Applying eTOM (enhanced Telecom Operations Map) Framework to NonTelecommunications Service Companies - An Product/Service/Solution Innovation Example

Alan McSweeney

As Its Simplest, Innovation Is

A good idea successfully implemented and operated This implies the need for effective processes for generating and identifying good ideas and for bringing them to fruition

December 31, 2011

2

Successful Innovation Means

Having a function and associated processes for Product, Solution and Service Lifecycle Management (PSSLM) Structured approach to the introduction of innovations within product/service/solution offerings from concept to delivery and operation

There is no easy way to creating a new product/solution/service designed for large-scale sale and use

December 31, 2011

3

Move To Service ManagementTrends in information technology such as cloud and XaaS are moving companies from product to service and utility suppliers Evolution of telecoms companies mirrors the path many companies want to follow

Move from provision of telecoms links to services (voice, data, television, gaming, wireless) Telecoms industry can provide a model for business processes and best practices for other industries looking to move to greater service orientation

Move to services can be challenging for companies A structured approach to innovation in important in such a moveDecember 31, 2011 4

Spectrum Of Product/Solution/ServiceServices Supplied As Part Of Solution Solution As A Service (Cloud, XaaS, Utility Services, etc.)

Product

Solution

Limited Services

Ongoing Services

Utility Services

Collection Of Products Provided As A PackageDecember 31, 2011

Extended Services Such As Warranty And Support, Warranty Renewal5

Migration From Products to Services

Where Many Companies Are Now

Where Many Companies Want To Be

Product

Solution

Limited Services

Ongoing Services

Utility Services

Need A Structured Process For Innovation To Achieve Services Vision

December 31, 2011

6

Spectrum Of Product/Solution/Service

Sell Me Products That I Will Use To Solve A Problem

Sell Me A Solution To A Problem

Take Responsibility For Operating The Solution To The Problem

December 31, 2011

7

Innovation Means

Acceptance of change innovation implies and requires change Innovation exposes an organisation to change A secondary affect of successful innovation is the willingness of an organisation to change To be good at innovation means to be good at change Innovation means welcoming change and being able to successfully deliver change Innovation means continuously challenging accepted conventions If you cannot change, you cannot innovateDecember 31, 2011 8

Changes Implied By And Required For Move To Utility ServicesChanges The Nature Of The Business Relationship With The Customer Changes The Nature Of Financial Relationship With The Customer Changes The Services Provided Changes The Information You Have On The Customer

Changes To The Organisation Cost Model

Implementing and Sustaining Underlying Organisation Change

December 31, 2011

9

Changes Implied By And Required For Move To Utility Services

Changes The Nature Of The Business Relationship With The Customer: organisation becomes responsible for service management (availability, continuity, capacity, change, release, risk, security, access, facilities, compliance and many others) Changes The Nature Of Financial Relationship With The Customer: from initial payments and with smaller recurring component to near continuous payment for service Changes To The Organisation Cost Model: shift costs to organisation from customer as initial and ongoing investment required to generate recurring service revenue with consequences for cashflow and growth Changes The Services Provided: from initial supply with some packaged services and ongoing support/warranty to service management-oriented services Changes The Information You Have On The Customer: you know their pattern of usage of your service (product) and can obtain and exploit such insightsDecember 31, 2011 10

eTOM (enhanced Telecom Operations Map)

Provides a detailed process framework for a telecoms utility companies that can be adopted by non-telecoms organisations moving to solutions as a service operating model Developed by TM Forum - www.tmforum.org eTOM http://www.tmforum.org/BusinessProcessFramework/1647/home.html

Reference framework that classifies and defines the business activities used by a company involved in delivering (online) services three major process areas: Strategy, Infrastructure and Product concerned with planning and lifecycle management Operations concerned the core of operational management Enterprise Management concerned corporate or business support management

Offers the potential for non-telecoms companies to learn from an effective operational frameworkDecember 31, 2011 11

eTOM Business Process Framework OverviewCustomerOperational Processes Sales, Fulfillment, Assurance, Billing and Support

