Christoffer Andersson is the recently announced managing vice president of Ericsson's Billing and Customer Care Solution Area, which was formerly the LHS Group, acquired in 2007. Here, Andersson, who describes himself as a fresh face, tells VanillaPlus how the company plans to develop now it is fully-integrated within Ericsson
VanillaPlus: Ericsson acquired LHS more than three years ago. What will be different now LHS has been integrated into Ericsson's newly established Billing and Customer Care Solution Area?
Christoffer Andersson: We acquired LHS in 2007 and are very grateful to Wolfgang Kroh, former CEO of LHS, for his leadership of the company, especially in the critical post-takeover period while we combined our solutions and go-to- market approach – and which contributed so much to the successful integration into Ericsson. The acquisition of LHS and its flagship billing and customer care product portfolio was all about strengthening our portfolio and competence and becoming the leaders in OSS/BSS.
I am very excited to be the fresh face managing this new Billing and Customer Care Solution Area which now incorporates our fulfilment and newly launched CRM offerings. I believe OSS/BSS is a critical area for communications service providers and that we have some exciting opportunities ahead of us as we move forward with our strategy.
VP: How does this addition of Billing and Customer Care support Ericsson's corporate strategy?
CA: Rapid advancements in network technology can create a huge potential impact on the way that business is conducted and on peoples' lifestyles: just look at the applications realised by mobile broadband or at some of the possibilities being discussed for machine-to-machine communications.
For me, the real challenge for the industry is to be able to monetise these technical advances and to create viable business models. That's why I view OSS/BSS as one of the most important and exciting areas to be in, in communications right now.
Ericsson’s strategic goal is to be the number one choice for OSS/BSS consolidation and transformation. We're going to base this on our world-class, end-to-end software portfolio, our systems integration expertise and our managed services. This combination can support any type of communications service provider of any size, from tier 1 operators to smaller virtual operators. In BSS, I view LHS’ BSCS iX, together with our strong fulfilment offerings as a cornerstone of Ericsson’s overall offering in this area.
VP: So, does Ericsson now view itself as a software company?
CF: Actually we’ve been a software company longer than most people might think, bundling software with hardware based solutions. However it is clear to us that a software-led approach, based on openness and ease of integration, is essential for us to help operators with their business challenges. For example, the ability to easily integrate CRM, order management and fulfilment systems is key for an operator that wants to achieve a faster time-to- market.
I therefore view the type of software skills, competence and technology acquired with LHS as leading the way in this approach.
VP: Looking ahead, how would you summarise the OSS/BSS challenges facing the industry?
CF: The economic crisis has really focused minds on efficiency and reducing operating expenses. But this is not just a short-term focus, it has become a driver of longer-term next generation strategies. And I think this is the case both in mature markets, where tough competition and declining margins are factors, and also in emerging markets where many operators are already facing up to an eventual slow-down in growth.
VP: What specific evidence have you seen for this?
CF: Increasingly, we are seeing a demand for convergent charging and billing solutions, both pre and post-paid and also fixed-mobile and multi-play. This is from all types of operators, not only greenfield operators but also incumbents, who identify OSS/BSS transformation as being key to their business strategies.
Put simply, operators are trying to do more with less. A good example is the Portuguese quadruple-play operator Optimus, who recently drastically reduced its number of activation systems. This is serious IT consolidation and shows a strong focus on creating a leaner operating environment.
VP: How would you characterise the so-called next generation of OSS/BSS systems?
CF: It is about consolidation and transformation. It’s about creating a leaner environment through consolidation and transforming business processes to adapt to next generation ways of doing business.
We are already seeing new value chains and business models emerging around content and apps for smartphones, so it’s clear that OSS/BSS requirements will continue to change and evolve. I believe next generation OSS/BSS is really all about business empowerment and business innovation – and providing operators with the flexibility to adapt cost-effectively to innovative new business models, as they emerge.
For example, this could be the flexibility to quickly set-up and support virtual operators serving the M2M sector. Or perhaps being able to launch advertisement sponsored content services, involving multiple chargeable parties.
VP: So how would you advise operators to go about achieving these next generation strategies?
CF: How to design next generation OSS/BSS architecture and the transformation journey is a tough question and the answer really depends on the operators’ priorities and business objectives.
