Historically, operators have responded by investing in BSS that were considered strategically important - to win and retain customers, increase ARPU and improve the customer experience - or in OSS - to reduce operating costs and make business more efficient.
However, according to an Analysys Research report titled 'Billing and OSS Trends: The Transition to Telecoms IT,' the supply-side of the telecom industry has been undergoing major transformation and consolidation - typified by the emergence of four application domains of telecoms IT that encapsulate the traditional sectors of BSS and OSS: cash, customers, services and resources.
Considering these, operators should identify the areas they need to improve on to enable them to properly allocate their IT budget.
Analysys sees the wholesale market becoming increasingly important, driving investment in the cash domain, or in retail and wholesale billing, mediation, revenue assurance and fraud management.
Suddenly all manner of IT applications - including charging and billing in the cash domain - become either critical enabling technologies for new wholesale services, or services that can be wholesaled in their own right.
Expect the importance of IT teams within the wholesale and network divisions of fixed and mobile operators to increase. Retail operations will increasingly become customers for - and specifiers of - applications that they previously had a major hand in building and operating. Operators' IT teams will have to put at their new customers' disposal powerful and user-friendly interfaces. OSS and BSS solutions may even be provided to multiple retail consumer service providers in the form of 'software as a service.'
Also, the requirement to resolve the issues of clear, transparent and use-friendly charging for content, delivered on- and off-net, is getting more urgent, particularly in the mobile service market. Expect to see major investment in off-net content billing platforms, and micropayment systems, over the next few years.
With the advent of IMS and other NGN infrastructures, customer service will be placed under increasing pressure, forcing operators to focus more on the oft-neglected issues of ease of payment, bill clarity and tariff transparency.
In relationship to improving the customer experience, according to the Yankee Group's 'Five Significant OSS Trends We Expect to See in 2008' report, there will be a close alignment among service assurance, service management and service fulfillment functions.
In today's dynamic communications environment, it will be impossible for operators to keep pace with the consistent change and dynamism introduced by converged services unless their fulfillment and assurance systems are closely aligned. A single and central view of subscribers, their provisioned services and their interactions with network resources will be the better way to provide a customer-centric view of products and services.
It is critical to close the gap between service fulfillment and assurance, which will enable providers to reuse interfaces and process fragments that can subsequently be triggered in either the service fulfillment or assurance context.
Service assurance solutions will also need to have a profound service management component. Service management provides an understanding of where service quality for different services stands, what combinations of different service quality scenarios are possible, and which service quality scenarios deliver the greatest value to CSPs.
Boosting the 'service' layer
On the OSS side, service fulfillment systems should be able to support different service creation environments that are part of SDPs or SDE. The Yankee Group expects OSS technology vendors to create a tighter link between the service delivery platform and the provisioning layer.
The TeleManagement Forum (TMF) is working to align SDP solutions with fulfillment solutions. Leading service fulfillment vendors have come up with a service creation environment (SCE) that is typically a GUI where all published services can be viewed in addition to mapping of all individual service components with its underlying network resources.
Network capacity planning and trend analysis will also become an area of key focus for OSS vendors. Accurate capacity planning and trending is becoming critical in the context of fulfillment of NGN services.
On-demand, bandwidth-intensive service requires dynamic, real-time allocation of network resources across the end-to-end network infrastructure. Accurate, realistic and proactive network capacity planning and trending capabilities are a key requirement for OSS solutions.
Planning will not only enable correct sizing of the future network but will also help CSPs reduce capacity shortfalls, minimize order fallout and increase efficiency by identifying underutilized network resources.
Analysys says that the advent of triple-play services and the need to roll out new customer premises equipment more quickly will stimulate investment in network management and quality of service, with QoS set to be extremely important in differentiating the service offerings of fixed network service providers in the next-generation market - especially where headline broadband speeds are advertised as a competitive differentiator.
The ability to provide different levels of service quality increases customer choice, and can also be used to align resource utilization more closely with price, creating a more sustainable business model. Ensuring that customers receive and are billed for the appropriate service level is essential to maintaining customer satisfaction and revenue.
Without a horizontal, streamlined OSS strategy, there is no chance of success for carriers investing heavily in NGNs and major business transformation projects. Carriers now realize the importance of a streamlined OSS strategy, resulting in all major transformation projects allocating 30% to 40% of their software budget to OSS investments.
With vendor competition heating up, major product developments and R&D efforts are under way. One common message coming from most pure-play service activation vendors is the launching of skeletal network inventory platforms in an attempt to become a one-stop shop for all the OSS needs of the carriers.
In most transformation projects, network inventory takes center stage; operators will spend more on network inventory than on service activation or order management - the two other central categories of fulfillment.
For greenfield operators as well as emerging markets, the OSS-in-a-box or bundled OSS approach works well. To target those emerging markets, OSS vendors should have all the fulfillment pieces, however skeletal they might be.