Strategy, Infrastructure and Product

Strategy, New Ideas, Products And Associated Supporting Infrastructure Moved to Production and Steady-State Operations

Operations

Enterprise ManagementFundamental Supporting Business Processes Needed To Run Any BusinessDecember 31, 2011 12

eTOM Business Process Framework - DetailStrategy, Infrastructure and Product Strategy and Commit Infrastructure Lifecycle Management Product Lifecycle Management Operations Support and Readiness Operations Fulfilment Assurance Billing and Revenue Management

Marketing and Offer Management

Customer Relationship Management

Service Development and Management

Service Management and Operations

Resource Development and Management

Resource Management and Operations

Supply Chain Development Management

Supplier/Partner Relationship Management

December 31, 2011

13

eTOM Enterprise Business Process Model Common Structure

eSample business process model has a three pillar structure that is common to other business process models Generic structure that forms a template for specific actualisations eTOM provides a detailed template for communications service providers that can be applied to other similar service companies

Operational Processes With Cross Functional Linkages Vision, Strategy, Leadership, Business Management Management and Support Processes

December 31, 2011

14

Sample Enterprise Business Process Models - 1Business EnvironmentCompetitors, Governments Regulations and Requirements, Standards, Economics

Customers Process NeedsBusiness Controlling ProcessProcesses That Direct and Tune Other ProcessesCustomer Acquisition

Core ProcessesProcesses That Create Value for the CustomerProduct Delivery Order Fulfilment Customer Support

Business Measurement ProcessProcesses That Monitor and Report the Results of Other Processes

Enabling ProcessesProcesses That Supply Resources to Other ProcessesChannel Management Supply Management Human Resources Information Technology Business Acquisition

Suppliers ProcessesDecember 31, 2011 15

Sample Enterprise Business Process Models - 2Align

Supply ChainInnovate Plan

Source Sell

Make

Fulfil

Customers

Build

PeopleDecember 31, 2011

Finance

Information

Environment

Governance16

Sample Enterprise Business Process Models Common StructureVision, Strategy, Business ManagementVision and Strategy

Operational Processes With Cross Functional LinkagesDevelop and Manage Products and Services Market and Sell Products and Services Deliver Products and Services Manage Customer Service

Management and Support ProcessesBusiness Planning, Merger, Acquisition Human Resource Management Information Technology Management Financial Management Facilities Management

Governance and Compliance

Legal, Regulatory, Environment, Health and Safety Management

External Relationship Management

Knowledge, Improvement and Change Management

December 31, 2011

17

Achieving the Potential New Product/Service/Solution Innovation Industrialisation and Productisation

Productisation is a pre-requisite for and an enabler of industrialisation

Productisation IndustrialisationCommon Implementation and Operation Approaches Defined Set of Products/Solutions/ Services and Packaging/Delivery Options

December 31, 2011

18

Innovation and eTOM

Innovation is about managing the value from new ideas New and enhanced existing products, solutions and services are just one aspect of innovation Product, Solution and Service Lifecycle Management (PSSLM) is a generalised view of completing the innovation process and achieving actualisation of ideas

December 31, 2011

19

Migration From Products to Services

Where Many Companies Are Now

Where Many Companies Want To Be

Product

Solution

Limited Services

Ongoing Services

Utility Services

Use Appropriate Elements Of eTOM Process Framework To Achieve Services Innovation And Transformation

December 31, 2011

20

Innovation Extends Creativity To Implementation And Generation Of Value

Manage

n atio nov InImplement Verify Clarify Develop Discern

Sell Market

alue V

y tivit Crea

Using a Structured Approach to Industrialising Innovation Maximises Value21

December 31, 2011

Where Organisations Look For Innovation

Product/solution/service innovation is just one aspect of a wider view of innovation

