Unified OSS vs best of breed

For over a decade, outsourcing to India has provided Western companies with a means to cut service development and maintenance costs, deal effectively with the peaks and valleys of demand and focus their own efforts on more strategic work. Both India’s government and entrepreneurs were quick to take advantage of this growing trend, attracting multi-national after multi-national to outsource their business services. According to Nasscom, Indian ICT and business outsourcing services last year employed four million people and accounted for 7% of India’s gross domestic product.
 
However, the extent of outsourcing in India is likely to decline over the coming years. The cost advantage used to be at least a 1:6 return, but this has now dropped to less than 1:3. The demand for workers in the ICT services industry has now outstripped the supply of labor to such an extent that a worker shortage is being created, driving up wages and pushing western companies to outsource to Eastern Europe and elsewhere. Technology commentators have also pointed out that low value-added and easily automatable work should disappear over the course of the next decade. This has led some industry analysts to claim that India is facing an economic backlash, as western companies take their business elsewhere.
 
If India is to continue to thrive economically in the 21st century, it will need to diversify into developing its own products and services, rather than simply acting as a support for others. To this end, Indian companies will need to create a stable and advanced communications infrastructure to support their growing highly skilled workforce with experience spanning IT, finance and telecoms. Fortunately, this is a path India has already started down.
 
The Indian telecom market presents substantially different requirements to those in western Europe or North America. They are also extremely lucrative, with OSS Observer forecasting revenue growth in emerging markets at 11% from 2007-2012. Even so, the development of India’s communications infrastructure will be a long and difficult process. Indian telecom companies face the enormous logistical challenge of a rugged landscape covering over three million square kilometers and a huge, largely rural population. The key will be in accessing their large and often rural populations. Some 70% of India’s 1.1 billion people live in rural areas with tele-density of around 2%.
 
While the opportunity for customer growth is clear, the automation and intelligent management of manual activities to generate operational efficiency will be critically important when maintaining services for such a large volume of subscribers spread across a huge area. One Indian operator is currently supporting a 1:1750 staff to subscriber ratio.
 

 

 

Anyone who believes that Indian operators will only need to provide a basic level of customer service is also in for a rude awakening. It is a common misconception is that subscribers in emerging markets do not expect a high-quality customer service experience. In reality, any providers who do not scrupulously maintain and improve their SLA face extinction. Subscribers in emerging markets are technology literate and competition from other operators is relentless. Indeed, competition is a major reason why India has some of the lowest mobile rates in the world, at just 2 cents per minute. This need to defend market share and capture new subscribers is also driving innovation in service offerings. In addition to coping with rapid subscriber growth, operators in India must reduce the time-to-market for new products, since demands for 12-15 new products and features per year are not unheard of.
 
To tackle these problems, Indian operators have once again shown their ability to innovate by opting a single unified OSS. Modern OSS has been shaped by developed markets, culminating in a “best of breed” approach potentially unsuited to emerging markets.
 
“Best of breed” approaches to OSS cost more money due to the need for integration and data synchronisation, as well as latencies. In contrast, a unified OSS allows for the simplification and consolidation of end-to-end services – improving and stretching the supply chain wherever possible, from equipment supplier to end customer. This presents operators in emerging markets with sophisticated OSS without the associated long lead times and high costs. This has meant that some Indian operators that are seeing increases of millions customers per month are rapidly expanding their offerings and rolling out next-gen services.
 
It is also important that OSS providers in emerging markets empower their clients to take control of their OSS and work with them in partnership. Often, Indian operator’s cost constraints are such that they can only maintain their OSS in the long-term by doing it themselves, supported by the product vendor as needed. The OSS vendor must put in place knowledge transfer strategies that will gradually introduce the operator’s IT staff to the system. Achieving complete transfer of responsibility within a few years is realistic and proven, where supported by the product vendor.
 
As their telecom infrastructure becomes more advanced, India will be empowered to source new services and products, not just outsource the operations of others. It will not be long before India’s resource of highly trained workers is matched by a 21st century communications network.
 
With ARPU’s falling worldwide, operators are now desperately adding value to their services and, increasingly, medium or high ARPU countries may feel the bite of revenue reductions on their operations and question whether their network is providing them with the necessary tools to exploit economies of scale. The Indian approach to these problems can teach us valuable lessons about the challenges that developed markets have not yet had to contend with, but may soon find themselves facing.
 
Tony Kalcina is Clarity International’s chief product officer