Analytics and Data Are at the Heart of CSP Innovation

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Speeding up requires new technology approaches. With that goal in mind, communications service providers (CSPs) are aggressively tackling their responsiveness, cost levels, and business models with an intent to transform how they operate. However, CSPs are bedeviled by complex internal processes that historically limited experimentation and often result in lengthy and unwieldy operational projects. Stepping away from “waterfall” projects and also maximizing new approaches requires CSPs to update their technology investment criteria. CSPs can do so by expanding upon the following tactics.

Make the move to cloud/SaaS (selectively). In 2015, CSPs took early but clear steps to embrace cloud-based solutions for specific business operations platforms. IDC’s recently updated Worldwide Communications Service Provider Operations Forecast, 2016-2020 (June 2016) showed that 2015 market revenues grew 1.7% when compared to 2014 levels, due in part to the adoption of cloud-based and SaaS-based platforms, especially for customer care and fulfillment. Buyers reported key examples of smaller, more focused projects to improve customer satisfaction while continuing to sustain and enrich high-value platforms. For two years in a row (2014 -2015), CSPs have taken steps to invest in subscription-based operations solutions, which shows important progress in controlling spending while shifting to outcome-driven investments capable of being leveraged. While the transformation of the network via software defined networking (SDN) fuels a broader discussion of expensing practices and sourcing preferences among CSPs, the business imperative to improve customer satisfaction was a major driver in 2015 deals for cloud/SaaS-based solutions.

Invest in data over process/workflow. For innovative CSPs, the value of technology solutions lies in the data and information rather than in the specific means of collecting or storing the data. IDC sees that CSPs have found cost efficiencies in cloud-based or SaaS solutions, which preserve their key operational data but limit unnecessary – and often routine – process and workflow engineering. In some cases, CSPs are choosing solutions and updates that are less customized and more widely used by other telecommunications players or even other industries. Moving away from large foundational application development is one step; another key advance is strategically focusing on the corporate knowledge base and data.

Invest in analytics but explore less narrowly sourced solutions than in the past. Significantly, most CSPs are reporting that some of their most strategic and high-value projects are designed to improve analysis of their corporate data. Updates to mission-critical business operations platforms include analytics as a periodic upgrade to installed systems. TeleManagement Forum data models for analytics are being updated as well. However, many mission-critical IT platforms were designed for traditional communications industry practices. With the advent of digital transformation (see my prior blog), communications industry buyers now have a broader experience of both business analytics and data analytics, as well as optimal technology sourcing, which means that they are shifting their views of suppliers.

Expand upon the financial team’s use cases. The transformation of internal business practices affects internal processes beyond networking and customer care. CSPs are embarking on broad-based modernizations of their operating practices as they work to compete with digital leaders. The financial team is especially engaged with using analytics during the transformation. Revenue assurance was already a strong use case for analytics, which prompted significant investments to analyze lost or missing revenues. Increasingly, however, the experiences gained with revenue assurance are being extended to achieve a broader operational efficiency in the financial practices of CSPs.

At the same time, data scientists in the communications industry are growing more sophisticated. Many data scientists in CSP organizations are on customer satisfaction teams that aim to improve net promoter scores and alignment with optimal customer profiles. Increasingly, data scientists are working on business operations to help CSPs transform themselves to achieve better financial efficiency through the use of smarter sourcing arrangements and margin assurance.

With an eye on the future, IDC recommends that CSPs consider the following actions:

Action 1: Embrace the shift to significant cost efficiencies via cloud/SaaS hosted solutions, integrated portfolios, and standardized interfaces.

Action 2: Support analytics work. Updates to these mission-critical IT applications with cloud platforms and big data and analytics technologies are gaining momentum. With many suppliers promoting analytics capabilities, the breadth and depth of these capabilities must be carefully assessed – especially in light of the cloud/SaaS sourcing trend that is emerging for mission-critical operations platforms.

Driving faster, stronger business results is a top priority for CSPs.

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Elisabeth Rainge
Elisabeth Rainge is the Research Vice President of IDC's Communications Service Provider Operations research program. She is responsible for research into how CSPs use software-rich technology solutions to improve their efficiency, effectiveness and profitability. Key areas of research include customer experience, infrastructure transitions, business value, revenue management, business support systems (BSS) and operational support systems (OSS). She is a seasoned analyst with a strong commitment to making research useful to her clients, advising operators, end users, vendors and others on a variety of industry trends and developments. Elisabeth rejoined IDC in 2013 after spending three years at Nokia Solutions & Networks (formerly Nokia Siemens Networks) where she led NSN's Cloud and Enterprise Strategy initiatives, contributed to technology strategies and worked as part of the analyst relations team to drive the use of market research across the company. In her previous tenure at IDC, Elisabeth launched the company's Next-Generation OSS & Billing service in 2000, expanding IDC's coverage of management of networked infrastructures and the telecommunications industry. After initiating coverage of telecom operations, she evolved coverage to examine the expanding use of IT technologies in the telecommunications industry. Elisabeth led IDC's NGN Operations service -- covering CSP operations, carrier-grade VoIP infrastructure, network management and network test and measurement -- as a member of its CSP network infrastructure team from 2007 through early 2011. In addition, she led IDC's enterprise Network Management research from 1996 to 2007. Ms. Rainge has a bachelor's degree in history from Boston College and speaks Spanish.

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