modular, cloud native architecture with software components enabling IT and network capabilities over time.
Migrating to these modern technology architectures requires best practices and applying the learning from technology migrations of the past. These are the best practices we suggest that CSPs consider when planning technology migrations: The Open Digital Framework marks a significant change for the digital service provider (DSP) software market, simplifying the solutions and removing the need for large-scale customization and integration. Service providers will prioritize investment in software and technology that differentiates their business, not in the customization and integration of non-differentiating solutions. This creates opportunities for new market entrants and established vendors to unlock value-added partnerships. Working closely with the relevant standards bodies, TM Forum is the platform to drive rapid innovation in the modernization of CSP technology, the foundations are now in place – now is the time to scale.
- Overall migration approach: Modernising IT architecture should be customer led (not IT led) so that it is targeted around delivering short, medium and long-term value to the business.
- Data migration: Do not migrate old business models. The investment required is often significant and making that investment to replicate your current business model and current operating model is not often the opportunity to go after.
- Roll-back approach: Migrating to the new capabilities should follow these two principles – 1. Customer led: as greenfield as possible, enabling new business and operating models; 2. Capability led: use case driven approach - iterate delivering value regularly which build out the capabilities using an "MVP" approach.
- Communication and ways of working: Creating a partnership between IT and business, and communicating, communicating, communicating to make sure that all decisions are jointly owned by the business and IT.
- Develop a detailed migration execution playbook: Document all of the activities and associated costs based on the agreed principles: Plan the scope, Transform the data, Build the migration pipeline, Operational processes and manual workarounds, Decommission and archive.