December 31, 2011

22

Where Organisations Can Look For InnovationBusiness ModelHow Do You Make Money? How Do You Work With Other Organisations For Mutual Benefit? How Do You Create and Add Value To Your Products And Services? How Are Core Processes Supported And Enabled? How Do You Design Your Core Products And Services? How Do You Connect Or Provide A Common Platform For Your Products And Services? How Do You Provide Value To Your Customers Beyond Your Core Products And Services? How Do You Get Core Products And Services to Market? How Do You Communicate Your Core Products And Services? How Do Customers Feel When They Interact With Your Organisation And Your Products And Services?23

Finance Processes Products and Services

Networking and Alliances Core Processes Enabling Processes Product Performance Product System Service

Provision and DeliveryDecember 31, 2011

Channel Brand Customer Experience

Product, Solution and Service Lifecycle Management (PSSLM)

PSSLM is concerned with the functions and processes need to define, plan, design, build, deliver, maintenance, manage revise and retirement of all products, solutions and services in the organisations portfolio Enable the organisation strategic and business product/solution/service vision Drive internal and customer-oriented processes to meet market demand and customer expectations

December 31, 2011

24

Product, Solution and Service Lifecycle Management (PSSLM) PSSLM

belongs within Strategy, Infrastructure and Product/Solution/Service (SIPSS) function of SIPSS functionDevelop strategy Commit to the organisation Build and resources infrastructure - supports the delivery products, solutions and services themselves and their associated functional processes Develop and manage products, solutions and services Develop and manage the supply chain

Responsibilities

December 31, 2011

25

Strategy, Infrastructure and Product/Solution/Service (SIPSS) Function Innovation SIPSS

development of new products/services/solutions lie in SIPSS function divided intoHorizontal functional groups Marketing and Offer Management Service Development and Management Resource Development and Management Supply Chain Development Management

Vertical process views Strategy and Commit Infrastructure Lifecycle Management Product, Solution and Service Lifecycle ManagementDecember 31, 2011 26

Strategy, Infrastructure and Product/Solution/Service (SIPSS) - Horizontal Process Functions and Vertical Process ViewsStrategy, Infrastructure and Product/Solution/Service (SIPSS) Strategy and Commit Infrastructure Lifecycle Management Product, Solution and Service Lifecycle Management

Marketing and Offer Management

Service Development and Management

Resource Development and Management

Supply Chain Development Management

December 31, 2011

27

Strategy, Infrastructure and Product/Solution/Service (SIPSS) - Horizontal Process Function DetailsMarketing and Offer ManagementMarket Strategy and Policy Product and Offer Portfolio Planning Product and Offer Capability Delivery Marketing Capability Delivery Product and Offer Development and Retirement Sales Development Product Marketing Communications and Promotion

Service Development and ManagementService Strategy and Planning Service Capability Delivery Service Development and Retirement

Resource Development and ManagementResource Strategy and Planning Resource Capability Delivery Resource Development and Retirement

Supply Chain Development ManagementSupply Chain Strategy and PlanningDecember 31, 2011

Supply Chain Capability Delivery

Supply Chain Development and Change Management28

SIPSS Vertical Process ViewsStrategy, Infrastructure and Product/Solution/Service (SIPSS)

Strategy and Commit

Infrastructure Lifecycle Management

Product, Solution and Service Lifecycle Management

Responsible for the generation of strategies and establishment of business commitment in support of the Infrastructure and Product/Solution/Service Lifecycle processes involving all levels of operation from market, customer and products/solutions/services, through the services and the resources on which these depend to the involvement of suppliers and partners in meeting these needsDecember 31, 2011

Responsible for the definition, planning and implementation of all necessary infrastructures (application, IT and network), as well as all other support infrastructures and business capabilities (operations centers, architectures, etc.)

