Managed Services as the Key Catalyst of the
Communications Industry Transformation
Paolo Sidoti
Executive Partner
Accenture Communication & High Tech
EALA Network Lead
Copyright © 2010 Accenture. All Rights Reserved.
Milan – April, 13th 2010
Today’s Challenges for Telco Operators
How to achieve profitable growth and higher operational efficiency?
• New competitive pressure
• Traffic growth, revenue decline
• High network costs and
reduced budgets
• Dual focus: maintain
legacy networks and
support next-generation
network build-outs
• Rapid pace of technology
and business change
Copyright © 2010 Accenture. All Rights Reserved.
1
The Cost Pressure and the Need to Change
Require a New Transformation Approach
High pressure on costs and the need to rapidly transform network
operations are fostering the demand for Network Managed Services
as the catalyst to achieve immediate and sustainable cost
reduction and long term operational efficiency.
Traditional Cost Cutting
“Lower cholesterol by eating less”





Strategic Transformation
“Lower bad cholesterol by eating better”

Headcount reduction.
Budget driven.
Cuts both non-value and
value added activities.
Fewer value-adding
resources available.
Root causes remain, costs
grow back.




Value Added Activity
Non-Value Added Activity
Operating model optimization.
Capability driven.
Focused on cutting costs on
non-value added activities.
Value-adding resources are
maintained or grown.
Long term cost structure
improvement.
Accenture and TM Forum have recently conducted a survey that
confirms the increasing interest of communications industry executives
in Network Managed Services.
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2
Which Benefits do the Operators expect from
Network Managed Services?
Predictable costs and service levels
Reduced
Time to
Market
Immediate
Cost savings
Strategic
sourcing
Ability to
rapidly scale
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Business
flexibility
Improved
efficiency
3
Managed Services Market Outlook
The Managed Services market for Telco Operators and Media is
expected to grow from $ 4.9 bn in 2008 to $ 7.9 bn in 2012.
Managed Services are showing the highest CAGR (12,6%) in the area
of services for the communications industry.
Worldwide Managed Services Spending for the Telecom and Media Market ($M) *
2008
2008-2012
CAGR %
2009
2010
2011
2012
930.5
1,039.3
1,174.4
1,333.0
1,516.9
13.0%
Asia Pacific
1,837.9
2,159.5
2,509.3
2,883.2
3,269.5
15.5%
EMEA
2,154.3
2,363.9
2,594.2
2,852.5
3,128.1
9.8%
TOTAL
4,922.6
5,562.7
6,277.9
7,068.7
7,914.5
12.6%
Americas
* Source: IDC - “Worldwide Managed Services for Telecommunications and Media 2008-2012 Forecast and Analysis” - February 2009
Copyright © 2010 Accenture. All Rights Reserved.
4
Managed Services Market Outlook (…continued)
2008
M$
2012
%
M$
%
Wireless
3,446.1
70%
5,488.1
68%
Wireline
1,476.5
30%
2,426.4
32%
Totals
4,922.6
100%
7,914.5
100%
2008
M$
Managed
Operations
Hosted Services
Totals
Wireless Operators have
been predominant so far,
even though Wireline share
is expected to increase in the
near future.
2012
%
M$
%
3,944.2
80%
5,717.1
72%
978.4
20%
2,197.4
28%
4,922.6
100%
7,914.5
100%
Managed Operations
represented approx. 80% of the
market in 2008, but Hosted
Services are expected to grow
in the next years.
* Source: IDC - “Worldwide Managed Services for Telecommunications and Media 2008-2012 Forecast and Analysis” - February 2009
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5
Network Managed Operations Services
Which processes within the Network Operations Management are
typically outsourced?
Network Operations Managed Services and BPO - % On Total, 2009
The service areas with the highest
CAGR (’08-’12) are:
•
Next Generation SDP (+15,6%)
•
Provisioning & Activation (+7.1%)
•
Network Management (+7.6%)
•
Source: Accenture elaboration based on Gartner market research data, 2009
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6
A Network Transformation and Outsourcing Program
is a Long Journey….
Strategy and Planning
Strategy
definition
Business
Case
Due Diligence
Partner
Selection
Transition
Planning
Contract
negotiation
HR transition
Service
Transition
Knowledge
transfer
Communicatio
ns
Management
Transition
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NOC
Operations &
Help Desk
Field
Operations &
Maintenance
Vendor
Management
Performance
Mngm &
Optimization
NOC
Operations &
Help Desk
OSS
Operations &
Maintenance
SLA
Management
Contract
Management
NTW Security
Operations
Transformation
Operation
NTW
Deployment
Site & NOC
preparation
OSS design
and plan
Planning
/Desing
Operations
Optimization
OSS
implementati
on
NTW Security
Planning
NTW Tuning/
Testing
OSS
Optimization
7
…starting with the key step of assessing in which areas
