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BSS RevolutionA Must for the New Digital OperatorBy Ines Guzman and Jean-Marie Pierron

September 2014

Why a BSS Revolution?During the last decade telcos have transformed their information technology and business support systems landscapes, focusing on convergence, operational efficiency and cost reduction. They have followed diverse paths — greenfield transformation, evolutionary transition, overlay approaches — but with similar challenges.

These have included managing multi-year transformation programs, long business transitions with customer impacts, complex data migration and difficulty decommissioning old systems— sometimes with an uncertain business case. Meanwhile, Digital Transformation has arrived:

• Consumption patterns are changing

• Ability to influence and enhance customer experience in real time is a competitive advantage

• New business models are popping up with need to monetize new revenue streams of all kinds.

Although telecom and cable operators have benefitted greatly from the explosive adoption and utilization of mobile services, digital is enabling new entrants to disrupt services that operators have traditionally monetized. A recent Accenture consumer survey1 demonstrated a global demand for digital companies as alternatives to operators. So there is an urgent call to

action for operators to rethink their business models and approach, to attack and succeed in the digital wave, with the following challenges:

• Moving from an engineering culture to a service-oriented culture with a strong customer focus, where the customer is the center of the universe

• Understanding change as a continuous process, rather than a series of discrete projects

• Creating a whole new business model is needed to survive in the digital marketplace.

Copyright © 2014 Accenture All rights reserved. Omni Expectations | 1

A New Way to TransformIn order to make the shift from telecom or cable operator to digital service provider, there must be a much higher level of customer interaction at a much lower service cost. Selling through physical retail stores, deploying massive call centers and depending on a monthly bill to communicate with the customer are no longer sustainable options.4 To accelerate their digital operating model transformation, telcos are considering a new way to transition BSS.

Implement a differentiating digital transformation strategy. One approach applied successfully in the banking industry is splitting the distribution systems (everything related to customer experience management, omni-channel, order entry and product catalog) and the production systems (e.g. CRM, Billing, A/R, A/P, Collection), then integrating the two worlds through an industry hub. The transformation approach requires:

• Investing in building a differentiat- ing new customer digital experience: lean, agile, fast time to market, high value potential

• Minimizing and rationalizing the non-differentiating layer, including BSS legacy systems

• Building an industry hub with an integration layer to integrate the distribution layer to the production layer

• Simplifying business processes in combination with product catalog rationalization

• Setting up a digital capability road map, ROI-driven, to progressively implement the future capabilities.

Additional initiatives can complement this new transition’s schema.

Outsource or move to a lightweight cloud replacement standalone solution. This includes roaming settle-ment, partner management, fraud analysis, churn analysis, workforce management, commissioning and trouble ticketing.

Leverage SaaS technologies. Build the differentiating layer or implement agile and fast cloud-based BSS to support adjacent markets or new business models.4

Build virtualized software-based operational stacks. Bring business, IT and network organization and systems to work across a single real-time IT infrastructure.

Last but not least, there is a need for operators to adopt a completely new culture of transformation.3 The most profound shift for industries, such as telecommunications, is understanding change as a continuous process, rather than a series of discrete projects. Adoption comes from comprehensive cultural change, such as the integration of “design thinking” into product development and a strong focus on customer feedback. To embrace the rapidly changing digital environment, companies are branching away from the engineering roots from which they grew, opting instead for a service-oriented culture with a strong customer focus.

2 | Omni Expectations Copyright © 2014 Accenture All rights reserved.

Overall the digital transformation is still in its early stage. Beyond the conver-gence of the BSS platform, which is an ongoing process or objective for half of the queried companies also driven by the wave of M&A in the operator’s sector, there is still much disparity in ways to manage customers across channels. The good news is that the majority of the queried telcos have ongoing digital transformation agendas to build a multi-channel or omni- channel capability, along with concrete plans to simplify business processes and rationalize product catalog. The big question mark is the ability to move a plan to execution while getting the funding and the business case.

Telcos in Europe and APAC: current practices

Ongoing digital initiatives

Voice of the OperatorsTen telcos in Europe and APAC have discussed their transformation strategies with Accenture. Digital transformation is still in its early stage, but the majority of these businesses have ongoing digital transformation agendas with a key focus on customer experience, renewal and simplification.