Responsible for the definition, planning, design and implementation of all products/solutions/services in the organisations portfolio to required profit margins customer satisfaction and quality commitments, delivering new and retiring existing products/solutions/services to the market29

SIPSS - Horizontal Process Functional GroupsMarketing and Offer ManagementDefines strategies, develops new products/solutions/services, manages existing products/solutions/services including retirement, manages pricing, sales and channels and implements marketing communications and promotion and offering strategies

Service Development and Management Strategy, Infrastructure and Product/Solution/Service (SIPSS) Resource Development and Management

Plans, develops and delivers services to operations domain for product/solution/service creation and design, managing and assessing the performance of existing products/solutions/services and ensuring that capabilities are in place to meet future product/solution/service demand

Plans, develops and delivers the resources - physical and non-physical - needed by operations to support products/solutions/services, manages and assesses the performance of existing resources and ensures that capabilities are in place to meet future products/solutions/services needs

Supply Chain Development ManagementDecember 31, 2011

Focuses on the interactions required by the organisation with suppliers and partners who are involved in maintaining the supply chain network of relationships that a service provider manages to source and deliver products, supports sourcing decisions, suppliers and partners selection30

Horizontal Process Functional StructureLevel 1

Four levels of process detail within horizontal structure

Level 2

Level 3

Level 4

December 31, 2011

31

Product, Solution and Service Lifecycle Management Functional Structure Levels 1, 2 and 3Product, Solution and Service Lifecycle Management Marketing and Offer Management Service Development and Management Resource Development and Management

Level 1 Level 2Supply Chain Development and Management Supply Chain Strategy and Planning Supply Chain Capability Delivery Supply Chain Development and Change Management Resource Strategy and Planning Resource Capability Delivery Resource Development and Retirement

Market Strategy and Policy Product and Offer Portfolio Planning Product and Offer Capability Delivery Marketing Capability Delivery Product and Offer Development and Retirement Sales Development Product Marketing Communications and PromotionDecember 31, 2011

Service Strategy and Planning Service Capability Delivery Service Development and Retirement

Level 3

32

Product, Solution and Service Lifecycle Management Functional Structure

Functional view of what is needed to productise the results of innovation Not prescriptive of the approach

December 31, 2011

33

Marketing and Offer Management Levels 2, 3 and 4 Level 2 Level 3Marketing and Offer Management Product and Offer Development and Retirement Product Marketing Communications and Promotion Define Product Marketing Promotion Strategy Develop Product and Campaign Message Select Message and Campaign Channels Develop Promotional Collateral Manage Message and Campaign Delivery Monitor Message and Campaign Effectiveness Market Strategy and Policy Product and Offer Portfolio Planning Product and Offer Capability Delivery Marketing Capability Delivery Sales Development

Gather and Analyse Market Information Establish Market Strategy

Gather and Analyse Product Information Establish Product Portfolio Strategy Produce Product Portfolio Business Plans Gain Commitment to Product Business Plans

Define Product Capability Requirements Capture Product Capability Shortfalls Approve Product Business Case

Define Marketing Capability Requirements Gain Marketing Capability Approval Deliver Marketing Infrastructure Manage Handover to Marketing Operations Manage Marketing Capability Delivery Methodology

Gather and Analyse New Product Ideas Assess Performance of Existing Products Develop New Product Business Proposal Develop Product Commercialisation Strategy Develop Detailed Product Specifications Manage Product Development

Monitor Sales and Channel Best Practice Develop Sales and Channel Proposals Develop New Sales Channels and Processes

Establish Market Segments Link Market Segments and Products Gain Commitment to Marketing Strategy

Deliver Product Capability Manage Handover to Product Operations Manage Product Capability Delivery Methodology

Level 4

Launch New Products

Manage Product Exit December 31, 2011 34

Service Development and Management Levels 2, 3 and 4Service Development and Management Service Development and Retirement Gather and Analyse New Service Ideas Assess Performance of Existing Services Develop New Service Business Proposal Develop Detailed Service Specifications Service Strategy and Planning Service Capability Delivery

Gather and Analyse Service Information

Map and Analyse Service Requirements Capture Service Capability Shortfalls Gain Service Capability Investment Approval

