Recently we asked a sample of service
provider executives to tell us what
keeps them awake at night, to describe
their business preoccupations, their
sources of botheration.
The many comments we received fall mainly
into three categories: investor pressure;
service price/performance; systems problems.
• Investor pressure: Generating
customers, revenue and profits to meet
the demands and expectations of investors.
• Service price/performance: Meeting
customer expectations for new services
at low prices, while increasing the
speed with which new products and services
can be developed, implemented and supported.
• Systems problems: Managing the
ever-increasing complexity of the network
and IT infrastructure – and finding
more and more money to pay for the care
and feeding of the legacy IT environment.
One of our respondents, a CIO in a competitive
service provider, pointed out that his
list of challenges, the things that
keep him awake at night, is pretty much
the same as the list he would have drawn
up ten years ago, when he worked for
a large long-established telco in a
Surely that can’t be right! We’ve
moved a long way in the last ten years,
and one would think that the new competitive
environment would change the pain points,
at least a little.
And if it is true, is anything happening
in the industry to suggest that things
will be any different in a further ten
Let’s look at these three areas
a little more. First, the discovery
that investors want a return on their
investments will not cause much surprise.
It has ever been thus, in all industries.
What has been different in the telecom
industry over the last few years is
that some investors expected very rapid
returns from their investments. New
entrants gave them business plans that
fueled these expectations. In contrast,
ten years ago investors in telecom expected
steady growth, and modest returns over
many years, not months. Today’s
special challenge for service providers
is to manage the fall-out from those
overly-optimistic plans and convince
investors that profits are possible
if they swallow their disappointments
and hang in there for the long term.
come from serving customers well,
at a price they are willing to pay."
To reassure the investors, service
providers now need to show a clear
and specific track to profitability,
which brings us to the second
set of sources of botheration.
Consider all of the problems surrounding
bringing services and products
to market: keeping costs down,
improving service reliability
and availability. It should be
no surprise that customers continue
to expect better service at lower
prices. This, after all, is one
of the reasons governments worldwide
have been changing the rules to
allow competitors into telecommunications.
Talk to managers in any other
industry – car manufacturing,
airlines, home appliances, supermarkets
– and they will describe
the same set of challenges related
to product performance, value
and competition. No surprise there,
So what’s different in telecoms?
It seems that many of the frustrations
are linked to the difficulty and
cost of creating services and
managing operations. Many service
providers find that the available
tools are not completely up to
the job. Managers find that they
spend too much time fixing the
tools or finding workarounds,
instead of using the tools to
make money. It’s as if the
driver needs to keep stopping
to fix the engine of the car,
instead of concentrating on finding
a good route and keeping the car
on the road.
So, digging down a further level,
we come to the specific complaints
and concerns about business and
operations support systems. Executives
in all functional areas commented
on the persistence of old problems
such as the need for manual workarounds,
inadequate views of customer data,
incomplete information about network
assets, the high cost of integrating
systems, data integrity, multiple
systems in the same functional
space and so on…
There is a causal chain here.
Investors cannot be satisfied
unless companies generate profits.
Profits come from serving customers
well, at a price they are willing
to pay. But good service and tight
cost management need tools that
work, and too many service providers
tell us they do not have an operational
environment that is truly fit
for purpose. Few service providers
will assert with confidence that
there are no stranded assets in
their networks, that all customers
are being charged the right amount
for their services, that there