Convergent CRM Convergent billing system Basic digital and fragmented multi-channel applications Fragmented applications to manage POS, call center and Web Separate application to manage Web

50%

30%

40%

60%

100%

As-is:

Ongoing digital transformation agenda to build a multi-channel or omni-channel capability Plans online charging and policy management as key capabilities Plans to simplify and standardize sales processes and tools Considers one tool to address all channels, including Web Plans to keep a separate application to manage Web

Ongoing digital initiatives:

80%

50%

20%

80%

70%

Copyright © 2014 Accenture All rights reserved. Omni Expectations | 3

The consumer electronics industry is undergoing massive transformation as consumers become more connected than ever to an increasing array of digital products and services, anywhere, anytime. As smartphones and tablets become commonplace, the focus of consumer interest is shifting. Wearable devices, digital health and other forms of digital applications are gaining momentum as empowered consumers add products and services to their digital portfolio.

Accenture’s recent Consumer Survey1 demonstrated a global demand for digital companies as alternatives to operators. In the digital future, operators will have to strive to compete and/or partner with many large to small digital competitors. Operators today own key assets, including the network and customer installed bases with a history of contacts and billing, but those are no longer sufficient to survive the coming wave.

If the following services were available from all these service providers, which providers would you consider using for each service?

Voice of the Market Our recent consumer survey demonstrated a global demand for digital companies as alternatives to operators. Operators will have to strive to compete and or partner with the digital disruptors.

VoD Broadband

Customer survey:

Broadband

In the Home

Phone CallsPay TV Catch Up TV Phone Calls

Mobile

29%

23% 24%27%

32%

24% 26%

35%35%

40%

30%

25%

20%

15%

10%

5%

0%

Apple

Twitter

Google

SamsungMicrosoft

AmazonFacebook

Messaging

4 | Omni Expectations Copyright © 2014 Accenture All rights reserved.

Copyright © 2014 Accenture All rights reserved. Omni Expectations | 5

6 | Omni Expectations Copyright © 2014 Accenture All rights reserved.

We believe operators must strive to become key actors in the digital value chain: Integrated digital service providers.2 IDSP are operators that are standing up infrastructure capabilities, operations and offerings to pursue digital as a business: digital infrastruc-ture core, digital business operations & capabilities and digital offerings.

Becoming an IDSP will enable an operator to offer a new set of solutions. A sampling of future scenarios could include: digital home integrator, home healthcare integrator, customized cloud provider, M2M enabler, one-stop shopping for IT, smart city providers and road tolling partner.

To enable this model, operators are called to rethink and innovate their customer operations and inherent BSS landscapes beyond the required core capabilities, including:

• Digital channel and self-service UX

• Order entry and validate

• Customer interaction

• Campaign management

• Charging and billing

• Order fulfillment

Operators need to adopt strategic capabilities in the service market:

• Integrated policy management & control and real time charging

• Collaboration

• Social sentiment analysis

• Next Best Action/unified marketing

• Omni-channel experience management

• Single online product catalog and single order entry function common to all sales channels

• Partner enablement (API access to key business functions, multi-tenancy), and partner value distribution across roaming, wholesale, reseller, content, over the top, M2M partners

• A single, dynamic and shared set of customer profiles.

Driven by the varying customer needs, there is an increasing need for data intelligence to turn big data into “right now” data. For most value, the data need to be integrated with an analytics engine, decision support system and campaign management system to trigger context-aware events in real time. We believe that BSS transfor-mations must leverage extensively on real time and analytics. The value realization outcome of the BSS transformation should be analytics based, tracked and enabled.

The BSS transformation journey needs to become a continuous process where required digital capabilities and features will come progressively on top of the existing legacy systems, driven by business priorities, ROI and customer needs.

The New Digital OperatorTo become key players in the digital value chain, operators are called to rethink and innovate their customer operations and BSS landscape and need to adopt strategic capabilities in the service market.

Copyright © 2014 Accenture All rights reserved. Omni Expectations | 7

Customer Experience, Segmentation & Cost Management

Experience Blueprint

Command Center

Segments Analytics & Command Center Drive Segment Cost Management:key to top quartile CE and profit outcomes

Customer Platforms:nano marketing campaigns, investment in digital channels, chat, crowdsourcing

Channel Integration Is Critical:only by combining multi-channel routing, multi-vendor call center management and leading practice digital channels delivers the best cost outcome

Cloud-based “Lightweight” SaaS & PaaS Telco BSS Platform:now enables rapid deployment and agile development.

