Managing 5G and IoT customers and partners
Effectively managing a 5G and IoT business will require more discipline and automation; while simultaneously being more flexible. Fortunately, Ericsson has a lot of experience providing powerful customer and product lifecycle management for our Digital BSS solutions.
The impact of 5G and IoT on business processes
This blog post is the last in a series of three exploring the new demands that 5G and IoT use cases are putting on telecom BSS. In this post I focus on the impact on business processes. The previous posts concentrated on monetizing 5G and IoT business models, and the impacts of monetizing 5G and IoT on Digital BSS.
Customer life-cycle management
This area covers customer interaction and all processes that generate revenue. What we’re seeing is 5G and IoT contracts are increasingly influencing business priorities and driving the decision process. Normally, customer life-cycle management is described from a consumer perspective but here I focus on enterprises and partners instead.
The Digital BSS will need to include a new set of party roles such as Supplier, Intermediary, Partner, and Broker. These party roles will be classified into segments, just as customers are, to enable business optimization. In the case of customer segmentation, the business aim is to achieve better ROI as the segmentation enables more precise offers to be shared with specific customer types; increasing the probability of a successful match. The same logic applies for the new set of party roles.
The party roles share many similarities: they all have journeys similar to onboarding, bill-cycle, termination flow, self-service, and so on. But each part of the journey is unique to each role. Similar differences also apply to each role for information models, business rules and process flows.
The different party roles (including consumers) are the main BSS assets for Communication Service Providers (CSPs), as these segmentations drive additional sales, reduced churn, and improved profitability etc.
The most efficient way to work with party roles is to have a sequence of specifications that allow the creation of any desired party role easily as the business model evolves.
If we consider the party roles created for IoT, each process in the customer lifecycle needs to focus on cost-efficiency and repetition capability. This is because margins on IoT are much lower than on, for example, smartphones, and each process is used thousands of times a day.
Let’s consider some of the customer process functions that are directly impacted by the new party roles and IoT:
- Consumer marketing. Consumer marketing is characterized by fast changing offers and campaigns. Lower prices on offerings is the most common promotional lever. The only common service level agreement is megabyte volume. Stability, trust, and long-term relations are of less importance: a dissatisfied individual will only have a limited effect on the CSP’s business. Consumers are treated as an almost uniform group. General advertising and sponsorship often has a fairly good effect.
- IoT marketing. IoT customers are far less susceptible to campaigns than general consumers are. In general, the IoT customer values predictability, stability, trust and long-term relationships, as this allows them to focus on their own business. The drawback is that if these terms are eroded, the IoT customer will take their business elsewhere. CSP reputation is of high value for IoT customers. Industry specific advertising and sponsoring is more likely to have an effect as it shows that the IoT offerings work well for a specific industry segment. Joint marketing between CSP and an IoT customer is quite plausible and will benefit both.
- Consumer relationship. Consumers are individuals and appreciate being seen, hence, there is quite a positive response to loyalty programs and personal bonuses. This reasoning also suggests that consumers are susceptible to promotions and campaigns. The consumer relationship is quite volatile, and the consumer may churn once a subscription period ends or a pre-paid account is closed. CSP reimbursements to a consumer is unusual. The more services that are tied to a consumer, the higher the hurdle for the consumer to churn. The main CSP focus is to minimize CSR and support costs by introducing self-service. Consumer roles are quite simple: they represent the customer and sometimes other users (for example, those on shared family contracts).
- IoT relationship. The IoT customer acts primarily on business rationale, focusing on factors like CSP reputation, predictability and trust. A key part of the IoT relationship is delivering flawlessly on contracted service level agreements (SLAs). Contractual penalties are likely to be found in IoT contracts and the IoT customer will monitor these. The IoT customer is looking for an “as trouble-free as possible” relationship. Self-service becomes more important to the IoT customer as IoT contracts embraces more services and devices. These will also be re-configured as the IoT customer’s business evolves, including the commissioning and decommissioning of services and devices. In addition, the self-services will have to support more internal roles and processes: administrators/fleet managers, delegated ordering, financial approvals, technicians for support and integration and more.
- Consumer offerings. The consumer offerings are generally simple in structure and scope: data volume, subscription duration, payment scheme and possibly a device. Campaigns make consumer offerings more complex as well. But all-in-all, they’re not too complicated, so the selection can be left entirely to the consumer.
- IoT offerings. The IoT customer is buying a critical part of their business capability. IoT offerings are quite complex as they are composed of many types of services and these services are deployed on a very large number of - often heterogeneous - devices. The offers typically comprise of fixed or mobile communication and communication related services such as encryption, latency, guaranteed delivery etc. Additional offerings may also include reports on how the IoT services perform. An IoT customer’s network will fluctuate in size due to business demands, suggesting that IoT offers will have tiered pricing. An IoT customer may need assistance in selecting the best offering, preferably by an automated advice service. A large IoT customer will be strong enough to have negotiated customized schemes, that is, a customer unique offering. IoT offering contracts are likely to include data integrity, SLAs and penalties. Pre-paid IoT offers will also exist but not as commonly as post-paid IoT offers.
Sales channels (CSR, online, shop etc.)
- Sales to consumers. Consumers typically choose the most suitable offering themselves, and are targeted to do impulsive shopping, i.e. to change or add to their selection. They can do this in any type of sales channel: online, physical shop, CSR or Tele Sales.
- Sales to IoT. IoT offers are quite complicated and will likely require assistance, preferably fully automated assistance. Their buying behavior is 100% business driven and 0% on impulse. Upselling requires a business motivation, often with a proven upside to the IoT customer. Few, if any IoT customers, will visit a physical store, they prefer either an online shop or require a sales representative. It is likely that industry specific MVNOs will appear, that will act as both sales representatives and sales consultants.
Onboarding and fulfillment
- Consumer onboarding. Basic BSS and service provisioning. Only SIMs, mobile devices and CPE for multiplay require physical logistics. Device, SIM and number inventories and warehousing are required.
- IoT customer onboarding. Onboarding represents a cost for the IoT customer, and therefore the process must be as efficient as possible: streamlined and automated. The onboarding process will include large numbers of devices and services, but also involvement from the IoT customer as described above. IoT onboarding is an ongoing process throughout the IoT customer’s lifecycle and as their business evolves.
- The IoT onboarding process will increase complexity, scale, and real-time demands on order management, both on BSS and network level. The complexity will increase if there are service dependencies. eSIMs is one way to improve the efficiency of IoT onboarding, although it may reduce the cost for the customer to churn.
- Industry specific MNVOs are likely to develop industry tools for onboarding and IoT readiness.
- Device, SIM and number inventories, and warehousing is required although eSIM will remove the physical handling of SIMs. Device capability management is required as services and tariffs may need to be considered.
- IoT case: Most IoT services require mobile, fixed and additional services: few CSPs will cover all requirements. 5G will also require cooperation between network infrastructures to fulfill 5G promises. CSPs will onboard additional suppliers to fill their own gaps, which creates a need for an additional supplier role; for the onboarding and management of supplier services, and a revenue splitting and settlement functionality.
Revenue assurance and management
- IoT revenue management: Many of the assurance and settlement processes will be SLA driven and be composed of multiple suppliers of multiple services. This becomes more complex as the settlements in many cases could become dependent on each other. It’s not just straight forward assurance but “trail assurance.” Technologies such as blockchain will most certainly come into play here.
Product lifecycle management
Product lifecycle management sets up the function, capacity and coverage needed and requested. The input can be product development requirement, business strategy, customer needs, proactive network planning, new technology or cost-efficiency needs.
This is one of the important business process areas between 5G core, OSS and BSS. The aim is to share a common environment to facilitate cross-selling, and present joint offerings to improve cost-efficiency.
It’s the responsibility of orchestration to manage 5G core applications and processes, so it has little impact on BSS. However, the ability to execute on the same execution environment so that BSS can scale as the business fluctuates is essential.
The Digital BSS responsibilities here will be to manage the “sourced” services and their lifecycle. For example, if a third-party application has been modelled as a service building block and is associated with a product offer, then the lifecycle management of that building block falls under the BSS responsibility.
In this series of blog posts I have tried to introduce the new demands on Digital BSS thinking that are being driven by 5G and IoT use cases. The first post looked at the business demands. The second post looked at the impact on the BSS itself. And this post looked at the customer and product lifecycles.
If you have found this interesting, I invite you to watch the replay of our webinar “Turn your BSS into a 5G monetization engine”, where an Ericsson expert joins IHS Markit industry analysts to explain the technical detail of 5G MonetizationJoin webinar
You may also be interested in the whitepaper from earlier this year in which Analysys Mason discusses their view of the monetization systems needed by service providers to support their 5G revenue ambitions.Download paper