Telecom operators are encountering new network integration and operations challenges in their next-generation services evolution, as discussed in part 1, outsourcing network operations and infrastructure planning. The statistics show how carriers are trying to improve network operations planning and management.
In the 1990s, only about 18% of telecom network infrastructure changes were coordinated by contractors that won outsourced contracts to manage carrier network integration projects. By 2008 integration outsourcing had grown to 63%.
What caused the increase? Operators have found that relying on standards development isn't sufficient in the complex and fast-paced world of next-generation network (NGN) deployment, even though it is the traditional way to insure interoperability among network components. By 2005, the pace of service opportunities had exceeded the pace of standardization, which further complicated the issue. For example, a standards-setting process started in 2006 to integrate IT technology at the service layer with traditional network technology. The standards aren't yet complete.
In addition, there are explosions in the cost of integrating the components of NGN infrastructure, in the cost of NGN operations, and in operations errors that are not only individually unacceptable, but collectively are a disastrous risk.
Outsourcing solutions helps reduce network integration risks
To reduce the risk of integration and operations disasters, operators are breaking with the tradition of waiting for standards completion taking steps that include the following:
- Increasing the number of network integration contracts awarded in connection with major NGN deployments to make a single party accountable and responsible for the integration of the wide range of network technologies.
- Dividing networks into technology procurement zones and selecting a small number of vendors within each zone, and naming the winners responsible not only for providing infrastructure components but for accepting and managing an integration contract within the zone. Vendors can partner with smaller players to achieve full technology solutions within a zone, which encourages vendors.
- Requiring procurement zone winners to establish a network operations process for the life of the technology and update any existing processes as needed.
- Outsourcing ongoing operations management to a suitable vendor where the pace of technology change, opportunity change, or both suggests that sustaining operations using service provider personnel will be problematic.
The notion of a global network operator outsourcing network operations to a third party seems radical, but it is a logical step from the network and technology integration contracts that have already become the rule in NGN deployment. The traditional problems in acquiring and retaining skilled personnel are exacerbated for next-generation network operations by the multiplicity of skills required. Furthermore, some tasks associated with NGN operations are so specialized that a given operator may not be able to justify full-time staff to perform them.
Outsourcing network operations – a plan that works
The real driver here is the bottom line – managing service opportunities rather than reducing costs.
Operators report that outsourcing ongoing network operations actually facilitates the transition from deployment to live operations that serve customers and earn revenues.
The hand-off from a managed installation to a self-supported ongoing operations state is tricky. Operators that have experienced the transfer of responsibility in a large-scale network report that problems are more than twice as likely to emerge in this interval as in ongoing operations. This can result in customer complaints and a loss of credibility for new services.
That doesn't mean that network integration and operations outsourcing contracts can't also save money. Skilled operations personnel make fewer errors, and as noted earlier, errors can account for fully half of total network operations center costs. This is particularly true for Tier Two and Three providers that likely cannot draw the necessary skills from their local labor pools.
Where local skills are lacking, operators must resort to incident-based support from vendors or integrators. The cost of these services on an as-needed basis, combined with local labor costs, often exceeds the cost of outsourcing them. The magnitude of the potential savings increases with the complexity of the NGN project, the geographic scope of the network, and the range of services the network will support.
Next-generation network integration is a special skill that operators have already recognized they can't hope to maintain in house. It's becoming clear that NGN operations is also a special skill, and that operators will need to think seriously about the benefits of outsourcing operations much more in the future.
Back to part one on outsourcing network operations and infrastructure planning.
About the author: Tom Nolle is president of CIMI Corporation, a strategic consulting firm specializing in telecommunications and data communications since 1982. He is the publisher of Netwatcher, a journal addressing advanced telecommunications strategy issues. Check out his SearchTelecom.com networking blog Uncommon Wisdom.