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Managed Services as the Key Catalyst of the Communications Industry Transformation Paolo Sidoti Executive Partner Accenture Communication & High Tech EALA Network Lead Milan – April, 13 th 2010 Copyright © 2010 Accenture. All Rights Reserved.
1 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. Today’s Challenges for Telco Operators How to achieve profitable growth and higher operational efficiency?
Copyright © 2010 Accenture. All Rights Reserved. 2 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. Strategic Transformation “Lower bad cholesterol by eating better” Traditional Cost Cutting “Lower cholesterol by eating less” 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. Headcount reduction. Budget driven. Cuts both non-value and value added activities. Fewer value-adding resources available. Root causes remain, costs grow back. Accenture and TM Forum have recently conducted a survey that confirms the increasing interest of communications industry executives in Network Managed Services.
Copyright © 2010 Accenture. All Rights Reserved. 3 Which Benefits do the Operators expect from Network Managed Services? Immediate Cost savings Improved efficiency Predictable costs and service levels Strategic sourcing Business flexibility Ability to rapidly scale Reduced Time to Market
Copyright © 2010 Accenture. All Rights Reserved. 4 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. 20082009201020112012 2008-2012 CAGR % Americas 930.51,039.31,174.41,333.01,516.913.0% Asia Pacific 1,837.92,159.52,509.32,883.23,269.515.5% EMEA 2,154.32,363.92,594.22,852.53,128.19.8% TOTAL4,922.65,562.76,277.97,068.77,914.512.6% Worldwide Managed Services Spending for the Telecom and Media Market ($M) * * Source: IDC - “Worldwide Managed Services for Telecommunications and Media 2008-2012 Forecast and Analysis” - February 2009
Copyright © 2010 Accenture. All Rights Reserved. 5 Managed Services Market Outlook (…continued) 20082012 M$% % Managed Operations 3,944.280%5,717.172% Hosted Services 978.420%2,197.428% Totals 4,922.6100%7,914.5100% * Source: IDC - “Worldwide Managed Services for Telecommunications and Media 2008-2012 Forecast and Analysis” - February 2009 Managed Operations represented approx. 80% of the market in 2008, but Hosted Services are expected to grow in the next years. 20082012 M$% % Wireless 3,446.170%5,488.168% Wireline 1,476.530%2,426.432% Totals 4,922.6100%7,914.5100% Wireless Operators have been predominant so far, even though Wireline share is expected to increase in the near future.
Copyright © 2010 Accenture. All Rights Reserved. 6 Network Managed Operations Services Source: Accenture elaboration based on Gartner market research data, 2009 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%)
Copyright © 2010 Accenture. All Rights Reserved. 7 A Network Transformation and Outsourcing Program is a Long Journey…. Planning /Desing NTW Security Planning NTW Tuning/ Testing Site & NOC preparation NTW Deployment Operations Optimization Field Operations & Maintenance NOC Operations & Help Desk Performance Mngm & Optimization Vendor Management OSS Operations & Maintenance OSS design and plan OSS Optimization Service Transition HR transition Communicatio ns Management Knowledge transfer OSS implementati on Business Case Strategy definition Partner Selection Due Diligence Strategy and Planning Transition Transformation Transition Planning Contract negotiation SLA Management Contract Management NTW Security Operations NOC Operations & Help Desk Operation
Copyright © 2010 Accenture. All Rights Reserved. 8 …starting with the key step of assessing in which areas Managed Services would provide more benefits Technical Organization al Readiness Technical Business SuitabilityValue Performance Savings Risk Which functions, activities and groupings should we consider? Which functions are appropriate for alternative sourcing model? Which groups are ready for a change in sourcing model? What are the objectives for alternative sourcing? Criticality Mitigations What are the options to manage risk? 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.
Copyright © 2010 Accenture. All Rights Reserved. 9 Accenture has Developed a Portfolio of Managed Services and Solutions… …targeting specific processes where business value can be most effectively generated. Provisioning Services Network Testing Services Network Planning & Engineering Solutions Service Accelerator Solutions Managed Field Force Service Rental & Power Contract Manag. Global Reach & Scale Industry Expertise & Consulting Skills Leading Assets & Resources Trusted Service Provider ENABLERS SERVICES Administrative management of rental contracts and power supplies (existing and new) Optimization of related costs Industrialized service development and launch capability Field Force Managed/Hosted Solution Field Force Transformation Solution Network & Service Provisioning Porting Service Order Fallout Management Handset and CPE Testing Services and Application Testing Network Equipment Testing Outside Plant Engineering Access Network Technology & Capacity Planning Leased Lines / Backhaul Optimization Wholesale Cost Management International Association of Outsourcing Professionals TM named Accenture #1 best outsourcing provider for 2009.
Copyright © 2010 Accenture. All Rights Reserved. 10 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
Copyright © 2010 Accenture. All Rights Reserved. 11 Accenture Mobility Operated Services Vertical applications on top of a proven enabling platform Mobile Data Collection Mobile Marketing Services Mobile Voucher Infomobility Mobile Enterprise Apps. Mobile Money Managemnt Telematics Mobile Loyalty & Rewarding Managed Services Components: Define – mobility strategy, products and business model, including vendor selection Develop – architecture assessment and design, and integration with third parties including Mobile Network Operators, business partners and vertical vendors Run – ongoing operations and management of the mobility solution via a managed services AMOS Framework Mobility Platform (Service Delivery Platform with Open SDP) Mobility Platform Vertical Applications Reduced time to market and simplified third party integration Simplified Infrastructure Standardized Design and Interfaces (SOA) Open Solution Streamlined Delivery process
Copyright © 2010 Accenture. All Rights Reserved. 12 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. Network of Mobile Operators Markets Consumer Content Provider Service Provider Business Partners Business Accenture Mobility Operated Services
Copyright © 2010 Accenture. All Rights Reserved. 13 …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.
Copyright © 2010 Accenture. All Rights Reserved. 14 Q & A
Copyright © 2010 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture. Thank You ! 15
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