CoralTree's roundup of 2014

So in good order and good end of year tradition, we felt it worthwhile to recap some of this year's blog articles and see if they correlate with what the key goings on are in the industry.

Customer Experience

We started off the year with a blog on Customer Experience, at the time it proved to be very popular and it remains one of our most read blog articles. This is probably because in this environment of reduced ARPUs, general financial instability, and diverging customer habits getting the upper hand on the competition has been driven, in no small way, by improving Customer Experience.

Maybe that includes getting rid of customer bills?... it might sound controversial, but one operator is already doing it. This is something that we covered in a blog post ingeniously titled "Customers don't really want bills".

Even with things starting to pan out for many operators, as the European economy strengthens, superior customer experience has definitely become something that consumers expect of operators and driving the efficiency agenda can play a part in that as well. Talking of efficiency... 

Operational Efficiencies 

Other ways that operators have sought to improve their bottom line and increase their profits is through operational efficiencies. The OSS side of things has had a lot of focus in recent months with all the talk - and hype? - surrounding 'NFV' (Network Functions Virtualisation).

But BSS efficiencies have been talked about in a variety of flavours and incantations. We covered such topics in "Do we understand the meaning of convergence?" and "Expectations that have sped ahead: efficiency is crucial". 

These topics appear to have dropped off the radar a little bit in the wake of all the NFV talk. However, the OSS/BSS bottleneck that currently prevents some operators maximising efficiencies in NFV, could see BSS efficiencies and even new BSS implementations (make sure you know why they sometimes fail!) being put in place to enable the full benefits of Network Functions Virtualisation integration.

Hopefully this means the topic will get a whole new lease of life!

Viewing Habits

Consumer changes in viewing habits have also come to the fore this year. From the extremes of customers ditching pay-tv services altogether, which have been becoming more of an issue for CSPs, as companies like Netflix become more prevalent. We've started covering this in part one of the "cord cutters/cord nevers" series. To customers general viewing habits changing a topic we looked at in "What’s next? Interactive multi-tasking!"

In a strange twist, North Korea has show just how much viewing habits have changed and how much ready consumers are for change.

With major US cinema chains pulling Sony's new film 'The Interview', but high public demand to view it, Sony called on On-Demand providers YouTube, Google Play, Microsoft Video and more recently iTunes to host the video for a nationwide release which earned them $18m. As much as they had aimed to earn via a national cinema release, so is this the end of the cinema?

We'll be looking at this ever more important topic in the new year.

What can we expect from the coming year? 

Well, all these topics have been high profile topics throughout 2014, but the industry is still far from implementing these features fully. So we should expect to see more of them over the coming year(s)! 

But there are a great many other things that might well present themselves in 2015, such as an increased focus on BSS systems that are able to provide flexible, personalised offerings to customers. Or an increase in telecoms companies adopting more non-traditional services, which are predicted to grow from 8-10% of income, to a potential 15-20% of revenue. This could help sure up bottom lines that are constantly under threat.

What ever the new year brings, Happy New Year, and all the best in 2015! 

Spitting in the Soup: Part Two - On the hook.

Spitting in the Soup - part 2 - On the Hook

As a small boy, growing up in rural Nottinghamshire, a highlight of my week would be a trip to the local newsagents to buy another six-penny pack of American Civil War cards. Each wax-papered pack would contain about five random cards from a series of maybe 200 in total, plus a nominal one inch square of bright pink bubble gum. 

Amongst our gang of local village boys, by far the most treasured card was one depicting a poor Confederate soldier helplessly impaled through his torso on a huge angled wooden stake. He had a ghastly agonised expression on his face and blood seeping from an enormous chest wound. By any standards it was a horrific sight, unless of course you were aged seven. Nowadays, I often think back to that picture when I encounter those CIOs of telecom operators who are struggling to come to terms with their own uncomfortable predicaments. Not so much "on the hook" as "on the spike".

To understand the CIO's predicament, I should explain that a telecom BSS solution plays a similar role within a large telecoms organisation to that of the vital organs in the human body - say the heart, liver, and lungs. So, unfortunately when dealing with some vendors, once that BSS solution has been installed and implemented (of itself a major challenge), the operator is effectively "on the hook" to that BSS vendor, and as helpless as that poor Confederate soldier. Up until final implementation and cut-over from any previous system, there may still be a small window of opportunity to escape from the vendor's clutches (see Spitting in the Soup part 1). 