Manage Service Research

Establish Service Strategy and Goals

Define Service Support Strategies

Design Service Capabilities

Produce Service Business Plans

Enable Service Support and Operations Manage Service Capability Delivery Manage Handover to Service Operations

Manage Service Development

Develop Service Partnership Requirements Gain Enterprise Commitment to Service Strategies#December 31, 2011

Manage Service Deployment

Manage Service Exit35

Resource Development and Management Levels 2, 3 and 4Marketing and Offer Management Resource Development and Retirement Gather and Analyse New Resource Ideas Assess Performance of Existing Resources Develop New Resource Business Proposal Develop Detailed Resource Specifications Resource Strategy and Planning Resource Capability Delivery

Gather and Analyse Resource Information

Map and Analyse Resource Requirements Capture Resource Capability Shortfalls Gain Resource Capability Investment Approval

Manage Resource Research

Establish Resource Strategy and Architecture Define Resource Support Strategies

Design Resource Capabilities

Produce Resource Business Plans

Enable Resource Support and Operations Manage Resource Capability Delivery Manage Handover to Resource Operations

Manage Resource Development

Develop Resource Partnership Requirements Gain Enterprise Commitment to Resource PlansDecember 31, 2011

Manage Resource Deployment

Manage Resource Exit36

Supply Chain Development and Management Levels 2, 3 and 4Supply Chain Development and Management Supply Chain Strategy and Planning Supply Chain Capability Delivery Supply Chain Development and Change Management Manage Supplier/Partner Engagement Manage Supply Chain Contract Variation Manage Supplier/Partner Termination

Gather and Analyse Supply Chain Information Establish Supply Chain Strategy and Goals Define Supply Chain Support Strategies Produce Supply Chain Business Plans Gain Enterprise Commitment to Supply Chain Plans

Determine the Sourcing Requirements Determine Potential Suppliers/Partners

Manage the Tender Process

Gain Tender Decision Approval Gain Approval for Commercial Arrangements Negotiate Commercial Arrangements

December 31, 2011

37

Product And Offer Development And Retirement Levels 3 and 4 Process DetailsGather and Analyse New Product Ideas Assess Performance of Existing Products Develop New Product Business Proposal Develop Product Commercialisation Strategy Develop Detailed Product Specifications Manage Product DevelopmentResearch and analyse demographic, customer, technology and marketing information to identify new product and offer potential opportunities, compare current capabilities with the identified opportunities and develop new opportunity concepts Analyse the performance of existing products to identify inadequacies and required improvements using information from customers and from operational activities Develop and document business proposals for the identified new product concept, including a business case, identifying the new product requirements, service components, development costs and anticipated benefits, risks and the competitive positioning Ensure that product specific pricing, sales channel support and regulatory approvals are identified and agreed and developed ensuring that all commercialisation aspects of the product development process associated with selling the product are covered Develop and document the detailed product-related technical, performance and operational specification including required product features, the specific service and resource requirements and selections, the specific performance and operational requirements and support activities Ensure the co-coordinated delivery in line with the approved business case of all required product capabilities for that business case across the organisation

Product And Offer Development And Retirement

Launch New Products

Manage the initial introduction of new and enhanced products into the market and handover to operations for ongoing rollout Identify existing products which are unviable and manage the processes to exit the product from the market, identify customers impacted by the exit, develop customer specific or market segment exit or migration strategies, develop infrastructure transition and/or replacement strategies38

Manage Product ExitDecember 31, 2011

Sample Cross-Functional Scenario - Get Approval For The Development Of A New Product/Solution/Service

Product/solution/service consists of components that can be reused to further define and build new products/solutions/services New product/solution/service proposal is then submitted for approval Processes involved in this scenario are: Product and Offer Portfolio Planning Product Marketing Communications and Promotion Product and Offer Development and Retirement Service Strategy and Planning Service Development and Retirement Resource Development and Retirement Product and Offer Capability Delivery Service Capability Delivery Resource Capability Delivery

