managed services as the key catalyst of the communications industry transformation paolo sidoti...
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Managed Services as the Key Catalyst of the Communications Industry Transformation
Paolo SidotiExecutive PartnerAccenture Communication & High TechEALA Network Lead Milan – April, 13th 2010
Copyright © 2010 Accenture. All Rights Reserved.
Copyright © 2010 Accenture. All Rights Reserved.
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• New competitive pressure
• Traffic growth, revenue decline
• High network costs and
reduced budgets
• Dual focus: maintain
legacy networks and
support next-generation
network build-outs
• Rapid pace of technology
and business change
Today’s Challenges for Telco Operators
How to achieve profitable growth and higher operational efficiency?
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The Cost Pressure and the Need to Change Require a New Transformation Approach
High pressure on costs and the need to rapidly transform network
operations are fostering the demand for Network Managed Services
as the catalyst to achieve immediate and sustainable cost
reduction and long term operational efficiency.
Strategic Transformation“Lower bad cholesterol by eating better”
Traditional Cost Cutting“Lower cholesterol by eating less”
Value Added Activity Non-Value Added Activity
Operating model optimization. Capability driven. Focused on cutting costs on
non-value added activities. Value-adding resources are
maintained or grown. Long term cost structure
improvement.
Headcount reduction. Budget driven. Cuts both non-value and
value added activities. Fewer value-adding
resources available. Root causes remain, costs
grow back.
Accenture and TM Forum have recently conducted a survey that confirms the increasing interest of communications industry executives in Network Managed Services.
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Which Benefits do the Operators expect from Network Managed Services?
Immediate Cost savings
Improved efficiency
Predictable costs and service levels
Strategic sourcing
Business flexibility
Ability to rapidly scale
Reduced Time to Market
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Managed Services Market Outlook
The Managed Services market for Telco Operators and Media is expected to grow from $ 4.9 bn in 2008 to $ 7.9 bn in 2012.
Managed Services are showing the highest CAGR (12,6%) in the area of services for the communications industry.
2008 2009 2010 2011 2012 2008-2012 CAGR %
Americas 930.5 1,039.3 1,174.4 1,333.0 1,516.9 13.0%
Asia Pacific 1,837.9 2,159.5 2,509.3 2,883.2 3,269.5 15.5%
EMEA 2,154.3 2,363.9 2,594.2 2,852.5 3,128.1 9.8%
TOTAL 4,922.6 5,562.7 6,277.9 7,068.7 7,914.5 12.6%
Worldwide Managed Services Spending for the Telecom and Media Market ($M) *
* Source: IDC - “Worldwide Managed Services for Telecommunications and Media 2008-2012 Forecast and Analysis” - February 2009
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Managed Services Market Outlook (…continued)
2008 2012
M$ % M$ %
Managed Operations
3,944.2 80% 5,717.1 72%
Hosted Services 978.4 20% 2,197.4 28%
Totals 4,922.6 100% 7,914.5 100%
* Source: IDC - “Worldwide Managed Services for Telecommunications and Media 2008-2012 Forecast and Analysis” - February 2009
Managed Operations represented approx. 80% of the market in 2008, but Hosted Services are expected to grow in the next years.
2008 2012
M$ % M$ %
Wireless 3,446.1 70% 5,488.1 68%
Wireline 1,476.5 30% 2,426.4 32%
Totals 4,922.6 100% 7,914.5 100%
Wireless Operators have been predominant so far, even though Wireline share is expected to increase in the near future.
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Network Managed Operations Services
Source: Accenture elaboration based on Gartner market research data, 2009
Which processes within the Network Operations Management are typically outsourced?
Network Operations Managed Services and BPO - % On Total, 2009
The service areas with the highest CAGR (’08-’12) are:
• Next Generation SDP (+15,6%)
• Provisioning & Activation (+7.1%)
• Network Management (+7.6%)
•
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A Network Transformation and Outsourcing Program is a Long Journey….