As I said, an operator’s immediate priority could be to create a leaner operational environment and reduce op ex, perhaps by reducing the number of billing systems. Alternatively
operators that are more focused on improving customer experience or time to market may target the integration of their fulfilment and CRM systems, for example, to use device management intelligence for targeted market launches or enhanced customer support.
VP: So what are the key success criteria for achieving these transformations?
CF: In our experience, the key to a successful transformation is to take an early look at the organisations’ business process as well ensuring that business objectives and priorities are identified and understood from the outset. However this should not necessarily be performed at a high level but also across different areas and levels of the organisation.
There also must be buy-in across all major stakeholders – not just from the CIO and CTO, but also on the business side from the CFO, and ideally the CMO as well.
After completing each key stage of an agreed transformation project, these objectives and priorities really should be re-assessed: to ensure they are still valid and that the overall transformation project remains on the course that makes most sense to the business.
VP: Machine-to-machine communication seems to be attracting a lot of hype in the industry these days. What kind of business models will emerge from M2M?
CF: Yes, it really is a hot topic. We believe that with the different types of applications of M2M communications, the total number of telecoms connections could increase from the 5 billion we have today, to some 50 billion by 2020.
In truth, it is still too early to know exactly what the business models will look like. This is a good example of the whole challenge facing OSS/BSS to be flexible and business adaptive. It is possible from this sector, for example, that one, two or three-sided business models could emerge, with sponsors also being involved in the value chain.
VP: What OSS/BSS challenges will operators find entering the M2M business?
CF: The first challenge is to support these new business models in the value chain as quickly as they emerge. Each operator will have to make sure their OSS/BSS can handle these new requirements – depending on what they decide will be their role and differentiation in the value chain.
The second is to make sure that their OSS/BSS can run lean enough, with low enough overheads, to support these huge expected numbers of transactions and ultra low Average Revenue per User (ARPU).
The third is the problem of supporting the growth in sheer number of connections, I mean to literally millions of connections, which will need very highly scalable systems. We know that scaling will present operators with real challenges, particularly in the area of configuration
and cost effective management and monitoring of these millions of devices.
The good news from Ericsson’s point of view – andhopefully the operators will feel the same way, is that I believe we are well positioned to provide the operator with the OSS/BSS flexibility to cost effectively adapt to whatever new business models emerge, as well as support the lean running and the massively scaling systems that we believe they will need.
VP: As is often predicted, do you think many operators will be reduced to the status of dumb bit pipes?
CF: Many operators may simply become delivery channels, or what used to be called dumb bit pipes, but I really don't see this as a problem. This could be the most viable and sensible strategic model to adopt for certain operators; for those who can build a competitive advantage around cost effective access and transport services on a wholesale basis, rather than direct contact with the end user. After all, there is nothing dumb about creating shareholder value.
VP: Will operators naturally evolve towards new strategic models, or need to make a conscious decision about which models to adopt?
CF: Nowadays, new sources of significant revenue are coming from device and internet centric value chains and operators must ask themselves how and with whom they should compete. To be successful, I believe that many operators will have to make a very honest assessment of their assets in terms of technology, brand and market.
To a large extent, as a vendor we view this as our role; to help our customers visualise how their market is evolving – and advise them how best to adapt.
VP: What should an operator look for in a vendor when designing next generation OSS/BSS architectures?
CF: At Ericsson I would view our role as transformation partner. As I said I view our role as helping customers visualise their next generation business and to identify what their business priorities should be. Asking questions about their customer base usage habits could help them determine if, for example, customer- centric factors, time-to-market or innovation are their most important priority, or whether lowering op ex should be their primary objective.
To be successful, at the core of this approach should come a strong, end-to-end product portfolio. One that not only encompasses the configurability and performance needed to meet the customers’ next generation business requirements, but also the openness and modularity to enable the customer to transform their architecture in a stepwise fashion, in line with their business priorities.
A transformation partner should have a strong product roadmap, showing how future market needs will be supported by their products and the services expertise to help customers move seamlessly and cost effectively to future releases. As I mentioned at the beginning Ericsson’s strategic goal is to be the number one choice for OSS/BSS consolidation and transformation. We
aim to achieve this by providing a more holistic approach to ICT; providing experience, insight and technology across the IT, network and consumer domains.