Painful but true

Once the new system has "gone live", and the project celebration party bunting has been taken down, the operator gradually becomes aware of some pretty unsettling home truths:

• The vendor's A team, whose experience and skills were so valuable during the implementation project will gradually drift away to other higher priority (for the vendor) projects/clients, being replaced by inexperienced youngsters, whose industry training the operator seems to be unwittingly paying for.

• The exciting vendor strategic road-map that was so key in convincing the sceptics on the system selection committee to originally choose that particular path from the various available options, drops from sight as though it had never actually existed. Any attempt to engage the vendor in a discussion about it is met with either a blank expression or hysterical laughter.

• As the operator introduces new products and lines of business with corresponding new system requirements, the cost of such incremental system changes goes through the roof, and software is delivered late and with numerous bugs. Support levels deteriorate continuously. There is no other source for the software changes or software support, so the operator has literally nowhere to go. 

• The vendor acquires another BSS business, and announces that the newly acquired company's application software will form the centre-piece of its exciting (for them maybe) new roadmap. The solution that the operator has just spent millions implementing is effectively relegated to legacy status with massively reduced R&D funding.

Sadly for our industry, these kind of post-implementation disappointments have become the rule rather than the exception in recent years. In most "normal" economic market models, vendors delivering poor levels of software, service, and value for money would quickly be driven out and replaced by vendors with better offerings. 

We don't have much choice with who we pick... 

Unfortunately, in the BSS market two powerful forces combine to create a stifling inertia that prevents the development of an efficient market. Firstly there are the enormous barriers to entry that face potential entrants into the BSS industry. BSS applications have increased massively in their complexity as operators have launched new lines of business, with so-called triple-play and quad-play operators now offering complex bundles of telecoms services. 

The expertise required to design and develop such applications is such that there are probably no more than a handful of businesses worldwide attempting to create new applications for the industry, despite analysts estimating the annual market size as being in excess of 15 billion dollars. (Gartner 2011 IRCM Magic Quadrant)    

Secondly, the costs of switching BSS solution are so high, and the negative business impact of switching so great - requiring the business to freeze itself for a year or more, that operators generally have little option, but to grin and bear it.  

So what is our disillusioned and disappointed CIO to do in such circumstances? The real secret of survival for CIOs is to ensure that such scenarios simply do not arise in the first place, with the key issue being that of vendor selection. In fact I would go so far as to say the secret of success here is in not just finding the right vendor, but in finding a vendor with the right people. Ultimately it is the vendor's service delivery team that you will be hugely reliant on, not their corporate image, stock exchange listing, plush executive offices, or extravagant entertaining.

So what is a CIO to do?

So to finish, here are a couple of free tips for anyone thinking of entering the minefield that is buying a new BSS:

Make sure that you meet the vendor staff who will be responsible for implementing your system. Get hold of their CVs and get references from their previous client projects. Make a careful note of their names (the good ones), and ensure that the project staffing list forms part of your implementation contract. Make this a show-stopping contractual point, and do NOT back down.

Negotiate tough, but fair service levels that are clear and measurable. Insist on contract terms that will require the vendor to meet the estimated cost of you having to replace their system in the event that service levels are repeatedly breached, or as an alternative, that will trigger the automatic release of the application source code from escrow. You don't really want to have to exercise either of these options, but they should both help to keep the vendor in line. 

In my next article, I will explore why "small IS beautiful" as far as BSS vendors is concerned, and why there are so few of us around.

Spitting in the Soup - Why BSS implementations fail - Part 1

"Spitting in the soup", or as it is more commonly encountered in French, "cracher dans la soupe", is an expression that is largely confined to the world of professional cycling to describe the behaviour of a cyclist who has revealed the secrets of the peloton, normally in relation to performance enhancing drug-taking. The implication being that by spitting in the ‘soup’, the individual spoils things for everyone else. 

This series of blog posts about the BSS industry will not be revealing secret drug-taking, although you would be forgiven for thinking that the "strategic roadmaps" touted around by some major BSS vendors could only have been created whilst their authors were heavily drugged. The intention of this series is to draw back the veil from what has become over the last 10 years a broken and highly dysfunctional industry, by taking a look at some of the strategies (con tricks to you and me) employed on both sides of the BSS industry.