Planning /Desing
NTW Security Planning
NTW Tuning/ Testing
Site & NOC preparation
NTW Deployment
Operations Optimization
Field Operations & Maintenance
NOC Operations &
Help Desk
Performance Mngm &
Optimization
Vendor Management
OSS Operations & Maintenance
OSS design and plan
OSS Optimization
Service TransitionHR transition
Communications
Management
Knowledge transfer
OSS implementati
on
Business Case
Strategy definition
Partner SelectionDue Diligence
Strategy and Planning Transition Transformation
Transition Planning
Contract negotiation
SLA Management
Contract Management
NTW Security Operations
NOC Operations &
Help Desk
Operation
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…starting with the key step of assessing in which areas Managed Services would provide more benefits
Tech
nic
al
Organizational
Readiness
Tech
nic
al
Business
Suitability Value
Per
form
ance
Savings
Risk
Which functions, activities and groupings should we consider?
Which functions are appropriate for alternative sourcing model?
Which groups are ready for a change in sourcing model?
Risk(“Why not?”)
Value(“Why?”)
Readiness(“When?”)
Suitability(“What?”)
Network Functions
What are the objectives for alternative sourcing?
Cri
tica
lity
Mitigations
What are the options to manage risk?
Accenture has developed a patented methodology (ABOM – Accenture Business Operations Modeling) to help identify which network functions would support a Business Case for Managed Services based on clearly defined criteria.
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Accenture has Developed a Portfolio of Managed Services and Solutions…
…targeting specific processes where business value can be most effectively generated.
ProvisioningServices
Network Testing
Services
Network Planning & Engineering
Solutions
Service Accelerator Solutions
Managed Field Force
Service
Rental & Power Contract Manag. Global
Reach & Scale
Industry Expertise & Consulting
Skills
Leading Assets &
Resources
Trusted ServiceProvider
ENABLERS
SERVICES• Administrative management of rental contracts and power supplies (existing and new)
• Optimization of related costs
• Industrialized service development and launch capability
• Field Force Managed/Hosted Solution
• Field Force Transformation Solution
• Network & Service Provisioning• Porting Service• Order Fallout Management
• Handset and CPE Testing• Services and Application
Testing• Network Equipment Testing
• Outside Plant Engineering• Access Network Technology &
Capacity Planning• Leased Lines / Backhaul
Optimization• Wholesale Cost Management
International Association of Outsourcing ProfessionalsTM named Accenture #1 best outsourcing provider for 2009.
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Accenture Mobility Operated Services
Accenture Mobility Operated Services give the opportunity to expand the product portfolio with a “service store” via the mobility channel.
The managed services approach helps companies define, develop and run the right mobility solutions, resulting in new revenue streams, lower operating costs and reduced risk and complexity.
• One-to-many platform • Managed services business model• Industry-specific solutions• Transaction-based pricing
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Accenture Mobility Operated Services Vertical applications on top of a proven enabling platform
Mobile Data
Collection
Mobile
Marketing
Services
Mobile
Voucher Infomobility
Mobile
Enterprise
Apps.
Mobile Money
Managemnt
TelematicsMobile
Loyalty & Rewarding
Managed Services Components:
Define – mobility strategy, products and
business model, including vendor selection
Develop – architecture assessment and
design, and integration with third parties
including Mobile Network Operators,
business partners and vertical vendors
Run – ongoing operations and management
of the mobility solution via a managed
services
AMOS Framework
Mobility Platform (Service Delivery Platform
with Open SDP)
Mobility Platform
Vertical Applications
Reduced time to market and simplified third party integration
• Simplified Infrastructure• Standardized Design and Interfaces
(SOA)• Open Solution• Streamlined Delivery process
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Accenture Mobility Operated Services Business Model
Accenture Mobility Operated Services platform is integrated with leading communication service providers and business partners.
Accenture Mobility Operated Services enables enterprises to launch services through our platform while reducing the high initial costs of IT and infrastructure set up, and by minimizing the burden, risk and complexity of managing multiple connections to third parties.
Network of Mobile
Operators
Markets
ConsumerContent Provider
Service Provider
Business PartnersBusiness
Accenture Mobility
Operated Services
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…Conclusions
► The Communications and High Tech market is now consolidating
under a strong competitive pressure.
► Managed Services are becoming the key catalyst of the
transformation process of Communication & High Tech Industry.
► Accenture wants to play a distinctive role in this transformations
leveraging its Network Consulting and Vertical BPO capabilities
and act as Trusted Advisor, Innovative Service Provider or Partner
for Network Equipment Vendors.
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Q & A
ANY QUESTIONS
?
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Thank You !
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