IT transformations - Capgemini Consulting Nederland

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In order to successfully tap the cloud computing opportunity, it is important that operators carefully evaluate different cloud computing service segments within their market, identify the value proposition and create a roadmap for services, forge the right partnerships with technology enablers, and identify relevant sales channels. IT Renewal Key Issues Telecom operators have built up expensive legacy IT systems over many years which have now become prohibitively costly to maintain. The cost of deployment is clearly one part of the equation, but operators are increasingly focused on reducing the total cost of ownership (TCO). The complexity of these legacy IT estates also creates challenges on the speed of deployment of new services which is increasingly important when competing with highly agile online entities. There is now a trend to simplify the IT estate and focus on the deployment of more standardized solutions which are implemented “out of the box” with minimal customization. This is linked to a simplification of business processes whereby best practice— often eTOM 32 based—industry standard processes are being selected at the expense of highly customized processes which, in practice, offer little differentiation in a highly mature industry. Key Focus Areas Addressing the given key issues, the need for most operators is a radical IT and business transformation to reduce TCO, to have a single consistent view of the customer, and accelerate time to market for new services. This can be achieved by focusing on commercial off-the-shelf solutions (COTS) based on standard business processes. Operators are increasingly adopting COTS from vendors such as Amdocs, Oracle, and Comverse for billing and ERP. However, the biggest challenge ahead for telcos will be to ensure transformation success, as only one out of three 33 IT transformations is successful in delivering within time and budget as they lack the necessary alignment and commitment. In order to successfully renew their IT systems, operators need to strive for a change in organization, business processes, and IT in an aligned manner. Operational Renewal Key issues The pressure on TME players’ margins due to slower revenue growth, increasing costs, and fierce competition has prompted several operators to embark on cost cutting programs. The challenge is to move from short-term cost cutting to creating sustainably efficient organizations and optimize functional performance in order to raise profitability. This would ensure that not only current activities are efficient, but also enable headroom to invest in new business expansion. Three example areas require attention: infrastructure sharing and outsourcing, sustainable efficiency, and environmental sustainability. Key Focus Areas Infrastructure sharing and outsourcing Network infrastructure sharing and outsourcing all or part of network related operations is a key strategic option for operators to reduce costs and free up vital resources. It is expected that by the end of 2010, 60% of the world’s wireless operators and 80% of the emerging market operators will have some form of network-outsourcing contract 34 . As operators rollout new networks, share active and passive infrastructure, outsource network management functions, and share and outsource network backhaul, this will not only “ Only one out of three IT transformations is successful in delivering within time and budget ” 32 Enhanced Telecom Operations Map, published by the TM Forum, it is the most widely used and accepted standard for business processes in the telecommunications industry. 33 Capgemini Analysis; Standish Group as quoted in the July Computer Bulletin from the BCS 2009. 34 The International Communications Project, Issue 12, Managed Services Partnering.XXXXXX 17
help them save costs, but will also result in faster rollout speeds, broader coverage, and reduce the time-tomarket for new services. Network sharing and outsourcing is becoming a key priority for operators to enhance operational efficiencies and reduce costs. Leading global operators such as Orange, Vodafone, and TeliaSonera have all outsourced network operations in order to develop lean business models 35 . Similarly, in both emerging and developed markets, operators such as 3 UK, T-Mobile, and Bharti have forged network sharing deals 36 . Sustainable Efficiency Today, TME players operate in an increasingly complex environment with a multitude of services, diverse geographical footprint, and numerous support systems. This has resulted in enlarged organizations, increased process complexity, and multi-layered technology platforms, all designed to meet the growing needs of consumers. Due to this, the profitability of operators has also suffered. The average EBITDA margin of major European operators 37 has witnessed a fall of nearly 12% between 2005 and 2009. Operators, therefore, require a step change in operational efficiency in order to remain profitable and competitive. Sustainable efficiency is a holistic approach to drive value and reduce costs across the organization. In order