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2013/14

[transform] [digital] [business]

Smart services smart business

Maximize your agility and innovate your way to a more profitable future

How to maximize margins Using experience to keep customers Analytics: Exploiting data and other assets

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TM Forum Yearbook, 2013/14


Publications Managing Editor: Annie Turner aturner@tmforum.org Editor: Claire Manuel cmanuel@tmforum.org Creative Director: David Andrews dandrews@tmforum.org Business Development Director, Research & Publications: Mark Bradbury mbradbury@tmforum.org Senior Publisher: Katy Gambino kgambino@tmforum.org Production Assistant: Aideen Greenlee agreenlee@tmforum.org Head of Marketing: Lacey Caldwell Senko lsenko@tmforum.org Report Design: The Page Design Consultancy Ltd Vice President, Events, Publications and Content: Rebecca Henderson rhenderson@tmforum.org Advisors: Keith Willetts, Chairman and CEO, TM Forum Martin Creaner, President, TM Forum Nik Willetts, Chief Strategy Officer, TM Forum Published by: TM Forum, 240 Headquarters Plaza, East Tower, 10th Floor, Morristown, NJ 07960-6628, USA www.tmforum.org Phone: +1 973-944-5100 Fax: +1 973-944-5110 Printed by: Stephens and George www.stephensandgeorge.co.uk

Contributors
George Malim is a freelance technology journalist. He has covered the communications market since 1999 and contributes to Global Telecoms Business, VanillaPlus and Wireless magazines. Dr. Phil Marshall is the Chief Research Officer of Tolaga, where he leads its software development and research. Before founding Tolaga, he was an executive at Yankee Group for nine years. Marshall has 20 years experience in the communications industry. Tim McElligott has been a technology writer since 1999 focusing on communications industry operations. As Editor-in-Chief of Billing & OSS World (B/OSS) from 2008-2012 he drove and produced the publications editorial and conference content. Prior to that he was Senior Editor at award-winning Telephony magazine and Editor of Telephonys rural independent supplement. McElligotts writing career is supported by his background in various technical positions with Tier 1 wireline and wireless operators. Rod Newing has contributed regularly to the Financial Times for 17 years on technology, communications, business and health. He also contributes to supplements in The Times, Daily Telegraph, Washington Post and a range of professional and trade magazines. Vaughan OGrady is a freelance writer and editor specializing in communications and the oil and gas industry, as well as general business and technology themes specific to Africa and the Middle East. He is a former Editor of GSM World Focus and Communications Africa. Dr. Lorien Pratt is Cofounder of Quantellia, a global consulting and solutions company for decision engineering. A communications industry veteran, Pratt is best known to the TM Forum as a former Director of OSS and infrastructure at Stratecast. Jody Ranck has over 25 years of experience in global health and technology. He is the author of Connected Health: How Mobiles, Cloud, and Big Data will Reinvent Healthcare and is an advisor to startups, PwC, and Open mHealth. He also writes about health technology for GigaOm. Robert J. (Rob) Rich is Managing Director of TM Forums Insights Research. He has more than 20 years experience in market research and consulting, including 11 years as Executive VP at Yankee Group. Before that he spent 17 years in the computing and networking industry.

2013. The entire contents of this publication are protected by copyright. All rights reserved. No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means: electronic, mechanical, photocopying, recording or otherwise, without the prior permission of the publisher, TeleManagement Forum. TM Forum would like to thank the sponsors and advertisers who have enabled the publication of this fully independently researched yearbook. The views and opinions expressed by individual authors and contributors in this publication are provided in the writers personal capacities and are their sole responsibility. Their publication does not imply that they represent the views or opinions of TeleManagement Forum and must neither be regarded as constituting advice on any matter whatsoever, nor be interpreted as such. The reproduction of advertisements and sponsored features in this publication does not in any way imply endorsement by TeleManagement Forum of products or services referred to therein.

John Williamson is Communications Editor of Janes IHS Jane's C4ISR & Mission Systems, and is Co-Editor of the Mobiledotcomms electronic magazine. He is a regular contributor to the Inkslinger.news website. Previously he worked for Telephony, Telecommunications and Microwave Journal. Monica Zlotogorski is Vice-Chair of TM Forums Latin American Advisory Board. She edits the Forums Inside Latin America newsletter and writes for the Inside Leadership newsletter. She has over 16 years international business experience and speaks five languages. She is VP of Research at Telesperience.

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Contents

Thoughts from the top


9 Using your digital initiative to thrive Keith Willetts, Chairman and CEO, TM Forum The next phase of evolution of the digital world needs considerable thought and action before we to get to the stage where enterprises can trust emerging digital services enough to run their businesses on them.

Familiar themes, new twists

12 Keeping up with change Martin Creaner, President, TM Forum When an industry finds itself on shifting sands, business as usual isnt a viable strategy. From eHealth to smart grid, ePayments and wider machine-to-machine (M2M) services, the addressable market is growing exponentially and so are the potential number of competencies that the successful service provider needs to thrive. 14 Balancing standards, innovation and insight is the key to success Phil Jordan, Group CIO, Telefnica We need to create and operate in a much more open environment to foster innovation. Naturally, to sustain our businesses into the future, we face a number of operational and other challenges. If we negotiate them well, there is a wealth of new opportunities for our industry in the digital world. 16 Monetizing big data in the communications industry Scott Stainken, General Manager, IBM Global Telecommunications Industry Big Data, in all its dimensions, is making new knowledge available and new processes, too, are emerging to take advantage of what it has to offer.

22 Global perspectives: Changing the way we do business By Monica Zlotogorski The cyclical pattern of business models is coming to an end and being replaced by new ways of doing things that affect all industries and all companies. 27 Managed services rise in the era of cloud By Rod Newing The increasingly digital world means that communications companies will need to change from developing and providing a complete solution to being a managed service provider within an agile ecosystem. 32 Managing the product lifecycle is key to the digital economy By John Williamson Product Lifecycle Management encompasses a diverse range of sectors, from aerospace and defense to pharmaceuticals and medical devices. We look at why and how it is being adopted by the communications industry.

18 Game-changing technologies unlock potential growth in communications Montgomery 'Monte' Hong, Managing Director Global Communications Industry and Asia Pacific Communications Industry Lead, Accenture Operators will need to grasp and act on some key, game-changing technology trends that will affect the communications industry over the next three to four years.

35 Wi-Fi hots up competition for customers By Rod Newing Wi-Fi is enabling new business models and ways for operators to differentiate themselves, which is already resulting in wireless and wireline converging. However, to make the experience truly seamless, there is considerable work to be done.

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Contents

40 Customer experience: 10 tips to make it better By Rob Rich It is still relatively early days for customer experience management in the communications industry, which means there is everything to play for. Here are 10 steps that can make a big difference to how customers view their service provider right now. 43 Why we need policy everywhere By John Williamson Policy-based management is expanding its role. We look at how policy is developing and how service providers are using it and plan to exploit it in the future. 47 Securing maximum value from bringing your own device By George Malim Bringing your own device (BYOD) into the workplace has resulted in amplified security risks that are only now being properly considered and addressed. The right processes and metrics need to be established to secure BYOD and enable its full potential to be unleashed.

real-time analytics to support retailers. It also represents an important new revenue opportunity for the service providers. 58 Is outsourcing fraud management the way forward? By Annie Turner Few companies have outsourced fraud management. As the problems intensify, should the merits of this approach scale, big data and analytics be taken more seriously? 60 Thrive another day with real-time convergent charging By Tim McElligott Thinking about real-time convergent charging is the only option right now for service providers who believe that the anytime, anywhere mantra is real, necessary and achievable. Using unique research by TM Forum, we recommend the next steps.

New horizons
64 LTE how big are the risks to service providers businesses? By Phil Marshall Ph.D. The migration from 2G to 3G to 4G long-term evolution creates potential risks to operators' business. What are the risks and what can we do to mitigate them?

50 Revenue assurance: Hitting a constantly moving target By George Malim Just as the communications industry is evolving to address new business models and additional sources of revenue, so too must revenue assurance, as it becomes fundamental to the success of the new digital value chain. 53 Converting eyeballs to footfalls: Helping bricks and mortar compete in a digital world By Dr. Lorien Pratt Communications service providers are offering business intelligence gleaned from analyzing big data as a source of 67 M2M: The rise of the machine By Phil Marshall Ph.D. How and where are machine-to-machine communications already in use and whats next on the agenda? A look at how smart grid is shaping up and what needs to happen to make it reality.

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Contents

83 Making social networks work as customer self-care centers By Annie Turner Social networks are changing the face of customer care, in communications and other industries. There is no doubt that this is popular with customers, but is it viable and sustainable for service providers?

72 eHealth saving lives through partnerships and innovative ecosystems By Jody Ranck, DrPH Over the past few years we have witnessed incredible growth in the use of communications technologies in health systems worldwide. What is happening and what are the implications for the healthcare and the communications sectors? 77 Apps but not as you know them. Part 1: HTML5 looms and promises to open up the mobile application world By Rod Newing HTML5 is set to revolutionize the mobile Internet by replacing native apps, which only run on a specific device, with web-based apps that will run on any. This could and should open up the mobile world and create a level playing field. 87 Mobile payments: Looking beyond the transaction By Vaughan OGrady Mobile payment sounds like a simple concept, but many customers still dont understand whats involved. With lots of different payment offerings flooding the market, consumers are going to become more confused. Will the public embrace mobile payments and how can mobile operators make them pay? 90 Delivering APIs for enterprises is big business By Dr. Lorien Pratt There is a big market for enterprise-grade mashups and communications service providers are uniquely placed to deliver them, if they follow emerging best practices and exploit their assets. 93 What is TM Forum Frameworx and how can it help you? TM Forums suite of standards and best practices. 94 Index of advertisers 80 Apps but not as you know them. Part II: Where's the money? Targeting smaller firms with bundled connectivity and apps By Rod Newing Seeing HTML5 simply as a protocol for browsers is largely missing the point. As we saw in the first part of this article, it has the potential to change business models and even open up new revenue streams.

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Using your digital initiative to thrive


Welcome to the latest edition of Perspectives, which I hope you enjoy and find stimulating. Having spent my whole career in communications and computing, I feel truly privileged to have been part of the birth and early steps of the digital world. Theres never been a more interesting and exciting time in our industry, but really we are only in the foothills of a market which will become ubiquitous and underpin almost every aspect of our lives, our business, education, entertainment, wellbeing and security. Everything that can be digital, will be! I recently took some time out from my day job to take a long, hard look at how the digital world is evolving and what companies need to do to thrive and capitalize on the enormous opportunities it offers. I summed up those thoughts in my book Unzipping the Digital World 1 and through many conversations with people around the world, continue to
1

refine those perspectives. One of the key themes in the book is that players who want to thrive need to carefully pick their spots in the digital ecosystem based on where there is the best fit between market needs and their ability to succeed. Another theme from the book was to move quickly and develop clear leadership. Its fair to say that such advice seems to be being heeded: Were seeing some positive moves by different companies not all will succeed, but at least they have thrown their hats in the ring. The next phase Since writing the book, one issue that has become clearer to me is that the next phase of evolution of the digital world is going to demand a lot of thinking and action to get to the stage where enterprises can really trust emerging digital services to the point that they can run their businesses on them. If Web 1.0 was about getting access to information

and services like email, and web 2.0 was about the growth of applications, content and other exciting consumer services, then Web 3.0 is where businesses really embrace digital services instead of running most of their own internal IT and applications (this theme is examined in the article on page 80). The potential is enormous and with advances in machine-to-machine (M2M) technologies, are likely to pervade every type of business. For that to happen, the digital world has to move a long way beyond the prevalent best efforts approach to service quality and the typically laissez-faire approach to security. An app that doesnt work on your smartphone, or Facebook losing your password, may be annoying but not necessarily disastrous. For an enterprise with its brand and trading at stake, its a different ballgame service reliability and security2 are vitally important to companies.

Unzipping the Digital World, which was published in 2012, gives an eye-opening view into how to thrive and survive in the rapidly evolving digital economy. It is available to purchase on Amazon: www.amazon.com/dp/B0082PLD4W TM Forum published Securing our connected world in January 2013, which explores the growing importance of securing the cyber supply chain, as well as the critical work of our security management team. It has identified the five areas that most commonly suffer breaches, drawing on best practice and research from around the world to provide pragmatic, economic (in every sense) guidance on how best to protect them. It is available free to all employees of our member companies who register on our website and for non-members to buy from www.tmforum.org/SOCW2013

www.tmforum.org / Perspectives / 9

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They simply wont trust their business, reputation and brand to luck. In some cases like eHealth (see page 72), peoples lives might depend on it. So enterprises will want tough and binding service level guarantees and those providers who cant deliver to them simply wont sell. Enterprise-class services demand an order of magnitude leap in the way services are designed and most importantly the processes and systems that underpin them operationally. This cant be bolted on there isnt some magic box that can be wheeled in that suddenly delivers high levels of service reliability and availability, a great customer experience and high levels of security and integrity. Learning from each other The communications industry has come in for a lot of criticism in recent years for building over-engineered and expensive technologies that deliver very high reliability. Many people have argued that web-based services need to be launched very quickly with minimal support systems to slow them down and wondered why the communications world couldn't be more like them. In reality, there is validity in both approaches. The communications world has to be much more flexible and agile if it wants to compete. On the other hand, if enterprise digital services are

to meet enterprises needs, everything in the digital value chain has to be industrial strength to meet rigorous service level agreements from major customers. This includes underpinning communications, computing and storage, through applications and information, to the various enabling services like authentication, charging, customer relationship management and so on. Even 99 percent reliability means over three and a half days of downtime a year and if that applies to each of the component services in the chain at this level, overall availability will be totally unacceptable. Rather, each one probably needs to have five or maybe six 9s reliability to achieve the overall availability needed. There is much that different communities within the digital world can learn from each other. Its good to see that the diversity and range of companies who are members of the Forum is increasing to help share that experience.

Yet there are some major issues in delivering enterprise-class, digital services that no one has really faced before. Communications companies have been able to control their service quality and security by owning and operating the whole enchilada from the underpinning infrastructure through to applications like messaging. A common language The digital world is much more fragmented an ecosystem of different players each delivering their element of the service with a different access network, core network, computing, storage and many applications providers. And where services comprise a number of aggregated application services, the challenges get even harder. If the only person getting the end-to-end picture of the overall service quality is the user, trouble is bound to follow. Its not just the end-users company that will want a tough service level agreement: each collaborating partner in the value chain will need to have stringent agreements between them too. They will need a common view of what to measure, how to escalate and resolve a problem, how to expose authentication and security information to each other, how to apportion and share revenue and so on. Even

at the most basic level, essential ingredients are a common lexicon of what you call things, which business processes are running across the entire service chain and common ways of defining important information. Im very pleased to see that the Forum has engaged strongly in raising these issues and, more importantly, is doing something about them. The recent launch of the Digital Services Initiative (www.tmforum.org/digital), the Simple Management Interface to expose important operational data between services (see page 92), the rapidly expanding work on big data analytics (see page 26), security2, customer experience management (see page 40), B2B trading interfaces (see page 92) and M2M (see page 67) are all highly positive contributions to helping move the industry forward and removing the roadblocks to us all thriving in the digital world. My thanks to each of you for your continued support of the Forum: Its your organization and without your involvement it can do nothing. Together we can change the world.

If the only person getting the end-to-end picture of the overall service quality is the user, trouble is bound to follow.

Keith Willetts Chairman and CEO TM Forum

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KEEPING UP WITH CHANGE


For as long as I can remember, the communications industry has been going through change. In fact, change is pretty much the only constant element that we can point to over the past decade. It used to be the change associated with the fixed-mobile convergence or IT-telecom convergence. Then it was the change associated with the new breed of multimedia services and the emergence of the smartphone and tablet. The emergence of over-thetop services heralded another era of change, with services such as Skype and WhatsApp forcing fundamental changes to the business models of every operator. Add to this the emergence of two-sided business models and a whirlwind of regulatory changes, its not hard to see why change has become the only certainty in the industry. But its not enough to simply spot the changes. I often use Charles Handys famous analogy of the Boiling Frog. Some frogs have a fatal flaw. They are good at detecting changes in temperature, but are poor at assessing overall temperature. So if you pop a frog in a pot of water and slowly turn the heat up, the frog will boil to death without realizing its in trouble, until its too late. Certainly, it detects each small change in temperature, but doesnt take such an incremental alteration in circumstances as lifethreatening. Despite all our sophistication, any industry including communications, can suffer the same fatal flaw. No one in communications is ignorant of the changes that beset us. Too often the reaction is to note that change and then carry on with business as usual cutting costs to maintain margins and repackaging products to extend their life. When an industry finds itself on shifting sands, business as usual isnt a viable strategy. We are all aware of the rapidly emerging, open digital services economy. We are moving way beyond voice, data, music, games and movies into a world where everything that can be digital will be. From eHealth to smartgrid, ePayments and wider machine-tomachine (M2M) services, the addressable market is growing exponentially and so are the potential number of competencies that the successful service provider needs to thrive. Many aspects of how the communications and associated sectors are shifting are covered in this publication, our yearbook, Perspectives. To whet your appetite for the coming read, Id like to suggest a few areas that every service provider should seriously address over the coming year. Develop a big data analytics strategy: For decades the communications industry has treated handling data as a chore. The attitude was that the only valuable use of data about customers was to bill them accurately. All that other data about customers and their behaviors was a distraction. Now big data (see page 53) is perhaps the hottest topic in the our industry (and many others) and we have woken up to the fact that our future success could well rest on how effective we are at extracting the wealth of information buried in that data. From revenue (see page 50) and fraud management

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(see page 58), to managing customer experience (see page 40) to new service development (see page 80), effective data analytics sits at the heart of a successful strategy. Success wont come from simply reading publications, attending conferences and setting up task forces. Every operator needs to understand four key things about their data: data do they have and what does it tell them about the customer? n What further data can they reasonably collect and what is its value to the operator and to other players in the ecosystem? n What can the operator do with it from a regulatory point of view and from the expectations of privacy that its customers have? n What is the monetization strategy for this data? Executing a companywide, holistic strategy based on the answers to these four questions is essential for every operator over the coming year. Revisit your approach to managing customer experience: As we move further and further into the open digital economy, managing customer experience has to be completely reimagined. Not only are customer expectations changing ever
n What

more rapidly, they are now contrasting how they are treated by their service provider with their treatment by entirely different industries offering new digital services. Customers preferred ways of sharing and receiving information, and interacting with their service provider are also changing rapidly as is their way of complaining about poor service. Any service provider that does not have a wide-ranging social media strategy (see page 83) integrated with their customer experience program is seriously out of date. Whats more, the customer experience strategy has to fit with and complement the big data strategy. This is because much of the information needed to delight customers must be captured and made widely accessible to the people developing the products and services, and dealing directly with the customer. Critically analyze your security preparedness: The communications industry is delivering a wider and wider range of digital services across increasingly complex, multi-party value chains. Every service provider has to critically analyze both their own security preparedness, and the security preparedness of the end-to-end delivery mechanism. What new vulnerabilities will emerge as new services are created, and how can they

adopt a concurrent secure design methodology in their new service development process (see page 64)? Stringently assess how effectively you form and maintain business-to-business (B2B) partnerships: The structure of the industry is inexorably evolving from being a business-to-consumer (B2C) industry, to being a B2B and B2C industry. B2B implies a need to partner extensively, and service providers have little experience of effective partnering, and even less of being the junior partner in any given relationship. Service providers need to consciously work on their partnering skills, and begin to decide what sorts of business models they can operate comfortably and competently in the open digital economy. So a few key pointers for you to be aware of as you browse the insightful and thoughtful articles in this edition of Perspectives. I hope you find it engaging and informative and that it helps you to chart your way through these increasingly confusing waters.

As we move further and further into the open digital economy, managing customer experience has to be completely reimagined.

Martin Creaner President TM Forum

www.tmforum.org / Perspectives / 13

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Balancing standards, innovation and insight is the key to success


The communications industry is in the enviable position of having huge demand for its core product, and for data services especially, all over the globe. Its true that we face increasing competition, fragmentation and disruption in our value chain, but we also have the customer relationships, technology assets, partnerships and experience to succeed. Naturally, to sustain our businesses into the future, we face a number of operational and other challenges. If we negotiate them well, there is a wealth of new opportunities for our industry in the digital world. One of the biggest operational challenges is that our customers service expectations are constantly rising. We invest heavily and always strive hard to deliver what our customer want and expect. Even so, as the ecosystem of applications and services becomes bigger and more fragmented, it is difficult to provide a consistent, high level of service. For those of us who work in technology in communications, in particular, the onus is always to do more with less. Simplification and transformation are key It is not so much that we should put ourselves under pressure to spend less on IT, but rather to optimize our running costs and invest in the growth and transformation of our industry. We need to dedicate fewer of our resources to our traditional and core products as their profitability erodes and be ready to compete hard against an unprecedented number of new competitors and disruptive elements. They face none of the infrastructure, cost and regulatory pressure we do. Radical simplification and transformation are the key to success in optimizing our core business. This vital transformation has to streamline our product offer and service experience and, particularly in IT, implement standards to improve consistency and ease of integration, and optimize operations. We are in an era of great change in our industry that will end with the wide scale commoditization of the original telco business model. The need to modernize the core business and innovate in new areas has always been the case in any industry, but in this instance, the characteristics of the old and new worlds are very different. This has serious implications for the technical skills we need to navigate this strange land. The history of our industry tells us that innovation came from within our own organizations, and network and IT equipment providers. We lived in a world we controlled, where everything was integrated vertically but now the world is much more open and innovation comes from anywhere and anyone not necessarily where we were used to looking! We need to create and operate in a much more open environment to foster innovation. We then must ensure we are ready to enable and encourage developers, startups, existing customers and other businesses to utilize our capabilities to innovate. Only

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then will we in the industry take the lead role as the fastest and easiest aggregator of digital services. The rules are changing Even in the approach to taking new innovation to market, the rules of the game are changing. In those days of controlled innovation and technology, we had fantastic market power. We thought about how we could make money at a different point than now; wed industrialize a product before monetizing it. Now we have to think about it the other way round, and work on the basis that if its not going to appeal to our customers, we need to move onto the next thing, fast, rather than risk spending a fortune trying integrate it with our complex legacy systems. As the saying goes, if youre going to fail, fail fast, fail cheaply, learn and move on. As you can see, competing in the digital world is not simply about technology but

a shift of mindset, culture and skill a redefinition of our business and business model. Our approach to this challenge was to set up Telefnica Digital to change the rules for Telefnica and lead the charge to foster and encourage all sources of innovation, including start-ups and emerging technology. We are more active than ever in forming partnerships and alliances to enhance our assets in the digital world and of course we use our own considerable capabilities to bring new and innovative products to market. As we transition more and more into the digital world the highest value role of a telco and the IT inside it is to focus on the integration and aggregation of services for customers and we have a lot to offer. This is because when consumers and businesses of all sizes consider the things that really matter to them, they will look to partners

and brands they can trust to secure their data, provide reliable access to it, and respect and protect their privacy. If you download a 69p app, it doesnt matter how well it works, you buy a different one next week. However, I dont think that will be good enough and robust enough for many aspects of peoples lives their health, their financial security and their childrens education, or indeed to run a business. In both cases, personal and professional, reliability and trust in the application, service and underpinning technology are fundamental requirements and the needs of both individuals and businesses are converging in many ways. This is where I believe our industry has a big role to play and value to add. We are companies with a heritage of managing data, delivering services, safeguarding privacy, securing information and providing connectivity

that underpins the daily life of millions. Are we not perfectly placed to help individuals and their employers to get the maximum benefit as they and their businesses become more and more digital? Of course everything is becoming more digital at a tremendous speed. There are many types of convergence evident as businesses see the same opportunity and value chain, and start to orientate their strategy to capturing data and creating insight about customers. Digitalization is a race to real, intimate and practical insight for all businesses looking to find new growth in the digital economy. Insight comes from data, data from great IT systems and great IT systems are emerging in the new digital telco, based on balancing standards, innovation and insight. Phil Jordan Group CIO Telefnica

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Monetizing big data in the communications industry


In the history of business, data has never been more important than it is today. Knowledge has always been key, but we've never before been able to access, manage and act on so much real-time information. The systems we are developing and deploying all over the world are helping enterprises understand and use all this big data to make really smart decisions. It is becoming clear that businesses able to transform themselves can take advantage of these new big data and analytics capabilities and gain a tremendous competitive advantage. This isnt news, but in all of its dimensions volume, velocity and variety big data is making new knowledge available and new processes are emerging to take advantage of what it offers. At the same time, new questions and challenges are emerging. What are the security threats and implications of having so much data available? What about data protection and privacy how do we protect the data from misuse? How do we assure customers ownership of their own data, especially as laws, customs and expectations in different parts of the world are not the same? As investment grows, so too do the expectations of returns on it. Yet the road is littered with the scarred remains of science projects, or attempts to do things with data that were intuitively interesting, and even intellectually compelling, but too remote from business objectives to be operationalized. Big datas uses need to propel the business forward, make it run better and enable good decisions. Monetizing data has grown from this desire to see a return on investment. It isnt just about selling data as part of a revenue-generating transaction, often through third parties. Its primarily about internal monetization, connecting data-oriented processes to improvements in the business. The concept of external data monetization has gained currency in recent years. Communications carriers have been looking at their networks, and customers, and considering what broad, significant contextual insights can be derived. The relevance of the data to other industries is clearly something that we should be able to make money from, and we have seen businesses begin to take novel and interesting approaches to the problem. Take vertical market opportunities. This area focuses on making information in the enterprise available to third parties so their businesses can execute better on the digital platform. Opportunities could include advertising, but its also about machine-to-machine (M2M) communications, smarter cities, and a smarter planet. Combining data about location, with usage, purchase patterns and preferences can provide a rich picture of consumer behavior so third parties can deliver more relevant, personalized services. For instance, Istanbul now plans its traffic infrastructure better because it has access to location-based analytics. M2M businesses collaborate with communications service providers not just because they have the infrastructure

We are only at the beginning of the digital monetization path with all these opportunities on the horizon.

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to provide connectivity, but because the carrier can also offer data and insights about network performance and behavior to help M2M companies run their businesses better. There are also more direct opportunities with commerce, and in particular with digital advertising. While the communications business has experimented with mobile advertising for some time, it has proved difficult to scale. Advertising on mobile platforms particularly with the rise of the smartphone and emergence of tablet computing is growing, and will continue to grow, but it is not clear how big a role the network operator will play. In the broader area of digital advertising there is massive growth in programmatic buying, with integrated, seamless, real-time bid-for advertising that demands huge quantities of data. It is growing to include established platforms like TV and radio, which are themselves becoming digital. This is a direct commercial opportunity for the communications industry, with network operators allowing their data

to be used for analytical modeling of buying and selling options for advertisers and publishers alike. There are challenges, of course, in applying big data to advertising and e-commerce, not least in security and privacy, as mentioned, but also in terms of permissions, and managing customers opt-in. Consumers are going through an adjustment process right now; recent work1 by Pew Research suggested two thirds of people still feel negatively about targeted advertising. This is changing. Enhanced personalization of advertising combined with the integration of other media will help this market mature, opening up opportunities for communications companies. By connecting data processes directly to sales and marketing, communications service providers can build a deeper return on their investment profile. They can justify incremental investment in the domain once they can demonstrate internal monetization. As it matures, that same

infrastructure can help build the digital economy, supporting the creation of external new businesses and improving the delivery of digital services, for their customers and their customers customers. There is deep, genuine, persistent value in that, and the communications industry can monetize that value despite the ongoing commoditization of its core services. Alongside all these developments, we are entering the Cognitive Systems Era. A new generation of computing systems is emerging with embedded data analytics, and managed, automated, data-centric architectures in which the storage, memory, switching and processing are moving ever closer to the data itself. In today's programmable epoch, computers essentially process a series of if then else equations. In the future, cognitive systems will learn, adapt and ultimately hypothesize and suggest answers. This will require
1

a fundamental shift away from how computing has progressed for decades, and at the same time it will also open up myriad new ways for communications service providers to drive data-based revenue streams. We are only at the beginning of the digital monetization path with all these opportunities on the horizon. Our first priority on this journey should be to improve the enterprises performance and gain insight into customer experience. Over time these insights can be collected and combined with external data to help develop entirely new service offerings and business areas. A solid information management strategy is key to capturing value in the future, and to navigating the opportunities presented by big data successfully. Scott Stainken General Manager Global Telecommunications Industry IBM

Please go http://pewinternet.org/Reports/2012/Search-Engine-Use-2012/Main-findings/ Targeted-advertising.aspx for more information

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Game-Changing technologies will unlock potential growth in communications


It is the framework which changes with each new technology and not just the picture within the frame, said Marshall McLuhan, a Canadian philosopher of communication theory. For the communications industry, in particular, the environment has certainly evolved and will continue to do so. Few could predict that communications service providers would contend with a global economic crisis, only to face new opportunities and challenges that transcend the more obvious ones, such as mobility. Todays technology trends are hitting at the core of service providers ability to recognize and quickly address opportunities, and drive growth generated by some of the most promising trends. Several challenges communications service providers faced last year are enduring into 2013. For example, average revenue per user will continue to decline and non-traditional competitors to rise. Inexpensive or free text messaging, low-cost voice, data and media bundles, and the proliferation of all sorts of devices from phones, to gaming consoles, to health monitors will continue to tax network capacity and its management. New research1 found that more than half the people who arent using the mobile Internet now are thinking of doing so in the near future. Simultaneously, providers enterprise customers are still shifting voice traffic onto data networks, and adopting fixed mobile convergence technologies to create a seamless mobile experience. There are some key, game-changing technology trends that will affect the communications industry over the next three to four years. As a result, providers should: Keep an eye on contextbased services. Imagine a scenario where a provider identifies roaming subscribers and offers them special promotions on travel, accommodation and other helpful services in the city where theyve just arrived. To be players in this arena, providers should gather and use specific contextual information shopping environment, location, social context, usage patterns and shopping preferences and embrace new sources such as geographical location, time of day and information from social platforms, while balancing convenience with privacy laws and customers privacy expectations. Embrace and manage big data. As customers interact via voice, email, instant messaging and social platforms, and new devices proliferate, data demands continue to grow. Providers have started to harmonize network operations across technology and service functions. For example, for quadruple play, customers with voice, video, media and data services, the rating portion of the billing application needs different rules to combine different data types to properly bill subscribers. Kenyas Safaricoms mobile banking operation, M-PESA, integrates services such as remote money transfer, cash deposits and withdrawals and billing services for utilities. Clearly, industrialized data management will be required, and data governance teams will be needed to sort out the data sprawl, create new

There are some key, game-changing technology trends that will affect the communications industry over the next three to four years.

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architectures, data policies, interfaces, validation, and management. The problem is not the absence of enough data, but the absence of the right data, and how quickly it can be utilized to make real-time decisions that can impact infrastructure investments, service management, network policies and premium offerings. Find their place in the mobile cloud. The mobile cloud is progressing, with consumers and enterprise users employing a combination of cloud storage solutions to store, retrieve and consume content while on the go. Communications service providers seeking a stake in this lucrative market must battle some of the web giants that pioneered cloud computing services. Despite the competition, there are potential new opportunities for wireless operators to develop their own carrier-based versions to provide safe storage for consumers personal data, which is being generated and stored on an increasing scale. With most subscribers using more than one brand

of device, having access to data and other media beyond the limits of device makers personal cloud silos is paramount. Wireless operators are uniquely positioned to provide such services. Tap into the machineto-machine momentum. The soaring growth trajectory projected for machine-to-machine (M2M) communications has accelerated competition across the communications ecosystem. Some providers are responding with in-vehicle connectivity, or telematics, to generate new revenue. In fact, in 2012, U.S. wireless operators inked major deals with automotive giants, which can potentially reach into other verticals, such as health care, asset tracking and home automation. As the number of connected devices climbs, it will become increasingly difficult for communications service providers to convert the Internet of Things into a real business. They should address trends in key vertical market segments, such as healthcare or retail, and consider strategic

partnerships to drive new value. Use social media to connect with customers. Social platforms are driving consumers to websites where they expect 24/7 access to information and community. Monetizing social media may be in its early stages, but providers should look to offer a broader range of services on social platforms, including grievance management, service status, self-guided help, or customer feedback, using social media to promote new services and build brand strength. Be a good host. Platform as a service (PaaS), commonly called hosted communications, will continue to expand, giving providers a much-needed opportunity to shift the emphasis from cost-cutting to business innovation. For example, some providers are offering M2M capabilities to help companies manage their infrastructure from a hosted environment. One European provider enables businesses to monitor, track, and manage their enterprise devices in 50 countries.

Orchestrate security resources and responses. As providers expand their relationships with content providers and partners, they face potential security threats which range from identity theft to SMS message hijacking. Adopting data-platform approaches and orchestration, which involves gathering the right resources and quickly when theyre needed, will be paramount to preventing and addressing security issues. Providers and their CIOs should already be internalizing key technology trends such as these so they can start framing discussions about them and, more importantly, the impact the technologies will have on the business and the new initiatives they can drive. Montgomery Monte Hong Managing Director Global Communications Industry and Asia Pacific Communications Industry Lead Accenture

Mobile Web Watch 2013, Accenture

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Sponsored feature

From BSS to BES, an age of enablement


By Jiao Aijun, Director BSS Marketing, Huawei The business support system (BSS) is largely designed for the age of voice, text and data, but in the digital economy, the dumb pipe threat looms large over CSPs, and BSS now has to bridge the gap between network infrastructure and service innovation that often starts from the Internet world. BSS must evolve from service support to service enablement, culminating in an entirely new platform the Business Enablement Suite (BES). From BSS to BES In the halcyon days of mobile telecoms, network deployment speed translated to more subscribers and more revenue, so it was considered preferable to simply build a new BSS or a new charging system to accommodate a new technology/business rather than spend months or even years modifying the legacy gear. This leads to a tangled mess that could be called business service spaghetti. Business flexibility is hampered, while time to market (TTM) for new services usually takes weeks or even months, as opposed to the days or hours of the Internet world. Most of the services being churned out today are long-tailed and flame out quickly, making them ill-suited to siloed management. A new philosophy of enablement is needed, suitable for an ecosystem where innovation could come from anywhere, and this is why the business support system must evolve into the business enablement suite (BES). A BES would be something completely new to the telecom industry, but its not difficult to find precedents in cyberspace. Internet players are good at building an open ecosystem (over a service platform) that attracts as many partners as possible in order to deliver the best service experience to end users, often monetizing it after the fact through reverse charging, freemium services, etc. Empowered by this openness, and other elements, every partner can run and manage their business/service autonomously. Amazon and its ilk are good examples. BES: A neurodynamic tree BES, as a concept new to telecoms that will serve vastly different business functions depending on an operators comfort zone, can be thought of as a neurodynamic tree, as opposed to traditional BSS, which grows more like an ordinary tree. As an ordinary tree grows, the side that faces the sun (the north or south side, depending on your hemisphere) grows more robustly, with the shape of the tree itself gradually changing over a matter of months, much like the response time of a traditional BSS to the business environment. But in the digital economy, circumstances change quickly, and an ordinary tree cannot flourish under such conditions. A new kind of tree is needed, one that is aware of its environment and can react promptly a neurodynamic tree. With the neurodynamic structure of a BES tree, each of its many leaves acts as a customer touch point, and could be used for query, subscription, billing, payment, delivery, or catalog purposes, among others, and is equipped with the necessary skills, information, knowledge and tools to instantaneously respond to changes in the surrounds, just like how a nerve detects a hot stove and tells the hand to pull away, all without instructions from the brain. A good example here is a retail channel, which is capable of defining flexible business rules on its own. When a customer accesses this channel, the context (location) is obtained and the customers preferences (indicated by dozens or hundreds of tags) are matched against these predefined business rules. After matching, a comprehensive set of actions such as promotion, billing, notification and advertising can be triggered instantly in a user-friendly manner. Within this neurodynamic tree, each leaf acts autonomously, as does the tree itself, with big data acting as the soil that nourishes it. As the ecosystem grows more robust, more of these trees can thrive, with each leaf receiving the nutrients (customer insights broken down from big data) it needs on demand. Key attributes of BES There are four key features that make the neurodynamic structure of BES what it is. Experience on demand The selection of goods online, and the information about them, is virtually limitless. Both of these trends make customers more demanding. A premium experience is critical to both converting and retaining a prospect, and it should last throughout the entire purchase and

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consumption lifecycle. Thanks to the seamless collaboration of online and offline channels, as well as synergy between IT and communication networks, the boundaries between digital goods, physical goods and communication services are blurring. Goods and services should be tailored to the customer (through configuration) and delivered on demand without waiting, in a well-advised and well-informed fashion. Business agility CSPs typically provide all services themselves, monopolizing the entire lifecycle; with agility in this case relating to internal operations such as price configuration, business process orchestration and bill formatting. In the digital economy, if CSPs want to move beyond dumb pipe services, they need to aggressively partner with retail channels, virtual network providers, service providers and vertical industry partners, and this means no more monopolies. Instead, they must enable their partners to work autonomously, defining their own business rules and orchestrating their own business processes, with the entire process as automated and simplified as possible, so that efficiency and a better user experience are assured. Cultivating innovation Any BES will act as a business enabler for building an entire ecosystem. Its success depends largely on how many partners are attracted and how many business opportunities are created. A BES will be open as it will provide

internal capabilities to all partners through standardized interfaces, while allowing a certain level of sharing among partners in accordance with in-place agreements. It will also consist of lightweight modules that can be tailored to support a variety of business models. Data-driven value realization Big data is still largely an unexploited resource in the telecoms industry, but this has to change as this data will prove the soil through which any operators neurodynamic tree will thrive. Although big data is less exploited in the telecom industry than in the Internet world, telecoms has the advantage as data from networks, services and the Internet can all be combined to better the customer experience and create more opportunities. How BES is utilized There are four levels of utilization for BES that an operator can exploit. The first is simply the infrastructure level, and encompasses broadband pipe and basic communication services, such as voice messaging. Infrastructure enablement is the second level, where CSPs provide Infrastructure as a Service (IaaS) to enterprises and SMEs, or enter vertical industries with partners by exploiting their industry-specific expertise and capabilities. CSPs are well positioned here as they are already trusted providers of reliable and secure communication services. The third level is consumer service enablement, and this is where CSPs

form an alliance with OTT players to provide innovative services that deliver a superb user experience. CSPs can expose their internal capabilities such as billing, charging, communication services, payment, customer preference storage and service context to facilitate service innovation for OTT players, and get a slice of their revenue. The top level is simply consumer services, where an aggressive CSP might compete directly with OTT players to establish their brand in the consumer market. With a BES in place, a CSP will become a local or regional economic leader, with all the advantage that this implies. Market cases currently include Telefnica Digital and SingTel Digital Media. Many CSPs will prefer to stay in their comfort zone with simple pipe services, but even they will need BES to stay ahead of agile competitors, while those looking to take enablement further, such as Vodafone (with its stated intention of being the Amazon of telecommunications companies), will certainly need it. In the digital economy, differentiation is profit, and BES is how we get there, through its innovation, agility, value creation and on-demand experiences.

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Familiar themes, new twists

Global perspectives: Changing the way we do business


Although the communications industry is widely perceived to be in crisis, particularly in developed markets, its not the end of the world just the end of the world as the industry has known it. The cyclical pattern of business models is coming to an end and being replaced by new ways of doing things that affects all industries and all companies. Monica Zlotogorski is our tour guide as we look at trends and innovations around the world that prove the industry can live to fight another day.
the communications industry has much to offer and what it offers is in great demand, as demonstrated by the insatiable appetite for more bandwidth everywhere. Despite the gloom caused by fast-eroding income from core services and the rise of fierce competition from those who dont have the challenges of running national and international public networks, there is much to celebrate. For one thing, people the world over are increasingly viewing communications as indispensable: In Kenya, people will skip a meal or walk to save the bus fare so they can keep their mobile phones in credit often making a call or sending a message will help them put food on the table later. The cost of a top-up is around 72 Kenyan shillings (less than $1),

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with many Kenyans only earning $1 a day, which is a good indication of the importance attached to communications. This is not least because more than two-thirds of the Kenyan adult population uses Safaricoms M-PESA money transfer service to receive and make payments. Some $8.6 billion flowed through the service in the first half of 2012 alone, a huge chunk of that countrys gross domestic product. M-PESA is, however, an exception to the general rule that communications service providers are good at technical innovation, incremental processes and, to some extent, innovation on a tight budget. Conversely, that they are not, in the main, so adept at other types of invention on the service, business and marketing levels. Different types of innovation The problem is the innovation strategies theyve used

in the past are becoming less useful. Sadly, communications service providers have become trapped in a process of whats called red ocean innovation, where a crowded and defined market space (connectivity) is being turned bloody due to cut-throat competition and a focus on marginal changes of pricing and products, says Teresa Cottam, Founder and Chief Analyst, Telesperience. Elsewhere there are blue ocean opportunities for them to exploit, but to transition to these requires them to build a life-raft using service and business model innovation, experience innovation (creating novel or valuable customer experiences) and supply chain innovation; that is, becoming more adept at working with partners. Incremental innovation wont deliver the results service providers need fast enough, but disruptive innovation is often different to what many of them think. Innovation doesnt have to

be a major new technology implementation: it can just be an advance in packaging, pricing, design or customer service. In other words, you dont get special innovation points just because you tackle the hard innovation rather than the soft innovation. Why do service providers make life so difficult for themselves? Whats more, what customers perceive as

In future, innovation will not only come from inside communications providers: it will be more distributed, deriving from a wider range of sources, including partners and even customers.

innovative is often different to what the industry perceives it to be, adds Cottam. In future, innovation will not only come from inside communications providers: it will be more distributed, deriving from a wider range of sources, including partners (see the next section) and even customers. By ignoring this type of innovation operators are narrowing the volume of new ideas they are able to exploit and effectively creating a bottleneck. Innovation is a powerful competitive weapon; but it takes many forms, and communications service providers need to invest in the full arsenal to wage this war successfully, concludes Cottam. A great example of a service provider that is employing customer-sourced innovation is the U.K.-based virtual mobile network operator giffgaff, a subsidiary of Telefnica, which runs on O2s network. The term giffgaff is a colloquial Scottish

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term, which means mutual giving. The companys mission statement is "the mobile network run by you" to reflect the fact that some users help run aspects of the operation, harnessing innovation at the business model, product, experience and marketing, not the technical, level. For instance, customers are encouraged to suggest novel rates, which are trialed. If there is sufficient demand for them, they are permanently adopted. Also, users are given 5 ($7.92) for every member they recruit to giffgaff and earn so-called payback points for answering questions in the community. Change your view of value Value-based analysis is an innovation tool that looks at an organizations workflow and allocates value parameters to each step in the process of bringing value to customers, explains Andrs Jordn, former VP of Innovation, Deutsche Telekom, and Co-Founder and Managing Partner, Arcus Advisors. But value doesnt necessarily translate exactly into a number. Value can also be driven by more qualitative factors such loyalty index and/ or lifetime revenue value assessments for each subscriber. Additionally, the inherent value of a subscriber can also be enhanced by their future potential to buy not-yet-defined services driven by evolving subscriber trends. The issue is that this has not always been so with

certain operators who at times seem to be indifferent to their customers needs and desires, he says, leading to severe revenue losses for operators. For example, they have not been able to assess the future

top down, which influences the decisions of its 35,000 employees to constantly deliver the best value for customers."1 Interestingly, the idea is never simply to sell products and services, but rather

parties, like Skype and WhatsApp. Barriers are things we create, we want to protect the past and at the same time grow. If you look at Apple, they cannibalized their iPod with the iPhone when iPod

Its possible to have a very innovative product that isnt a commercial success. It is important not to confuse innovation with the financial outcome in the market.
and anticipate consumer trends effectively and in turn leverage their unique value parameters, according to Jordn, regarding the over the top (OTT) phenomenon. He adds, They have been unable to package their network of authenticated subscribers with compelling services in ways that make it effortless for content producers to engage and deliver content on a revenuesharing basis. Why not create business-to-business OTT platforms that could be accessed by content producers and that could sell movies to its authenticated users in frictionless ways? Based on some industry metrics this would mean six movies a year per authenticated subscriber, creating a new revenue opportunity for the operator. Furthermore, the operator could then create additional service bundles which could, for instance, include movies, cloud storage, or cloud replication services. Apple has a "market-driven culture, inspired from the provide experiences and an emotional connection to a brand. It works for Apple and for Starbucks along with many retailers, as well as for Mercedes Benz, BMW and a number of other car makers. Its important to remember that advances in technology dont necessarily mean value to customers: Its possible to have a very innovative product that isnt a commercial success. It is important not to confuse innovation with the financial outcome in the market.2 Cannibalization isnt always bad Retail businesses cannibalize their offerings by bringing new options to customers every two to three weeks. They understand cannibalization is not a dirty word, but a strategy that keeps bringing customers back to the store. This is in great contrast to the communications industry, which greatly fears cannibalization, although its core revenues are being eroded anyway by outside functionality was included in the first iPhone. Any product manager at any telco would have blocked the release of the iPhone because of the consolidated presence of the iPod or, worse, would have removed the iPod functionality from the iPhone before market release. This is a mistake; if you do not eat your lunch, someone else will. If you really want to see innovation in the core of the business do not let anyone in your company block the release of a product to market using the cannibalization argument, observes James Finn, Director of Communication Product Design, Telefnica Digital. Learn from emerging markets Communications service providers in emerging markets have a better chance of sustaining themselves in the value chain for a number of reasons. Low credit card penetration means OTT app stores are ineffective on their own in emerging markets.

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Partnering with operators for charging app purchases to a postpaid bill or a prepaid account increases developers revenue opportunity and keeps operator brands topof-mind with consumers, explains Wally Swain, Senior Vice President Emerging Markets, Yankee Group. Swain also considers that there is an opportunity for local content. Local app content (especially music) is likely to be ignored by the OTT app and music stores, apart from some of the larger markets like Brazil and Mexico. Operators have credibility in most emerging markets as high tech players and can attract developers and content owners to partnerships. He adds, Movistar's Campus Party program (in Latin America) is a good example of this idea. I would recommend they distribute through operator-branded sub-stores under the major app store brands because they control the handset real estate and customer experience. Further evidence of how local content can give operators additional revenue streams and help them retain customers is provided in TM Forums Middle East Regional Insights report3. Lets also consider the small and medium enterprise (SME) market, an opportunity that communications service providers from developed
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Learning from other markets


TM Forum has published a series of Regional Insights reports on markets within the Middle East, Africa, Asia Pacific and Latin America. They are can be downloaded free by all employees of the Forums member companies by registering on the website or to buy by non-members from www.tmforum.org/regionalinsights

markets are trying to figure out particularly microbusinesses with 10 or fewer employees. From a purely financial perspective, these MiPYMEs (micro-businesses) are going to be relatively low average revenue per user (ARPU) better than average consumer ARPU, but still fairly low. The CFO will want customer care to treat them like mass market customers, pushing them to online channels or low priority queues in the call center. This will meet with resistance from MiPYME customers, Swain warns. He adds, Online channels are important but they also need special treatment they need to look more like consumer portals than large enterprise portals. Processes must be stepby-step and language must be non-technical because there is no IT department filling out the forms. For the majority of MiPYMEs, the IT department is often a son or daughter who uses computers at school. Due to the challenges they face, many emerging markets are ahead of the curve in

lots of areas. Learning from all their experiences can help service providers in developed markets think in a different way, also known as a 'trickle-up' innovation process. Dont worry about failure The pharmaceutical industry does it, Google does it, Apple does it. In an interview, the late Steve Jobs said that sometimes when you innovate you make mistakes. It is best to admit them quickly and get on with improving your other innovations.4 Despite the demonstrable success of this fail fast, fail cheap approach, the communications industry at large shies away from it. James Finn from Telefnica says its a lack of audacity. Google, Apple and Facebook launch products that are not perfect; in fact, Facebook has several sayings in its office such as, released is better than perfect and move fast and break things. Google also is establishing itself as the killer zombies, when a product is not working kill it rather than let it be. I'm sure

we all know several zombies in our companies and if we ask why not kill, why not be removed, I think well see its a lack of boldness on our part. Partner more, monopolize less Blocking OTT or degrading OTT communication can cause backlashes from customers who are prevented from using their favorite apps. It will put operators under pressure when other players choose not to block, and can also cause clashes with regulators when it comes to net-neutrality, states Daniele Tricarico, Pyramid Research. He also suggests that pricing neutralization may help in the short term, but in the long term it may not protect operators from price pressures. There are some positive signs regarding partnerships with OTTs. As an example, in September 2012, the 3 group launched a WhatsApp data pack5 and a WhatsApp roaming pack6, which the company says is enabling customers in Hong Kong to enjoy the full functionalities,

http://instant.marketculture.com/index.php?option=com_content&view=article&id=83:wp003decisionmakersandprofittrends Great by Choice: Uncertainty, Chaos, and Luck Why some thrive despite them all, Jim Collins and Morten H. Hansen, p. 223-224 From rapid growth to maturity: Strategies for sustainability was published in January 2012 by TM Forum in collaboration with Informa Telecoms and Media. It can be downloaded by all employees of the Forums member organization who register or bought by non-members from: www.tmforum.org/MiddleEastInsights2013 4 Insanely Simple: The Obsession that Drives Apples Success, Ken Segall, p. 199 5 www.three.com.hk/website/appmanager/three/home?_nfpb=true&pageid=3a2001&_pageLabel=P400328951219906687968&lang=eng 6 www.three.com.hk/website/appmanager/three/home?_nfpb=true&_pageLabel=P200470391219567710594&lang=eng&pageid=534001

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at home and abroad, of what is arguably the most popular OTT communications app in the world. There are several reasons to think that by partnering with WhatsApp 3 it is heading in the right direction. One is that through the partnership the operator enhances its brand by proximity with a popular Internet brand, which ultimately contributes to increasing customer loyalty and reduce churn. The partnership also has an impact on revenues, because it provides 3 an opportunity to increase both the range of services offered and the number of potentially billable events. Additionally, AT&T, Sprint, China Mobile, France Telecom/Orange and Swisscom are some of the communication service providers that have offices in Silicon Valley. Their objective is to speed up R&D and product delivery with innovation acquired from start-ups.7 Become a business enabler The consumer market is commoditizing communications. The industry needs to accept this and move on, for example looking at the big opportunities there are in serving businesses from other verticals, be it via cloud services, machine-to-machine communications, bring your own devices, payment solutions or other means. Perhaps one of the biggest services that communications service providers can offer

to SMEs, other verticals and the public sector involves big data (see panel). For example, the International Telecommunication Union suggests that a retailer exploiting big data could boost its operating margin by more than 60 percent. The U.S. healthcare sector could create more than $300 billion in value every year by enabling more efficiency and quality. Government administrators in Europe could save more than 100 billion through greater operational efficiency alone all through intelligent analysis of big data. Users of services enabled by personal-location data could generate $600 billion in consumer surplus.8

In summary In her recent book Kill the Company, Lisa Bodell, founder and CEO of futurelink, argues that in some companies, short-term profit becomes such a priority that it dominates every aspect of the business at the expense of long-term profitability. You start to turn your gaze inward, obsessed by finding ways to reduce your costs and increase your output, instead of looking outward at external factors like customer needs and market trends that will fuel future growth. The result is that your culture becomes increasingly risk averse and impatient. As times have got tougher, this has been the case more and more for

many communications service providers, right across the globe. Yet the communications industry will have to brace itself to face unimagined change if it is to survive. Telecoms might not be supplied by telecoms companies, banking might not be supplied by banks. The players might be very different very soon. The consequences are difficult to predict, said Bruno Lanvin, Executive Director, e-Lab, INSEAD.9 One thing is certain: We can no longer continue to address the symptoms to our problems with more technology. We need to change the way we do business.

