2 minutes read
Innovations in mobility are driving continuous change in how individuals use communications services – and in how communications services providers (CSPs) respond. With connected cars, digital health services, and other cloud-based services proliferating, individuals do more with their mobile phones and connected devices. As CSPs work to respond, a key challenge is to balance technology and adoption curves with business metrics, especially profitability.
Within CSPs, organizational silos are experiencing big shifts as IT, networks, customer, and new business units benefit from cloud, analytics, and mobility innovations. Greater agility in network infrastructure resources and business operations platforms allows for faster, easier service launches. Industry discussions about 5G, IoT, and video-based services push network infrastructure teams to innovate. For some IT staff, the key innovation now emerging in business operations platforms is the wider availability of cloud-hosted and SaaS business and operational support systems for CSPs. These advancements are driving important improvements in the cost to run IT and network systems.
In conversations with senior CSP staff about digital transformation, a more complex picture emerges. Pulling the CSP organization together around an updated, shared mission is a key tenet of many digital transformation projects. The journey for CSPs includes blending IT and network teams, delivering a great customer experience and, increasingly, finding the right updated operational model. Digital transformation leaders in CSPs want to shape both the customer experience focus and technology innovations toward updated business outcomes. Revenue assurance tools examine traditional KPIs such as churn and fraud as historically-based assessments. Other metrics such as average revenue per user (ARPU) and average profit per user (APPU) focus on a subscriber based view of services. What’s missing is a business analytics approach that leverages the holistic view of the CSP operations.
Margin management is emerging to rival revenue management as an updated operational tool. By utilizing a structured approach to examine the margin of specific services, CSPs could determine a new service offering’s viability before making an expensive product catalog integration. Using such an approach, the network infrastructure load of specific content or connection concepts could be assessed in terms of revenues or profits. The proprietary approach to infrastructure purchasing, deployment, and operations precluded this kind of analysis. Now, changes in infrastructure and operations are opening up new possibilities in business operations.
As CSPs seek out updated business models and improved customer experiences, the digital transformation discussion also includes the relatively new area of margin assurance. Analysis of the margins associated with agile new services based on SDN/NFV, connected cars, and wearables is poised to become as much of an innovation in how CSP operations are run as the usage shifts and the technological innovations that drive these new services. For CSP leaders managing highly technical teams and working to harness today’s connected consumers, margin assurance provides an opportunity to balance possibilities with a practical approach.
The story of business model innovation by CSPs is often overshadowed by the highly visible transformation of the network from hardware to software or the improved customer care platforms for consumer or business customers. However, when we look at the overall impact of revenue optimization investments over time – and the impact of those investments – the emergence of margin assurance is a significant industry development.