A rare but illuminating glimpse of what goes on in the industry was provided in the UK courts a few years ago when the BSkyB successfully sued BSS vendor, EDS, for significant damages (£300m+) in relation to a failed BSS replacement project. Such cases are extremely rare in the industry due to the huge corporate embarrassment on both sides of the fence, not to mention the enormous legal costs involved in fighting a protracted dispute in the high court. Normally such scenarios are settled behind closed doors, well away from any courtroom and subject to stern gagging conditions, to prevent the gory details of what has gone wrong being exposed to public (and industry) scrutiny.

The court's full written judgement is freely available here, and although it is a lengthy document (450 pages), it should be compulsory reading for anyone involved in the buying or selling of large scale IT solutions. As well as containing a multitude of fundamental lessons for the various parties to such transactions, the judgment also delivers some highly entertaining passages relating to the Sky counsel's hilarious courtroom demolition of the EDS bid mastermind, Joe Galloway's credibility. 

Highlights of the Case

I have a trimmed the following down to some of the key highlights regarding Mr Galloway - but you can read a verbatim segment of the court judgement regarding Joe Galloway here.

Mr Galloway claims that he attended a College on the Virgin isle of St John.

• Straight away, Mr Galloway was discredited because the College was a 'buy a degree' online sham - the prosecuting QC bought the same degree as Mr Galloway's, from the same college, for his dog Lulu, who even got higher marks!

He proceeded to maintain the lie however stating that;

He would regularly travel to the college by getting a connecting flight to St. Thomas, which is the largest island and then fly to St. John.

• Turns out that whilst there is a runway on St. Thomas, there is no airport/runway on St.John (which is only two kilometers away), nor has there ever been - when pressed he replied "As I said before, I don't recall specifically"

Part of his time and study there was spent working on a project for Coca Cola at Coca Cola facilities

• Evidence provided by a solicitor that travelled to the Island and a US Virgin Isles senator - which was not challenged - showed that, just like the airport/runway, there has never been nor is there a Coca Cola office or facility on the island. No, infact, was/had there ever been a college of the name stated by Mr. Galloway.

He would provide the council with evidence of his time at the college by producing some of the books he used. 

• He did indeed provide the court with a book that he said was from his time spent at the college - it bore the barcode, stickers and pencil markings which linked it with a library on a Missouri college campus and had been recently acquired.

So what does this case tell us?

For those of you who wisely invest the time to read through the entire judgement, a number of striking features of the case will emerge:-

• The breath-taking willingness of the vendor to say and do virtually anything in order to win the business, an approach that can be summed up as "he who lies most, wins". 

• The reliance of the vendor on obscure contractual wording to avoid liability for any such pre-contract (mis)representations.

• The failure of virtually everyone involved in the delivery of the project to follow "normal IT industry" planning, analysis, design, development and testing procedures.

• The overwhelming conclusion that having won the business, the vendor's delivery plan consisted of little more than "winging it".  

Clearly the old maxim caveat emptor was never more appropriate than in the case of the purchase of a BSS solution.

Industry insiders will chuckle to themselves at the constant references in both the Sky ITT document and EDS response document to "world class" this and "world class" that, as though the repeated use of that phrase would somehow on its own guarantee, a well "world class" outcome.  

Now you may be thinking that what happened between Sky and EDS in this case was very much a one-off. Sadly, I have to inform you that the only unique element of the scenario is that it eventually ended up in court. The whole sorry catalogue of vendor misrepresentation, unrealistic operator expectations, inadequate requirement specifications, finger in the air pricing, non-existent resource allocation, unproven solution deployment, inadequate testing etc. etc. is pretty much the norm in the BSS industry for this type of project. I say all credit to Sky for having the balls (and deep pockets) to refuse to accept such woeful service execution from their vendor. 

In my next article - "On The Hook" - I will address the seemingly hopeless plight of most telecoms operators with respect to their existing BSS platform. 

You can read part two of John's article here

John Phillips is the Managing Director for CoralTree Systems.

John’s Code to Success: “I've never been afraid to venture beyond my existing technical skill-set, viewing any such scenarios as fantastic learning opportunities, rather than risks to be avoided. With today’s modern technologies, if a business requirement can be described in words, then it can almost always be developed and delivered.”