TM Forum, big data and analytics


TM Forums Data Analytics/Big Data Management Group is part of our unique Collaboration Community (which has more than 65,000 active participants from all over the world). The mandate of this Group is to help service providers make the best use of business intelligence and data analytics tools in the enterprise-wide activities of business assurance. This team is focusing on bridging the gap between raw data analytics technology and the specific business needs of communications service providers as represented by the TM Forum Business Metrics. The initial focus is on revenue-impacting data such as orders, different types of data records and trouble tickets. For more information and/or to find out how to take part in this key area of work, please go to www.tmforum.org/bigdatagroup or contact Steve Cotton, Director, Business Assurance programs via scotton@tmforum.org The Data Analytics/Big Data Management Group intends to be a Business Metrics Contributing Team, which works closely with the Business Metrics & Scaffold Team. Like all Business Metrics Contributing Teams, they will be trained and assisted in operating within the Business Metrics Scaffold and the process for metrics development. For more information about the Business Metrics Scaffold please go to: www.tmforum.org/ busmetdevelopment or contact Ken Dilbeck, Director, Collaboration Research & Development, TM Forum via kdilbeck@tmforum.org
7 8 9

http://techcrunch.com/2012/11/04/silicon-valley-telecom-startups-dominate-share-of-vc-investment-with-fresh-business-models/ http://www.mckinsey.com/insights/mgi/research/technology_and_innovation/big_data_the_next_frontier_for_innovation http://world2012.itu.int/summary3

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Managed services rise in the era of cloud


The increasingly digital world means that communications companies will need to change from developing and providing a complete solution to being a managed service provider within an agile ecosystem. Rod Newing explains.
The world is rushing towards digitization of products and services, with everything becoming automated. With digital channels replacing traditional channels to market, communications companies must change from providing entire services in-house to bundling internal and external services, either direct to customers or through an industry specialist provider. Today, a communications service provider owns almost all of the value chain, including the customer experience, its services and the network, but not the devices and device manufacturing, says Mary Whatman, Founding Partner, Parhelion Global Communications Advisors, a communications industry consultancy. Tomorrow, a communications service provider will have a role in the value chain, but will not always own it. TM Forums introductory guidebook, part of Frameworx 12.5, titled: Managing Partnerships, A guide to developing successful and sustaining managed service partnerships in the digital economy1 contrasts outsourcing, which typically involves deploying people to deliver the service, with managed services. They are usually technology or processcentric and rely on specialization and economies of scale. In-house products Many communications service providers today develop all their products in-house, sell them through their own sales force or retail shops, and run them on their own networks. However, with their large consumer markets stagnant, they are looking towards the smaller but faster growing business market. This gives them an opportunity to move beyond typical fixed and mobile voice and data transport to cloud services, including:
n Software n security n core

and authentication; business applications; personal productivity tools; and n collaboration. A communications service provider may use its own brand to build a bundled offering of services that it sells directly to customers. To do this it can call in specialist third parties to provide individual aspects of the offering. It could also provide services, both internal and external, to a third party, like a healthcare provider, who provides an industry specialist package of services, of which communications is just one aspect. Scale brings profitability Communications service providers can also make internal services available to competitors, increasing the all-important scale that brings profitability. If you provide retail and wholesale services within the same company, the conundrum can arise about whether you are helping

as a Service (SaaS), Platform as a service (PaaS) and Infrastructure as a Service (IaaS); n unified communications; n managed fixed and mobile services;

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Familiar themes, new twists

competitors to be just as good as you, says Keith Willetts, Co-founder, Chairman and CEO, TM Forum, and author of Unzipping the Digital World 2. Running them on a reasonably autonomous basis makes much more sense. Disaggregation, in all industries, is a growing trend that we will see more and more. Managed services are not just suitable for larger business customers. Gartner, the analyst, predicts that by 2016, 60 percent of smaller and medium-sized businesses (SMBs) will use managed network services for some aspect of their IT services and support. Selling managed services into businesses is an area that systems integrators have claimed for quite a while, but is becoming more prevalent and a more important revenue stream for telcos, says Evan Kirchheimer, Practice Leader Enterprise, Ovum. However, they are pretty new at providing anything beyond managed network services to enterprises, so they are looking to expand into areas that are closely coupled to the network. In the last two years we have seen a vast increase in securing access to and providing cloud services. Intergrating bundles The problem with bundling together services from different specialist providers is integrating them and ensuring quality of service. It is very difficult at the moment, because each party measures their quality of service

and customer experience differently, says Willetts. Contractual and operational arrangements between the parties should be driven by customer requirements, which are reflected in a service level agreement (SLA). TM Forums SLA Management Handbook3 defines an SLA as an element of a formal, negotiated commercial contract that documents the common understanding of all aspects of the service and the roles and responsibilities of both parties from service ordering to service termination. SLAs can include many aspects of a service, such as performance objectives, customer care procedures, billing arrangements, service provisioning requirements, etc. Monitoring agreements SLAs are monitored through a range of key performance indicators (KPIs). The handbook says that these are inherently networkfocused and provide little direct indication of the end-to-end service delivery that the network supports. They should be focused on service quality and quality of experience. Kirchheimer says that communications providers need to implement a proactive service approach. Instead of waiting for faults to
1

happen and then responding, they should use the latest monitoring and analytics technologies to do active service review. This allows them to anticipate problems before they affect the customer. He also says that communications providers must invest in due diligence on the potential clients organisational structure and decision-making process. For instance, mobility is often procured in each country by local communications managers. You must ensure that the people you are dealing with have the agreement, or are able to coerce, other parts of the organization to adhere to the new procurement process, he says. We have seen telcos selling managed services come up against real headaches and having to renegotiate contracts, because one country will not comply. Managing Partnerships says that managing relationships with other providers and delivering quality services end-end across a complicated ecosystem is a core competency for success in the digital world. The problem is that culturally, many big companies arent good at it because they are used to dominating relationships and calling the shots. Thats a significant disadvantage in the digital world: successful and

See Managing partnerships Introductory guide, which is available free to members from the Forums website at: www.tmforum.org/Introguide/Managingpartnerships Unzipping the Digital World, which was published in 2012, gives an eye-opening view into how to thrive and survive in the rapidly evolving digital economy. It is available to purchase on Amazon: www.amazon.com/dp/B0082PLD4W 3 The SLA Management Handbook is available free to members from the Forums website at: www.tmforum.org/GB917SLAManagement
2

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sustaining relationships are an essential factor because you rely on others and they rely on you in an ecosystem. Willetts says that many big companies are bad at partnering, because they are used to having power over smaller companies. The majority of procurement departments pressure suppliers on price and payment terms and dont really care if it bankrupts them, he says. That is not a great starting point for sustaining partnerships. They need to relearn and rethink how to structure sustainable partnerships that are mutually beneficial and will create an effective ecosystem. A different approach Taking a different approach, Verizon Communications acquired Terremark Worldwide, a managed infrastructure and cloud service provider to enterprises, in 2011. There is a fundamental shift underway in how enterprises consume IT resources, and concluding this transaction is a turning point in Verizons push to provide integrated, enterprise-class cloud solutions and accelerate growth in this important segment, says Robert Toohey, President, Verizon Business. We will leverage

Many big companies are bad at partnering, because they are used to having power over smaller companies.

our collective strengths to roll out a differentiated portfolio of secure, on-demand cloud computing solutions to be delivered through a unified enterprise IT platform. Kirchheimer says that many telcos sell the deal and then think about how to build the service infrastructure up to support it afterwards. In contrast, the systems integrators have a long history of understanding service desk culture, alerts and alarms, managed service platforms and so on. With the world population rising towards nine billion people by 2050, not to mention billions of machines

connecting to the Internet, making managed services work at a large scale is a critical issue. Willetts says that it will require a tightly integrated set of automated interfaces to exchange information between players in the ecosystem. This is something TM Forum is looking at with its Simple Management Interface (see panel), part of its Digital Services Initiative (see www.tmforum.org/digital). Willetts sees the move to disaggregation changing the face of the industry into a sort of diamond shape. The vertical telco that does everything from opening shops to digging up the street is likely to break down into much more focused serviceoriented business units, he says. At the infrastructure level, there will undoubtedly be consolidation, as margins are getting thinner and more economies of scale are needed. However, when creating new products and services, size is a disadvantage, as the bigger you are the slower you are. We will see millions of small innovative fast-moving service innovators. Today only a few digital retailers are surviving and there probably isnt room for many more.

More open trading Willetts wants to see a much more open trading system. In closed trading ecosystems, companies like Amazon, Apple and Google, which take digital services to market, set the rules. TM Forum wants any player to be able to work with any other player, based on common agreements and exchange of information between the parties. However, he says that today nobody fully understands the new business models and how it will all work. Who is a partner and who isnt a partner? Who is a friend and who is a foe? People are moving at different rates in their thinking in the evolution of this ecosystem, he says. Nevertheless, there are considerable opportunities. Managing Partnerships concludes that in the digital world, services are much more complex, user expectations are higher, change is more radical/ dynamic and the global nature of the market infinitely greater. Being able to manage complex partnerships seamlessly for the benefit of the user, to deal with the constant change and to keep operational costs within sensible bounds is going to be a key weapon in the armory for aspiring digital services players.

TM Forums Simple Management Interface


TM Forum is mindful of the importance of using standardized interfaces in the digital ecosystem to simplify and speed up integration, which also translates into keeping costs down and shortening time to market. The Simple Management API (or SMI also known as TMF617 the latest version is defined here: www.tmforum.org/ SMIinformationagreement) and is at the heart of TM Forums Multi-Cloud Management Pack for more information go to www.tmforum.org/DSI/Multicloudmgmt where you will find lots of resources.

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Lead-To-Cash Agility with Telaura CRM Suite


Lead-to-cash flow is extremely important for Communication Service Providers (CSPs) in order to increase their sales efficiency and effectiveness. To gain the full power over day-to-day activities, internal and external sales accounts, this flow should be traceable throughout the enterprise. Since lead-to-cash flow spans different domains, it touches almost every single application in a CSPs ecosystem. To automate this flow, all the systems in the path should be integrated end-to-end successively. It also requires elimination of manual interventions along the flow. Completely automated lead-to-cash process reduces problems originating from: product information; response of order handling after negotiation has been complete; n tracking leads and orders separately.
n delayed n out-dated

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Etiyas next generation CRM Suite Telaura fully automates the CRM part and facilitates the ERP part of the leadto-cash flow. Lead-to-cash flow starts in Telaura Lead Management, where sales leads are either created or imported into the system. To create sales leads from existing customers, Telaura Customer and Account Management modules provide special search and filtering APIs. It is also possible to upload previously generated lead data into the Telaura Lead Management System. Sales leads that are created from an external source follow a different path than the leads created from existing customers. When a lead from an external lead data file qualifies, Telaura Customer and Account Management allows the user to create a legal customer entity readily

Telaura Lead-To-Cash Flow Telaura Lead Management manages leads and sales pipeline processes as well as sales accounts Telaura Product Catalog serves as a central product and service catalog Telaura Customer and Account Management provides useful customer information Telaura Order Management handles order capture and order fulfilment processes

Lead

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30 / Perspectives / www.tmforum.org

through the sales pipeline of the Telaura Lead Management Module and the system guides the sales representative for increasing the probability of achieving a sale. When the negotiation is over, the lead is converted into an order automatically by Telaura Sales and Order Management. From this point on, Telaura Sales and Order Management guides the sales representative during the remaining order capture process and ensures that all the information required to complete the order is acquired while the customer is still online. This unique feature secures the revenue and prevents any jeopardy that might occur in the after-sales processes. An important portion of customers who are convinced to purchase in the first contact are lost in the second contact if the order is not placed in the first one. To increase the efficiency of the sales pipeline, it is crucial to capture all the information from the customer during the first contact. Telaura CRM Suite allows one sales representative to start and complete the sales from beginning to the end even for the most complicated communication services. Telaura Contact Management keeps track of all on-going and completed business interactions that take place between customers and the CSP. Telaura Lead Management takes customers preferences and their contact history into account while deciding on the mediums and frequencies for contacting the customers. Thus, the customers are less likely to complain about the contacts they face more often than they ask for. Design unique solutions for customers Telaura Lead Management handles sales pipeline processes by accessing

Telaura Product Catalogs standard offers. It is also possible to create unique solutions for special customers on the fly by customizing standard offers. The customized solutions can readily be sent to order management and then to billing processes, providing a dynamic lead-to-cash flow. The customized order is decomposed into recognized building blocks by Telaura Order Management so that fulfilment processes can be completed without additional effort. End-to-end sales performance monitoring Lead-to-cash performance monitoring provides much more critical information about a CSPs sales cycle than sales pipeline performance monitoring. Sales pipeline monitoring can provide information about sales accounts performance but lead-to-cash performance monitoring also gives information about the after-sales processes, customer satisfaction, costs and revenues related with the sales. Telaura CRM Suite follows lead-tocash processes until the order is fully completed (or failed). Therefore, it gives tools to analyse the enterprises sales effectiveness end-to-end. Social media support With Telauras new Social Media Connection SOMEMTO, it is possible to search for opportunities and initiate lead-to-cash flow for customers in social media. SOMEMTO provides the advanced means to search and identify customers, prospects, competitors and their customers in social media platforms. Telaura CRM Suite allows engaging customers and prospects, in their trusted environment, using their

networks. With the help of SOMEMTOs social media collaboration functionalities, customers get involved in the presales processes, such as finding new prospects or helping to identify the best solutions for other customers within their network. Etiya's Telaura CRM Suite certified conformant to TM Forums Business Process Framework Release 9.0 and TM Forum's Information Framework Release 9.5 Telaura CRM Suite is designed and developed to reflect the globally accepted standards of the TM Forum Business Process Framework. Modules are also conformant with the Information Frameworks data entities and APIs. Hence it is possible to substitute any Telaura module with any other Information Framework compatible system or using an individual Telaura Module in a different SOA based environment. Standardized business and architectural model of Telaura delivers benefits such as: an agreed enterprise information model for end-to-end service management, defined using businessoriented UML models; n an extensible, proven, and flexible information model supporting rapid introduction and management of new technologies and services; n a clear, common language between buyer, supplier and business partners.
n

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Familiar themes, new twists

Managing the product lifecycle is key to the digital economy


Generally held to have originated in the automotive industry in the 1980s, Product Lifecycle Management now encompasses sectors as diverse as aerospace and defense, transportation, industrial machinery, electronics, energy and utilities, pharmaceuticals and medical devices, consumer electronics and domestic appliances. John Williamson explains why and how it is being adopted by the communications industry.

Product Lifecycle Management (PLM) has become a major global IT trend, which, according to Global Industry Analysts, could be worth $44.2 billion by 2017. Communications and other digital service providers increasingly perceive PLM as a must-have tool in their OSS/ BSS repertoires if they are to operate and compete in the digital economy. The upshot, as noted by Catherine Michel, CTO, enterprise product management software specialist Tribold, is that the competitors in todays increasingly commoditized digital service industry are commercially compelled to seek more ways to reduce their time- and cost-to-market, while improving innovation and quality. Michel reports that the pressure is on to execute a

product strategy that delivers simplification and accuracy, personalization without customization, reliability and flexibility at a low cost. To respond to the intensifying pressure, service providers are increasingly focused on deploying a discipline that is turning under-managed capabilities and fractured processes into a coordinated effort to design, develop, deploy and maintain the products on which their business is centered, comments Michel. In this context, Product Lifecycle Management is the key to effectively and efficiently innovate and manage a companys products and related services and resources, to assure ongoing sustainability and profitability. This is borne out by the thinking of one PLM pioneer, Telecom New Zealand

(Telecom NZ). Product excellence is a critical capability that will underpin Telecoms future business model, as our future product portfolio will have lower margins, more complex architectures and shorter life cycles, observes Ella Obreja, Telecom NZs Product Design & Capability Manager. As an organization we understand the need to address our current legacy challenges and future proof performance through our new wave product portfolio that will substitute our legacy portfolio over time, enabling a rapid simplification of the endto-end product ecosystem at Telecom. The PLM proposition PLM is the process whereby the whole lifecycle of a product is overseen and managed. In an ambitious

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Familiar themes, new twists

iteration, the remit of PLM could extend from product concept through design, development, manufacture, pricing, marketing, roll-out, distribution, activation, billing, maintenance, and modification and upgrade through to retirement and decommissioning. According to TM Forums Product Catalog: Managing the product lifecycle1 Quick Insights report published in 2012, a PLM system can incorporate elements of Computer Aided Design (CAD), Computer Aided Manufacture (CAM) and Product Data Management (PDM) technologies and processes. PLM can also be related to, and interlinked with, a number of other disciplines and processes, including Master Data Management (MDM), Product Information Management (PIM), Supply Chain Management (SCM), and Customer Relationship Management (CRM). In the case of the digital service industry the Enterprise Product Catalog (EPC, although other similar terms are in use) is a critical element in the design, deployment and operation of a PLM capability. The EPC is a central database for data relating to the range of service products offered. Access to this (ideally) single version of the truth, enables service providers to define, develop, bundle, market, sell, turn on, bill, upgrade and retire product and service offerings in the most efficient manner possible. Among the key capabilities

that the EPC needs to possess are: the provision of a single point of access to a consistent view of a single set of data; the ability to create and control standardized definitions of products and services; and the support of linkage to business intelligence and market analytics systems and applications. Benefits of PLM If implemented correctly, PLM can bring big operational, financial and customer experience benefits. The newly published Product Lifecycle Management Introductory Guide2, a contribution from Tribold and Telecom New Zealand to TM Forums Frameworx 12.5 suite of standards-based tools and best practices (see page 93), lists some of these benefits as:
n Reduced

support better product designs, increase reuse of components, improve standards and consistency, and provide greater visibility and management of product data. n Better quality products and processes (improved performance of product management processes), greater customer value, higher net value performance, more information available and better accuracy, better quality product launches and provisioning, improved service quality, and fewer technical defects. The new Guide cites some examples of PLM benchmarks, which have been proven by referenced case studies (see panel on page 34), including:
n 50

operating costs; decreased execution cost, better performance from human resources, and lower churn rate. n Better time management through shorter time to market, less waiting time and delay in delivery to the customer through improved collaboration and establishing a consistent product development process across the business. n Innovation in that organizations are looking to PLM to enable more innovation at the idea stage,

percent reduction in the time to market; n 20 percent increase in revenues by widening the product portfolio; n 20 percent increase in revenues by introducing products faster; n 40 percent increase in revenues by introducing new products/services compared with earlier offerings; n 35 percent better quality products; and n 60 percent reduction in cost to market.

Product catalog: Managing the product lifecycle was published by TM Forum in September 2012 and is available free to all employees of the Forums member organizations who register on the website or for non-member to buy from www.tmforum.org/QIProductCatalogue 2 The TM Forum Product Lifecycle Management Introductory Guide can be found at www.tmforum.org/FXintroguide/PLM
1

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Familiar themes, new twists

Barriers to progress Implementing PLM capability in the digital service industry has its challenges. A major, over-arching obstacle is the continuing operation of numerous disparate OSS/ BSS within service providers. These are often the result of unstructured, ad hoc, piecemeal acquisitions of legacy management systems over time to support additional products and services as they were added to the portfolio. Tribolds Michel summarizes some of the other chief impediments to implementing PLM as:
n a

n failure

to capitalize on the synergy across product development projects; and n no processes to support retiring products. These pain points need to be turned into opportunities for growth and a sustainable organization. Improvement in PLM can range from minor adjustments to major transformation, states Michel. If an organization focuses wisely on the most inefficient areas of the process, broad benefits can be gained. Help at hand Despite the challenges to implementation, PLM is increasingly viewed as one of the pillars of sustainable business for service providers in the future, to help them streamline operations and products, as well as better enabling them to introduce innovative new services through partnerships and collaborations, and quickly.

lack of executive commitment and enforcement of PLM; n no control outside the product management and definition process; n no definition of the idea generation and planning phase;

Put simply, Telecom New Zealand's PLM project is about building a center of excellence around our product practice, driven by collaborative and innovative people with a view to establishing a competitive advantage in a fast moving and highly competitive market, concurs Obreja. Our implementation and associated culture change is already underway. And our vision is fully supported across all parts of our business as we rapidly transform Telecoms product practice and deliver product excellence as a core capability. Elsewhere Michel suggests that, in general, the digital service industry is at the nascent stage of institutionalizing PLM. She also asserts that as momentum builds, TM Forums Frameworx suite of standards and best practices (see page 93) is proving instrumental in transitioning PLM into a core

but ultimately conventional OSS/BSS capability for that industry. TM Forums Product Lifecycle Management Introductory Guide, referenced above, analyses the rationale for PLM in the digital services industry, gauges the maturity of the frameworks available, and outlines how service provider organizations might go about deploying PLM for their purposes. PLM is rapidly becoming a key competency for service providers as they embrace digital services that demand dramatically shorter lifecycles and agile product data management, sums up Nik Willetts, Chief Strategy Officer, TM Forum. This Introductory Guide, based on the collective expertise and experience of Tribold and Telecom New Zealand, provides a solid foundation for anybody embracing PLM, and for best practice in this area.

Great call of China


Another digital services PLM trail-blazer is China Telecom. That companys move from being a telco to an integrated information service provider meant that the way it offers products and services, and bundles them, has changed rapidly. Not only was the number of new products growing explosively, but their source, content, form and business models have altered greatly too. The service provider recognized that efficient, effective management of the products and their packaging, right through their lifecycle, was crucial. It built a Product/Packaging Management (PPM) system to do just that, initially referencing, then contributing to, TM Forums work on Product Lifecycle Management. The Forums Information Framework, part of TM Forum's Frameworx suite of best practices and standards, was also fundamental to the PPM, which has delivered many benefits to China Telecom. These range from standardized interfaces (which were partly responsible for reducing integration costs by 48 percent) to halving the time to market in some areas, and providing much more consistent data across systems. To read the full story of China Telecoms remarkable transformation using PLM, please see page 35 of the TM Forum Case Study Handbook 2013, which which can be downloaded free from www.tmforum.org/casestudyhandbook2013

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Familiar themes, new twists

Wi-Fi hots up
Mobile network operators are incorporating Wi-Fi into their infrastructure because it is the only way to provide a good enough service for smartphones and tablets users, but there are other drivers too. As Rod Newing outlines, Wi-Fi is enabling new business models and ways for operators to differentiate themselves, which is already resulting in wireless and wireline converging. However, to make the experience truly seamless, there is considerable work to be done, for instance adding the full mobility features of cellular networks, including automatic authentication and connection, automatic handover and roaming, and security.
Data traffic generated by smartphones and tablets is growing more rapidly than cellular network capacity. Mobile operators are also facing users' perception that Wi-Fi offers a better experience, with higher data speeds at lower, or no, cost than cellular. It has been an interesting journey for Wi-Fi, says Daryl Schoolar, Principal Analyst, Infrastructure, Ovum. Five years ago most of the established [mobile] operators saw it as a threat to their revenues, but now they are scrambling to look for the best and most economical way to deal with all the different data types. They see it as an important complement to their cellular network. Some facts The U.S. regulator, the Federal Communications Commission, estimates that the industrys demand for mobile data capacity by 2015 will be 25 to 50 times greater than it was in 2010. This is caused by customers moving toward more data-intensive devices that allow them to video chat, stream live video and download movies or large work files on smartphones and tablets. Research from ABI Research and the Wi-Fi Alliance found that 74 percent of people who have Wi-Fi on their mobile phone use it and 77 percent say they will seek Wi-Fi in their next phone. The WBA Wi-Fi Industry Report: Global Trends in Public Wi-Fi, NextGeneration Hotspot: Moving from Standardization to Commercialization, was published in November 2012 by Informa Telecoms & Media and the Wireless Broadband Alliance. It reveals that 78 percent of telcos believe that Wi-Fi is either important or very important to their overall strategy and 18 of the worlds top 20 telcos have publicly committed to deployment. The report says that the main drivers are to offload from cellular networks (46 percent), increase customer satisfaction and reduce churn (35 percent) and increase revenue opportunities (17 percent). The fastest-growing locations are expected to be local area outdoor hotzones (26 percent); wide area outdoor hotzones (19 percent); trains, planes and cars (16 percent); bars, cafs and restaurants (16 percent); retail (10 percent); hotels (7 percent) and airports (4 percent). Problems to overcome Although Wi-Fi is assuming center stage, it will require

competition for customers

The U.S regulator estimates that the industrys demand for mobile data capacity by 2015 will be 25 to 50 times greater than it was in 2010.

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Familiar themes, new twists

a lot of work from operators to make it really useful. In Small Cell Market Opportunity Part 1: Carrier Wi -Fi, Schoolar describes todays Wi-Fi solutions as pretty dumb. Offloading basically just dumps cellular traffic onto a Wi-Fi network with little thought for the condition of that network. Nor does the mobile operator have much insight into what its

subscribers are doing while on the Wi-Fi network. In order to send and receive video, pictures and other high-density content, users need a lot of bandwidth. Phil Dance, Chief Executive, DGV Solutions, a communications consultancy, was formerly Managing Director, Technology, at BT. He says that the effective transfer rate of a fully-loaded

fourth generation long term evolution (LTE) cell could be one megabit per second. That was fine when LTE was first thought of in the days of copper, he says. To get a good experience with high-definition movies and hi-fi sound, users will want several megabits per second. Building more masts is not feasible economically, even if planning authorities allowed it. Another driver is that Wi-Fi is being built into smartphones, even at the lower end. Dance points out that the full mobility of a cellular system is less important with Wi-Fi, as it is very difficult to consume highdensity content when moving. The Informa/WBA survey reveals that the top three barriers to wider adoption and usage of public Wi-Fi are authentication (63 percent), availability of a common roaming standard (60 percent), 3G/Wi-Fi interworking (56 percent),

inconsistent user experience (49 percent) and cost of roaming (48 percent). Standards are essential Standards are essential to provide a good Wi-Fi experience, so the Wi-Fi Alliance Hotspot 2.0 Task Group is developing Wi-Fi Certified Passpoint. This certification program for devices will enable authentication and roaming interoperability. Release 1, launched in June 2012, covers network discovery and automatic selection, based upon user preferences and network optimization; automatic access to networks; and encryption. Release 2, expected in the fourth quarter of 2013, covers immediate account provisioning at the point of access and selection from multiple networks. Also important is the access network discovery and selection function (ANDSF) from the 3rd Generation Partnership Project (3GPP). It assists cellular devices to discover Wi-Fi networks and provide the rules for connection. It ties the Wi-Fi back to the core network, to help with network selection, says Schoolar. The core network will know the state of the Wi-Fi network. If 3G, 4G and Wi-Fi networks are all available to a subscriber, it wont put everybody to the same network, but try to move different people to an appropriate network based on rules set by the mobile operator.

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Small cell integration Wi-Fi will be integrated into future small cell base station equipment, to increase both coverage and capacity. Ovum expects products to be available in the second half of 2013. They are both addressing a similar problem, but the application and network footprint of the two types wont be the same, says Schoolar. Wi-Fi is for more sedentary indoor users and will be subject to more local interference than licensed spectrum. A licensed small cell would be better for people walking around, although neither is as good as the regular network when it comes to mobility. Turf wars Despite the lack of standards to make it easy to use, carrier Wi-Fi is already in use around the world. The Informa/WBA survey reveals that BTs 4.5 million Wi-Fi hotspots saw an 80 percent year-on-year increase in the number of minutes to 1.7 billion in the second quarter of 2012. Similarly, China Mobile saw a 103 percent year-onyear increase in the first half of 2012 to 267 billion megabytes, with Wi-Fi as a percentage of total mobile traffic increasing from 59 percent to 69 percent. Competition for hotspots will increase, with costs following suit, so it is important to be the first mover. In the U.S., a number of cable companies, including Bright House Networks, Cablevision, Comcast, Cox Communications and Time Warner Cable,

have formed SpectrumCo, a joint venture. It is to give the companies customers free Wi-Fi connections via 50,000 hotspots and has sold some of its spectrum to Verizon Wireless. The U.S. broadband market is fairly flat, says Schoolar. They are pushing Wi-Fi so their subscribers can continue to use their broadband service away from home.

digital economy1 refers to Verizon Wireless launching its Share Everything tariff in June 2012, which treats voice as just another data service. It will offer unlimited phone calls and texts, instead charging for a metered monthly data allowance that can be shared by up to 10 devices. The much anticipated move will likely have farreaching implications for

the infrastructure level, which he says is a scale game. Conclusion There is a big demand for Wi-Fi roaming, as many consumers are currently put off by the cost. Informa Telecoms & Media estimates that although there are more than 340 million roaming trips per year, only a few hundred thousand people use Wi-Fi.

The Wi-Fi community has a major opportunity to cement Wi-Fi once and for all, firmly at the heart of the way consumers access the Internet on the go.
As cable operators have regional franchises, they do not compete against each other. Allowing other members of the consortiums subscribers to roam onto their networks provides a larger, more national footprint. As the tide of Internet-borne content continues to rise, the cable companies are hoping that the free Wi-Fi offer will encourage customers to stay, as well as allow them to compete more strongly against triple and quad play operators. Competitive landscape The cable companies are not alone in seeking to use Wi-Fi to help them compete better and retain customers. Mobile and fixed carriers have recognized that this approach will allow them to share their infrastructure and maximize traffic on their networks. TM Forums Quick Insights report, Driving Innovation: Seven ways to thrive in the the cellular industry in the U.S. and beyond, says the report. Other operators are expected to follow this pricing model, which will enable them to pay for their hefty investments in 4G technology and make a reasonable return on investment from everrising data traffic levels, while encouraging users to connect more devices to networks. This will involve alliances between cellular and fixed carriers, who will compete on their ability to offer the best user experience. Wireless and wireline are going to start to merge, says Dance. Consumers will not want to know how they are connected, they will just want to be best connected for the content they are going to receive. He sees the dominant vertically integrated communications companies breaking down, with multiple retailers and service providers, but consolidation at This latent demand represents an opportunity for operators to increase the attractiveness of their offers by bundling access to Wi-Fi to stimulate usage where there currently is little or none, says Thomas Wehmeier, Principal Analyst, Informa Telecoms & Media. Ultimately, the most successful players in the Wi-Fi space are likely to be those that understand and draw together a diverse range of business models to build a holistic business case. The Wi-Fi community has a major opportunity to cement Wi-Fi once and for all, firmly at the heart of the way consumers access the Internet on the go.

