Smarter Communications Point of view Ready for Anything In an industry where change is the only constant, communications service providers are preparing for battle It’s not unusual to hear CEOs of companies in various sectors claim their industry is in the midst of a “transformation.” But it’s hard to imagine an industry that better fits that description than communications. A combination of empowered consumers, new competitors and a sharp increase in demand for mobile and data services has conspired to thrust this crucial sector into a constant state of change. It’s not surprising, then, that 76 percent of communications service provider (CSP) CEOs identify industry transformation as the one factor that will have the largest impact on their organization over the next five years.1 This relentless change is being driven by the market, and in particular by a new breed of consumer that demands instant access to information whenever they want, wherever they are. Already, there are six billion mobile devices in use globally. By 2020, experts expect 50 billion mobile devices will be connected to the Internet.2 As a result, demand for data services will increase 26 times by 2015 and result in a surge of network traffic that requires massive infrastructure investment that may or may not translate into commensurate revenue for CSPs.3 When CSPs fail to deliver on these mounting consumer demands, bad news travels fast and wide. A recent IBM® survey of nearly 13,000 consumers in 24 countries reports that more than 73 percent of consumers in mature markets and 85 percent in emerging markets tell their friends and family about their poor experience with a CSP.4 And many of those unsatisfied customers become active brand antagonists. That is why communications industry marketing executives rank enhancing customer loyalty and advocacy as their number-one priority.5 It’s also why a host of disruptive, over-the-top competitors are siphoning off CSP revenue and threatening to reduce traditional service providers to dumb pipes with razor-thin margins. Highlights: • 76 percent of communications service provider CEOs identify industry transformation as the one factor that will have the largest impact on their organization over the next 5 years. • Successful transformation requires agile infrastructure, a culture of collaboration, and a constant source of operational and financial insight. • The three things CSPs must do, regardless of their strategic direction, are: –– Deliver smarter services –– Transform operations – Build smarter networks Smarter Communications 2 Point of view So how does a CSP compete in a market that changes so quickly and so unpredictably? How should a CSP react when powerful brands like Amazon, Apple and Google become competitors overnight, and customers churn at an alarming rate? The answer is to get faster, smarter and more efficient. The answer is to transform. CSP Transformation Incremental change is no longer a viable option. Service provider CEOs know that as the industry transforms, so too must their organization. But in such a dynamic market, CSP executives face some difficult strategic questions: What role will their company play in the new communications value chain, and how will they differentiate themselves? Will they become a world-class retailer of devices and content for consumers? Will they shed functions to serve as the pre-eminent network wholesaler? Will they consolidate and position themselves as the full-service global information and communications technology (ICT) leader for enterprises? These are enormous decisions with far reaching impact that, in many cases, require major transformations. It’s impossible to say how this industry will evolve. But based on IBM’s experience, top-performing service providers are preparing for transformation by developing expertise in five key areas that support their near- and long-term strategies: 1. Implementing a cost-effective and ultra-fast broadband strategy. 2. Building agile, flexible infrastructure. 3. Nurturing a culture of collaboration. 4. Utilizing network and customer insights. 5. Focusing on cost containment. These common success factors apply regardless of strategic direction as a full-service operator, cloud provider, wholesaler or retailer. In order to achieve these common success factors, CSPs will need to transform by driving three industry imperatives: • Deliver smarter services to generate new sources of revenue more quickly. • Transform operations to achieve business and service excellence. • Build smarter networks to optimize and monetize next-generation networks. Which of these three imperatives a CSP emphasizes will vary depending on its particular strategy. Many CSPs will need to significantly improve retail and merchandising capabilities. Some will focus on growth from ICT and cloud-based services. All will need to improve customer insight and reduce cost to deliver core services. IBM works with CSPs, large and small, that have chosen their strategy and are relentlessly transforming themselves to achieve success. The following examples highlight the kinds of competencies these carriers are building to become smarter CSPs. Deliver Smarter Services Smarter services are based on an information infrastructure that integrates all relevant sources of customer, usage, behavior and network data into a 360-degree view of the customer. Applying advanced analytics to this data results in personalized offers tailored for each subscriber. To speed the creation and delivery of these new services, smarter services are built on a next-generation services platform, often using cloud technology. Smarter services also embrace an ever-growing application partner ecosystem to expand the portfolio for current customers and new vertical markets such as banking, healthcare, government, and more. Smarter Communications 3 Point of view One service provider implemented predictive analytics to improve its small business retention rate. This CSP needed to identify which of its small-business customers had the highest risk of switching to a competitor. The company deployed an analytics solution that evaluates more than 500 variables for predicting customer defections within 90 days. That solution allowed the customer intelligence team to build an accurate model keying on the 25 most relevant variables. Using this information, the client service managers now proactively prioritize outbound calls to at-risk accounts. The service provider realized a 60-percent improvement in revenue retention rates that equates to millions of dollars in annualized revenue protection. What makes this initiative even more impressive is that fewer client services managers are needed to provide the same level of risk coverage. These resources now can be better utilized and deployed where they are needed most. Results from a recent IBM study that measured the ROI for analytics applied to the customer experience