Outputs from scenario New product/solution/service with its associated services and resources developed, tested and accepted Configuration information including pricing rules and promotions

Steps can be iterated for rapid product/solution/service concept exploration and examinationDecember 31, 2011 39

Process Interactions Get Approval For The Development Of A New Product/Solution/ServiceProduct and Offer Capability Delivery Product and Offer Development and Retirement

1 2 14 3

Service Capability Delivery Service Development and Retirement

5 4Resource Capability Delivery Resource Development and Retirement

6Supply Chain Development and Change Management

Product and Offer Product and Offer Service Service Capability Capability Development and Development and Delivery Delivery Retirement Retirement

Supply Chain Capability Delivery

15

13

Resource Capability Delivery Resource Development and Retirement Supply Chain Capability Delivery Supply Chain Development and Change Management

8

7 9 11

10 12

December 31, 2011

40

Process Interactions Get Approval For The Development Of A New Product/Solution/Service1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Provide Product/Solution/Service Development Plan Provide Product/Solution/Service Development Plan Provide Resource Infrastructure Requirements Provide Product/Solution/Service Deployment Plan Provide Service Infrastructure Requirements Provide Supplier/Partner Capability Requirements Provide Supplier/Partner Infrastructure Requirements Provide Resource Infrastructure Requirements Provide Supplier/Partner Required Capabilities Provide Resource Infrastructure Plan Provide Supplier/Partner Integration Plan Seek Approval For Supplier/Partner Infrastructure and Integration Plan Seek Approval For Resource Infrastructure Plan Seek Approval For Service Infrastructure Plan Seek Approval For Product Infrastructure Plan41

December 31, 2011

Repeat Process Cycle At Greater Levels Of Detail For Refinement and Iterative Delivery And Identification of Appropriate InnovationsProduct and Offer Capability Delivery Product and Offer Development and Retirement Service Capability Delivery Service Development and Retirement Product and Offer Product and Offer Service Service Capability Capability Development and Development and Delivery Delivery Retirement Retirement Resource Capability Delivery Resource Development and Retirement Supply Chain Capability Delivery Supply Chain Development and Change ManagementDecember 31, 2011 42

Resource Capability Delivery

Resource Development and Retirement

Supply Chain Capability Delivery

Supply Chain Development and Change Management

Use The Framework As A Checklist For Product/Solution/Service DevelopmentMarketing and Offer Management Market Strategy and Policy Gather and Analyse Market Information Establish Market Strategy Establish Market Segments Link Market Segments and Products Gain Commitment to Marketing Strategy Gather and Analyse Product Information Establish Product Portfolio Strategy Produce Product Portfolio Business Plans Gain Commitment to Product Business Plans Define Product Capability Requirements Capture Product Capability Shortfalls Approve Product Business Case Deliver Product Capability Manage Handover to Product Operations Manage Product Capability Delivery Methodology Define Marketing Capability Requirements Gain Marketing Capability Approval Deliver Marketing Infrastructure Manage Handover to Marketing Operations Manage Marketing Capability Delivery Methodology Gather and Analyse New Product Ideas Assess Performance of Existing Products Develop New Product Business Proposal Develop Product Commercialisation Strategy Develop Detailed Product Specifications Manage Product Development Launch New Products Manage Product Exit43

Product and Offer Portfolio Planning

Product and Offer Capability Delivery

Marketing Capability Delivery

Product and Offer Development and Retirement

December 31, 2011

Summary

eTOM (enhanced Telecom Operations Map) business process framework can provide a workable model for transition to services for non-telecommunications service providers Proven framework for area of services provision Organisations offering cloud and XaaS services moving from products to communications-like utility services eTOM can be extended outside its core telecommunications focus to these organisations

December 31, 2011

44

More InformationAlan McSweeney alan@alanmcsweeney.com

December 31, 2011

45