TM Forums Quick Insights report, Driving innovation: Seven ways to thrive in the digital world, was published in August 2012. It is free for all employees of TM Forum member companies to download by registering on the website and for non-members to purchase from www.tmforum.org/qidrivinginnovation

www.tmforum.org / Perspectives / 37

Sponsored feature

CEM: Theres no one right solution


All critical success factors required to evolve towards a holistic CEM start from an outside-in thorough understanding of the customer. This customer insight enables the clear definition of the business objectives and metrics, which should be aligned with an inside-out CEM vision and strategy. After achieving consistency among vision, strategy, business objectives and metrics, key drivers can be adopted to accomplish successful CEM transformation. What are the key drivers for successful CEM transformation? In 2012, Huawei cooperated with Informa to initiate a research project to enable us to understand the drivers for CEM and the importance from an operators perspective. It came as no surprise that retention and loyalty/churn consistently ranked the highest. But after reviewing the results it became abundantly clear that the key drivers varied greatly depending on the positioning of the operators CEM vision and strategy. From excellent network experience to superior service experience Although the concept of CEM was developed to address the shortcomings of a pure Network KPI approach, a successful customer-centric operation can only be assured if the network experience is already at an excellent level. Therefore Network & Service Quality Improvement is the initial and critical phase required for successful implementation of a CEM solution. Once the operator has achieved at least a satisfactory network level
2012 2015 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0%

Source: Informa Telecoms & Media

experience they are in a position to begin Service Quality Management activities. The service quality management must be based on an E2E Per Service Per User (PSPU) KQI system. This system can monitor both in-service and customer care quality, demarcate problems and accurately determine the root causes. As a result of this evaluation process an optimization plan can be provided to enable Superior Service Experience. From superior service experience to superior customer lifecycle experience Different from Superior Service Experience, which only focuses on a customers experience in the phase

of use, Superior Customer Lifecycle Experience requires a holistic approach to the customer experience lifecycle become aware and select, buy, use, pay, get help and loyalty. Operator will require the support of a Customer Experience Consulting team to guide and support them through the various challenges they will encounter. The first step in defining the customer experience is Journey Mapping. This is simply illustrating the steps and metrics a customer goes through when interacting with the operator. There is an extensive list of industry-defined metrics, but the ability to customize the metrics for an individual operator will be a key factor

38 / Perspectives / www.tmforum.org

in successful CEM. The successful operator will be the one that capitalizes not only on the expertise of their CEM partner, but also maintains their primary focus on the specific metrics that are impacting their customer satisfaction. Operation Consulting drives the successful CEM implementation for the consideration of efficient and effective service operation. It advises operators how to reduce costs, increase efficiencies and achieve operational Best Practices focused on improved end user satisfaction. This is accomplished by addressing four key areas. Business Process Management can dramatically impact the performance of any company and differentiate any organization from their competitor. Organization and Competence Management evaluates the staff competence and current organizational structures to ensure they align with the corporate goals. Operational Benchmarking provides a real-time performance analysis that allows telecoms operators to compare their operations against their competitors. Change management facilitates the transition of individuals or teams within organizations from a current to a desired mode of operations. Operators need to address the importance of properly managing and providing Experience Assurance from a total customer lifecycle viewpoint. It is critical to not only consistently maintain revenue through ongoing customer satisfaction but also ensure retention of profitable customers. As mobile phone penetration increases in a market, the acquisition of new customers

becomes increasingly challenging. It is imperative that operators adapt experience assurance to upsell services as well as increase loyalty, as this also has the added benefit of preventing an organization from wasting valuable time and money constantly acquiring potentially less profitable customers. This also includes a dynamic and robust policy control process. There are many aspects to policy control that include (1) the ability to accurately predict the impact of congestion, not only by location and device, but also by factoring in data traffic spikes and demand anomalies (2) optimize capacity by using proactive, customer-sensitive policy controls (3) cost-effectively address the challenges of managing network congestion, by adopting a targeted congestion and application specific approach, or to put it another way, Experience Monetization. Huawei understands that CEM is a holistic approach with business objectives to lead system and process integration in a customer-centric model, and success can only be assured with these all inclusive approaches. This means that an effective CEM program is implemented with an understanding of the Customer Experience Lifecycle while incorporating the voice of the operator to provide a customized solution to meet the specific needs of the operator. In short there is not one right solution as each operator will face unique challenges to be successful and needs the guidance of a partner with global experience and specific expertise in the CEM area.

By Trevor Cheung VP, Global Technical Service, Huawei Director, Huawei CEM Solution

www.tmforum.org / Perspectives / 39

Familiar themes, new twists

Customer experience: 10 tips to make it better


To stay profitable, customer experience must be a key element of an organizations business strategy. It is not only about dealing with individual customers in the most satisfactory way (from the point of view of both customer and company). Done correctly, much information can be gleaned to help improve customer experience, marketing, sales, and the design and delivery of services and products. The good news is that it is still relatively early days for customer experience in the communications industry, which means there is everything to play for. Rob Rich walks us through 10 steps that can make a big difference to how customers view their service provider right now.
#1 Top of the bill Inaccurate and/or confusing bills generate the largest number of complaints to operators, and bill shock has seen regulators step in all over the world. In addition to upsetting customers, complaints are expensive to deal with. Getting billing right has lots of benefits for everyone, and prevention is far more effective than cure. For example in 2010, as part of a three-year customercentric, margin-driven revenue assurance program for retail customers, Verizon Retails program prevented 77 percent of combined over- and under-billings, fixing the problems before the customers first bill. The estimated annual savings from preventing customers making calls to its call centers to complain about bills was more than $20 million. The team has also prevented more than $40 million in under-billing. It also helped reduce churn (see TM Forum Case Study Handbook 20121 for more details). #2 Get emotional It is all too easy to get tangled up in the details and challenges of deploying a customer experience program and lose sight of the true object of the exercise to understand customers and please customers more, keep hold of customers, and sell them more, better designed, products and services. It is a salutary lesson that typical customer relationship management (CRM) systems have reported failure rates of more than 80 percent in their effectiveness of dealing with calls. From the boardroom to the mail-room, employees should be obliged to regularly consume their companys own services and products and use the customer support channels. It is a more powerful, emotional and instructive lesson than all the metrics in the world to go through five long menus when youre in a hurry, only to be told that the department you want is closed. Customer experience is about people and their emotional response to how they are treated. As a recent study2 by consultant Peppers & Rogers demonstrated, customers who trust their service providers spend a lot more money and stay with them, which could add up to an additional $1 billion revenue annually for mobile operators in North America alone. #3 Measuring the right things Were getting better at this, but theres still some way to go. Measuring how quickly calls are answered by call center agents and how fast they get off the phone isnt necessarily useful if the query escalates. Spending longer on the phone the first time might have been a much more economic and satisfactory outcome all round. This becomes more challenging in a multi-channel world where operators need to measure the successful completion of tasks and customer satisfaction levels for everything they offer. The TM Forum Business Benchmarking Web-based Self-service survey found this is not the case for more information see the September 2011 edition of TM Forums Business IQ, Knowing the customer pays.3 The survey found that respondents only take the most basic measurements of customer usage, successful completion, and customers satisfaction with transactions. The number of parameters measured needs to be extended if it is going to provide real insight that operators can

40 / Perspectives / www.tmforum.org

Familiar themes, new twists

act on to improve the customer experience and the measurements should be in place across all the customer engagement channels, including marketing campaigns. #4 How would you like to engage? Successful multi-channel approaches ensure a seamless, convenient way for customers to interact with the service provider in the way that suits them. Multi-customer care channels give companies a way of maximizing the effectiveness of all touch points to increase revenues while keeping sales and customer service costs under control. New ways of interacting include social networks (see page 83), instant messaging, web-based self-service, and eChat joining the more established channels of email, text, retail outlets, and phone calls. However lots of service providers are not taking advantage of these instant means of communication which are so much faster and easier for customers (and the company) than a string of emails over a relatively long period of time. They are also cheaper for the company than dealing with phone calls to the call center. Service providers who get this right are reporting that the number of calls to their centers falls among customers they are able to track through their online activities, although there is still a considerable amount of work to do to ensure the

channels complement each other and have a consistent look and feel, as we explore below. #5 Dont shy away from social media Service providers cannot afford to ignore social media unhappy customers are likely to be tweeting or venting their rage on Facebook even while they are waiting to speak to a call center agent. Still, the amount of spending and effort regarding social media needs to be proportionate. Operators should be open-minded, experiment, and then fix things that dont work quickly. Many decision-makers within service providers are too old to be digital natives; better to have dedicated social networking champions who get how social networks operate and use the right, less formal language. Customers who are happy with a fast resolution to their problem are likely to retweet or react positively on Facebook, which many service providers have already found is a hugely powerful endorsement. #6 Not my department is not good enough To ensure the entire organization is aligned with improving customer experience, service providers
1

need to address the issue of different departments having different measures of performance and targets, which are often in conflict with each other and do not support the companys overall business goals. For instance, those promoting new services are likely to meet resistance from those whose function it is to maximize and maintain profit from established offerings. This is one area where top management support to improving customer experience is essential to communicate goals to all staff and remove interdepartmental conflicts. #7 Agents need to be better armed Contact center agents will need increasingly sophisticated resources to field calls accurately, such as dynamic scripts, access to expertise from elsewhere in the organization, and an endto-end view of what has gone before. The starting point should be that all customer touch points have equal access to information about the customer. Cohesive, instant responses give the customer confidence in the service provider and make them feel that the service provider is interested in them as an individual and understands them. These are

Many decision-makers within service providers are too old to be digital natives; better to have dedicated social networking champions who get how social networks operate and use the right, less formal language.

See TM Forum Case Study Handbook 2012, which can be accessed free from www.tmforum.org/casestudyhandbook You can read Making the Connection: Trust Impacts the Bottom Line in the Mobile Telecom Industry in the fall 2012 version of TM Forums Business IQ, Moving from prevention to recovery. It is free for all employees of the Forums member companies to download after registering on the website and for non-members to buy from www.tmforum.org/biqra2012 3 TM Forums Business IQ report, Knowing the customer pays, was published by in September 2011 and is available free or to buy on the same terms outlined above www.tmforum.org/RP/ BIQKnowingtheCustomer
2

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Familiar themes, new twists

all good reasons to stay with an operator and buy more products from them. #8 Incentives, not alienation Trying to force customers to stop making calls and use other channels is a sure-fire

is to address the most pressing first. Service providers need to effectively track the trajectory from when a customer shows interest in a product or service to how, where, and when they buy it and what

series of expensive (in every sense of the word) complaint and support calls and the transaction being cancelled, or even worse, contributing to churn? There needs to be systematic understanding of

whats going on in particular sets of circumstances. #10 The importance of processes If a customer cant get on with a handset, is an organizations service platform sufficiently well integrated to enable them to arrange to return it at a convenient retail outlet, which is aware they will be doing so, or by post if that suits them? Is the mechanism in place to reimburse them promptly or replace a faulty phone or offer a different model? Throughout such processes, does the service provider know how the customer prefers to interact with the company? If they prefer email, they could be irritated by a phone call.

Service providers need to effectively track the trajectory from when a customer shows interest in a product or service to how, where, and when they buy it.
way to alienate the significant majority who still prefer the phone, and lots of those who normally use self-service will revert to phone calls in certain circumstances. Instead its much better to offer retail and contact center staff incentives to encourage customers to learn how to use web self-service and to offer customers incentives for doing so to do so, which could be free minutes or texts or a simple game for their smartphone. #9 Greater use of analytics While the difficulties inherent in analyzing and assimilating data in different formats from many different sources are huge, there is an even bigger upside: the more touch points and information you have, the greater your opportunities to better understand and serve your customers. Analytics will play an increasingly central role in establishing answers, but this is only of value if service providers act on the information to address issues. The obvious approach happens afterwards. Service providers need to know if customers like and use the new service or product, or if they are experiencing problems using it and complaining. Is a new offering generating additional revenue or leading to a information generated by the reports from various systems and departments, rather than ad hoc data which is difficult to assimilate and use. Having said that, those reports must be sufficiently flexible for managers to be able to run ad hoc queries to understand

TM Forums Customer Experience Maturity Model


TM Forums Customer Experience Maturity Model helps service providers assess and identify current and desired maturity levels. The Model contains five levels and six dimensions grounded in the Customer Life Cycle and Frameworx business models (see pages 52 and 93). By assessing its maturity in each dimension, a service provider can gain insight into how best to prioritize and implement best practices and standards typically an enterprise is not at the same level across all dimensions. The initial launch of TM Forums Customer Experience Solution Suite is part of Frameworx 12.5 (see page 94), and supported by related Training and Business Benchmarking offerings. The Best Practices and Standards portion of the Customer Experience Solution Suite is embodied in three documents: v1.1: Customer Experience Management Introduction and Fundamentals. This document establishes the terminology and comprehensive concepts for operationalizing the management of customer service n GB962-A v1.1: CXM Service Metrics describes a preliminary set of operational key performance and quality indicators. n GB962-B v1.1: Maturity Model outlines the five levels of maturity, applied to six dimensions, characterizing each dimensions essential attributes at every level of maturity. For more information about the Customer Experience Solution Suite please go to: www.tmforum.org/CxSS1.0
n GB962

42 / Perspectives / www.tmforum.org

Familiar themes, new twists

Why we need policy everywhere


Policy-based management is expanding its role, moving from being concerned primarily with load balancing on networks and throttling bandwidth hogs to being a key enabler of customized, personalized digital services. John Williamson looks at how policy is developing and how service providers are using it and plan to exploit it in the future.
Policy-based management a big and growing business. Infonetics Research predicts that the supporting global software market will be worth $1.9 billion in 2016, up from $589 million in 2011. At the same time, it is dramatically enlarging its scope and is viewed by many as the only way to deal effectively with the rapid expansion of products and services. Unique, prima facie research carried out by TM Forum in 20121 reveals that operators policybased activity is evolving from network management to risk management to cope with soaring data traffic volumes, then into personalization, monetization and development of future applications. Avoiding shocks and blocks The first wave of extensions to policy managements role include avoiding bill shock, which can upset customers, increase churn, attract legal challenges and reduce future use of mobile data services. In certain geographies, service providers have regulatory obligations to minimize bill shock, such as CTIA Wireless Consumer Usage Notification Guidelines in the U.S. and the European Unions data roaming legislation. Another element of this first wave is that policy management is at the forefront of managing network capacity to meet the real challenges of rising demand for bandwidth. The Visual Networking Index, published by Cisco Systems in 2013 predicts that global mobile data traffic will increase 13-fold to reach 11.2 exabytes a month or 134 annually by 2017. The Index reckons his is equivalent to: 30 trillion images (such as via MMS or Instagram), that is, 10 images daily from each person on Earth for one year; or 3 trillion video clips (such as on YouTube) or one video clip daily from each person on Earth over one year. Clearly no operator has pockets deep enough to invest in network infrastructure to accommodate anything like these levels of traffic. To prevent congestion, service outages, and resultant loss of revenue, reputation and customers, they are using policy management, in conjunction with network service and customer analytics, to carefully husband their bandwidth and other assets. Their options include:
n throttling the consumption of heavy users at peak times; n off-peak pricing, so customers who are approaching or have exceeded usage caps are

encouraged to shift their usage to off-peak hours through discounts; n variable pricing by application/application class; and n Wi-Fi offload (see article on page 35). Getting personal The second wave of policymanagement applications, underway now, is about personalization and monetization. Many of these products and services are likely to be the same as those on offer today, but provided and delivered in a much more personalized, interactive and dynamic way, with the customer having greater control over the way the service is consumed. An example might be a shared wallet plan. The early offerings allowed all users to

1 TM Forums Insights Research report, Policy Everywhere: Acting on network intelligence was researched and written by Rob Rich, Managing Director, Insights Research, TM Forum, and published in July 2012. It is free for all employees of the Forums member organizations to download after registering on the website and for non-members to buy from www.tmforum.org/insightspolicyeverywhere

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Familiar themes, new twists

draw equally from resources covered by the plan (such as voice minutes, texts and data units). Emerging policy-driven versions allow the account owner to dynamically allocate plan resources among specific users according to different parameters (for example, a parent setting a childs consumption according to usage, costs, time of day, or physical location, plus the security such as restricting access to the web perhaps). The principle could be applied to the enterprise, with an employer allowing certain employees additional capacity or roaming. Network administrators can review these needs and quickly effect changes, empowering these employees. New services can also be added more quickly. In both cases, operators expect that by increasing choice and diversity, and giving customers better, faster control, they will show greater loyalty and spend more. State of policy play How far are operators along the line in deploying policy for first and second wave applications? TM Forum undertook a survey to find out in the first part of 2012, conducting in-depth interviews with 17, mostly Tier 1 operator members, drawn from the converged, mobile and cable communities. The sometimes surprising takeaways included:

n 52

percent of respondents had already deployed some sort of rules-based policy solution, up from 45 percent in an earlier TM Forum survey. n Implementations varied broadly, and included a few internally developed tools, although those using homegrown products were at least considering migration to a commercial solution. n Another 24 percent were planning or had begun implementation of a solution, although 24 percent were not planning an implementation at that point. n Several implementations were basic a few were using some policy tools in conjunction with home location register deployments, mostly regarding rules around data traffic measurement and subsequent traffic

management. n A few were using simple policy management tools in conjunction with DPI tools, though they were taking a conservative approach. n The most popular implementation was the deployment of some kind of policy server that was based on the 3GPP policy and charging rules function (PCRF) standard. The third wave The third wave of policy management applications is all about new services. Interestingly, in November 2012, Analysys Mason reported its recent survey found more than 50 percent of newly implemented policy management solutions were expected to be in support of new service offerings. This ties in with the TM Forum research when respondents were asked which applications they

believe will drive further implementation and what barriers they see to broader adoption of policy. The intention to move away from policy as an enabler of first-wave applications to the second and third waves was very noticeable. Looking three years ahead, although necessities such as fair usage, congestion control and security and behavior monitoring will still be strong not surprisingly, given the increases in expected usage the most growth looks like it will come from personalization and monetization efforts, and the introduction of new services (see Figure 1) As far as developing new services goes, three general areas stood out: machine-tomachine (M2M) applications, third-party content delivery, and cloud-related connectivity. There have been some optimistic assessments of

Figure 1: New policy management deployment/expansion drivers (each participant named their top three)
Fair usage Service quality/ net congestion improvement Tiered services pricing Security/ behavior monitoring Bill shock prevention Personalization/monetization New services introduction 0% 10% 20% 30% 40% 50% 60% Source: TM Forum, 2012

in 3 years today

44 / Perspectives / www.tmforum.org

Familiar themes, new twists

the potential size of the M2M marketplace as much as $290 billion by 2017 according to MarketsandMarkets but the opportunity is not without considerable challenges (see page 67). They include: the large variety of M2M segments, applications and devices; the

telematics, remote surveillance and residential security, and eHealth (see page 72). To targeting these opportunities, service providers need policy control to guarantee adequate capacity to critical high bandwidth communications, and to defer less important

The intention to move away from policy as an enabler of first-wave applications to the second and third waves was very noticeable.

dynamic and unpredictable nature of M2M traffic; the low latency/real-time requirements that challenge throughput; security; and the need to furnish low-cost solutions. Nevertheless, respondents to TM Forums survey saw viable M2M opportunities in public safety, vehicle

traffic during times of congestion. Respondents expressed considerable interest in the role of policy in partnering with third-party players to deliver applications, content or device-specific quality of service to enhance customers experience. The requirements here are

real-time charging and tracking of usage (see article on page 60), bandwidth control/policy and charging enforcement function (PCEF see article on page 67 capability, rapid notification of exceptions or violations and, depending on the particular service, Deep Packet Inspection (DPI). A number of participants are also interested in being able to provide guaranteed throughput for cloud-related activities, to support commercial customers who subscribe to cloud services (Software as a Service, Infrastructure as a Service, Platform as a Service, and so on) with specific service level agreements. The service providers themselves will need the same policy management and related capabilities as in partnerships with third parties. Some form of service reporting would also be important to maintain the relationship with the

Figure 2: Barriers to deployment/expansion of policy management systems


Ease of integration Cost of integration Ease of deployment/use Cost of solution Ability to implement end-to-end Business case justification Scalability of solution Cross organization cooperation Vendor fragmentation 0 1 2 3 4 Source: TM Forum, 2012

customer. TM Forums survey produced a prioritized list of what are perceived to be barriers to policy management deployment and expansion (see Figure 2). Leading the list are issues round integration and cost. On the integration front, policy control is anything but a standalone capability, and its strength comes from its potential position as the bridge between the BSS and OSS and the network, sourcing information from a variety of locations. To carry out this role it must integrate with a variety of systems, databases, network elements and sometimes even devices. Since most service providers network and systems infrastructure is a collection of multi-vendor, both legacy and new, and sometimes highly customized elements, and business and network data integrity is often found wanting, integration is bound to be a huge challenge. Standards are critical to easing integration in terms of speed, cost, flexibility, protecting investment and, increasingly, in the timely, viable introduction of new digital services. Frameworx is at the heart of TM Forums activities, a suite of standards-based tools and best practices to help service providers with the considerable challenges of integration in the digital world please see page 93 for more about Frameworx and how it can help.

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Sponsored feature

We need timely and accurate responses to cyber threats


Networks, both private and public, are under constant pressure from increasingly sophisticated and persistent cyber-attacks. The recent rash of attacks on critical infrastructure shows no signs of slowing and has the very real potential of adversely impacting the livelihoods of companies and citizens across the globe.
Unfortunately, the emphasis of cyber-threat defense solutions today tends to triangulate on identification, mitigation, and impact analysis. Little consideration is given towards the realtime automation that is required to more effectively mitigate the impact of the attacks. FISMA compliance drove early procurements for Intrusion Detection Systems and Security Incident and Event Management Systems. These systems proved to be effective in logging, tracing, and alerting threat related activities, but fell short in their ability to effectively manage the automation required to ensure the real-time protection of the outer and inner boundaries of the network. There has been significant spend on threat detection and compliance tools, yet the time to corrective action and the expense associated with it continues to increase. The increased volume of threats related to data are taxing these systems beyond their intended use, driving the need to augment them with additional systems and human resources. The U.S. government calls for collaboration The recent escalation of foreign nation cyber-attacks against U.S. companies and foreign infrastructure providers is lessening the stability of global diplomatic relations. While many of the attacks were reportedly aimed at corporate espionage, many were targeted at the industrial-control systems that operate critical infrastructure, such as power grids and gas pipelines. These attacks have forced the President to propose, and the Congress of the United States to respond, with unprecedented measures to ensure collaboration between the government and commercial sectors. An Executive Order signed by the President, in tandem with a subsequently issued Presidential Directive, provides guidelines for an improved cyber security framework that facilitates increased information sharing between the government and critical infrastructure while preserving privacy provisions. This should be welcome news for those providers and vendors who are up to the task of securing our nations interests. The need for machine speed automation The Executive Order and Presidential Directive will undoubtedly serve as a framework for creating new messaging and automation fabrics to facilitate the machine speed responses that are needed to mitigate the impact of cyber threats. As this framework takes shape, the public and private sectors remain in immediate and dire need of solutions that enable timely, accurate and automated responses to threats. CSG International has addressed the immediate need by employing a dynamic and adaptive defense solution that analyzes a massive number and variety of data sources, including SIEM and non-SIEM data sources, (such as flow and packets capture records) to drive automated workflows, which isolate and de-activate /activate network elements in real-time. CSGs solution mitigates and automates activities creating an active cyber defense, which increases the scale, speed, and efficiency with which an organization can identify and respond to emerging threats, while also reducing the expense associated with sorting, analyzing and acting upon threat data. Based on CSG Internationals 30year heritage and success enabling and supporting some of the worlds largest public and private networks, and through our extensive network of partners, we look forward to guiding the evolution of standards that will enable the messaging and security fabrics that are essential for immediate and machine-speed responses to counter threats. For more information on CSGs progressive work in developing Cyber Security solutions, and to download a white paper on the Importance of Cyber Data Management, please visit www.csgi.com/industries/government. About the Author: Fred Brott is President of CSG Internationals Government Solutions group. Fred can be reached at fred.brott@csgi.com.

46 / Perspectives / www.tmforum.org

Familiar themes, new twists

Securing maximum value from bringing your own device


Bringing you own device (BYOD) into the workplace has brought a massive and fragmented range of devices, applications and content to the end user. However, that has resulted in amplified security risks that are only now being properly considered and addressed. Theres no need for panic, but certainly the right processes and metrics need to be established to secure BYOD and enable its full potential to be unleashed, writes George Malim.
The bring your own device (BYOD) phenomenon has caused radically heightened security concerns within enterprises. Once these were controlled environments where corporate laptops were securely connected to virtual private networks and mobility was addressed by a device of the companys choosing. Now we are in an era of multiple devices connected in myriad ways to the enterprises network and data. Few, if any, are regarded by their users as solely for work purposes. As users have become familiar with the highavailability, mobile environment delivered by BYOD, enterprises cant remove that functionality theres no going back and the benefits to the company too are substantial. Employees are more productive due to being able to work remotely and via mobile, and employees clearly appreciate having choice when it comes to technology. The security of the companys and its customers data, however, presents the most serious challenge concerning BYOD. The reality is that it is a disruptive battle, explains Bryan Fite, US&C Security and Mobility portfolio manager at BT Global. No such thing as 'normal' Enterprises lost it as soon as an executive brought an iPod into work or used a private mobile for business. Having non-company equipment is not new, but the concept of security as an enabler is. It requires a changed approach to enterprise security. Most people that have come up through the [security] profession have become known as the people who say no, adds Fite. Now, they have to act like business people; they cant simply say no, they have to put a price on yes. Nobody owns BYOD in an organization is it a human resources or an IT responsibility? A whole bunch of people are working on the same problems, but not talking to each other. We dont really understand what normal is in these environments. My advice would be to do a companywide survey on this because there are lots of people already working on it. Christy Coffey, Director of Industry and Security programs, TM Forum, is also working to address the need to put a price on yes. She explains, The market really needs metrics around the monetary value [of BYOD] and the risk value on the device. BYOD is going to happen; you cant stop it so the question becomes how do you measure the risk of the data on the device? Everything isnt at the same risk level, so understanding the value of the user experience balanced against the risk value to the data is critical. This is fundamental as giving end-users choices inevitably means there is no normal situation to be assessed. One executive might favor an iPad, another may prefer an Androidbased smartphone. The iPad user might routinely connect to corporate information and content via Wi-Fi, the smartphone user might use LTE. Both will use different operating systems and each set of technology will have a different range of security threats that the enterprise must address. For instance, in the U.S., it is mandatory to disclose

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Enquires to Tim Banham Telephone: +44(0)201 701 75218 Email: tim.banham@telecoms.com

Familiar themes, new twists

when a device that may contain company data is lost. However, if the device is encrypted, disclosure is not necessary. This isnt about security for securitys sake, adds Coffey. Its about understanding the asset and the vulnerabilities associated with it. You have to understand the value of that asset and the potential loss, then take appropriate security management steps. A standardized approach The need for a standardized approach to security by BYOD users is emerging, which can be applied to all users across many types of device. Fite favors keeping it simple by holding the data within the enterprise and only exposing it to mobile devices, not transferring it. Dont put any data on these devices, use remote presentation, use Citrix and mainframes, use business logic for the user experience, he says. Be device-agnostic, but device-aware so the user experience is good. Why would you read a 30,000 cell

spreadsheet on a mobile? Enterprises need to focus on the business benefits of BYOD when establishing how they will secure their company, its an ongoing process. Just like no one is responsible for BYOD in an enterprise, vendors dont

Metrics Quick Start Guide: Mobile Device Management, which is free for all those within the Forums member organizations to access free by registering on the website then going to www.tmforum. org/GB9661.2. For more about the Forums Cyber Ops projects, including this Quick

There is now a change in thinking organizations dont want to just measure uptime anymore. They want good security practices across the supply chain to reduce risk.

have a part number for BYOD, says Fite. BYOD is a program not a part number. The end game is to recognize that youll have to start building environments and systems that are resilient because you cant control the end-points. Given the fragmentation of BYOD and the lack of standardization, TM Forum is including BYOD in its Cyber Operations metrics work. So far, the group working on this issue has produced a CyberOps

Start Guide, see Securing our connected world, 2013 edition, available on the same basis to member companies and for non-members to buy from www.tmforum.org/ securingourconnectedworld. In addition, plans are in place to initiate a Catalyst project (see panel) at the Forums Management World event in Nice, France in May 2013. The aim will be to find standardized, measurable metrics associated with BYOD risks and rewards. There are some metrics

you can associate with the criticality of this data, says Coffey. Hopefully we could come forward with some sort of agreement regarding what good looks like. This could present a series of opportunities for service providers. Network performance and assuring availability have always been the metrics and there has been no incentive to make sure networks are secure and there are good practices to prevent cyber risk, she adds. There is now a change in thinking organizations dont want to just measure uptime anymore. They want good security practices across the supply chain to reduce risk. She adds, A shift in mind-set is happening within government and defense organizations, and now in communications service providers that support large enterprise contracts. Good, consistent, safe practices across the supply chain mean you reduce risk by 85 percent. Were trying to peel apart the onion and get to the root of the risk. The issue isnt the device, its the data.

What are TM Forum Catalyst projects?


