Revisiting service providers’ agility; think of it like a flywheel

Miriam:

As 5G and IoT come into their own, highly configurable services e.g. network slices, create a new dynamism in service offerings while the permutations and combinations of equipment and software applications broaden the range of services. All indicators point to an explosion of new services and bundling opportunities across industry verticals in the enterprise space. To rise to the challenge of taking new innovative services to market with ecosystem partners and capitalize on opportunities, the BSS needs to be well-oiled, loosely coupled, scalable, flexible, tightly (but not rigidly) integrated with OSS and packet core, while being open and accessible to partners and adjacent systems – in a word, agile. Why think of agility as a flywheel? The “flywheel” refers to a mechanism that is driven by rotational speed – it requires significant initial effort to kickstart the motion and build momentum, but once that initial inertia is overcome, it is designed to efficiently accelerate to much greater speeds in a stable manner.

I am delighted to feature Yesmean Luk, a Senior Consultant with STL Partners, as a guest blog author on the Ericsson blog.

So, please Yesmean give your reflections on the interpretation of and plans relating to agility as explored in a previous STL Partners and Ericsson study in 2015.

Yesmean:

Thank you! Many changes have occurred since then and you can explore the current thinking in a new report revisiting understandings of agility and aspirations around agility “Driving the agility flywheel: the stepwise journey to agile”.

 

Six years have passed…

…since the publication of “The ‘Agile Operator’: 5 Key Ways to Meet the Agility Challenge”, and much has changed in the world of telecoms. The journey towards network virtualization was just beginning in 2015, and today it is well underway. Many operators have virtualized much of their core networks and are now looking to deploy containers as their focus shifts to the radio access network (RAN).

Back then, the telecoms industry was also in the midst of the 4G investment cycle. Now in 2021, service providers are considering how to best realize 5G’s commercial opportunities in the enterprise market through network slicing and enabling services such as data management and analytics.

In 2015, edge computing was also, well, very leading edge; but now operators and hyperscalers are offering enterprise edge computing solutions and many see the distributed edge cloud as an integral part of their 5G strategy.

In the last five years, more service providers are moving from a pure horizontal strategy – offering largely the same voice, messaging, and connectivity services to consumers and enterprises – to a vertical one in which tailored connectivity and enablement services are coupled with specific vertical industry solutions.

So, where have we got to in terms of becoming a more agile and innovative industry? And what does our current situation and trajectory imply about ‘BSS transformation priorities’ for service providers going forward?

 

What are the key elements of telecom agility?

It is worth revisiting the framework that STL Partners developed to explore agility in 2015 and examining the progress made in each of the five elements in the last five years. The STL telecom agility framework comprised five elements to reflect the need for transformation across the service providers’ businesses (the premise being that you are only as agile as your least agile dimension):

1. Organization.

Internal culture and processes are key barriers to becoming more agile. Establishing this agile mindset and culture will lead to closer collaboration between teams, localized decision-making, and empower employees across the business to work more flexibly, efficiently and independently. This in turn will stimulate innovation and allow service providers to move at the speed necessary to succeed in today’s competitive marketplace. Key elements of an agile culture include:

• Places the customer at the center of their strategy and decision making
• Has simplified internal processes to enable quick decision making
• Fosters an innovation culture, built on the lean start up approach
• Measures and evolves, adapting to changes in the marketplace 

 

2. Network.

The network remains a service providers principal asset. Increasing network agility improves the service offering and reduce costs. Service providers must:

• Embrace virtualization and containerization to enable faster and more flexible product and service innovation and capacity management
• Use real-time analytics, AI and automation tools – to meet customer experience and capacity needs

 

3. Service.

Legacy systems and structural barriers must be overcome to enable service providers to launch compelling services quickly in the face of increasingly agile and innovative competition. The agile service provider adopts the following principles for new service creation:

• Iterative product creation, placing the customer first
• Reduced time-to-market for new services
• Quick response to the market and to competitors’ offerings