and service innovation corroborates clients’ findings. Detailed modeling shows that by integrating business intelligence and employing analytics and autonomics, an illustrative wireless CSP with $8 billion in revenue and 17 million subscribers could achieve total five-year benefits of $718 million with an ROI of 830 percent and a payback of 15 months.6 Transform Operations Smarter operations creates an Operations Support Systems/ Business Support Systems (OSS/BSS) environment that delivers a superior customer experience and fulfills and services new, converged and existing services faster and at lower cost. This modernization often requires transformation of back-office and customer-facing systems and processes to establish more agile, customer-centric and lean operations. Smarter operations implement open architectures and standards-based solutions established by organizations such as the International Telecommunications Union (ITU) and the TeleManagement Forum (TMF). This approach to transformation lowers risk, improves operational efficiency and allows the CSP to respond more rapidly to business change for faster results. One CSP realized it must reduce costs and streamline its processes to react more quickly to competitive threats. It needed to be able to launch new products and services in days, not weeks or months. One of the first aspects of its business it chose to transform was order management. Right from the start, the company was committed to using TM Forum’s Frameworx in its IT transformation program. The operator has now automated and manages its complex processes after adopting a business process management platform and TM Forum’s Frameworx. The CSP has enjoyed excellent results, including 40 percent less expenditure on professional services; 45 percent shorter delivery cycle for the ongoing maintenance and new releases of processes; and 40 percent reduced total cost of ownership. Build Smarter Networks Smarter networks is an emerging area that integrates analytics and intelligence across the network domain. For example, smarter networks use analytics to maximize network capacity and utilization, enabling CSPs to reduce or defer the potentially massive infrastructure investments required to keep pace with traffic growth. Predictive analytics can improve the efficiency, security and energy usage of passive infrastructure such as cell sites, data centers and other facilities, and even device endpoints. Applied to the active network, analytics can help establish self-organizing networks that self-plan, configure, heal and optimize. Smarter networks also opens new revenue possibilities when the network is used as a platform that monetizes a new generation of network-based services. As an example of a smarter networks implementation, one CSP used IBM’s Intelligent Site Operations solution to reduce its mobile network of more than 32,000 tower sites spread across 11 telecom circles in India, which include some of the toughest terrain and remote locations in the world. The company automated oversight efforts and implemented real-time reporting of system data from cellular towers combining sensors, data tracking and analytics. TLW03016-USEN-01 © Copyright IBM Corporation 2012 IBM Corporation Route 100 Somers, NY 10589 Produced in the United States of America February 2012 IBM, the IBM logo and ibm are trademarks of International Business Machines Corp., registered in many jurisdictions worldwide. Other product and service names might be trademarks of IBM or other companies. A current list of IBM trademarks is available on the Web at “Copyright and trademark information” at: ibm/legal/copytrade.shtml Microsoft, Windows and Windows NT are trademarks of Microsoft Corporation in the United States, other countries, or both. The content in this document (including currency OR pricing references which exclude applicable taxes) is current as of the initial date of publication and may be changed by IBM at any time. Not all offerings are available in every country in which IBM operates. The performance data and client examples cited are presented for illustrative purposes only. Actual performance results may vary depending on specific configurations and operating conditions. THE INFORMATION IN THIS DOCUMENT IS PROVIDED “AS IS” WITHOUT ANY WARRANTY, EXPRESS OR IMPLIED, INCLUDING WITHOUT ANY WARRANTIES OF MERCHANTABILITY, FITNESS FOR A PARTICULAR PURPOSE AND ANY WARRANTY OR CONDITION OF NON-INFRINGEMENT. IBM products are warranted according to the terms and conditions of the agreements under which they are provided. IBM Institute for Business Value. 2010. Capitalizing on Complexity: Insights from the Global Chief Executive Study, Telecommunications Industry Perspective. Mobile Phones, bbc.co.uk/news/10569081 Cisco Visual Networking Index: Forecast and Methodology 2010-2015 IBM Institute for Business Value. 2011. 2011 Global Communications Consumer Study. IBM Institute for Business Value. 2011. From Stretched to Strengthened: Insights from the Global Chief Marketing Officer Study, Communications Point of View. IBM Center for Applied Insights. 2011. Smarter Communications through Analytics: Harnessing the Power of Data and Analytics to Maximize the Value of Each Customer. Please Recycle The client analyzed this collected data to detect energy and service anomalies to identify the ideal tower configurations that offered the highest level of overall efficiency. Beyond simple performance monitoring, the solution also performs trend analysis, looking for fraud or unexpected energy spikes. By observing energy usage, the company also can drive improved efficiencies by replicating configurations with the best energy profile across its towers. As a result of analytics-based automation, energy usage-related costs are reduced by 20 to 30 percent. Delivering on the Promise of Smarter Communications The challenges ahead are formidable, and there are many paths to success. Major strategic decisions must be made quickly that ensure CSPs can compete in an all-IP world, operate with the leanest and most agile cost model, and delight their customers. CSPs worldwide select IBM as their partner in these transformations. IBM has served the communications industry for nearly 100 years, investing continually to ensure its employees have the skills and experience to solve their client’s most complex problems. IBM has spent nearly $14 billion in the past three years in analytics acquisitions alone, and has thousands of people directly delivering services to the communications industry across the globe. Find out how IBM can support your strategic direction with smarter solutions to help you become a smarter CSP and, together, build a smarter communications industry. For more information For more information, please visit ibm/smarterplanet/us/en/ communication_technology/ideas/ 2 3 4 5 6 1
Posted on: Tue, 11 Jun 2013 14:53:32 +0000
Trending Topics
Recently Viewed Topics
© 2015