TM Forum Catalysts are short-term, collaborative projects which strive to create solutions for critical industry operational and systems challenges, as defined by different types of service providers, such as cable companies, defense agencies, enterprise IT departments and others. The projects last between three and six months and their culmination is a live demonstration at one of TM Forums Management World events. They are based on the Forums Frameworx suite of standards-based tools and best practices (see page 93) and typically feed their work back into the Forums unique Collaboration Community (which has some 65,000 active participants working on a wide range of goals) to extend and enhance those tools and best practices for the good of all TM Forums members. Contact Megan Lunde, Catalyst Program Project Manager, TM Forum, for more information, including how to get involved, on mlunde@tmforum.org

www.tmforum.org / Perspectives / 49

Familiar themes, new twists

Revenue assurance
Just as the communications industry is evolving to address new business models and additional sources of revenue, so too must revenue assurance. George Malim explores how revenue assurance is becoming fundamental to the success of the new digital value chain.
Revenue assurance used to have the primary focus of ensuring operators were collecting revenue for the voice services they provided correctly. However, as they begin to move away from charging by the voice minute, the number of SMSs sent and even the volume of data consumed, the revenue assurance discipline is going through a step change. Revenue assurance is moving in a couple of directions, says Steve Cotton, Director, Business Assurance programs, TM Forum. The first is to include a cost side of the equation to move towards what some are calling margin assurance. If you are bleeding to death on the cost side, gross margin is a big issue. The second direction is in terms of revenue assurance practice in distinguishing revenue assurance activity and a revenue assurance group from each other, adds Cotton. Practitioners justify the existence of their jobs by the savings they create and were now reaching a point when revenue assurance costs are no longer simply covered by finding gross leakage.

hitting a constantly moving target


Its a different world out there with multi-partner models and if you look at the next generation maturity model (see page 52), one that accounts for the new ecosystems and the OTT [over the top] environment, there are all sorts of impacts, so revenue assurance activities must cast a broader net to earn their place in the budget.

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Familiar themes, new twists

Temporary respite The move from charging for voice minutes to flat rate data may have appeared to simplify the revenue assurance challenge but if it is a respite at all, it will be only temporary. Operators who have been moving up through the TM Forums Revenue Assurance Maturity Model, need to control the costs of delivering free services. As the market matures, they will add huge complexity by starting to charge for the value of the experience delivered. If you go back 15 years, the majority of traffic carried on networks was voice but today 80 percent of traffic is data, although it only generates 20 percent of revenue, explains Dr. Lee Scargall, Group Director, Revenue Assurance and Risk Management, Qtel Group. That means the main challenge for operators is to shift the business model from voice minutes. Operators like EE in the U.K. have just released 4G tariffs where for 36 a month ($58) users get 500Mb of data and unlimited texts and voice calls. Theyre shifting the business model from minutes to bytes. If you look at revenue assurance in that business model, its quite simple voice and SMS are zero-rated so its all about bundles and how much data is in your allowance. The challenges will come when they stop charging by the Meg or kilobyte and start charging by the value of the data services being provided. That changed emphasis

requires a rethink in approach and a new step on the maturity path, which the Forum is pioneering in its Revenue Assurance Impact Measurement Catalyst Phase II project (see page 66), led by Dr. Gadi Solotorevsky, CTO of cVidya Networks. Revenue assurance is not just a technical audit between

operators are trying to give the impression that this is simpler, but they are adding quite a lot of complexity behind this in their new systems, Solotorevsky adds. Family plans in the U.S. are a good example. From a revenue assurance point of view you need to ensure that everything is managed

As operators climb the maturity model ladder, practitioners shift from having a hound dog attitude of sniffing out leakage to proactive prevention.

We have DPI [deep packet inspection] tools today and, in a couple of years time well forget about the 36 for 500Mb flat rate idea and move towards differential charging for data contexts for example x for an email, y for video streaming and z for a Facebook session. "Thats when the real challenges will come in. Revenue assurance will have to understand what data service is being provided, and if its being charged for correctly. In essence, revenue assurance will at first simplify and then get far more complex. Rigorous planning A substantial part of that complexity will be because operators will no longer have the value chain to themselves. The business will involve a web of partners, all seeking to get an accurate share of revenue for the value they provide. There are quantitative risks in the dropping of the ball between partners so one of them doesnt have visibility into their fair share of the earned value, explains Cotton. You have therefore got to have a well-designed endto-end system that multiple parties are involved in. The qualitative side is the impact on the customer experience and customer relations of poor operations across the extended value stream. This can be more fatal because you could get massive churn to the extent that you lose the critical

systems, it provides critical data, he explains. Its obvious that if there is no economic significance to a service you dont have to put revenue assurance there. In many operators, voice minutes and SMS are seemingly less important, but sometimes service providers overlook these issues because they say they are not charging their customers based on minutes. Yet in most cases the service providers are being charged for interconnect so they still need to consider the costs and apply revenue assurance techniques to avoid leakages. A different landscape Free or apparently free services still carry a revenue risk and still need some form of assurance. In some parts of the world voice minutes and SMS are almost free and

correctly when a user gets 5Gbytes of data across multiple devices. The role of revenue assurance here is to verify that all the services are supplied correctly according to the price plans. This is reflected in the changing attitudes of revenue assurance professionals. As operators climb the maturity model ladder, practitioners shift from having a hound dog attitude of sniffing out leakage to proactive prevention, says Cotton. From my perspective thats not just happening in revenue assurance but across the business assurance portfolio I oversee at the Forum. Scargall points out the flat rate data era is merely a precursor to a radically more complex charging environment. I think the landscape is totally different now, he says.

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Familiar themes, new twists

mass needed to operate the business. It requires much more rigorous planning and design than traditional service offerings and operations. At the tipping point Solotorevsky agrees and goes further, saying, These arent clear back-to-back relationships. In the past there was a pretty clear line and the checks were straightforward.

There were a lot of technical challenges but clear logic. Now though, you are buying bundles from different providers and selling bundles of different content so its not a one-to-one relationship. If revenue assurance can provide the direct cost and the direct revenues you can then talk about margin. Analyzing margins is much more complex today, but new revenue assurance techniques

can give a lot of insight. Quality of service is the other side of the equation. The challenges are much more difficult because the customer is not just buying a movie or an app, theyll be buying high definition or low jitter as part of the service. This is a very complicated relationship and revenue assurance needs to become embedded more and more to make it work.

Scargall sees that too: Operators are making huge network investments to go from 3G to 4G but what is the business case? When do we extract the value? he asks. Were right at the tipping point where it is now about [flat-rate] data but operators will soon be looking at the value of [specific] data services and operational challenges of charging and assuring based on that.

TM Forums Revenue Assurance Maturity Model


TM Forums Revenue Assurance Maturity Model is part of TM Forums Revenue Assurance Solution Suite (GB941). Well established and widely used throughout the industry, it has been refined and honed by our members over a long period and has brought great business benefits to many of our members. We are applying this proven approach to customer experience management: Frameworx 12.5 includes a guidebook with a roadmap, maturity model and an outline of customer-centric processes and about 250 metrics. Details on our website www.tmforum.org

Figure 1: The phases of revenue assurance maturity


1. Initial 2. Repeatable 3. Defined 4. Managed 5. Optimizing
1. Ad-hoc, chaotic. Dependent on individual heroics. 2. Basic project/process management. Repeatable tasks 3. Standardized approach developed. Designing-in control commences. 4. Leakage quantitatively understood and controlled. 5. Continuous improvement via feedback. Decentralized ownership, holistic control.

The five pillars of the Revenue Assurance Maturity Model are: Organization How a business organizes its revenue assurance (RA) responsibilities highlights the alignment between the goals of the business as a whole and the goals of the RA organization. Organizational fit is also a reflection of the business culture and the extent to which the business culture is suited to genuinely adopting RA objectives. People The maturity of RA can in part be gauged from the number and skill of human resources dedicated to RA or providing secondary support. Influence The ability to proactively instigate, manage and deliver change is a sign of mature RA. Influential RA delivers financial rewards to the business and a mechanism to continuously improve the efficacy of RA against its full potential. Tools The use of tools is one of the most tangible guides to RA maturity. However, maturity relates to the cleverness of design and implementation, the synergistic use of tools to meet multiple business objectives, and the blend of activities supported by automation as well as the raw processing power, number and cost of tools. Process RA involves the improvement of processes, but is itself a high-level process containing many detailed processes that should be improved over time.

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Familiar themes, new twists

Converting eyeballs to footfalls:


Helping bricks and mortar compete in a digital world
Bricks-and-mortar retailers are always seeking ways to understand their customers better and to influence their behavior to increase sales. This is especially important as they are competing more against online sites. Communications service providers are offering business intelligence gleaned from analyzing big data as a source of real-time analytics to support retailers. It also represents an important new revenue opportunity for the service providers, as Dr. Lorien Pratt explains.
As communications service providers look for ways to thrive in the new digital economy, they made much progress in exploiting the gold mine of big data, which has been talked about for years. As a typical service provider manages billions of records a day, in the form of call detail records, billing, orders, location and many others, the thinking is that there must be other ways of making money from all that information. Arguably they have been lacking a driving market need that intelligence derived from their big data can fulfill, which is not open to other players. In addition, in a fast-moving competitive world, a communications provider would need to pivot, that is continuously adjust its business model to track shifting market and technology trends, several times a year, to stay competitive. So far, providers have not shown this level of creativity and agility. Pivoting around footfalls During the last few months of 2012, this situation began to change in two ways. First, several industry players discovered that real-time measurement of footfall is an important weapon for brick-and-mortar retailers. The idea is that if Googles search data drove the online advertising explosion, then anonymized analytics in realtime for the real-world about who visits a store can be just as valuable to bricks-andmortar marketers, particularly to help retailers combat the growing trend of customers using stores as showrooms. In other words, people go visit stores to have a physical look at and feel of products before buying them online at the most competitive price. There are opportunities to serve customers in the offline world that are unique and valuable, but retailers need data to compete effectively against the Internet. Second, Telefnica, through its Dynamic Insights initiative, has created a promising experimental unit model almost a Google inside a telco that looks likely to be able to handle the multiple business model pivots needed to succeed. Verizons Precision Marketing division is following similar lines. According to Emeka Obiodu, Principal Analyst for

There are opportunities to serve customers in the offline world that are unique and valuable, but retailers need data to compete effectively against the Internet.

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Big data volumes present massive opportunities for communications service providers
Communications service providers (CSPs), cable operators, and media and entertainment companies are all struggling to manage the explosion of varied, highvolume, and high-velocity of big data. For CSPs to be successful and profitable in their hyper-competitive industry, however, they must address their customer needs largely by unlocking the inherent value contained within this big data. All CSPs are pursuing a range of big data initiatives that rely heavily on information management and analytics for clear insight into customers preferences and behaviors and to translate these to customer-impacting services and business models. A key difference between CSPs and other industries is that CSPs are already familiar with handling vast volumes of data in their existing and routine processes. However, to date, they have not taken advantage of monetizing the inherent value in their data. Big data solutions based on a scalable and highperformance data analytics platform enable them to manage and analyze the treasure trove of information that they collect and store. CSPs opportunity CSPs are looking to differentiate their offerings and target customers more effectively, thereby generating greater customer loyalty and establishing new business models in partnership with third-party providers. With HP Telco Big Data and Analytics (powered by the HP Vertica Analytics Platform), CSPs are unearthing value from their data and generating new revenue sources to offset the commoditization of their traditional services and compete in the OTT market. With these valuable insights, they can now target cross-sell and upsell opportunities among their existing customer base. Big data applications that are context aware can place CSPs at the heart of the digital value chain. By combining real-time insight (location, interests, and activities) with demographic knowledge, such as CRM information, habits, and preferences, CSPs can be given unparalleled marketing intelligence. Core focus areas CSPs are focusing on three core areas from which they can maximize the value of their big data:
n Targeted

traffic-boosting offers, and how to serve customers most efficiently. n New Business Models - Transform from a provider of network infrastructure to value-added content provider for third-party and OTT service providers. CSPs need to ensure that they dont simply invest more and more in the network if they want to prove their value to partners they need to know more and more about their subscribers. Big data presents a range of opportunities for CSPs to address. A core set of technology is common to all, and CSPs can use that to implement a company-wide big data strategy or to address specific business cases for big data. HP Telco Big Data and Analytics solution (powered by the HP Vertica Analytics Platform) brings a combination of capabilities in HPs business analytics solutions together with deep solutions expertise for the telecom industry. Subscribers are increasingly expecting more and more behavior-based, personabased offers and services from their service providers. By doing so, they will transform their businesses and improve their profitability. Learn more by downloading the following white paper: www.vertica.com/ from-big-data-to-knowledge or visit www.hp.com/go/TelcoBigData

Products and Marketing Offers - Increase loyalty and personalize the user experience according to actual customer needs. n Network Experience Optimization Understand how the network is utilized, so that CSPs can identify where to invest in new capacity, when to make

Figure 1 - From knowing to understanding your customer

Figure 2 - Focus Area

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Familiar themes, new twists

Communications & Broadband, Ovum, Companies like Verizon and Telefnica are starting to offer anonymized and aggregated mobile network data to companies and public sector organizations, which will use the data to measure, compare and understand how their customers behave. The opportunity In the offline retail world, site analytics is the science of tracking how buyers use and behave in stores. Historically, raw data is collected by market research firms, using people with clicker counters or clipboards. This data is digested and analyzed by various specialist companies, such as Experian with its Footfall platform which tracks various key performance indicators (KPIs) about a retail site, alerting managers when customer traffic does not meet certain criteria. In recent years, shoppers have been using their mobile phones more and more while in stores to evaluate products. According to irysis,1 28 percent of shoppers in the U.K. use their smartphones; according to research from Pew Internet, this number climbs to over 50 percent in the U.S.2 Recently, this has led to many shoppers buying the product they viewed in the store online, a practice which is posing a considerable threat to retailers. Yet the very traffic generated by mobile phones within stores can also be a source of valuable data. This is where

communications service providers, with the ability to collect, anonymize, and analyze their data, have an important contribution to make. Telefnica s Smart Steps offered by its Dynamic Insights division is an excellent example. As shown in Figure 1, Smart Steps measures, on an anonymous basis, mobile phone usage in a particular area. Using a proprietary algorithm, it extrapolates its O2 users traffic to all people in the region, as shown in Figure 2. Steven Bartholomew, Director of Public Affairs, Telefnica Digital, says, We now think that we can use trends extrapolated from anonymized aggregated mobile phone network data to help other companies to make better informed decisions and to run their businesses more effectively. He says Smart Steps has a number of advantages over established, manual methods of collecting this information. For a start, it removes much of the lag between data collection and analysis, and timely decision-making. It also tracks the entire local area, not just the performance of a single store. This is important, according to Bartholomew, because, A store might think its doing well, with an increase in sales of 10 percent, but if the local regions footfall is growing by 15 percent then it is underperforming. Without this solution, the store may be unaware of this fact. Smart Steps also provides information about a store

Figure 1: Smart Steps screen shot

Reprinted with permission of Telefnica.

Figure 2: Smart Steps footfall tracking

Reprinted with permission of Telefnica.

www.irisys.co.uk/people-counting-blog/bid/61846/How-do-you-know-if-your-customers-areshowrooming http://pewinternet.org/Reports/2012/In-store-mobile-commerce/Findings.aspx

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Familiar themes, new twists

visitors previous behavior (for instance, in which grid did their travel originate?) and demographic information such as age and gender. It can also furnish hourly breakdowns of traffic, instead of a full-day aggregate and can track much larger samples of visitors to the store, yet is cheaper than employing human counters. Of course, data is only important to the extent that it can be acted on. Bartholomew claims the data Smart Steps provides can remove speculation and provide a more evidence-based approach to key decisions, including determining the location of new stores, shaping the formats and layout of new stores, tailoring product lines for stores and supporting hourby-hour staffing and resourcing decisions. It can also analyze the effectiveness of marketing campaigns. Competition A number of over-the-top players have already begun to address this market. Euclid (www.euclidanalytics.com) (see Figure 3) uses Wi-Fi data from mobile phones to analyze traffic patterns; Geotoko (www.geotoko. com) and MomentFeed (www.momentfeed.com) use check in information from social media platforms like Foursquare, Facebook, and Twitter. However, the data they can offer is fundamentally limited, as they can only extract a small sample of traffic data, compared to what communications service providers can potentially offer.

They know the location of a much greater percentage of their mobile phones, and can calculate traffic on other carriers networks through statistical analysis with a useful level of accuracy. Possible barriers These initiatives are in their early days. Says Ovums Obiodu, I dont believe the business model is proven yet. It is still contingent on avoiding a number of important barriers, especially around privacy. These include objections from European Union authorities, including the U.K.s Information Commissioners Office, on the use of anonymized data, and with potential actions from the Electronic Frontier Foundation and Civil Liberties Union in the U.S. Obiodu stresses, technology is not the barrier, its almost simple. The challenge is whether various countries will allow this [use of information] or whether well see a backlash, as has happened in the past. BT and the Phorm debacle spring to mind in 2009, after secret tests, the operator was forced to drop its plans to use the companys Webwise system to tailor adverts to broadband customers through tracking their online behavior. If these issues can be overcome, however, the potential for this kind of an offering to provide significant revenue benefit is substantial. The key is trust not doing anything covertly, ensuring people understand that all the

Figure 3: Sign in a Nordstrom's department store in Denver, Colorado. Euclid uses mobile phone Wi-Fi signals to analyze in-store traffic patterns

In a time of austerity regarding public spending in many countries, demonstrating improved performance could prove very popular indeed.

information is anonymous, not personal, and perhaps offering rewards for opting in, rather than putting the onus on people to opt out, would all be smart moves. It is also as well to remember that older people typically have the larger disposable income and are often much more cautious about privacy matters then their younger counterparts who are generally more relaxed about how information about them is used. If trust and respect can be preserved, then selling this business intelligence could be the physical worlds equivalent of the eyeball data provided by analytics from the web. In addition, over time, communications service providers will become more creative, inventing increasingly sophisticated mash-ups of location data along with that from market researchers, combined with anonymized footfall data. Finally, it could well appeal to the beleaguered tax payer: These offerings could and should have value for government and public sector applications. The information could be used, for example, to help local, regional and national authorities evaluate and tune the effectiveness of services like policing, planning and parking, so they can figure out where and how to best invest public funds. In a time of austerity regarding public spending in many countries, demonstrating improved performance could prove very popular indeed with all the parties concerned.

56 / Perspectives / www.tmforum.org

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Big Data Creates Big Opportunities


Driven by a data-hungry society, data consumption is skyrocketing, leaving in its wake massive amounts of data that service providers need to manage, extract, analyze and use. Although, according to a recent TM Forum study, service providers consider Big Data a key business driver to improve operational efficiencies and deliver better customer experiences, The European Communication Quarterlys Big Data Special Report revealed last April that 72 percent of service providers are not yet fully exploiting their data to generate customer insights. Amdocs partners with service providers to unlock intelligence to enhance performance across domains and improve profitability through better churn management, targeted cross- and up-sell and effective product introductions. Achieve operational excellence Fueled by increasing penetration of smartphones, tablets and other mobile broadband devices, the shift from offline to online data charging and differentiated rating groups, data service event growth is accelerating. In fact, an Amdocs analysis determined that the number of mobile events processed by charging and billing systems will grow 77% year-overyear from 2012 to 2015. Can traditional databases handle this unprecedented scale? Will linear database growth become cost prohibitive? Amdocs Tera Scale embraces Hadoop for scalable data-intensive distributed computing to reduce data management costs by 30-50 percent, delivering up to 15% savings on storage costs. Amdocs Elastic Online
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Charging, a main enabler for adopting Big Data technologies, resides as a layer in Amdocs Omni Convergent Charging, allowing dynamic allocation of charging resources. It uses high-availability cloud topology, enabling service providers to scale servers up and down with no downtime, gain failover support and reduce hardware costs. Give customers a unique experience Amdocs recent consumer survey, conducted with Coleman Parkes, found that 92% of consumers expect issues to be fixed proactively. Today 73% of proactive notifications are ineffective in resolving subscriber issues and 24% result in a contact center call. Amdocs Proactive Care leverages transactional Big Data and behavioral content together with real-time customer events to anticipate potential care issues and preemptively address them across all channels. It enables service providers attain prediction accuracy of up to 95% and reduce contact center costs by up to 20%. Maximize value of network data As consumption of data and video services continues to grow, enriching customer information with network data is crucial for service providers to have a true 360-degree view of their subscribers. In order to measure usage and quality of experience at the individual customer level, per data session, for each application and service used, service providers need a customer-centric approach to network analytics. Amdocs Customer Intelligence
DESCRIPTIVE

Network Analytics leverages untapped network data and Big Data analytics to provide a deep understanding of customer behavior and experiences, generate actionable insights and trigger personalized marketing offers and care actions. Navigate Big Data complexities Unexploited data, whether originating in the network, from M2M connected devices, social media or other sources, are increasingly being recognized as valuable resources from which to extract insights. As noted in TM Forums, Big data: Big volume, big payback and big challenge report, the majority of service providers are only utilizing a small portion of the data they currently have and cite data integration and data management as their biggest roadblocks. Adding to these challenges is a shortage of communications-focused resources experienced in Big Data platforms and technology. Amdocs works in partnership with service providers to uncover underutilized internal data, enrich it with external data and integrate analytical insights into critical business processes. Partner for Big Data success Generally available in May, Amdocs CES 9 has been specifically designed to help service providers be more efficient and embrace Big Data. Complemented by end-to-end services, Amdocs provides the deep understanding of data sources and the expertise to integrate analytical insights into communications business processes to deliver Big Data success.

PREDICTIVE

Internal

Customer Care Billing Voice

Email

Customer Management

External

data data data data data data data dadata data data a data BIG data a data DATA data data data dat data dat dataa data data data data

Operations
Feedback

Products & Services 3rd Party

Marketing

NW
Social

Finance

Census Blog

KPI's

Actionable Analytics

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Familiar themes, new twists

Is outsourcing fraud management the way forward?


So far, few companies have outsourced fraud management. As the problem of fraud intensifies (due to more partners being involved in delivering digital services, and in particular the rise of mCommerce and LTE) should the merits of this approach scale, big data and analytics be taken more seriously? Annie Turner looks at the potential.
KPMGs 2012 Global Revenue Assurance Survey1 found that only 4 percent of respondents outsourced their fraud management team. The report comments it is not surprising, given the sensitive nature of fraud, but on the other hand, Its time for fraud management to come of age. (TM Forum agrees, which is why the revenue assurance group has accelerated and expanded their activities in this field see panel). The Communications Fraud Control Associations last global report in 20112 found fraud accounted for an average of 1.88 percent of operators revenues, 1.66 percent less than the previous report in 2008. However, it is actually rising, but this is masked by the growth in overall revenues. Alarmingly, KPMGs report found that more than a fifth of respondents to its survey were leaking up to 10 percent of annual revenue. Both Europe and the Americas reported worse figures than the last KPMG survey in 2009, leading the authors to state: No wonder the respondents consider the number one objective for revenue assurance functions to be the prevention, detection and recovery of revenue leakage. Other activities such as fraud prevention, revenue management and cost saving are given a far lower priority. This seems rather contradictory as fraud is given as one of the top three reasons for lost revenue, along with transformational projects and poor system integration. In addition, there is the increasing importance of customer experience (see page 40): a secure relationship with your service provider is a key element, although it is often not thought of in those terms until something goes wrong. Then people feel violated and it shakes their confidence in the provider. Put another way, trust is one of service providers key assets indeed, research carried out by Peppers & Rogers Group3 in 2012 established that in the U.S. alone it was worth as much as $1 billion a year (without taking losses into account). So the stakes are high. Given all these factors, it seems strange that few fraud management teams report directly to a board member (a finding supported by the TM Forum Revenue Assurance Survey 2012) and the tools the teams have to address fraud seem to leave much to be desired. KPMGs report found that although 78 percent of respondents said they use some kind of revenue assurance/fraud management tool, 36 percent of participants said they werent satisfied with them and 44 percent said theyd brought limited levels of automation which could be for a variety of reasons. All of which makes managing fraud a moving target and an ever bigger and more difficult task, much of which is carried out by expensive, slow, manual processes. They lack the nimbleness and speed of those committing the fraud, who move onto the next soft target. Against this backdrop, arguably fraud management is a good candidate for business process outsourcing. In TM Forums Quick Insights report, Business Process Outsourcing: Enabling operational excellence and business agility4, Business Process Outsourcing (BPO) is defined as, a subset of managed services that involves the outsourcing of operational processes for certain business functions to a third-party supplier. Goals around business outcomes Historically the primary advantages of BPO included

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Familiar themes, new twists

lower capital investment and lower cost, non-core business processes, plus economies of scale and expertise in the specific process areas. Thinking more strategically, BPO can bring best practices and skills to service providers, which is potentially particularly interesting in the case of fraud management where processes and best practices are often in the early stages of development and implementation. BPO can also increase operators agility and scale to meet the demands of the ever-changing market and scale and data analytics will be some of the most effective weapons in detecting and preventing fraud. Also, BPO is evolving; increasingly the customer is setting goals based on business outcomes. There is

a growing tendency towards contracts, which includes some revenue or operating margin sharing or in the case of fraud management, this could be translated into the amount of money recovered or by the prevention of fraud, which has myriad causes. The types of fraud that are of most concern to operators vary from market to market, along with the communications service providers fraud priorities. To being with, service providers could perhaps outsource the management of particular types of fraud roaming, or subscription, say and move more categories over when the outsourcer has proved their competence. In theory, a BPO provider will be processing huge amounts of data from many sources, and be attuned to

established and new patterns that indicate potential fraud. Finding the right partner would potentially be difficult (see TM Forums Managing Partnerships Introductory Guide5 for pragmatic advice and best practice), as they

and is especially important with organizations managing aspects of network or service management or customer-facing processes, as data in these areas is rising particularly fast BPO suppliers must be prepared

It seems strange that few fraud management teams report directly to a board memberand the tools the teams have to address fraud seem to leave much to be desired.

would need to demonstrate not only the core systems and process skills, but also a good command and portfolio of process analytics. The BPO report notes, This will become increasingly important as more and more data becomes available,

to cope with the volume, variety and velocity of data that is emerging as we speak, and they must find ways to translate it to the benefit of themselves and their customers. This will be a key competency for suppliers.