Digital & Data Services Monetization

Maximize Use of Data:including buying, social, andlocation for loyalty, revenue lift and cost reduction

Digital/Social Marketing

Multi-Channel Sales, Service & Retention

Next Generation CRM/Billing/Order Management

Next Generation Insight Customer Analytics Segmentation & Targeting

Campaign ManagementSales PipelineChannel OptimizationData Monetization

Web & Mobile PortaleCommerceWeb CareMobile CareCommunityCollaborationOrder Entry

Real TimeDecisioning& Recommendations

Order management& IntegrationWorkflowProvisioning

Cloud Based Sales and ServiceSocial ListeningSocial AdsEngagement

Multi-ChannelSelf-ServiceCommunities/SocialLead ManagementForecastingOpportunity ManagementCollaboration

Seamless OmniChannel

Billing Convergent BillingeBilling3rd Party Billing

Multi-Channel

Charging & Policy Management

Real Time ChargingCost & Spending ControlMicro PaymentPolicy Management

Digital Customers

Connected Objects

Digi

tal S

ervi

ce P

latf

orm

s

Partners Customers Prospects Social Networks Shops Call Centers

Omni-Channel Digital Experience

Industry Hub

eRetail Online Sales Smart Care Digital Marketing

BSS/OSS

Network

Digi

tal A

naly

tics

& B

I

ERP

Integrated PCRF & RTC

Strategic capabilities to position in the service market

Accenture’s vision of a target next generation customer operations blueprint

This document is produced by consultants at Accenture as general guidance. It is not intended to provide specific advice on your circumstances. If you require advice or further details on any matters referred to, please contact your Accenture representative.

Copyright © 2014 Accenture All rights reserved. Accenture, its logo, and High performance. Delivered. are trademarks of Accenture. This document makes descriptive reference to trademarks that may be owned by others. The use of such trademarks herein is not an assertion of ownership of such trademarks by Accenture and is not intended to represent or imply the existence of an association between Accenture and the lawful owners of such trademarks.

References

1 Accenture Digital Consumer Survey, 2014 http://www.accenture.com/us-en/Pages/ insight-digital-consumer-survey- communications-media-technology.aspx.

2 Accenture “The New Digital Operator.” http://www.accenture.com/us-en/Pages/ insight-new-digital-operator.aspx?c= cmt_comsmtwt_10000042&n=smc_ 1013.

3 “Telcos Undertake Customer-Focused Transformation,” CMO.com interview with Ross Dawson. http://www.cmo.com/ articles/2014/7/13/telcos_undertake_ cus.html.

4 “You said you want a (BSS) revolution?” Dave Labuda, Founder, CEO & CTO, MATRIXX Software blog, July 1, 2014, http://blog.matrixx.com/say-want- revolution/

5 Gartner Research “Market Trends: Adjacent Market Revenue – Opportunities for CSP in 2017,” January 29, 2014.

About the Authors

Ines Guzman Global Managing Director Digital Customer Service and Accenture Interactive CMT EMEA Lead

For over 18 years, Ines’ career with Accenture has taken her across the world while focusing on communications, media and tech industries. She has considerable experience working with global clients including BT Global Services, BT Spain, Telefonica Digital, Telefonica O2 UK, Vodafone and KPN. Her successes have led her to several different opportunities within CRM for Accenture throughout the years, contributing to significant growth within those practices. Ines is currently the global lead for our Digital Customer Service practice, where she helps our clients better understand their customers, engage and build loyalty, and deliver increased value to them.

Jean-Marie Pierron Accenture Managing Director-Technology Lead of Comms/Media/HT France and Global Billing Lead

Jean-Marie’s career with Accenture has spanned 25 years with the last 22 focused on telecoms, media and high tech industries.

He has extensive experience working with clients around the world including Ameritech, Belgacom, Comcast, Liberty Global, Orange, Pacific Bell , SFR, SITA, T-Mobile and Vodafone.

His domain of expertise consists of delivery of large transformation programs embracing transformation of Customer and Financial Operations, M&A, Digital Billing and BSS/OSS Transformation.

Jean-Marie leads the Technology division for the Telecom, Media and High Tech sectors in France and he is the Global Lead of the Accenture Billing offering.

About Accenture

Accenture is a global management consulting, technology services and outsourcing company, with more than 305,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$30.0 billion for the fiscal year ended Aug. 31, 2014. Its home page is www.accenture.com.