February 25, 2016

3 Signs of a CSP Evolution

The transformation to a digital service provider requires new thinking around hybrid OSS models, the delivery of business services and connecting with customers at every point throughout their lifecycles.

2016 is shaping up to be the year of the digital service provider (DSP). A common thread running through discussions we have with our customers is that service providers are definitely beginning to make the transition to digital systems and processes.

For the rest of this year and into next, they’ll be embracing virtualization, selling smarter services to enterprises and putting more emphasis on delivering a better customer experience. These are all stops on the road to becoming a successful DSP, as I’ve noted in my column series in VanillaPlus.  

Kicking NFV in the OSS

Software-defined networking (SDN) and network functions virtualization (NFV) have been capturing attention for the past several years as organizations realize that their benefits go well beyond opex and capex savings. Reducing time-to-market, creating services quickly and inviting the opportunity to create new sources of revenue are among the many reasons why virtualization is so popular.

But transforming their networks will not happen all at once and it won’t be an easy endeavor. As I’ve previously written:

But to get to the operationalization stage, operators need to ensure their BSS/OSS can handle this shift from the physical network to the virtual network and the accompanying agile and streamlined processes that follow. Complicating things further is the fact that most operators will have a hybrid environment for more than a decade as they slowly make changes to their network architectures.

Because hybrid environments will prevail for the next decade or two, communications service providers (CSPs) will need to ensure their BSS/OSS systems can handle the physical and virtual worlds of networks and services.

New Enterprise Services

CSPs are working harder than ever to sell communications services to businesses – a profitable but very demanding customer set. Consumers today want their communications services available anywhere, on any device, all the time. Now CSPs are realizing that enterprises are beginning to expect this, too.

How can CSPs deliver more services to a wider variety of devices without driving up their costs? Many operators are finding that a virtual network ecosystem makes it easier for them to create, deliver and monetize business services:

By relocating CPE functions into a data center, the device itself can become a standard, commoditized box that communicates with the network and delivers virtual services to customers. These can include firewall, routing, VPN, network address translation, intrusion detection and much more. Services are delivered as virtual network functions (VNFs), which run on virtual machines (VMs) on hardware and can be chained together to deliver advanced functionality. This architectural shift also allows operators to offer cloud-based services in a cloud broker model, including office productivity applications, security, data storage and more.

Connecting with Customers Everywhere

Becoming a DSP is all about transforming the business to effectively engage digital consumers at every touch point in the customer lifecycle. All the trends that shape the CSP’s business will come back to customer service, as I wrote last month:

Underpinning all of these trends is the absolute need for operators to not lose sight of the customer, and more specifically, their level of service quality, engagement, satisfaction and ultimately loyalty. And at a time when service offerings can look similar from one operator to another, the only way to stand out from the crowd is by offering a superior customer experience.

The provider that manages to do this will be more efficient, more proactive and ultimately more innovative than the competition. But to get to this point, operators will need to embrace social, mobility, analytics and cloud in order to proactively find problems, which will then lead to reduced churn, being able to launch new services and ultimately achieve significant competitive advantages.

We’re are always thinking about the things that drive CSPs’ transformations into DSPs and how that shift will fundamentally change the way they do business. There is a lot of opportunity and a lot of competition so the road to digital success will involve strategic partners that are innovative, responsive to change and have the proven ability to execute large-scale initiatives. Netcracker is just that kind of partner that can help them move forward.


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