Digital Operating Models for CSPs: The DSP Equation
Communications Service Providers (CSPs) know they need to transform to meet the desires of the new generation of digital consumers who are accustomed to the instant-gratification, online world of Amazon, Google, and Netflix. This will require them to become Digital Service Providers (DSPs), which they know will require a revolution in the way they operate their networks and business. In this article, Analysys Mason presents the results of extensive research to answer the question “what are the essential elements of this DSP revolution?”
Three Journeys Necessary to Become a DSP
There are three journeys that a CSP must make to become a DSP, as shown in Figure 1. Each one is a major transformation in the way that the CSP operates – in the three areas of operations innovation, services innovation and network innovation.
D(SP): Digitalising the operations
First and foremost to becoming a DSP, the CSP must change the way that it interacts with its retail customers. It must provide a “digitalisation” of the user experience that has four key characteristics:
• The digital user interface is the main method of interaction between the consumer and the DSP
• The interactions are instantaneous and personalised
• The services themselves are mass customised according to user preference
• The user feels in control.
Chief Digital Officers, goaled with this journey, expect that digitalising the operations to provide large benefits, beyond satisfying the desires of the customers, as described in Figure 2. In particular, the replacement of human interaction with digital interaction with the customers, backed up by the massive automation of operations will radically decrease costs as well as speed up operations.
(DS)P: Providing New Digital Services
The second journey involves providing a new generation of services – often called “digital services” or “digital economy services.” Many of these services are being experimented with by many of the leading CSPs in their many digital organizations, often in new subsidiaries (such as the late Telefonica Digital). Some have reached the full implementation phase – in particular M2M/IoT and Connected Car, with the Connected Home to follow shortly.
Figure 3 displays some of these new digital services – most will need to be implemented as new software systems that will provide both end-user access to services as well as serving as software platforms for other businesses in a B2B2C (or more complex) value chains.
vNGN: A New Agile Network to Support the New Agile Business
Virtualisation of the network is a major hot topic and a precondition to fully realise the potential of a DSP. DSPs will create and decommission services, offers, and packages at a blistering rate – over one a week. Many of these will require elasticity in the underlying network – to keep up with quick-growing demands, without major investments in network equipment on speculation of success. This elasticity will come from software running on industry-standard computers that takes the place (“virtualises”) the functions previously requiring dedicated hardware. Other, more innovative services, will require new Digital Service Delivery Platforms (DSDPs) that will also be virtualised and capable of being implemented quickly and inexpensively as software adjuncts.
Implementing the DSP Equation
Leading Tier 1 CSPS are already well on the way to digitalising their operations. Experiments are ongoing on the new digital services. And the virtualisation of many network functions is already underway in traditional equipment vendors as well as a new generation of software providers. It will take a decade, but the benefits will be far reaching and the changes in what it means to be a provider of services will be profound.
The author of this blog is Mark H Mortensen
Mark is the lead analyst for Analysys Mason’s Customer Care, Service Fulfilment and Digital Economy Platforms research programmes, which are part of the Telecoms Software research stream. His interest areas include customer omni-channel self-service, operations systems enabling new CSP businesses in the digital economy value chain, and creation and support of differentiated services aimed at high-value customers. Mark was Chief Scientist of Management Systems at Bell Labs, and has also been president of his own OSS strategy consulting company, CMO at the inventory specialist Granite Systems, VP of Product Strategy at Telcordia Technologies, and SVP of Marketing at a network planning software vendor.
Results of this research will be published shortly in a Digital Economy Platform report by Analysys Mason.
 The digitalisation of the enterprise customer experience is somewhat different, especially in the researching and procurement phases. This will be the subject of another article in the future.
See http://www.vanillaplus.com/2016/03/08/16257-year-0-for-real-orchestrated-nfvsdn-deployments/ for a full discussion of this topic.
In a series of BLOG posts, I will be describing in greater detail the changes necessary to the BSS/OSS infrastructure to realise the digitalisation journey.