Managed Services would provide more benefits
Accenture has developed a patented methodology (ABOM – Accenture Business
Operations Modeling) to help identify which network functions would support a
Business Case for Managed Services based on clearly defined criteria.
Readiness
Value
Risk
(“What?”)
(“When?”)
(“Why?”)
(“Why not?”)
Which functions
are appropriate
for alternative
sourcing model?
Which groups are
ready for a change
in sourcing model?
Suitability
Copyright © 2010 Accenture. All Rights Reserved.
Organization
al
What are the
options to manage
risk?
Value
Readiness
Technical
Technical
Business
What are the
objectives for
alternative
sourcing?
Risk
Criticality
Which functions,
activities and
groupings should
we consider?
Suitability
Performance
Network
Functions
Savings
Mitigations
8
Accenture has Developed a Portfolio of Managed
Services and Solutions…
…targeting specific processes where business value can be most
effectively generated.
• Network & Service Provisioning
SERVICES
• Administrative management of
rental contracts and power
supplies (existing and new)
• Porting Service
• Order Fallout Management
Provisioning
Services
• Optimization of related costs
Rental
& Power
Contract
Manag.
• Industrialized service
development and
launch capability
Service
Accelerator
Solutions
• Field Force Managed/Hosted
Solution
ENABLERS
Global
Reach &
Scale
Industry
Expertise &
Consulting
Skills
Leading
Assets &
Resources
Trusted
Service
Provider
Network
Testing
Services
• Handset and CPE Testing
• Services and Application
Testing
• Network Equipment Testing
Network
Planning &
Engineering
Solutions
Managed
Field Force
Service
• Outside Plant Engineering
• Access Network Technology &
Capacity Planning
• Leased Lines / Backhaul
Optimization
• Wholesale Cost Management
• Field Force Transformation
Solution
International Association of Outsourcing
ProfessionalsTM named Accenture #1 best
outsourcing provider for 2009.
Copyright © 2010 Accenture. All Rights Reserved.
9
Accenture Mobility Operated Services
Accenture Mobility Operated Services give
the opportunity to expand the product portfolio
with a “service store” via the mobility channel.
The managed services approach helps
companies define, develop and run the right
mobility solutions, resulting in new revenue
streams, lower operating costs and reduced
risk and complexity.
•
•
•
•
One-to-many platform
Managed services business model
Industry-specific solutions
Transaction-based pricing
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10
Accenture Mobility Operated Services
Vertical applications on top of a proven enabling platform
Managed Services Components:
AMOS Framework
Define – mobility strategy, products and
business model, including vendor selection
Mobile
Voucher
Develop – architecture assessment and
design, and integration with third parties
including Mobile Network Operators, business
partners and vertical vendors
Infomobility
Mobile
Loyalty &
Rewarding
Telematics
Mobility Platform
Mobile
Enterprise
Apps.
(Service Delivery Platform
with Open SDP)
Run – ongoing operations and management
of the mobility solution via a managed
services
Mobile
Money
Managemnt
Mobile
Marketing
Services
Reduced time to market and
simplified third party integration
• Simplified Infrastructure
• Standardized Design and Interfaces
(SOA)
• Open Solution
• Streamlined Delivery process
Mobile Data
Collection
Vertical Applications
Mobility Platform
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11
Accenture Mobility Operated Services
Business Model
Accenture Mobility Operated Services platform is integrated with
leading communication service providers and business partners.
Accenture Mobility Operated Services enables enterprises to launch
services through our platform while reducing the high initial costs of
IT and infrastructure set up, and by minimizing the burden, risk and
complexity of managing multiple connections to third parties.
Markets
Consumer
Network of
Mobile
Operators
Business
Copyright © 2010 Accenture. All Rights Reserved.
Accenture
Mobility
Operated
Services
Service Provider
Content Provider
Business Partners
12
…Conclusions
► The Communications and High Tech market is now consolidating
under a strong competitive pressure.
► Managed Services are becoming the key catalyst of the
transformation process of Communication & High Tech Industry.
► Accenture wants to play a distinctive role in this transformations
leveraging its Network Consulting and Vertical BPO capabilities
and act as Trusted Advisor, Innovative Service Provider or Partner
for Network Equipment Vendors.
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13
Q&A
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14
Thank You !
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