The challenges telecommunications carriers face are not so different from those of their enterprise customers. They’re just a lot bigger. And IT managers are meeting them by pursuing consolidation -- that is, reducing the number of systems and personnel -- with a vengeance.
“You’re talking about revenues up to around $100 billion and tens or hundreds of millions of customers, business and consumer, with a lot of detail on those customers,” says Jay Pultz, vice president and distinguished analyst at Gartner. You’re also talking about recent mergers of massive organizations with their own IT departments and systems that were typically developed in-house.
“From an IT perspective, getting a very old industry with its unique scale through all the recent megamergers while maintaining customer expectations of absolute reliability is a huge challenge,” says Judy Spitz, CIO of Verizon Business. But that’s just maintaining a dial tone. Telecom providers also face new competition from cable providers, increased customer expectations, time-to-market pressures, voice/data convergence, and data protection. Clearly, things have changed for an industry raised on monopoly, regulation, and doing one or two things very well.
Even without megamergers, telecom would have a significant consolidation headache on its hands. “In the past, launching a new product generally meant launching a whole new line of business with a new set of processes, systems, policies, and customer services,” says Jim Preston, deputy CIO of BT Retail. “BT now has about 3,000 systems supporting all the different products and parts of the customer lifecycle.”
Many into one
The first step for many of the carriers has been IT staff consolidation. “We consolidated the separate IT functions from BT Retail, BT Wholesale, and BT Global Services into a single IT group that spans all the lines of business, so that we could transform the business with a single lens, rather than having lots of things running in parallel,” Preston says.
BT has also consolidated redundant systems and, wherever possible, replaced expensive in-house development efforts with off-the-shelf enterprise software. “We had more than 200 different systems for customer relationship management alone,” says Preston, who adds that BT is moving toward consolidating on Siebel’s CRM solutions. Consolidating data has also been a priority, not only for achieving the goal of one bill for multiple services but also for having a single view of customer data that can provide insight for competitive advantage.
Part of the challenge is choosing applications that support all the nuances formerly handled by legacy software. “You need to focus on detailed use cases to make sure you’ve covered all the bases,” Spitz says. “We pick the half-dozen or so key transactions -- a customer calling in with this type of problem with this kind of ticket and you have to do the following thing -- and trace it through the system architecture. Then we analyze multiple ‘what if’ situations. This ‘system walk’ is a very useful alternative approach to traditional [methods of] requirements gathering and verification.”
Verizon has achieved much of its consolidation through SOA. According to Shadman Zafar, senior vice president of architecture and e-services, Verizon defined 500 essential business functions that were duplicated as many as 30 times in the organization. A governance process was instituted that required developers to build Web services instead of duplicating functions and to make those services available to other applications and business units. At the time, vendors didn’t provide the operational infrastructure Verizon needed, so the company had to build its own platform, dubbed IT Workbench, to manage and expose SLAs, accounting, billing, and capacity management for its new Web services.
The economies of scaling down
Consolidation not only cuts costs, it also simplifies the system and data integration necessary to automate and streamline business processes that once were manual. “You can’t get the level of automation and flow-through you need when transactions have to wind their way through multiple complex systems that can’t talk to each other,” Spitz says.
Verizon Business relies on enterprise workflow engines to anchor its integration and process automation efforts. “Scalability is a big issue, so we go with two or three of the most significant enterprise workflow engine players and use them as anchor system platforms that provide multiple points of entry and egress for a wide variety of orders and services,” Spitz says.
The other consolidation, which is aided greatly by system and data consolidation, involves reducing the number of customer-facing portals. “We’re looking to drive a single customer self-service portal and, as much as possible, to make the external customer and internal views the same, so when the customer calls in, the call center rep is looking at the same type of screen,” Spitz says. Spitz adds that customers now expect a similar experience with telecom that they get tracing a package on the FedEx site.
Migrating data to the new systems while maintaining legacy systems is a complex undertaking that also requires stringent policies and governance. “We have a policy in place that says if we get a new customer, or an existing customer buys a new product, all the customer data must be migrated to the new system stack,” Preston says. BT is using a set of migration tools from Ab Initio for this process. The experience gained from this exercise will be used to migrate customers en masse down the road.
Finally, all agree that intelligent transformation requires a clear, consistent road map that everyone understands. “Everyone needs to know where you want to be in 18 months, 3 years, or 5 years as a business,” Preston says. “In my experience, real things move by an 18-month window.”
Hurry up and launch
The other side of the telecom challenge is launching new services quickly and efficiently, and making sure IT efforts align with the goals of the business units.
For each of its software development efforts, BT starts with what it calls a “three-day hothouse” in which competing teams, each composed of customers, business process reps, product reps, regulatory and policy reps, developers, and others, work intensively to build their own prototypes and then vote on the best solution, which is then developed further. This replaces what was once a very lengthy, sequential process of passing through all parties.
The goal is a 90-day development cycle to ensure quick development of a well-aligned product. “Traditionally, when large telcos deployed software, you would have huge amounts of documentation, system specifications, test specifications, requirements design, and heavy engineering,” Preston says. “Today the motto is ‘fail fast,’ which means a lot more quick building and trying. If it doesn’t work, fix it.” BT also runs a customer beta test site.
Verizon uses its SOA to stitch Web services together internally and to expose business services to third-party providers. It also takes advantage of offshoring to perform development and testing on a 24-hour basis. For example, a U.S. team might develop code during the day and then pass it onto a team in India after an end-of-day cross global videoconferencing and collaboration session for overnight testing during India’s workday hours, or vice versa.
Verizon has also made a great effort to improve the quality of its product testing staff. “They used to be second-class citizens,” Zafar says. “Now we hire only high-quality software engineers, and their role is considered extremely important.”
In the end, agility is the goal the telecoms are driving for, just as their customers are. Their challenge is getting the elephant to dance.