TM Forums fraud management activities


The Fraud Management Group has a Collaboration Community which our members are most welcome to join to help the industry tackle fraud please see www.tmforum.org/FraudManagement for more information. It is led up by Raul Azevedo, Director of Product Development, WeDo Technologies. If you would like to get involved in the Forums work on fraud (or any other aspect of revenue management or enterprise risk management) please contact Steve Cotton, Director, Business Assurance Programs, via scotton@tmforum.org The first edition of the TM Forums Fraud Classification Guide identified more than 80 types of fraud to provide consistency across the industry in how we characterize the threats it is free for our members to download from here www.tmforum.org/ GB954FraudClassification. The second phase of this work has detailed a ground-breaking approach to fraud classification which is being adopted by carrier associations to track fraud. Work continues to mature and promote the Forums Fraud Classification Model to encourage its wider use and enable members to describe and measure fraud accurately. TM Forums Fraud Operation Management Guidebook Release 1.0 is available free to members from www.tmforum.org/ GB947FraudOperations. It outlines best practices drawn from the communications and other industries. Release 2.0 is scheduled for publication with Frameworx 13, in May 2013. The aim is for the Guidebook to become a stepby-step implementation manual to help service providers identify where their resources can be most effectively focused. An implementation guidebook will be introduced at the same time.
Go to www.kpmg.com/Global/en/IssuesAndInsights/ArticlesPublications/global-revenue-assurance-survey/Documents/global-revenue-assurance-survey.pdf to download the report. For more information see www.afca.org/fraudlosssurvey/ The research can be found in the fall 2012 version of TM Forums Business IQ, Moving from prevention to recovery. It is free for all employees of the Forums member companies to download after registering on the website and for non-members to buy from www.tmforum.org/biqra2012 4 The report was written by Rob Rich, Managing Director, TM Forum Insights Research and published in December 2012. It can be accessed, on the same terms as outlined above, from www.tmforum.org/QIbpo 5 Managing Partnerships Introductory Guide is available to TM Forums member organizations, on the same terms as those above, from www.tmforum.org/Introguide/Managingpartnerships
1 2 3

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Familiar themes, new twists

Thrive another day with real-time convergent charging


Thinking about real-time convergent charging (RTCC) simply as a revenue management solution is rather like describing James Bond as a civil servant. RTCC is the only option right now for service providers who believe that the anytime, anywhere mantra is real, necessary and achievable. Tim McElligott looks at RTCCs potential, explores why operators are struggling to exploit it fully based on unique research by TM Forum and recommends next steps.
Real-time convergent charging (RTCC) combines the two most compelling aspects of digital communications: the ability to rate, charge and share usage as it happens (real time) and the ability to do so for multiple services simultaneously (convergence). Charging has evolved from batch-based billing for phone calls to online charging systems for multiple digital services. At the same time, the volume has grown, and continues to grow, at a pace that would frighten Gordon Moore (originator of Moores Law) himself. Simultaneously, RTCC has begun to expand its very purpose and seems to be in the process of becoming a much broader business solution. How did we get here? At its RTCC core is a revenue management solution, but as it can alter the experience of customers as they use services, it also can be a customer experience management tool, an enabler of customer self-care, a service delivery component, a marketing weapon, a business intelligence tool and a mechanism for managing partners. In short, it becomes more essential every day As one wireless operator surveyed for TM Forums Insight Research report, Realtime convergent charging: Adapting to the digital environment1 said, RTCC has become a solution with the potential to fulfill one big bundle of need. While service providers around the globe address very different markets with unique demands, demographics and infrastructure, they are discovering different but equally powerful drivers to adopt or consider more advanced RTCC solutions. This seems to signify a real sea change: after years of concentrating on becoming ever leaner and meaner, finally service providers are ready to develop new revenue streams

Figure 1: The drivers of driving real-time convergent charging efforts


5% 8% 27% 16%

New service introduction Transforming to next gen architecture Tapping into the OTT revenue stream Enabling better customer controls Competitive positioning Utilization
14%

Time to market

22% 8%

Source: TM Forum, December 2012

A sea change in thinking The research found saving money is not a top priority see Figure 1 rather introducing new services is the clear winner. Interestingly improving customers controls is its nearest rival. This could arguably be interpreted as being about reducing costs, but respondents all said it was about improving customers experience. Interesting too that it was

the service providers outside the Americas who saw RTCC as important in helping them with competitive positioning, as many face fierce rivalry at home from financially strong, overseas competitors. Service providers all acknowledged they have a long way to go in implementing RTCC (no one said they had completed a project, only 24 percent said theyd completed phase II and

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Familiar themes, new twists

46 percent said theyd completed phase I. Some 15 percent said they were at the procurement stage of phase I with the same number at the planning and evaluation stage). However, the research revealed more than just a progress report on implementation: clearly the rapid pace of change has had a profound effect on the way service providers see the process of transformation. It used to be project-based: Planners and engineers made their decisions, set their targets and timelines and with luck and persistence, could consider a project complete. RTCC implementations indicate every transformation has a sequel, which is being written before the original is in production. Regardless of how advanced service providers are with implementing RTCC, they are already considering next steps in the process. This is wise, but also has a tendency to hinder the projects that are underway, as the technologies in play become obsolete or are subsumed by the functionality

of other systems. How RTCC continues to evolve is shown in Figure 2. The split for top position between billing and creative pricing is revealing: further enquiry into the answers to this question suggested that while service providers see themselves as being, or striving to be, more marketcentric, operationally they are still, to some degree, firmly attached to their network mindset. Encouragingly, though, all the respondents were keen to see tighter ties between notifications and relevant offers that is they see the need to incorporate analytics and business intelligence more directly into the RTCC process (see page 40). Obstacles can be overcome Finally when asked what the obstacles are to fully leveraging RTCC, it is telling that the two top reasons are both self-inflicted see Figure 3. In other words, their greatest obstacle is themselves their culture, organization, systems and processes.

Figure 3: Obstacles to fully leveraging RTCC


30% 25% 20% 15% 10% 5% 0%

Transforming Procurement internal and processes operational costs

Integration

Managing scale

Analytics

Source: TM Forum, December 2012

Integration remain a huge challenge: process flows for new or newly integrated systems dont automatically include existing process flows see page 93 for how to get help with this from TM Forums Frameworx standards-based suite of tools and best practices, developed and honed over many years, by the communications and associated industries for those industries. Despite the barriers, the research concludes that

operating in the manner enabled by RTCC is like the difference between positive action and protectionism, between being on the offensive rather than the defensive. For engineers, its the chance to create rather than streamline, maximize instead of minimize, develop rather than maintain and compete instead of winning by attrition. For marketing people, its like eliminating the word no from the CIOs vocabulary.

Figure 2: What capabilities do you hope to add or improve with RTCC?


Bill integration Creative price plans Service modeling Offering complex services Customer self care (control) 8%
1

21% 21%

21% 29%

Source: TM Forum, December 2012

TM Forums Insights Research report, Real-time convergent charging: Adapting to the digital environment, was written by Tim McElligott and published in January 2013. It is available for all employees of the Forums member companies to download free by registering on the website and for non-members to buy from www.tmforum.org/ InsightsRTCC

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Sponsored feature

The case for centralizing BSS


By Dr. Andy Tiller, VP Product Marketing at AsiaInfo-Linkage Many operators work across multiple regions or countries, or as part of a large group. Standardizing Business Support Systems (BSS) across the group has been viewed as desirable by many operators as a way of achieving cost efficiencies and improving time-tomarket, but this has often proved difficult to achieve in practice. As part of its annual market survey1, the industry intelligence team at Telecoms.com harvested the opinions of almost 400 operator staff on this topic (see Figure 1), and found that 63% of them were in favor of BSS standardization (ie, use of common systems by all group operating companies Opcos). But 35% believed that the group should go further and actually centralize their BSS: this could potentially deliver even greater benefits, but implies that individual Opcos would no longer operate their own systems locally. The survey clearly revealed the business case for this radical centralization approach, with the main benefits being seen as substantially reduced OPEX, and the ability to offer consistent service to international customers (see Figure 2). OPEX savings are expected because the operator can implement changes just once in a single system, rather than multiple times in different systems and different locations. Such changes have traditionally proven to be time-consuming and expensive (especially in a highly customized BSS environment), and now threaten to become cripplingly so given the need for operators to respond ever more quickly to the threats and opportunities presented by the new digital economy. Centralization not only reduces the cost of changes, but equally importantly speeds up their delivery. Furthermore, it enables international products to be offered across all Opcos in the group, creates a single view of enterprise customers which span multiple Opcos, and helps the operator to project a single, global brand. Why centralizing BSS operations is difficult Despite the potential benefits, 44% of operator respondents felt that centralization of their BSS would be difficult or impossible to achieve (29% even felt the same about the relatively simpler standardization approach). According to the survey results, this has nothing to do with the business case. Instead, it reflects the historical reality that group operators have been unable to realize the benefits of standardization (let alone centralization), largely because it has involved restricting the flexibility of local Opcos to respond to their own market conditions. As a result, internal politics and conflicting business cultures across the group have prevented progress. This conflict was indeed found to be the biggest challenge to BSS centralization in the Telecoms.com survey, ahead of operational risk factors and regulatory constraints. How new technology can help address the challenge But it doesnt have to be this way any longer. With modern BSS systems running on private cloud-based technology platforms, its possible to get the best of both worlds. A single instance of the BSS, centrally hosted and maintained, can achieve enormous operational improvements while at the same time supporting local Opco requirements through multi-tenancy. Each local Opco can have its own products, tariffs, currencies, languages, taxes, and even its own customized business processes, and can stay in control of its own operation through BaaS (BSS-as-a-Service) type access via the private cloud. This concept was not lost on the Telecoms.com survey respondents, almost 65% of whom agreed that the task of standardizing the BSS function would be more easily achievable in a centralized BaaS environment, where the operator hosts a private cloud BSS to be accessed remotely by the

you believe international operators should look to centralise Figure 1: Do Industry attitudes to BSS centralization and standardization and/or standardise their BSS systems across their footprint? Do you believe international operators should look to centralise and/or standardise their BSS systems across their footprint? Operators (392 respondents) 70% Operators Others 63% 70% (392 respondents) (871 respondents) Others 63% (871 respondents)
35% 35% 35% 35% 17% 17% 14% 14%

80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0%

Centralise Centralise

Standardise Standardise

Neither

Source: Telecoms.com

Neither

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50% 40% 30% 20% 10% 0% Centralise Standardise Neither


17% 14% 35% 35%

Figure 2: The business case for BSS centralization and standardization


Rate each of the following benefits of a centralised BSS strategy (1 is not beneficial and 5 is extremely beneficial) 3.90 3.80 3.70 3.60 3.50 3.40 3.30 3.20 3.10

Operators (390 respondents) Others (851 respondents)


Source: Telecoms.com

individual Opcos. This mirrors AsiaInfos experience in China. BSS centralization in practice AsiaInfo has already had success with centralized, private cloud deployments of our Veris BSS systems for very large operators in China. We have helped both China Mobile and China Unicom to move parts of their BSS into the cloud for access by multiple different provinces, each with its own local requirements. The move to cloud-based technology platforms has not only improved timeto-market and achieved operational efficiencies, but has also saved substantial CAPEX through deployment on inexpensive and scalable blade servers rather than traditional Unix platforms (saving 80% on hardware costs for one provinces CRM system). China might be seen as a special case, given the clear authority of headquarters to make decisions and implement them across the Group. But this is not as clear cut as it seems from the outside.

The need to respond to cultural diversity in local markets from Beijing to Kashgar is at least as great as it is across a large European group operator. And the sheer scale of each of the 31 individual provincial operations dwarfs most European Opcos (for example, China Mobile has 60 million subscribers in Zhejiang province alone). However, one barrier which does not apply strongly in China is regulatory constraints specifically the requirement found in many regions that personal data must be hosted within the subscribers own country. This presents some challenges, but can be addressed by exploiting the power of modern technology platforms to distribute the database layer of the BSS while keeping other functions centrally located. Although this adds cost, requiring a data center in each country, it is still possible to achieve the key benefits of a centralized system, including reduced
1

OPEX and the ability to offer consistent service to international customers. But what about the operational risk involved in migrating from legacy systems to a more modern architecture? This is always a key concern for operator IT departments, but its one that needs to be addressed irrespective of the question of centralization. Many operators in established markets have legacy systems based on old technology. Although some of these systems are very sophisticated, they are very expensive to maintain and it takes too long to make the radical changes now needed for operators to exploit the opportunity of LTE and combat competitive threats in the new digital economy. Therefore radical change is needed, anyway. The cost and risk of BSS migration will always be significant, but in this context BSS centralization presents an opportunity to reduce the risk by simplifying operations, as well as enabling substantial efficiency savings. Ultimately, migrating to a modern BSS platform such as Veris not only delivers real-time performance, much lower CAPEX and OPEX and much faster TTM for new innovations; it also enables BSS centralization without loss of flexibility to respond to local market conditions.

Average score

About Telecoms.com Intelligence Telecoms.com Intelligence is the industry research offering from the leading news and analysis portal for the global telecoms industry. With over 80,000 unique monthly visitors and more than 70,000 registrations to its webinar platform, Telecoms.com has access to executive opinion of unrivalled breadth and depth.

The full results of the Telecoms.com survey can be downloaded here: www.telecoms.com/industry-survey/

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LTE how big are the risks to service providers businesses?


There are big potential risks arising from long-term evolution (LTE) 4G technology to operators business, in terms of the migration from 2G and 3G to 4G. Revenue loss and fraud could become very serious issues because of certain LTE characteristics. Phil Marshall Ph.D. examines the risks and what we can do to mitigate them.
Over the last two years, LTE has been adopted at an astonishing rate. According to Tolaga Research, over 130 commercial networks had been rolled out at the end of November 2012. The adoption rate is likely to increase over the next two years; most mature markets are expected to have commercial LTE-based services by the end of 2014. LTE is mainly deployed as an integrated overlay to 2G and 3G networks. Where there is no LTE coverage, LTE-enabled devices will fall back to the 3G or possibly 2G networks to ensure service continuity. As service providers deploy LTE and focus on strategies to monetize mobile broadband services, there are several fundamental changes in the way these services are delivered, all of which have implications for the operators businesses. All-IP network architectures They largely arise from the fact that LTE uses all-IP network architectures. This allows for service convergence by separating the service from the bearer. It utilizes Internet protocols endto-end and introduces new core network components in the enhanced packet core (EPC) and Internet multimedia subsystem (IMS) functions. Notable core network elements are introduced, including the serving gateway (S-GW), mobile management entity (MME), home subscriber server (HSS) and Policy Charging and Rules Function (PCRF). While it is beneficial for LTE to use all-IP architectures, there are a variety of fraud and revenue assurance considerations that emerge. For instance, LTEs architecture introduces additional nodes from which intelligence relating to fraud management and revenue assurance must be extracted. In addition, non-hierarchical all-IP architectures enable service access, orchestration and management functions to be distributed more widely, towards the networks edge and within devices themselves. This means that fraud management and revenue assurance solutions must extract intelligence from many more information sources, each potentially having different formats and collection mechanisms. Increasingly systems will require mediation layers to filter and correlate the various intelligence sources. Vulnerabilities and threats Another aspect is that IMS enables LTE to deliver voice telephony services with voice over LTE (VoLTE). The IMS architecture separates bearer and control functions, and uses the session initiation protocol (SIP) for its signaling. There are a variety of security threats associated with SIP, which might result in fraud. Examples include registration hijacking, server impersonation and message body tampering. Service providers must ensure that their IMS implementations address these challenges. A vulnerability arises from the fact that current LTE standards dont necessarily provide adequate protection on all network interfaces, such as the X2 interface between radio base stations. This increases the threat from hackers targeting radio base station routers, particularly in the case of small cells, which are potentially easier to access. While LTE networks are prone to the usual types of Internet attacks, many

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fraud management tools that have been developed for the Internet need to be adapted when applied to LTE networks. Careful attention must be paid to the differences in vulnerabilities for all-IP mobile networks relative to traditional Internet environments. The integration of LTE with 2G and 3G networks is complicated and requires a variety of inter-working functions such as between subscriber authentication elements (that is between the HSS and HLR), and to ensure service and subscriber policies are maintained. If these inter-working functions are not implemented correctly, they could create security vulnerabilities. Then there is the migration to IPv6. IPv4 will be in use for many years and dual-stack IPv4/IPv6 solutions have been proposed, but many are prone to attack. A variety of solutions such as Intra-Site Automatic Tunnel Addressing Protocol (ISATAP), Teredo and 6to4 aim to mitigate security threats in dual-stack environments.

Value chains are becoming fragmented. The trend is not specific to LTE, but it is becoming more commonplace in mobile broadband services and complicates service delivery in terms of orchestration, management and security.

The arrival of hetnets LTE will also herald the heterogeneous networks (hetnets) era: Service providers are offloading traffic onto Wi-Fi to meet capacity demands (see page 35), but lack the intelligence and standardized connection management to allow connections to automatically revert from Wi-Fi to mobile. These capabilities come with HotSpot 2.0 and Access

Network Discovery and election function (ANDSF), which will be introduced in a future release of LTEAdvanced. Weaknesses created by HetNets include the potential for man-in-the-middle attacks, where the smallcells and access points are hijacked to enable a hacker to interrogate and control network traffic flows. The threat is exacerbated in cases where network interfaces (such as the X2 interface between base stations) are not protected. Value chains are becoming fragmented. The trend is not specific to LTE, but it is becoming more commonplace in mobile broadband services and complicates service delivery in terms of orchestration, management and security. Security must be orchestrated among many more parties, and operators must anticipate that not all of the parties necessarily have adequate security regimes. It is critical that widely adopted solutions place an emphasis on specific security risks, particularly concerning fraud management and revenue assurance. For example, third party applications require near real-time credit management solutions to ensure adequate revenue management capabilities are in place. This is particularly true for digital services, which service providers are expected to deploy in the future, with many parties involved. User identity and profile

management with mobile broadband, one user might have many devices. This is already emerging with players like AT&T and Verizon launching data sharing solutions. In the case of machine-tomachine (M2M) services, it is conceivable that thousands of connected devices could be associated with an individual subscription contract. Adding intelligence As service providers seek to add intelligence to their services, profiles and identity are important tools in the arsenal. LTE introduces the HSS network element and uses Diameter signaling to coordinate subscriber profile information among the HSS and other legacy databases such as the authentication, authorization and accounting (AAA) and HLR. However, with services becoming more complicated and having to coordinate with legacy networks such as 2G/3G, identity and profile information is becoming fragmented. Subscriber identity information resides in mobile devices, the HSS, AAA and HLR nodes, and in application servers. This fragmentation could result in new inter-working functions, which could compromise the security of data about subscribers. As subscribers data, profile and identity management becomes more complicated, it is crucial that service providers implement robust security solutions and protect their customers

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trust in them. Ultimately trust combined with unique customer intelligence could prove to be one of service providers most valuable assets. By having open architectures that ensure rich application environments, smart devices are prone to attacks similar to those on computing devices. These include viruses, Trojans and other malware, which might not only disrupt services and enable identity theft, but target the LTE networks themselves. In conclusion As LTE continues to convert mobile networks from telephony to broadbandcentric architectures, service providers must anticipate and address vulnerabilities that are likely to emerge and compromise established fraud management and revenue

assurance regimes (see panel below regarding work on risks arising from LTE, as well as pages 52 and 59 for how TM Forums Collaboration Community is evolving its tools and best practices for both revenue assurance and

over the last year, focusing its efforts on securing the cyber supply chain and the five most commonly breached vulnerabilities based on extensive mining of research from many sources, followed by figuring out the most

By having open architectures that ensure rich application environments, smart devices are prone to attacks similar to those on computing devices.
fraud management). Service providers must carefully evaluate and respond to security vulnerabilities that these innovations create. This is particularly important in cases where third parties are involved and service providers havent got end-to-end control over the service delivery value chains. The Forums security management team has been working hard on these issues pragmatic and economic approaches to dealing with them. TM Forums latest edition of Securing our connected world explores and explains these issues and their remedies and can be downloaded free, by all employees of the Forums member companies from www.tmforum.org/ securingourconnectedworld

Risk management methodology addresses LTE issues


One of the chief aims of the TM Forum Revenue Assurance Impact Measurement Catalyst project was to build a standard model and best practice to measure the overall financial impact of revenue assurance so service providers can better prioritize and budget their activities. Catalysts are short-term collaborative projects that strive to create solutions for critical industry operational and systems challenges, typically defined by service providers. The solutions are demonstrated at TM Forum Management World: this Catalyst had two phases in 2012, demonstrated in Dublin at TM Forum's Management World and Orlando at TM Forum's Management World Americas. Both projects had a large team of service providers and industry vendors come together to define, develop and validate this new model. The goal is to create a framework of risks and turn it into a tool; not simply list problems but recommend controls. The list of recommended controls will increase and change as the project progresses. Already TM Forums revenue assurance program has built an impressive list of general risks, plus sub-level, detailed risks that apply to LTE specifically. Other areas will be added. For more information about the Catalyst project, please go to www.tmforum.org/MW2013CatalystRA The findings from the Catalyst project will be contributed to the TM Forums Revenue Assurance Guide Book (GB941 with a new Addendum F see www.tmforum.org/GB941F for more information) and establish a basis for a benchmark study.

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New horizons

M2M: the rise of the machine


How and where are machine-to-machine communications already in use and whats next on the agenda? Phil Marshall, Ph.D., looks at how smart grid is shaping up and what needs to happen to make it reality.
While potential machine-to-machine (M2M) applications are vast and will ultimately impact all facets of digital lifestyles, there are several applications that are seeing strong growth:
n Smart

grid applications use M2M device sensors to monitor and support the management of electrical transmission and distribution, and on premise energy management solutions.

n eHealth

(see article on page 72) addresses a variety of healthcare needs, including remote video monitoring in emerging markets, age-assisted living and fitness solutions, and the remote monitoring of

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New horizons

chronic illnesses such as heart disease, diabetes and respiratory conditions. n Connected home1 solutions incorporate a variety of capabilities, including surveillance and security, age-assisted living and energy management functions. n Digital signage provides advertising and merchandizing capabilities, particularly in the retail and financial services markets. n Connected vehicles and telematics provide invehicle security, navigation, diagnostics, collision protection and in the future will incorporate infotainment services. n In-field sensor networks, provide field surveillance capabilities in a variety of industries such as oil and gas. n Agricultural applications, which provide a variety of sensor-based solutions for animal management and production monitoring. Here we focus primarily on smart grid applications, with particular emphasis on the operational requirements for smart grid implementations, plus strategies for device and service management, security, data and analytics, and partnerships.2 Fueling smart grid Smart grid technology overlays two-way communications, and data collection and analytics capabilities on power grids. In markets like the U.S. and in Western Europe the key driver for smart grid is to

manage power consumption. In markets like India and Brazil smart grid is needed to improve the reliability of service and tackle theft, which is common in emerging markets. In India it is estimated to equal 40 percent of all generated power. While discussions regarding smart grid tend to place greater emphasis on smart metering, smart grid solutions impact all facets of the grid, whether in terms of energy management or transmission and distribution. Utility companies have had relatively advanced automation capabilities for their transmission infrastructure using supervisory control and data acquisition (SCADA) technology. Smart grid enhances these capabilities and brings a variety of automation capabilities to transmission and energy management. Of particular importance is automated distribution, which provides intelligent, two-way monitoring and management of transmission infrastructure. It is needed for energy conservation and reliability initiatives including: n Demand response, which monitors and proactively manages industrial and residential loads by altering appliance consumption. For example during a peak load period, a utility might remotely turn off a consumers hot water cylinder or increase the thermostat settings for air conditioning.

n Distributed

power generation, which allows distributed power sources (such as the excess power in an electric car, or energy from a small wind farm) to be put back into the grid or operated independently as a micro-grid during blackout conditions. n Improved distribution network management by reporting alarms and other fault conditions and enabling traffic monitoring to enhance optimization initiatives. Smart grid solutions incorporate a variety of premise equipment, which includes:
n Smart

Smart grid solutions impact all facets of the grid, whether in terms of energy management or transmission and distribution.

meters that enable utilities to regularly monitor power consumption (such as every 15 or 30 minutes) and include two way communications so power management sensors can be enabled (that is, for proactive load management solutions such as demand response). n Energy management systems that enable consumers to monitor their energy consumption n Smart appliances whose duty cycles and power consumption can be proactively managed. The commercial incentives of smart grid solutions for consumers and enterprises are varied. Those that are energy conscious are compelled to invest in smart grid solutions to manage consumption. In markets like
TM Forum's Quick Insights report, Connected Home: Does cable hold the key? was published in January 2013. It is available to all employees of our member companies who register on our website and for nonmembers to buy from: www.tmforum.org/ QIConnectedhome 2 For information about the other sectors, please see TM Forum's Insights Research report, M2M strategies for communications service providers. It can be accessed, on the same terms as outlined above, at: www.tmforum.org/InsightsM2M
1

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New horizons

the U.S., many consumers are seeking offerings that combine smart grid with home security solutions. Companies like AT&T have launched advanced home security solutions that leverage wireless technology and are well positioned to deliver smart grid capabilities as part of the overall offering. Transforming for smart grid Smart grid is disruptive to traditional utilities and impacts virtually every aspect of their enterprise. It challenges traditional operational silos by aggregating management and intelligence across distinct organizational groups. Management functions that would have traditionally involved field operations are automated and flooded with granular operational data that must be aggregated, queried and interpreted. Utility companies are often regulated with guidelines aimed at ensuring reliable service delivery and tariff thresholds that are managed fairly. In some cases in the U.S., regulations have restricted smart grid initiatives, particularly in cases where utilities have been aggressive in passing smart meter costs to their customers. Green energy initiatives that have been catalyzed by governments and regulatory bodies are coming to fruition. Many of these initiatives have been accelerated by the declining cost of essential technology and following the nuclear power plant meltdown that occurred in Fukushima,

Best practices, tools and standards to make smart grid a success


Some measure of the terrific interest in smart grid in both the communications and energy industries is reflected in the fact that TM Forums Smart Grid Community Group has 4,200 members and is growing rapidly. In particular, there is great interest in how each can contribute to and learn from the other for mutual benefit. The energy industry is showing great enthusiasm for any standards, tools and best practices that can be adopted and adapted in the interests of speed, interoperability, keeping costs down, operational and business agility, and making the most of the opportunities smart grid offers to all parties from supplier to consumer. The online Community Group offers a forum for all interested parties who are members of TM Forum to get together to share ideas and opinions, and to influence and have input into how the Forums Frameworx (see page 93) suite of standards-based tools and best practices (see page 52 for information about our Revenue Assurance Maturity Model), and other collateral and activities can be expanded and refined to meet the needs of smart grid. For more information or if you would like to join the Group, please go to www.tmforum.org/ community/smartgrid or contact Craig Bachmann, Director, Cable, Utility, and eHealth Care Programs via cbachmann@tmforum.org Japan in March 2011. This has been particularly beneficial to wind and solar, and has created opportunities for companies like Siemens to develop virtual power plant solutions that combine small alternative energy generation sites to create a large virtual grid. These virtual grids and the future ability for customers to pass energy back into the grid from excess power sources, such as electric vehicles, changes network capacity management and forecasting. In particular, as the variety and span of energy sources increase, advanced analytics tools will be necessary. New business models Innovative utility companies like SDG&E and Duke Energy/ Progress Energy in the U.S. are relatively advanced in their transformation efforts and recognize the operational and commercial potential that smart grid offers. To date, these companies have focused on integrating the various capabilities offered by smart grid. In addition, they are rapidly transforming their commercial and operational structures accordingly. Many energy utilities struggle to find an adequate business case for fully fledged smart grid solutions because of massive capital investments and operational upheaval involved. While there are tremendous opportunities for energy utilities to implement innovative solutions that capitalize on applying analytics to the data sources in the offing, it will be many years before utilities are likely to fully realize these opportunities. Current business models are essentially focused towards enabling smart connectivity and integrating renewable energy initiatives and in some cases creating virtual power plants (such as Siemens in Germany). The Smart Grid Consortium (SGC) has developed a sophisticated business modeling tool for evaluating smart grid business cases. The SGC model demonstrates that while the business case for smart grids can vary between regions and depend on other factors, such as weather conditions, tremendous business value comes from reducing peak load using demand response techniques (such as adjusting programmable communicating thermostats). However, since it is unclear whether consumers will accept demand response solutions, energy utilities cannot be certain of the implied commercial opportunity. The primary business value proposition for smart grid solutions are different in emerging markets where theft management has a tremendous impact on the

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business case, as does the notion of offering prepaid services to customers with poor credit (for example, paralleling the prepaid offerings that have enabled mobile phone services to proliferate in emerging markets). Companies like GridGlo have data analytics solutions that combine energy consumption data with other information sources, such as social networking, to create customer profiles. In particular, with smart metering, energy utility companies will increase the frequency of metering relative to traditional methods from four times per year to once every 15 to 30 minutes. This information itself provides a granular view of power consumption, which can be combined with customer profile information derived from other sources such as social networks and potentially GIS data such as weather patterns. This information might be used for optimization initiatives that achieve the necessary reductions in peak power consumption and possibly provide insights into the likelihood that customers will embrace demand response initiatives. Energy utilities are increasingly seeking partnerships with major IT firms for data and analytics capabilities and communication service providers to address the connectivity and the data management demands associated with smart grid

implementations. Traditionally the relationships between energy utilities and communication service providers have been visceral, with energy utilities questioning whether communication service providers can deliver adequate reliability and address the specific connectivity requirements associated with smart grids. More recently, energy utilities have been partnering with communication service providers to deliver cellular connectivity and share infrastructure deployment costs, such as in rural areas where the economics for communications networks is more challenging. Once energy utilities have their smart grid solutions established and have cleared the hurdle of addressing the initial business case challenges, they are likely to advance their data mining and analytics to:
n Improve

By leveraging rich data analytics and capitalizing on a granular understanding of supply and demand, energy utilities will ultimately be capable of optimizing service delivery and capitalizing on a variety of conventional and micro-grid power sources. In addition, data analytics will allow energy utilities to implement sophisticated energy management solutions and deliver targeted market offers. While it will take time for these solutions to gain mass market traction it is important that energy utilities and their partners plan for the evolving demands and requirements of their smart grid implementations. Big data and smart grid As smart grids gain market scale they will generate masses of data. Although the data collected from each meter read is only 8 bytes, meter reads are collected every 15 to 30 minutes. While aggregate data volumes are likely to be manageable, the record volume will require the data be stored in unstructured as opposed to relational database formats. This calls for 'big data analytics. There are several data analytical capabilities needed for smart grid implementations, which include:
n Data

their operations. Examples include preemptively identifying and rectifying anomalies such as poor voltage and reactive power conditions in the grid, outage management and better allocating operational resources. n Deliver innovative commercial offers such as prepay and rate plans that incentivize energy conservation. n Optimize the overall grid, including load balancing and forecasting, elimination of theft and enhancements to demand response systems.

on the basis of transformer connections to identify loading patterns, or by customer market segment to investigate peak loading conditions and identify demand response pools. n Consumption trend analysis: to enable individual users to evaluate their energy consumption relative to historical figures and market precedents. Basic trending analyses and incentive schemes have been piloted by a variety of energy utilities. These pilots have been demonstrated to be effective in driving energy conservation so long as incentives are appropriately targeted. n Correlation analysis: to identify statistical relationships between data sets to enhance predictions and forecasting, evaluate customer usage patterns and identify market strategies. Examples include correlation between ambient temperature and power consumption to conduct sensitivity analyses for peak load conditions, correlation trends between customer market segments and power consumption, and in identifying potential outage conditions.

grouping: where discrete data points are grouped according to specific attributes. For example, the data from all smart meters might be grouped

Data analytics will allow energy utilities to implement sophisticated energy management solutions and deliver targeted market offers.

