As Paul Hughes of Netcracker says, evolving from what was traditionally positioned as the simple outsourcing of a technology or process, managed services has evolved to be increasingly hands on while offering higher value and delivering a level of service that is tied to strict service level agreements.
In the telecommunications industry, managed services contracts have been commonplace in the North American market, with most cable MSOs and numerous wireline and wireless providers opting for managed business support services instead of running in-house infrastructure for billing and related aspects of their service delivery.
With the rapid evolution of services, competition, regulatory hurdles and keeping up with the ever-changing demands of customers, operators now have to make a choice between transformation and change management done by internal staff on their in-house infrastructure or bringing in a managed service provider with the expertise to handle it all.
Managed services as a clear market differentiator
Providing a differentiated customer experience is central to any CSP strategy these days, and for years efficient OSS/BSS processes and multi-channel CRM were managed in house. Why? IT departments were stuck with the mentality of believing no one else knew their customers as well as they did and that billing was their greatest differentiator. But times have changed, and digital transformation is forcing CSPs to evolve rapidly.
In competitive markets, organisations may also have trouble retaining knowledgeable staff; high value employee attrition can lead to a ‘brain drain’ within the IT department and put both carrier service delivery and the customer experience at risk. Not with standing the inherent cost in maintaining an IT department (an expense that many companies may wish to trim), the benefits of managed services can become more attractive. Each CSP approaches managed services differently, and must evaluate all potential impact on the customer experience.
Managed services can benefit the CSP through:
- A reduction in CapEx investments
- predictable cost structures
- predictable upgrade cycles and guarantees around performance
- consistency of processes and efficiency
- potentially lower operational costs
- the ability to refocus staff productivity around core business requirements
A typical managed services implementation includes license, implementation and hosting revenue and helps shift certain IT responsibilities out of the organisation. Such a shift should be closely evaluated by the CSP and the managed services partner they choose.
Key questions should include:
- Will a typical managed service OSS/BSS implementation that takes 9 to 18 months run the risk of any delays that could negatively impact the customer experience?
- Does the move to managed services mean losing control of strategic planning and control over service design? Will the CSP still be able to remain customer centric?
- Does a 5- to 7-year managed services contract restrict business agility around OSS/BSS, CRM or related technology areas?
- Will personalisation or differentiation of services be restricted due to the lack of flexibility by the managed service provider’s technology stack and limit a differentiated customer experience?
Don’t forget customer experience
Market research indicates that global IT managed services spending will continue to grow for telecom and cable customers. Service evolution demands today require a new level of focus on strategy, design and delivery of what customers want. As such, shifting day-to-day back office operations to a managed service model may be the right choice for organisations as part of their transformation.
The pitfalls mentioned above can be avoided by choosing a managed services partner that is aligned with both the short-term and long-terms business and technology strategy of the operator. Aligning industry best practices and deep-rooted transformation expertise with a partner that won’t disrupt internal operations should be the ultimate goal in order to enable the operator to offer the best possible level of customer experience.
Maintaining a differentiated customer experience shouldn’t be affected by the contract, as long as the managed services provider in question has a proven record of success in supporting voice, video and data services, a strong legacy in managed services, aligning the contractual relationship with the goal and future decisions of the CSP and delivering a service level that guarantees quality, flexibility and agility in a partnership that will truly deliver the best of both worlds.
The author of this blog is Paul Hughes, director, Strategy, Netcracker.
Comment on this article below or via Twitter: @ VanillaPlus OR @jcvplus