to implement it, a behavioral change is required at the heart of the transformation and a change in the way employees and employers approach, plan, and execute their work. This lean thinking can ensure sustainability and continuous improvement at every level. TME players can achieve significant benefits by holistically revisiting their organizational structures, operating models, and processes to remove waste and balance resources in both the front- and back-office operations. However, players need to keep in mind that implementing a truly sustainable operational excellence culture demands time and should not be viewed as a quick fix. Green Telco Operational renewal measures should be aimed at not only saving costs but also making a meaningful contribution towards the environment and benefiting from the corresponding goodwill. Even customer decisions today are driven by environmental friendliness and sustainability. Many customers are increasingly opting for online or e-bills over paper bills. Therefore, deploying focused initiatives around improving cooling efficiencies, reducing energy consumption, and implementing low carbon programs to realize tangible savings, should be the key priority for operators. Some operators are already deploying focused initiatives such as low carbon programs and the reduction of energy usage for sustainable cost reduction. BT has achieved a 43% global carbon intensity reduction through initiatives such as sourcing 41% of UK energy requirement from renewable sources and adopting a global energy savings campaign 38 . In another example, Vodafone has implemented measures aimed at reducing energy usage and its associated costs in its operations across multiple locations. The company has deployed initiatives to improve cooling, modernize its network equipment, and reduce diesel usage 39 . In conclusion, the Digital Renewal responses of TME players enable them to effectively address their most pressing challenges. By focusing on the five key priorities of this approach, players can enhance customer experience, develop a 35 Company Websites. 36 Company Websites. 37 Belgacom SA; BT Group plc; Deutsche Telekom AG; France Telecom SA; Koninklijke KPN N.V.; Telecom Italia SpA; Telefonica SA; Telenor ASA; TeliaSonera AB; Vodafone Group plc. 38 Corporate Responsibility, The BT story on Carbon Reduction, April 2010. 39 Company Website. 18
Page 1: volume 9: Spring/Summer.11 Capgemin
Page 5 and 6: Editorial Welcome to the Spring/Sum
Page 7 and 8: Digital Renewal: Addressing Transfo
Page 9 and 10: Figure 2: Digital Renewal Approach
Page 11 and 12: “ Several operators are exploring
Page 13: Mobile network traffic in Western E
Page 17 and 18: Cloud Computing: The Telco Opportun
Page 19 and 20: Figure 3: Stakeholders in the Cloud
Page 21 and 22: Figure 6: Categorization of Cloud O
Page 23 and 24: Hosting on Demand Telcos are alread
Page 25 and 26: Figure 9: Telco Strategies in the S
Page 27 and 28: Figure 11: Summary of Cloud Strateg
Page 29 and 30: Beyond Communications: Identifying
Page 31 and 32: Figure 3: Indicative Activity Chain
Page 33 and 34: Figure 5: Needs Served by Smart Gri
Page 35 and 36: “ An increased focus on safety an
Page 37 and 38: Figure 8: Strategic Options for Tel
Page 39 and 40: Figure 10: Telco Evolution as Servi
Page 41 and 42: Long Term Evolution LTE Opportuniti
Page 43 and 44: Figure 3: Commercial LTE Deployment
Page 45 and 46: “ LTE offers the most efficient,
Page 47 and 48: Figure 6: Key Technical Challenges
Page 49 and 50: Figure 8: Accumulated CAPEX and OPE
Page 51 and 52: Ubiquisys (femtocell), and Openwave
Page 53 and 54: IT Renewal: A Business Transformati
Page 55 and 56: to launch Web-based self-service ch
Page 57 and 58: Figure 4: High Level of Functionali
Page 59 and 60: and acceptance by all the different
Page 61 and 62: “ IT transformations, at their co
Page 63 and 64: Navigating the Content Quagmire: Pr
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Figure 3: Synopsis of Options for C
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Figure 4: Overview of Digital Conte
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Paid content may be subscription or
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“ Content providers need to focus
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Innovating the Telco Business Model
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Figure 2: Actions taken by Telcos o
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Figure 3: Trends Impacting Business
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Figure 4: Mobile Service Revenue Gr
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Strategy Bottlenecks by Michael G.
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are not active in are “contestabl
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Figure 3: Evolving Bottlenecks in t
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“ Companies should strive to make
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lite BYTES Some vignettes and trend
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“ Successful IT transformation en
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