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n Forecasting:

This leverages historical data and correlation analyses to predict future consumption. Forecasting also plays a pivotal role in impact analyses, such as in identifying the likely outcome of demand response initiatives, the implications of population growth and the impact of partial network outages. n Exception reporting: that uses analytics to identify anomalies in the data. This might be as simple as identifying a missed meter reading or involve more complex pattern and rootcause analyses of network outages. The trending of exception reports can also be used to identify and preempt conditions for future breakdowns. The implications of big data analytics on energy utility operations are profound and will drive massive business and operational support system (B-OSS) upgrades, and organizational changes to eliminate legacy silos and supersede manual forecasting, planning, and optimization functions. Potential security threats Enabling networked twoway connectivity among grid components and extensive data storage and analytics capabilities will enable tremendous commercial and operational benefits for energy utilities. However, these capabilities also create a slew of security concerns both in terms of

the vulnerability of the grid and protection of sensitive customer information. Based on precedents from other industries, energy utility companies can expect their network security expenditures to increase to 15 to 20 percent of their overall IT budgets. The IT budgets themselves will also see dramatic increases. IT security organizations will require cross functional teams that understand big data security, the requirements to protect the boundaries, bridges and peripheries of smart grid connectivity networks, and the salient operational characteristics of smart grids and the associated security implications. Energy utility companies can leverage best practices that have been developed among other industries. For example, communication service providers have extensive experience in protecting sensitive customer data, which is strictly regulated. Energy utilities can leverage the best practices that have been adopted by communication service providers to protect their big data.

Large multi-national enterprises generally have established security taxonomies for protecting their networks from attack. These best practices can be adapted and leveraged for smart grids. Particular attention must be paid to ensuring that the security taxonomies reliably account for the protocols, policies and functions specific to smart grid architectures and operations. The security demands for smart grids will continuously evolve to incorporate new innovations and address new vulnerabilities. These demands will drive industryspecific standardization and create the need for continuous auditing initiatives. Conclusion Smart grid investments will increase over the coming years and will require energy utility companies to undergo massive commercial and operational transformations. The drivers for smart grid initiatives will continue across all regions, whether driven by regulatory mandate

or with commercial intent. Once deployed, smart grids will provide tremendous efficiencies in terms of analyzing consumption and enabling demand response initiatives; grid resilience; and the ability to integrate disparate energy sources to enable virtual power-plants and micro-grids. Many energy utility companies will struggle with the organizational disruptions and adequate business case justification for smart grid solutions. Increasingly they are compelled to partner with infrastructure and IT companies and communication service providers to reduce costs and acquire new competencies. As these partnerships become more commonplace, and as more solutions are deployed, business case justifications will improve. This transformation is crucial for future energy demands and will revolutionize energy distribution in much the same way as the Internet has revolutionized communications.

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eHealth

saving lives through partnerships and innovative ecosystems


Over the past few years we have witnessed incredible growth in the use of communications technologies in health systems worldwide. For a sector of the global economy that has historically been viewed as a late adopter of new technologies, this is nothing short of extraordinary. Jody Ranck, DrPH, looks at whats happening, and its implications for health care and the communications sectors.
By 2011 the World Health Organizations survey of 114 member countries revealed that at least 83 percent of them had one or more major mHealth interventions.1 The ubiquity of cellphones is driving a surge of interest in the overall eHealth ecosystem, coming at a time when health systems are under growing pressure to both improve the quality of care and lower its cost. The global market for eHealth has a number of different sector drivers, which vary across the spectrum of industrialized and developing countries. Many analysts and long-time observers of the mHealth scene view several countries in Africa, Asia and Latin America as the most robust early adopters. In countries like Kenya, South Africa, and India, for example, the healthcare system fails to reach the entire population and the consequence is spiraling health problems driven

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New horizons

by infections from HIV, tuberculosis and malaria, to name a few. The rapid adoption of mobiles created a way to bring health education, medical reminders for drug adherence regimens, and even diagnostics into the hands of the poor and frontline healthcare workers. In more industrialized contexts the healthcare challenge is often the inverse: how to suppress demand for health services in tertiary care providers such as hospitals where the cost of care for chronic diseases is driving healthcare expenditures. In the U.S., the total cost of chronic diseases account for nearly $1.3 trillion annually2. The global burden of chronic diseases is expected to rise to $47 trillion by 2030 according to a recent report from the World Economic Forum (WEF) and the Harvard University, School of Public Health3.This is for cancer, diabetes, mental illness, heart disease and respiratory diseases alone. Moreover, according to the WEF report, the economic burden of chronic diseases is enough to sink most economies. Heading off the crisis The former Administrator for Medicare and Medicaid Services in the U.S. once observed that information is care when we speak of healthcare. For many people in low-income countries, information is a matter of life and death. In South Africa we have seen impressive results from the use of mobiles

in the area of HIV through organizations such as the Praekelt Foundation, whose txtalert program helped ensure adherence to complex anti-retroviral drug regimens. Another example is Cell-Life, one of the few mHealth systems from a developing country to scale nationally. It is helping test over 15 million for HIV. There is now a move in the global health arena to provide universal coverage of healthcare to the population. eHealth, particularly mHealth tools, will be essential to the underlying business model to create the efficiencies that can extend scarce healthcare dollars to the entire population. New products such as micro-insurance and microsavings can be harnessed with mobile money products in the healthcare sector to enhance access to care. In China, China Telecoms mHealth services offer easy access to care through scheduling services that have become popular. According to a recent Institute of Medicine study, up to $750 billion a year is lost due to fraud and inefficiencies4. Paper records, Medicare fraud, data silos and a host of other administrative ills cost the U.S. what it would take to cover the entire uninsured population eighttimes over. Many of the solutions offered by the communications industry are highly suited to relieving the pain points in health systems, which has become more obvious as healthcare has become

a far more information intensive industry than ever. In my book, Connected Health, I note how the algorithmic revolution that has fundamentally altered the landscape in music and entertainment, finance, and most other sectors is now disrupting healthcare as we know it. The very meaning of health and healthcare will change dramatically in the coming years. While communications

examples will illustrate where things are headed provided the regulatory frameworks and reimbursement policies can support growth of the overall ecosystem. Scanadu, a company spun off from NASA, has been one of the lead players in the latest X-Prize to produce the medical tricorder. Recently it announced the 2013 release of its first device, the Scout (which will cost about $150), a small handheld device

Some mobile network operators are playing major roles as thought leaders in helping both technology providers and healthcare systems navigate the changes ahead.
companies are right, for legal reasons, to dismiss the notion that they are healthcare providers, they are de facto healthcare providers through the products and services that enable the public to access care in new ways. This will have important implications for brands and customer relations in ways we can scarcely imagine at the moment. Innovation and eHealth Mobile devices are increasing much more than simple phones, and in the healthcare sector they are rapidly becoming a sensor, diagnostic, telehealth portal, and perhaps even a tricorder on par with anything seen on Star Trek. Just a few
1 2

which can be held next to the temple to record pulse, pulse transit time, heart rate, heart rate variability and blood oxygenation. It will soon be followed by devices for respiratory issues and urinalysis all of which can be done in the home. Qualcomm released its 2Net hub that provides a quick solution to integrating health devices in the home all signs of the growing expansion of connected devices that can monitor vital signs, falls and offer teleconsultations in the home. The medical home is another area of dramatic growth in the coming years. Keeping people out of the hospital is going to be a major push as the incentives

hwww.who.int/goe/publications/goe_mhealth_web.pdf 2010 Survey of Health Consumers: Key findings, strategic implications. Deloitte Center for Health Solutions, May 2010. 3 www.weforum.org/reports/global-economic-burden-non-communicable-diseases 4 www.nap.edu/catalog.php?record_id=13444

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New horizons

New multi-cloud management packs for digital services


This series of practical guides are part of TM Forum's wider Digital Serivces Initiative (www.tmforum.org/digital). They are available free for all employees of our member organizations to download by registering on our website from: www.tmforum.org/dsi/multicloudmgmt

towards prevention and avoiding unnecessary re-hospitalizations grow. Machine-to-machine (M2M) applications for remote patient monitoring will be a major market as aging in place becomes the norm for baby boomers expecting to grow old in a different manner from previous generations. In Europe some mobile network operators are playing major roles as thought leaders in helping both technology providers and healthcare systems navigate the changes ahead. Vodafone, Orange and Telefnica all have substantial investments in the sector and have taken the lead in identifying the barriers to policy and consumer adoption that need to be overcome to transform healthcare systems. They include matters like reimbursement, consumer awareness and interoperability issues. Many recognize the need to build a cooperative ecosystem that can bridge the technology

and healthcare divide that exists. In some markets such as the Philippines, India and South Africa, there are nascent efforts to create national stakeholder groups that can work to develop policy frameworks and coopetition to put the necessary building blocks in place to grow the market in a sustainable manner. In some cases, where the front-end of mHealth programs has gotten ahead of policies and foundational infrastructure requirements, weve actually seen governments call a moratorium on mHealth pilots, as was the case recently in Uganda. The future As the number of devices and sensors in the digital health landscape grows, the key challenge will be how to use the data to drive efficiencies and improvements in care while maintaining adequate privacy and security.

Enhanced interoperability often means greater risks and managing these risks will be central to building trust from patients, clinicians and payers going forward. Big data is a big topic virtually everywhere (see pages 16 and 26) but in healthcare the volume of data is enormous. Genomic data, health Internet of things, M2M devices in hospitals, clinical trials, open data from government data repositories, electronic medical records and data collected by the patients themselves from health and wellness devices are creating the proverbial data deluge. Healthcare systems have many silos, or vaults as some would have it. Data governance and management are critical to the overall connected health enterprise as they can ease the transition to the cloud computing (see panel above) and big data realm, beyond conventional data warehouses.

Already weve seen advances in clinical insights, in some cases from streaming data that had previously been discarded prior to the advent of big data and data analytics tools, which have been developed in the last several years. Data has the potential to save many lives, but the healthcare sector is poorly prepared to manage the move to the new world of digital health in most cases. This is where partnerships with the communications sector will loom large. In fact, innovation may be less about new devices in the long run and more about policy innovations and building innovative ecosystems (see panel below). They can be designed for the challenges the healthcare systems must tackle as progress has made the world both an older and younger place, interconnected in ways that could cause big healthcare problems to happen faster, and on a larger scale.

TM Forum Introductory guides


Creating an innovative organization (Version 1.2): This introductory guide is aimed at individuals and companies who want to improve their level of corporate innovation a fundamental need in a digital world where new ideas and concepts are being generated daily and the pace of change is accelerating. Innovation is the key driver of economic growth and is all about exploiting ideas rather than original inventions. The guide is less about inventing new things much of the basic technology underpinning the digital economy already exists its about innovating better and more effective products, processes and services to create economic value. For more information, visit: www.tmforum.org/FXintroguides/Innovativeorganization

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Want to learn more? Visit tmforum.org/CareerCertification or contact education@tmforum.org

Everything that can be digital will be.


Weve seen the future. And its digital. In just ten years, the way we communicate, consume information and entertainment has been changed forever. And thats just the start. The Digital Revolution is transforming our personal and professional lives. We demand simplicity, but the complexity behind our interconnected digital lives is only growing. TM Forums Digital Services Initiative focuses on overcoming the end-end management challenges of complex digital services, enabling an open, vibrant digital economy. For more information on the TM Forum Digital Initiative visit www.tmforum.org/digital There are five core principles of the Initiative:

New horizons

Apps but not as you know them


Part 1: HTML5 looms

HTML5 promises to open up the mobile application world


HTML5 is set to revolutionize the mobile Internet by replacing native apps, which only run on a specific device, with web-based apps that will run on any. This could and should open up the mobile world and create a level playing field for content providers, developers and operators, and maybe ensure that walled garden app stores are a thing of the past, giving operators another chance to make money from apps. Rod Newing investigates.
If you think that HTML5 is just a web protocol and nothing to do with you, think again. Mobile applications are a crucial element of the competing walled gardens, managed by Apple and Google and latterly Microsoft. Each has its own app store, advertising network, development platform and services, leaving no value role for communications service providers. As Nick Dillon, Senior Analyst, Ovum, observes, Native apps make up for a shortfall in web standards on mobiles. HTML5 promises to address some of those issues. Market Trends: Real Opportunities for Communications Service Providers Hide Behind the HTML5 Hype, from Gartner, says that Communications service providers are keen to launch new digital services to generate new revenue streams and/or reduce customer churn. Tier 1 CSPs expect 10 percent of their revenue to come from new digital services by 2017. HTML5 will be the most apt technology to underpin the development and distribution of these services. What is HTML5? HyperText Markup Language (HTML) is the standard markup language for structuring and presenting content. It is issued by the World Wide Web Consortium (W3C), which published the complete definition of HTML5 in December 2012. Though not yet a standard, its features are now complete so businesses and developers can use it in anticipation of its eventual release in 2014. Its W3C working group is co-chaired by Apple, IBM and Microsoft, with Google acting as editor. Many features of HTML5 have been built to run on low-powered devices, such as smartphones and tablets. It forms the cornerstone of the Open Web Platform, a full programming environment for cross-platform applications.

Native apps make up for a shortfall in web standards on mobiles. HTML5 promises to address some of those issues.

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It will replace native apps, which are designed to run in a single device environment and are installed in the devices memories. They were developed to take account of small screen sizes and limited keyboards. In an HTML5 web application, all or some parts of the software are downloaded from the web each time it is run. It can run within the devices web browser or as a client application that resembles a native app. TM Forum Quick Insights, Driving Innovation: Seven ways to thrive in the digital world1 explains that HTML5 applications will access the underlying capabilities of the phone that previously were only available to native applications. It is possible that in developed markets, well see users reacting against being forced to choose between competing, closed ecosystems, says the report, which is where we seem to be heading with Apple, Google and Microsoft, with the latter two moving into producing tablet devices intended to compete with the iPad, iPhone and iTunes. Yotam Ben-Ami, Director, Open Web Devices, Telefnica Digital, explains that HTML5 solves the discoverability problems with native apps. App stores already have hundreds of thousands of apps and they will soon have millions. Unless the user knows the name of the app to search for, they cannot find what they want. In contrast, the web has hundreds of millions of websites that can

be found relatively easily through a search engine. HTML5 will also help to mitigate the problem of fragmentation. Users may not have the latest version of their operating system or may have mid- to low-end smartphones, and so cannot run the latest native apps. Many of the downloaded apps dont work on the device, says Ben-Ami. However, the web has handled fragmentation for a long time, with different formats and different screen sizes. We are going to see a much more streamlined ecosystem with HTML5 than with native apps. HTML5 Adoption, Fact or Fiction: Developers Wade Through the Hype, from Kendo UI, a division of software development company Telerik, finds that 82 percent of developers believe it will be important within the next 12 months and 63 percent are already working with HTML5. Initially they will be using cross-platform development tools that will run HTML5 apps natively in a wrapper.

Firefox OS An example of how the web is preparing to open up through HTML5 is demonstrated by browser company Mozillas development of Firefox OS, a web-based operating system for devices. Its initiative was quickly joined by Telefnica Digital, then Deutsche Telekom, Etisalat, Smart, Sprint, Telecom Italia and Telenor. The first device manufacturers to commit are TCL Communication Technology (including the Alcatel One Touch brand) and ZTE Corporation.
1

With native apps you need twice the memory and more processing power alongside the operating system kernel and the web engine, says Brendan Eich, Chief Technical Officer, Mozilla, but with Firefox OS we have no native stack. Rather than compete with existing smartphones, Mozilla is initially targeting the low end. It is a hole in the market that has poor experience. This can be filled with web apps, which start quickly and work well offline. The OS can scale up to smartphones and tablets or

TM Forums Quick Insights report, Driving innovation: Seven ways to thrive in the digital world, was published in August 2012. It is free for all employees of TM Forum companies member to download and for non-members to purchase from www.tmforum.org/qidrivinginnovation

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down to feature phones soon. Although Telefnica has contributed open source code, Ben-Ami hopes that Mozilla OS will be fully leveraged by the other carriers. We are not looking at this as a competitive tool, he says. We are simply trying to distribute an operating system that will add value to all the stakeholders in the ecosystem, including the carriers. Gartners report says that smartphones constitute only 34 percent of mobile device shipments worldwide and in some developing markets more than 90 percent of devices are feature phones. Initiatives like Mozilla OS that reduce the cost of mobile access to the web would result in more consumers accessing apps, services and the mobile Internet, irrespective of their budget, and developers would have a much wider market to target. The report also says that Firefox OS will offer Telefnica the freedom to deploy its full range of digital services, from content streaming, personal cloud and mobile web apps to mobile commerce. Mozilla can provide the software foundations (application program interfaces or APIs) and the developer ecosystem, while Telefnica can offer OEM [original equipment manufacturer] deals, distribution and monetization channels, such as web stores. New business models HTML5 will allow communications service providers to offer services to

more consumers and could end the need to subsidize handsets. With mobile users able to access any app on any web site, Amazon, Apple, Google and Microsoft will

have local credit cards and banks, but users may not want to use Google Wallet or PayPal. Operators can provide direct-to-bill payments and can provide over-the-top payments

HTML5 will allow communications service providers to offer services to more consumers and could end the need to subsidize handsets.
have far less power to make the rules. HTML5 wont just solve problems, but create value through innovative uses that we cant necessarily imagine today, says Ben-Ami. Open platforms enable things like shared social experiences, that you can superimpose on location sensitive platforms For example, Web Real Time Communications (WebRTC), supported by Google, Mozilla and Opera, enables with real-time multiway communications, including audio, video, data, gaming, and so on. It can be done even better if the operators are involved, says Eich. If they simply provide a dumb pipe all they can do is expand their network capacity to accommodate over-the-top packets. However, if they are involved they can provision for use and guarantee quality of service. He also sees payments being a big opportunity (see page 87), as many areas of the world dont have national credit cards. Many emerging markets, particularly Brazil, with growing numbers of middle class consumers, mediated through a browser. Roger McNamee, Cofounder, Elevation Partners, a private equity media, entertainment and technology firm, says in his blog (http:// rogerandmike.com/) that most new web app models can be monetized at better rates than the current web standard. He anticipates advertisements searching the page they are displayed on to offer relevant products. Advertisements could also display payment buttons so that web sites could create demand and satisfy it without the consumer ever leaving the page. Such lead generation has a much higher market value than advertising. Gartner suggests that communications service providers could offer web developers marketing and merchandizing support and bundle their apps with data plans and devices. They could also help developers enrich the quality of their HTML5 apps and differentiate them through the use of network APIs, such as billing, location, MMS/SMS and user context. For example, being able to offer a single bill for all HTML5

apps consumed on multiple devices or screens via direct communications service providers billing. They could also provide security services in the form of curating HTML5 apps, mobile device management services, and so on to security-conscious enterprises and brands. Breaking down the walled gardens around the app stores is said to give power back to the communications companies. However, Dillon says it is more likely that dominant companies, like Google, Facebook and increasingly Amazon, who were born on the web, will become more dominant. It wont play very well into Apples business model, he says, where native apps are used to encourage customers to keep buying its expensive devices. Clearly, increased use of web apps and the fact that they are more dependent on the network than locally installed, native apps, will boost network traffic. Operators will need to prepare their infrastructure to avoid loss of performance. The time is now Service providers need to explore new profitable digital services through new business models, partnerships and innovation. The time to experiment is now, says McNamee in his blog. Failures dont cost much at this point and wins are likely to translate into businesses advantages that can be compounded over time.

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New horizons

Apps but not as you know them


Part II: Wheres the money?

Targeting smaller firms with bundled connectivity and apps


Seeing HTML5 simply as a protocol for browsers is largely to miss the point. As we saw in the first part of this article, it has the potential to change business models and even open up new revenue streams. By Rod Newing.

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The PC, in both its desktop and laptop forms, is coming to the end of its natural life. For Q4 2012 Gartner recorded a 4.9 percent decline in shipments worldwide and IDC a 10.7 percent decline in Europe, the Middle East and Africa. Tablets have dramatically changed the device landscape by causing PC users to shift consumption to tablets rather than replacing older PCs, says Mikako Kitagawa, Principal Analyst, Gartner. There is an increasing move away from providing employees with a standardized PC and mobile phone, towards allowing them to bring your own device (BYOD see page 47). Hence often employees can use whichever smartphone, tablet, or even PC, they choose in the workplace. This is only made possible by the move of corporate computing to the cloud, whether internal, external or hybrid, and HTML5 having the potential to bring cloud applications to the mobile world effortlessly. HyperText Markup Language (HTML) is the standard language for structuring and presenting web content. Version 5 is set to revolutionize the mobile Internet by replacing native mobile apps, which only run when downloaded to a specific device, with webbased apps that will run from any device without downloading software that resides on the phone. Many features of HTML5 are

designed to run on lowpowered devices, such as smartphones and tablets. Camille Mendler, Principal Analyst, Informa Telecoms & Media, has benchmarked 1,000 cloud software offerings from 50 providers in 38 countries. She found that 80 percent of them assume that the typical employee is working at a desk in an office using a PC. It is a shame and a fundamental problem that service providers are not yet addressing mobile workforces, she says. PCs are easy to address in the short term, but it isnt the total opportunity and is not going to build margin and differentiation. Gartners latest annual survey of CIOs top 10 technology priorities reveals analytics (see page 26) and business intelligence at the top (see page 53). However, the following priorities are all related to HTML5 mobile, cloud computing, collaboration, legacy modernization and IT management. Enterprises HTML5 offers enterprises, including communications providers, the opportunity to provide a new and simple interface (see page 92) to old mission-critical applications, delaying the massive task of replacing them. A single interface will run on any smartphone, tablet or PC and allow users to switch between them. I have seen HTML5 being used to build new user

interfaces to some of those complex, horrible-to-use, old historic green screen, back office applications that you find in large companies, says Warren Tucker, Managing Director, Network Services, Accenture UK & Ireland. It makes them much more accessible and easy to use on mobile devices. This gives productivity gains to workforces on the move and helps companies to use old systems without replacing them. However, internal apps will be supplemented by industrial-strength enterprise apps from third parties, which could include network operators. There's an App for That: The Growth of Enterprise Application Stores, from Gartner, predicts that by 2016, 60 percent of enterprise app stores will be primarily composed of third-party apps, rather than enterprise-developed apps. It also says that app stores are expanding from supporting mobile smartphone and tablet apps to PC-based apps. TM Forum itself originally developed separate apps for

each mobile platform to enable delegates to navigate around its Management World series of events, but then replaced them with a single app platform based on HTML5. It dramatically reduced the time and cost involved in producing a reliable app, says Nik Willetts, Chief Strategy Officer, TM Forum. The amount of development required was reduced and there was less testing, because we were more confident of the outcome on different platforms. You also have the option to deliver an app-like experience without formal approval by Apple, which is no small process to go through. Small is beautiful However, smaller and medium-sized enterprises (SMEs) represent a much more attractive market for communications service providers that want to offer apps for business, including those run by one person or a prosumer. Not only does their smaller scale make them more agile, but without established IT departments, Software-as-a-Service provided through cloud is an attractive option when they need to replace aging applications. TM Forums Quick Insights report Driving Innovation: Seven Ways to Thrive in the Digital World1 quotes Dr. Hossein Eslambolchi, communications industry

Internal apps will be supplemented by industrialstrength enterprise apps from third parties, which could include network operators.
1

Driving innovation: Seven ways to thrive in the digital world was published in August 2012. It is free for all employees of TM Forum member companies to download and for non-members to purchase from www.tmforum.org/qidrivinginnovation

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veteran and entrepreneur, estimating that there are 80100 million SMEs across the globe which could translate into a market worth $800 billion. The report also quotes Microsofts SMB Business in the Cloud 2012 report, saying that more than 60 percent of SMEs indicate they do not have the resources necessary to implement new technologies and services. Some 56 percent expressed a preference for buying IT and cloud services from a single source. Service providers are waking up to the possibilities of exploiting their expertise, trusted brand, relationship with customers and economies of scale for smaller businesses, says the report. Prosumers and SMEs present a big opportunity for communications service providers and if they dont meet their needs, someone else will. However, Mendler advises against treating applications as a separate business, with its own revenue potential. In the short to medium term, service providers are deluding themselves if they think they are going to make substantially more revenues simply from selling applications, she says. The primary purpose of offering applications is to secure their existing core broadband revenues. It will be more attractive for a customer to renew their fixed and mobile voice contracts if their provider also bundles in applications, storage, unified

communications and so on. This is getting towards the concept of utility computing, where a company goes to a single supplier for all its communications and computing needs. Tucker says that although some service providers could offer larger companies the opportunity to host their existing systems, or provide services to build new HTML5 interfaces for old applications and supply tablets and smartphones, a better strategy is to offer a business-in-a-box solution, particularly to SMEs. This could include customer relationship management and enterprise resource planning (ERP) cloud applications; call center-type services, like interactive voice response and call routing; and service desk and IT support. They are all capabilities that telecommunications operators have already, he says. It is very compelling to a small business, as it means they can provide the same sophisticated view to the customer as a big company without having to invest in expensive technologies. Mendler says that offering services for specific vertical industries is more prevalent in developing countries, where operators are more willing to take risks. She also sees new application opportunities developing in a wide variety of areas, including mobile device security; mobile video collaboration that is increasingly used for a wide range of activities,

including training and problem diagnosis; mobile marketing; forms for order entry, scheduling and reporting; worker tracking for accurate delivery times; and mobile worker security in emerging markets (an Informa analyst was kidnapped in Brazil and a Russian provider links mobile worker tracking with armed response). Service providers are unlikely to develop their own applications, but to bundle third-party services (see page 90). This means that the revenue must be shared, with the owner of the intellectual property taking the lions share. Mendler says that the operator might typically get only 20 percent revenue share in the first year and in the second year it could fall to 10 percent or even less, so they have to drive volume in order to get any type of margin. Get bundled up Systems integrators provide services to large enterprises and software companies target SMEs with their cloud applications. However, bundling applications with connectivity can give operators an edge. They should be able to provide superior performance and better security, says Mendler. If you are smart you sell a bundle together. Both large enterprises and SMEs need to limit the number of their providers, so it offers them convenience and overcomes their inertia. However, I am concerned that barely a third of telecommunications

providers I have looked at are proactively bundling broadband connectivity with an application or a suite of applications. As mentioned in Part I of this article, Telefnica Digital is planning to offer low-end smartphones through a joint venture with Mozilla. This will start in Brazil, where a smartphone is the primary means of Internet access for SMEs. It is a working tool for small business owners, so we are looking at how we can address their needs, says Yotam Ben-Ami, Director, Open Web Devices, Telefnica Digital. We must ensure they have access to the most relevant local content and applications with security and privacy. We will shortly conduct in-market research, but expect usage will change pretty radically between countries and between segments. There is no simple answer to meeting SMEs needs. HTML5 has the potential to allow operators to provide a bundle of services that will meet all the communications and computing needs of their customers. This could end up replacing internal IT functions. Operators need to focus more on the segmentation of their customer base, and the fact that it is becoming increasingly mobilized, in building successful application propositions, says Mendler. Based on my analysis, they are not developing their strategies appropriately at the moment.

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New horizons

Making social networks work as customer self-care centers


Annie Turner looks at how social networks are changing the face of customer care, in communications and other industries. There is no doubt that its popular with customers, but is it viable and sustainable for service providers?
Although social networks were not designed to be self-care centers for third parties, there are lots of reasons why providing customer support through this channel can work very well indeed. Capgemini1 outlines the potential advantages to organizations as being: customer loyalty; return on marketing investment; n reduced operating and labor costs; n increased IT efficiency (you dont need to build a new IT infrastructure to handle this channel); n more customer lifecycle moments of value.
n greater n improved

Being in the right place The potential is so great because, for a start, people would rather visit their favorite social network(s) than visit the gas companys website or that of the tax

office; its where they want to engage. So having a customer interaction channel via social websites shows a company is at least thinking about taking customers experience seriously. While engaging with customers in a place they like is a great start, its not anywhere near enough on its own. Consultancy Capgemini. is at pains to point out that simply having a social media account is not the same as having a social media strategy. Gartner reckons that more than 70 percent of IT-dominated social media initiatives through 2012 would fail because not enough attention had been paid to the design and human aspects. Successfully using social media as a self-care resource is about listening to how customers like to engage and making sure there are enough resources dedicated to it to make it work.

Avoiding password fatigue Second, people are likely to be frequent visitors to social network sites, so will probably know their login details like they know their own (real) name. There isnt the barrier of login fatigue to overcome. Ant Allan, Research VP, Gartner comments2, For an increasing number of Internet users, social networks are the Internet. Using login with Facebook or other popular social networks reduces friction and therefore improves users' experience of customer registration and subsequent login. For registration, the required personal information can be imported from users' social profiles, reducing if not eliminating form filling. Moreover, using a social network identity means users

don't have to remember rarely used passwords or endure convoluted password reset processes when they forget them. The importance of this aspect, it seems, cannot be overestimated. In the U.K., the government is considering allowing people to use their login details for social networking sites (as well as bank and mobile phone accounts) as proof of identity to access public services (gov.uk). This is part of what it described as an identity assurance program. The scheme is intended to provide a secure sign-in, without the government having to hold ID information on a centralized database, when people are applying for jobs or welfare benefits, paying car tax, applying for a passport or a student loan.

1 Trends in social media was published by Capgemini and is free to download from here http://www.capgemini.com/services-and-solutions/by-industry/telecom-media-entertainment/ publications/trends-in-social-media-no-1-in-a-4part-series/ 2 See www.gartner.com/newsroom/id/2326015 for more information about the research.

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New horizons

The mooted plan is to have this in place for 2013-2014, although the government is yet to announce which companies logins it will accept as proof of identity. Skeptics are concerned that it would be possible for someone with a fake social network account to easily construct an official identity for themselves. This concern is echoed by Gartner. The analyst predicts that by the end of 2015, 50 percent of new retail customers identities will be based on social network identities, rising from under 5 percent now. Gartner states that, in tandem with federation technologies and mobile computing, this will have a profound impact on the practice of identity and access management3 this year and beyond. This is good news for retailers as it should result in fewer failed registrations and logins, hence removing a barrier to more sales. On the downside though, all types of service providers will have to defend themselves against fraud as the practice proliferates. Gartner suggests service providers could put in additional controls where a retail site provides access to sensitive data and monetary transactions or just accept the additional risk because it is outweighed by the advantages. However, Allan adds, There will be increased demand for specialized vendors that support this use of social network identities, as well as for support for the Oath and Open ID Connect

specifications3 in traditional IAM [identity and access management] vendors' Web access management and federation products Mitigating these additional risks may offset any cost savings. This will be particularly pertinent for communications providers prepaid customers as the digital services ecosystem expands and becomes more complex: as the operator doesnt necessarily have the same level of data they would hold about a postpaid customer. Soon is not soon enough The third big advantage of customer support via social media, from the customers side at least, is that it should be much more immediate than emailing queries and considerably less wearing than going via a call center and interactive voice response. It also means customers can provide a public running commentary on how their query or complaint is being handled. Here again, there is good news and bad. The good news is that according to research done by Social Bakers4 carried out between the beginning of March and end of May 2012, The telecommunications industry is by far the most open and responsive industry on Facebook, it responds to 60.4 percent of questions from its fans. Mobile operator Personal Argentina answered the most queries but Claro in Guatemala reached a higher response rate (97 percent) and responds to fans faster in just 21 minutes!

Figure 1: Most socially devoted industries on Facebook


Telecom Airlines Finance Retail Electronics FMCG Automotive Alcohol Media
0% 25% 50% 75% 100%

60.4% 55.0% 46.4% 43.6% 41.5% 24.9% 18.8% 17.0% 5.2% 4.9%
Response rate

Fashion

Response rate The percentage of user wall posts that get responded by the company.

Data is taken from brand Facebook pages in these industries from March 1 until the May 30, 2012

Source: Social Bakers

Social Bakers research involved the monitoring of tens of thousands of companies on Facebook to set industry benchmarks to response rates and response times to queries. Telecoms next nearest rival was the airline industry with a response rate of 55 percent. While this is most encouraging, providing excellent customer service is a job thats never done and using social networks as a channel poses the old dilemma for service providers: improving customer experience affordably. The communications industrys history is littered with examples of how heavy investment has resulted in no

or minimal improvement in customer satisfaction. In 2011, having published its intentions to become much more customer-centric it was the first major Australian corporation to release its social media policy in 2009 Telstra missed its own targets on improving customer care, despite investing in social media staff 24/7/365. Fiscal 2012 was another story though, with analysts widely crediting Telstras adding 1.6 million new mobile customers to a combination of customer service and LTE. At this relatively early stage in offering customer service and support through social media, there is still everything to play for.

3 These issues are explored in TM Forums Quick Insights report, Identity and access management: Driving the business case, written by veteran security writer John Williamson, published in July 2012. It is free for all employees of the Forums member companies to download after registering on the website and for non-members to buy from www.tmforum. org/QIidentitymanagement 4 www.socialbakers.com/blog/656-top-6-most-socially-devoted-industries-and-brands

84 / Perspectives / www.tmforum.org

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New horizons

Mobile payments:
looking beyond the transaction
Mobile payment sounds like a simple concept, but many customers still dont understand whats involved. With lots of different payment offerings flooding the market, they are going to become more confused. Will the public embrace mobile payments and how can mobile operators make them pay? Vaughan OGrady investigates.
By the end of this decade billions of customers will be paying for goods and services using their mobile phones. Or at least, that is what retailers, credit card companies, platform providers, device makers, banks, mobile operators, specialist services and application developers are hoping. They foresee sales of digital goods such as games, apps, music and ringtones being superseded by sales of physical goods or specialized services supported and enabled by the massive takeup of smartphones. Thats why many players are already positioning themselves for a mobile payment market as the next growth area. Retail from petrol pumps to toys, coffee, rail tickets and more is a key target. It will involve the customer making the transaction in the physical location where the purchase has taken place or picking up goods, using the phone as verification of payment and ownership of the goods. Is this what customers want, though? A mobile payment system is no good unless you have consumer buy-in on a mass-market basis, says Eden Zoller, Principal Analyst, Consumer Telecoms, Ovum, and we just dont have that at the moment. Get your wallet out Still, that hasnt stopped V.me (Visa), Google Wallet, Isis (a U.S. operator consortium), Weve (a U.K. operator joint venture), Square (a card reader system), TabbedOut (a system for payments in restaurants

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New horizons

and bars), PayPal and many others from quickly moving to provide mobile wallets. A mobile wallet is a storedvalue account, using anything from a credit card or debit card to a gift card, a store card or a prepaid system on the phone as the enabling mechanism. The convenience and speed arising from combining QR images (a barcode of sorts that uses the camera in mobile phones) or proximity payment technology (such as near field communications NFC which Isis and Google are pushing), whereby a user waves a phone like a contactless card over a reader, might seem like an obvious winner. Yet, as Zoller comments, For most people mobile payments let alone mobile wallet is off their radar. Whats the business model? There is another big, vexed question for mobile operators

too wheres the money? Although there are lots of predictions around mobile payments and wallets and what a huge market it will be (Visa reckons half the transactions it processes will be carried out by mobile by 2020), how can network operators earn revenue from them? They are not likely to see a major boost to data traffic from mobile payments soon and it has become very clear that taking a cut from what are often modest transactions wont work: margins in the established payments chain are already wafer-thin and you cant charge someone more for paying by mobile. Digantam Gurung, Analyst, CCS Insight, points out that O2 (the Telefnica brand in the U.K.) is more concerned about building its brand and increasing loyalty by adding value to the transaction, than the transaction itself. Weve (the consortium

comprising EE, Telefnica UK and Vodafone UK) is looking beyond the transaction by saying from the start that theyre going to target advertising and marketing. For a company like Google, says Gurung, its part of the overall wider strategy about developing its advertising services. PayPal, Visa, MasterCard and others, meanwhile, cant afford to lose brand presence in a business they dominate. Elsewhere in the value chain, retailers could gain greater customer loyalty, new payment channels, convenience and customers spending less time standing in line. The problem is that the enabling payments infrastructure, whether for NFC or something else, isnt cheap and how do they know which mobile payments scheme to support? Retailers are also nervous about the expense of updating their software to

support mobile payment services and add-ons like coupons and special offers. Consequently, the majority of merchants are still sitting on the fence, says Zoller. In addition, NFC is not standard, although it is now designed into many new phones (though, significantly, not iPhones). GSMA is keen to promote SIM-based NFC, so that the operators keep control of it. At the same time, as Gurung points out, payment terminal manufacturers like Verifone and Ingenico are building NFC into their equipment, giving the retailer more options. In the meantime. While progress is slow in mainstream retail, a version of the mobile wallet has already taken off on a vast scale. In the developing world, SMSbased financial transactions notably bill payment and domestic remittances are seen by some as the basis

88 / Perspectives / www.tmforum.org

New horizons

of a mobile-led payment and banking revolution. There are many mobile money services in developing markets: Angel Dobardziev, Practice Leader, Telecoms Emerging Markets, Ovum, estimates there are about 150 services in countries as varied as Uganda, Paraguay, Pakistan and Barbados, offering everything from mobile-based payment for goods to funeral insurance. Mobile phone-based payments and savings make sense in countries where far more people have phones than bank accounts and there arent lots of other ways to pay. Even so, its not easy to implement. The business needs scale as the take per customer is likely to be very small. The next hurdle is encouraging usage; the company needs to start with simple offerings, and introduce new ones as they gain an understanding of what customers want. At the same time, the business has to build a network of agents, pay them and balance that against what you charge the customer. Getting either side of the equation wrong has serious consequences, as Smart in the Philippines found out. The price was very attractive, at 1 percent commission for the users, but that didnt leave much for the agent, who didnt promote it as keenly, explains Dobardziev. Then theres the problem of interoperability. Most of the services are islands, says

Dobardziev. Why sign up to transfer money if Econet and MTN in your own country, say, wont talk to each other? On the other hand, if you have over 40 percent of the market or 80 percent in the case of Kenyas Safaricom why share? Safaricoms M-PESA is a roaring success, but its success is based on scale and market dominance arising

single rail and ferry network in the U.S. introduced Masabis system last year and, claims Whitaker, enjoyed massive take-up and customer satisfaction. There are two common snags with transport systems though: first a lack of interoperability. In markets such as the U.K. there are a number of railroad companies,

From the operators point of view, location and other data could make mobile payments much more important and lucrative than the transaction itself.
from being the first mover. In reality only a handful of the 150 mobile money services in emerging markets are turning a profit, but as Safaricom has freely acknowledged, M-PESA was never about making money so much as providing a hugely attractive service for its customers, who would be much less inclined to churn. Different world? Perhaps a more obvious target in the developed world is tickets for travel. Ben Whitaker, CEO, Masabi, a U.K.-based developer of mobile ticketing technology for transport, describes his companys barcode-based ticketing system as: Competing with the queue [line]. You download an app, buy a ticket and receive a barcode. A reader, or even a smartphone, can verify it, which is quicker and easier than doing it online, at a machine or ticket office. The Boston mass transit a all with different ticketing systems, so achieving scale is not possible. Second, theres no income for the mobile network operator, although maybe the convenience would encourage people to start thinking about what else they can buy using the phones. Opportunities for operators Despite these big stumbling blocks, operators are already thinking about how they could use data from their customers mobile wallets, which would provide them with huge detail and insight, if analyzed intelligently (see panel on page 26). Zoller explains, Retailers and particularly advertisers want to get in front of as many people as possible. That is one of the reasons why operators are grouping together. Gurung adds: If you can create that network of retailers which can be served

through your mobile payment service, you can advertise retailers and products through that service. Thats how to generate revenue. At the moment, there are too many competing approaches to payment in general and the mobile wallet in particular, often with no obvious consumer appeal. Infrastructure for proximity payments is still limited, while back office systems for processing this new customer data and using it for marketing are simply not up to speed. Without scale and reach, marketing isnt much use. Its hard to sell mobile payment if the alternatives credit cards, online payment and cash are easier to use or understand. There is also concern about how secure payment systems are, including what happens if someone steals your phone? Mass market mobile payments will happen its just not clear how and when. People especially young people use their phones as all-purpose devices and NFCenabled smartphones and payment terminals are here or on their way. From the operators point of view, location and other data could make mobile payments much more important and lucrative than the transaction itself. Issues around who owns this data, how it might be shared (and with whom), how targeting would actually work and data privacy have yet to be clearly addressed. There are potentially huge rewards for those who get it right and get ahead.

www.tmforum.org / Perspectives / 89

New horizons

big business
Dr. Lorien Pratt argues that there is a big market for enterprise-grade mashups and communications service providers are uniquely placed to deliver them, if they follow emerging best practices and exploit their assets.
Application program interfaces (APIs) are the mechanism by which one computer requests and obtains information or services from another. Although APIs have been around for decades in various forms, the communications industry took a new look at them in 2012, inspired by an explosion of revenuegenerating APIs being offered by companies like Google, Facebook, LinkedIn, eBay and others. Yet considerable confusion remains. An API may be internal, meaning that both computers are within the same company, or external, supplied by different companies. Since businesses rarely exist in isolation, every time one business sends paper to another whether a contract, bill or price quote there is an opportunity to make that exchange much more efficient through an automated API. As in most industries, businesses operate within ecosystems of many different types of partners, lots of companies are using APIs more to speed the interactions between parts of a complex, interdependent machine. Communications is no different and examples include:
n an

Delivering apIs for enterprises is

internal APIs to define new services. What is new is the perception that a different kind of ecosystem is emerging, which exploits functionality provided by the

systems using object-oriented building blocks are now offering that functionality themselves across the web. In essence, the Internet has become a giant computer the so-called Programmable Web supporting software

API allows one operator to alert another that a subscriber has ported their phone number; n an AT&T subscriber with an Android device can buy an app and the cost is added to their phone bill; n a user tries to stream live video from CNN.com, which asks for their login from whichever network they are on (Charter Communications, Comcast or others) for authentication purposes; and n product managers within a service provider use

Companies that used to build software systems using object-oriented building blocks are now offering that functionality themselves across the web.
communications industry, yet is not what would be classically described as telecom and represents a substantial new revenue opportunity. Indeed, independent consultant Alan Quayle (www.alanquayle.com) pegs this mashup market as potentially being worth $115 billion to operators by 2015. The mashup economy Heres the idea. Companies that used to build software applications called mashups, which comprise APIs from many companies working together. The last year has seen massive growth in APIenabled mashups. Indeed, www.programmableweb.com listed more than 8,000 separate APIs in November 2012. This number is accelerating, with the last 1,000 being added in just three months. Interestingly, as well explore below, the

90 / Perspectives / www.tmforum.org

New horizons

Figure 1: How mashups evolve


Company (e.g. Acme) Computer (e.g. my desktop) Applications (e.g. paint) Applications (e.g. pricing analysis) Company (e.g. Acme) Mashup (e.g. teleconferencing companies

Objects (e.g. draw a square)

Computers

Traditional application

Applications built on an enterprise service bus or using internal service oriented architecture APIs

Applications now called 'mashups' built using the Internet as the 'bus'

Figure 1: APIs turn software inside out. On the left, we see that software applications (for example, Paint on your PC) tend to live inside computers, and are made up of a number of reusable objects whose APIs are shown as blue dots. In recent years, as shown in the center diagram, companies have realized that they can build more sophisticated applications through the enterprise service bus and, more recently, using Service Oriented Architecture (SOA) and Service Delivery Brokers' approaches, so that multiple computers can work together to solve a problem. Today, as shown on the right, a third revolution is taking place, where application mashups take software functionality produced by multiple companies and combine them together, using the web as the glue.

largest growth category among that most recent 1,000 APIs is the enterprise1. Enterprise mashups Where are the opportunities for the communications industry? First, hundreds of mashups today include telephony functionality, such as CallMyTeam (callmyteam. ob3solutions.com), which calls teams into a conference on demand, or Cognotix (www.cognotix.com), which creates and publishes web and phone surveys. Far more important, however, from a revenue point of view, is a new, enterprise-driven opportunity for communications service providers to enter this space. Mashups only work if they can rapidly access the systems they need across the network. For enterprises, todays best effort quality of service (QoS), which characterizes consumers mashups, is not good enough

the networks speed and performance are critical. As Keith Willetts, Chairman and CEO, TM Forum, says, for APIs to work, they must run fast and reliably. If you think about who owns the pipes between APIs, its the network operators. So for operators to offer QoS and other performance-focused requirements is a clear and unique benefit. In short, since communications service providers own the network infrastructure, they are uniquely qualified to offer APIs, which can guarantee various QoS criteria, such as speed, latency, call quality and many others. Willetts adds, These systems dont work without a low-latency network underneath them. Without QoS guarantees, for instance, cloud services like those offered by Amazon can only go so far.

Best practices As communications providers are beginning to succeed with APIs, best practices are emerging regarding how to succeed in the enterprise market. Here are 10 of the most important note how they are mostly interrelated: 1) Unique value: Focus on functionality, like QoS, that only communications service providers can guarantee, plus the APIs that offer these functions, and mashups that exploit them for lots more information about where operators have unique advantages, go to www. tmforum.org/webcast/ moneythroughAPIs and see page 30 of TM Forums Digital Life2.
1 2

2) Embrace partnerships: Understand the complexity of creating, structuring and executing within complex, heterogeneous partner ecosystems3. Matthew Key, CEO, Telefnica Digital, comments, Trying to control digital services from end-to-end is no longer an option. Partnership is vital to work with specialists in areas that are not a core competency. By creating a vibrant ecosystem around products and services, where different companies play to their key strengths, the sum can be greater than its parts. Work with your partners to develop mashups that use your APIs. Some operators are looking at

See http://blog.programmableweb.com/2012/11/26/8000-apis-rise-of-the-enterprise/ The first edition of TM Forums Digital Life was published in December 2012 and is available to all those within the Forums member organizations who register on the website from www.tmforum.org/digitallifepub 3 To get started with partnerships, see TM Forums Managing Partnership Introductory Guide which is free to everyone within the Forums member organizations who register on the website from www.tmforum.org/FXintroguides/managingpartnerships

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New horizons

specific market sectors like healthcare (see page 72) or transportation. Developing powerful enterprise mashups, which are specific to vertical sectors, is much more cost effective than ever before. 3) Follow the money: Dont seek to monetize APIs directly, rather recognize how they play in the larger ecosystem as a path to cash. Says the Forums Willetts, We're looking at the ecosystem being held together by APIs. They are valueless in their own right, but are a means to create revenue from a service. 4) Treat developers as carefully as end customers (even though they can be a net cost): This is probably the hardest pill for communications service providers to swallow. It is important to understand double virtuous cycle' where the more developers you attract, the greater the number of applications built using your API, which can create a lock-in effect for your network. Conversely, more applications will attract more users, which will in turn attract more developers. One beautiful example of developer support is Microsofts

TM Forums Simple Management Interface


TM Forum is mindful of the importance of using standardized interfaces in the digital ecosystem to simplify and speed up integration, which also translates into keeping costs down and shortening time to market. The Simple Management API (or SMI also known as TMF617 the latest version is defined here: www.tmforum.org/SMIinformationagreement) and is at the heart of TM Forums Multi-Cloud Management Pack for more information go to www.tmforum. org/DSI/Multicloudmgmt where you will find lots of resources.

BingAds site, which has video tutorials and extensive developer documentation.4 Telecoms would do well to learn from this and related examples. 5) Understand the ecosystems dynamics over time: These double, virtuous circles have the potential to create winner takes all dynamics. Indeed, one way that the digital economy may evolve is toward only one or two networks per country or region, with enterprises using apps based on APIs that depend on the network(s). 6) Make money from using mashups: Communications providers need to act on both sides of the equation, offering APIs as well as using them along with their partners in creative ecosystem mashups. For example, according

We're looking at the ecosystem being held together by APIs. They are valueless in their own right, but are a means to create revenue from a service.

to Quayle, BlueVia (the Telenor Group/Telefnica API initiative see www. bluevia.com) uses APIs for fraud management, refunds, currency management, managing tax, customer support and others combined to provide a mobile payment service. There is no better way of understanding how they work and what users and partners need. 7) Buy and sell: Dean Bubley, Founder and Consultant, Disruptive Analysis, Operators will (and indeed should) be paying for capabilities from Facebook, Google, Amazon and others, as well as (hopefully) making money from them elsewhere. I see APIs as [being] like a trading marketplace: most participants will be buyers as well as sellers. 8) Loose or tight? Consider the pros and cons of a tightly controlled ecosystem (like Apples which has the potential to irritate or even alienate customers) or taking a looser approach (like
4

Microsofts, which arguably is not so seamless). 9) Use vendor experts: Consider getting a jump start by working with one of many emerging vendors specifically focused on the needs of operators as they get up to speed in this space. They include Apigee, Apoena, Voxeo, Level7, and others. 10) Use TM Forum: In 2012 the Forum launched its Digital Services Initiative (www.tmforum. org/digital) to support its members as they make the transition from being communications service providers to digital service providers. The Open Digital Economy Steering Group is an important industry force and a key part of this Initiative. The Group includes influential companies like Telecom Italia, Telefnica, Telstra, Oracle, Microsoft and IBM. The Forum is also helping to create a common set of telephony APIs, to make things easier for developers.

www.bing.com/videos/watch/video/get-started-with-the-bing-ads-api/128tq662t

92 / Perspectives / www.tmforum.org

Frameworx

What is TM Forum Frameworx and how can it help you?


Adopted by 90 percent of the worlds largest service providers, TM Forums Frameworx suite of standards-based tools and best practices provides the blueprint for effective, efficient business operations. Frameworx enables you to assess and optimize performance using a proven, serviceoriented approach to operations and integration. Frameworx helps you: n Innovate and reduce time-to-market with streamlined end-to-end service management. n Create, deliver and manage enterprise-grade services across multi-partner value-chains. n Improve customer experience and retention using proven processes, metrics and maturity models. n Optimize business processes to deliver highly efficient operations. n Reduce IT systems integration costs and risk through standardized interfaces and a common information model n Reduce transformation risk by defining a proven blueprint for agile, efficient business operations. n Gain independence and confidence in your procurement choices through conformance certification and procurement guides. n Gain clarity by providing a common, industry-standard language for processes, information and applications. Frameworx is developed in the Forums unique Collaboration Community and continues to evolve through the efforts of the Community to meet changing market needs. It is driven by service providers and available exclusively to members, whose companies represent more than 90 percent of the worlds communications subscribers. Frameworx is made up of four core frameworks: Business Process Framework (eTOM) The Business Process Framework defines a comprehensive set of efficient, clear and effective business processes that are critical to running a service provider's business, at the least possible cost. The framework provides a multi-layered view that starts with primary organizational functions and drills down to thousands of process details, and is strongly aligned with ITIL. It is supported by off-the-shelf tools to provide an implementable catalog of the business processes and includes users guides and sample process flows to ensure your processes are streamlined across the enterprise and across partners in a value-chain. Information Framework (SID) The management of services, customer experience, networks and enterprise management functions demands consistency of data across an enterprise. The Information Framework provides a comprehensive, industry-agreed structured set of definitions for the information that flows through an enterprise and between service providers and their business partners. It is a widely adopted model that is supported by off-the-shelf tools for implementation into software solutions, reducing time and effort for creating standardized integration points. The Application Framework (TAM) Understanding how your business processes are implemented in your software systems environment is essential. This Framework provides a model for grouping processes and their associated information into recognizable applications that span the service provider's operations, business and enterprise management functions. It provides a common language and identification scheme between buyer and supplier for all application areas. It helps in the design of enterprise architecture through a better understanding of your systems. The Integration Framework This Framework provides direction on how operational processes can be automated by utilizing standardized information definitions from the Information Framework to define standardized Service Oriented Architecture (SOA)based management systems. It also provides an automated means to create standardized interfaces and use these interfaces to integrate applications within the enterprise and with partners. TM Forum Frameworx also includes adoption best practices for implementing key Frameworx-based functions across competencies such as revenue assurance, service level agreements and security; and management best practices for procurement, business metrics and benchmarking. TM Forum Business Metrics and Benchmarking Business Metrics Understanding the performance of your business is a critical aspect of managing transformation. Knowing how you compare to the industry in key operational areas will guide your transformation investment. TM Forums Business Metrics, mapped to the Business Process Framework, provide a way for you to measure success based on a balanced scorecard that covers: n Revenue and margin: a view of fiscal performance. n Customer experience: measures that impact the end- customers reaction to the service offering. n Operational efficiency: a view of cost and expense drivers.

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Frameworx

Benchmarking More than 170 service providers from over 65 countries use performance data from TM Forums Business Benchmarking Program to improve efficiency and effectiveness. TM Forum conducts regular group benchmarking studies. Participation is free to service provider members and participants receive secure, individualized reports showing their performance against each metric plus access to the benchmarking database. Aggregated results and access to the database are available for a fee to non-participating service providers and suppliers. For more information on TM Forums Business Benchmarking and Business Metrics please see www.tmforum.org/BusinessBenchmarking. For details of upcoming studies or to participate, please contact Chryssa Dislis, Senior Manager, Business Benchmarking, cdislis@tmforum.org. Latest release Frameworx 12.5 More than 200 people from 86 companies worked on 45 projects to create more than 60 new features in this release of Frameworx. Please visit www.tmforum.org/frameworx for more detail and to download the deliverables in Frameworx 12.5. Please contact usingframeworx@tmforum.org if you have any questions.

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