 

4. Customer.

Intuitive self-care tools/platforms are increasingly seen as an effective (and efficient) way to support customers alongside retail and call centers (since our research suggests most service providers globally are adopting an omnichannel strategy). To succeed, they must:

• Provide a simple, intuitive and highly customizable self-care platform
• Leverage data analytics and AI to understand customer usage, experience and context

5. Partnerships. Successful partnering requires a good understand a partner’s strategy and business model and a shared alignment over the right partnering model. To be an effective partner, service providers must:

• Understand a (potential) partner’s business model and adapt accordingly
• Ensure the right processes, contractual structure and incentives are in place

 

Today we are calling this journey towards achieving agile operating models and practices, such as DevOps and adopting CI/CD pipelines, the agility flywheel.

Figure 1: Achieve agility through incremental improvements across technology, the organisation, products and services (source: STL Partners)

 

Which activities must be pursued to achieve agility today?

Many of the building blocks for service innovation and growth are in place but that the emphasis for service providers to date has been on implementing agility changes which affect their core asset: the network. 

Virtualizing and containerizing the network has been in progress for the last 5 to 7 years whereas agility transformation activities elsewhere have been much patchier. For example, there are still few instances of operators building effective partner ecosystems or systematizing service innovation.  Most new services, and particularly those that move beyond connectivity, have been achieved via mergers and acquisition rather than organic development. Things are changing, and we believe the emphasis over the next 3 to 5 years will shift towards activities that will drive service innovation. We summarize the current status and our hypothesis on where service providers will focus going forward in the table below.

Agility area	Likely focus over next 3-5 years
Organisation	·         Continued shift in recruitment emphasis from telecoms engineer to software engineer/cloud specialists.  ·         Greater investment in service innovation (opex) and gradual reduction in network investment (capex). ·         Acceleration in automation activities – in network operations, provisioning, and customer care. ·         Gradual shift in performance metrics to reflect need for innovation speed and operational automation – e.g. time to new release, % of faults resolved automatically, etc.
Network	·         Tighter end to end integration between BSS, OSS and packet core in the pursuit of faster time to market and enhanced service quality. ·         Shift in focus towards containerisation and towards the Radio Access Network (RAN) and open approaches (oRAN) ·         Renewed interest in striving for service differentiation through the (5G) network via slicing, private networks etc.
Service	·         Substantial efforts made in new richer services by operators owing to the need for new growth areas beyond ‘best efforts’ connectivity and enabled by improved network capabilities ·         Continued focus on 5G and edge computing as the core of new growth.
Customer	·         Greater emphasis on personalisation and providing a tailored experience for customers whether leveraging online or offline channels. ·         Extension of data- and AI-enabled activities to services including connectivity and ‘beyond connectivity’ services.
Partnerships	·         Increased emphasis on partnership ecosystems for the development and delivery of services including those for edge computing, enablement platforms, and vertical industry solutions.

 

This calls for more agile business processes and flexible BSS

The last five years have seen service providers focus predominantly on building network and customer agility. STL Partners believes that the next five years will see this accelerate (owing to the roll-out of 5G, the virtualization and containerization of RANs, and the growth in digital channels and automation).

However, service, partnership, and organizational agility will become increasingly important as service providers seek to embrace new (cloud-based as-a-service) business models and develop a range of new connectivity and ‘beyond connectivity’ services. 

This focus on service innovation will require more flexible and responsive business processes that are delivered by agile OPEX-based organizations where resources can be redeployed quickly in response to customer needs. These new services will result in a need for a Telecom BSS that can cope with a wider array of business models being delivered via multiple partners. Across BSS, from the product catalog to billing and ongoing customer engagement, value will need to be distributed across the ecosystem. Simplicity, ease of use and speed are crucial.

 

Read more in the STL report Driving the agility flywheel: the stepwise journey to agile: