Telecom network operators have always faced the challenge of matching their technology and infrastructure to related services opportunities in order to generate revenue. But the Internet has changed the planning requirements for infrastructure and network operations planning, and service providers must adapt quickly.
In the past, the challenge of matching services to technology deployments was easier because the project lifecycles and capital cycles of telecom service providers were typically very long (seven-to-20 years), and the corresponding services evolved over a long period of time.
Consumer broadband changed telecom infrastructure and services balance
In terms of major change, the most important service lesson the Internet has taught is that consumer broadband services aren't long-lived extensions of traditional telecom services. Instead, consumer broadband services are linked to the creation and delivery of experiences. As such, services in the Internet era are linked to consumer market trends and fads that often develop and die within a year.
In fact, the Internet's worldwide reach created the perfect platform to develop and socialize new opportunities, which shortened the cycle of consumer interest and opportunity. Over-the-top (OTT) Internet companies evolved to meet customer needs and built a "soft" infrastructure made up of services and software.
This new structure was nimble and highly flexible, and as a result, most Internet opportunities went to the new players, creating "disintermediation" that cut traditional telecom carriers out of the revenue stream.
Traditional carriers face next-gen network operations issues
Today telecom carriers are competing with over-the-top companies that don't have enormous investments in infrastructure and are highly flexible. In light of these competitive pressures, the challenge for facilities-based carriers is to match customers' short-term demand cycles with infrastructure planning and capital cycles that can be 10 times as long as the demand for a service.
The solution is to integrate more IT resources into infrastructureservers, software and service delivery platforms (SDPs)and to create and sustain flexible service lifecycle processes that can provision long-lived enterprise services and support Web-delivered experiences that may last only a matter of hours or minutes.
The technology that can provide these capabilities is understood, and most operators are already deploying next-generation networks based on the paradigms of hosted service features and opportunity-driven service plans. Sorting out telecom network operations issues are next on the agenda.
Direct telecom network operations costs worldwide average 1.22 times more than carriers' capital equipment costs, and operators report that between 25% and 45% of these costs are related to dealing with errors made by operations personnel while performing configuration management, problem resolution, upgrades and additions to infrastructure, and other routine network operations tasks.
As the infrastructure that can deal with the new pace of opportunity becomes more complex, these cost points can only rise. The new complexity demands a skill set that blends information systems technology and network technology with some hard experience and applies both to NGN problems. Those skills are in short supply.
Telecom operators are encountering new network integration and operations challenges in their next-generation services evolution. The statistics show how carriers are trying to improve network operations planning and management.
Network integration risks
In the 1990s, only about 18% of telecom network infrastructure changes were coordinated by contractors that won outsourced contracts to manage carrier network integration projects. By 2008 integration outsourcing had grown to 63%.
What caused the increase? Operators have found that relying on standards development isn't sufficient in the complex and fast-paced world of next-generation network (NGN) deployment, even though it is the traditional way to insure interoperability among network components. By 2005, the pace of service opportunities had exceeded the pace of standardization, which further complicated the issue. For example, a standards-setting process started in 2006 to integrate IT technology at the service layer with traditional network technology. The standards aren't yet complete.
In addition, there are explosions in the cost of integrating the components of NGN infrastructure, in the cost of NGN operations, and in operations errors that are not only individually unacceptable, but collectively are a disastrous risk.
To reduce the risk of integration and operations disasters, operators are breaking with the tradition of waiting for standards completion taking steps that include the following:
Increasing the number of network integration contracts awarded in connection with major NGN deployments to make a single party accountable and responsible for the integration of the wide range of network technologies.
Dividing networks into technology procurement zones and selecting a small number of vendors within each zone, and naming the winners responsible not only for providing infrastructure components but for accepting and managing an integration contract within the zone. Vendors can partner with smaller players to achieve full technology solutions within a zone, which encourages vendors.
Requiring procurement zone winners to establish a network operations process for the life of the technology and update any existing processes as needed.
Outsourcing ongoing operations management to a suitable vendor where the pace of technology change, opportunity change, or both suggests that sustaining operations using service provider personnel will be problematic.
The notion of a global network operator outsourcing network operations to a third party seems radical, but it is a logical step from the network and technology integration contracts that have already become the rule in NGN deployment. The traditional problems in acquiring and retaining skilled personnel are exacerbated for next-generation network operations by the multiplicity of skills required. Furthermore, some tasks associated with NGN operations are so specialized that a given operator may not be able to justify full-time staff to perform them.
The real driver here is the bottom line – managing service opportunities rather than reducing costs. Operators report that outsourcing ongoing network operations actually facilitates the transition from deployment to live operations that serve customers and earn revenues.
The hand-off from a managed installation to a self-supported ongoing operations state is tricky. Operators that have experienced the transfer of responsibility in a large-scale network report that problems are more than twice as likely to emerge in this interval as in ongoing operations. This can result in customer complaints and a loss of credibility for new services.
That doesn't mean that network integration and operations outsourcing contracts can't also save money. Skilled operations personnel make fewer errors, and as noted earlier, errors can account for fully half of total network operations center costs. This is particularly true for Tier Two and Three providers that likely cannot draw the necessary skills from their local labor pools.
Where local skills are lacking, operators must resort to incident-based support from vendors or integrators. The cost of these services on an as-needed basis, combined with local labor costs, often exceeds the cost of outsourcing them. The magnitude of the potential savings increases with the complexity of the NGN project, the geographic scope of the network, and the range of services the network will support.
Next-generation network integration is a special skill that operators have already recognized they can't hope to maintain in house. It's becoming clear that NGN operations is also a special skill, and that operators will need to think seriously about the benefits of outsourcing operations much more in the future.
Part one of a three-part series
Next: A four-step plan to next-gen network outsourcing and integration
Tom Nolle is president of CIMI Corp
This article originally appeared on SearchTelecom.com