Managing the PSTN Transformation - IT · PDF fileManaging the PSTN Transformation ......

Managing thePSTN Transformation

A Blueprint for a SuccessfulMigration to IP-Based Networks

Sandra DornheimDeutsche Telekom AG

CRC PressTaylor & Francis Group6000 Broken Sound Parkway NW, Suite 300Boca Raton, FL 33487-2742

© 2015 by Taylor & Francis Group, LLCCRC Press is an imprint of Taylor & Francis Group, an Informa business

No claim to original U.S. Government works

Printed on acid-free paperVersion Date: 20141201

International Standard Book Number-13: 978-1-4987-0103-7 (Hardback)

This book contains information obtained from authentic and highly regarded sources. Reasonable efforts have been made to publish reliable data and information, but the author and publisher cannot assume responsibility for the validity of all materials or the consequences of their use. The authors and publishers have attempted to trace the copyright holders of all material reproduced in this publication and apologize to copyright holders if permission to publish in this form has not been obtained. If any copyright material has not been acknowledged please write and let us know so we may rectify in any future reprint.

Except as permitted under U.S. Copyright Law, no part of this book may be reprinted, reproduced, transmitted, or utilized in any form by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying, microfilming, and recording, or in any information stor-age or retrieval system, without written permission from the publishers.

For permission to photocopy or use material electronically from this work, please access www.copy-right.com (http://www.copyright.com/) or contact the Copyright Clearance Center, Inc. (CCC), 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400. CCC is a not-for-profit organization that pro-vides licenses and registration for a variety of users. For organizations that have been granted a photo-copy license by the CCC, a separate system of payment has been arranged.

Trademark Notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identification and explanation without intent to infringe.

Visit the Taylor & Francis Web site athttp://www.taylorandfrancis.com

and the CRC Press Web site athttp://www.crcpress.com

v

Contents

Preamble xiThe auThors xiiiInTroducTIon xviilIsT of abbrevIaTIons xxviiProjecT Team members for IP TransformaTIon xxxi

chaPTer 1 overarchIng ToPIcs 11.1 ThePSTNMigrationProcessandInterdependencies 11.2 ProjectOrganization 4

1.2.1 ProjectStructure:RolesandResponsibilities 41.2.2 Escalation 6

1.3 EnvironmentalStatusQuo 61.3.1 ExternalFactors 71.3.2 InternalFactors 8

1.4 ScenarioAnalysis 91.4.1 InterimSolutions 111.4.2 FullMigration 131.4.3 CombinedApproach(onanAreaLevel) 14

1.5 StandardMandatoryandOptionalKPIs 151.6 RiskAnalysis 15

1.6.1 ProjectInternalRisks 161.6.2 DeutscheTelekomAG/NatCoRisks

(Micro Environment) 171.6.3 EcoSystemRisks(MacroEnvironment) 18

1.7 End-to-End(E2E)Processes 191.7.1 AdjustmentinE2EProcesses 19

1.7.1.1 ProcesseswithoutMajorChanges 19

vi Contents

1.7.1.2 ProcesseswithIncrementalChanges 191.7.1.3 NewProcesses 20

1.7.2 CompleteE2EProcessforPSTNMigration 20

chaPTer 2 mIgraTIon Plan 232.1 ProductDevelopmentSequencing 25

2.1.1 SequencingFrameworkforProduct Development 262.1.2 PrioritizationCriteriaandRationalefor

NicheProducts 282.2 MigrationStrategy(IncludingPhasesandTypes) 29

2.2.1 AssessMigrationPhases 292.2.2 MigrationPhases—TimingGuidelines

and KeyLearning 302.2.3 AssessMigrationTypes 32

2.2.3.1 ListofMigrationTypes 322.2.4 DefinetheMigrationStrategyper

Segment/ProductandDerivetheRelatedCosts 342.2.4.1 FrameworkMigrationStrategy

for EachSegment/ProductIncludingUnitCostperMigrationbySegment/Product 34

2.2.5 MigrationStrategyperNatCo 352.3 MigrationSequencing—ProductSequencing 36

2.3.1 PrioritizationLogicforProductSequencing 382.3.2 PrioritizationLogicwithCriteria

and RationaleforNicheProducts 402.4 MigrationSequencing—AreaSequencing 42

2.4.1 AreaEvaluation 422.4.2 AreaSequencingApproach 44

chaPTer 3 ProducT PorTfolIo roadmaP 513.1 InformationCollection 51

3.1.1 ACollectionListoftheCompleteCurrentFeatures/ProductCatalogue/TerminalEquipment 523.1.1.1 IPMigrationofISDN—ISDN

FeaturesMissinginIMS 533.1.2 PreparationofaRegulatoryChecklist 53

3.1.2.1 ListofRegulatory-RequiredFeatures 543.1.2.2 ListofFurtherRegulatory

RequirementsandTheirImpact 553.1.3 IdentificationofTechnicallyAvailableFeatures 553.1.4 MatchingofCurrentFeaturesto

Available IPFeatures 563.1.4.1 FrameworkforMatchingFeatures

andDrawingConclusionsaboutFeatures 57

viiContents

3.2 AnalysisandSelectionofFeatures 593.2.1 IdentificationofFeatureBenefits 59

3.2.1.1 EvaluationApproachforFeature Benefits 60

3.2.2 CalculationofCosts/ResourcesfortheFeaturesinDiscussion 61

3.2.3 EvaluationofFeatures 623.2.3.1 EvaluationFrameworkfor

the SelectionofFeatures 623.2.4 RetirementofFeatures 63

3.3 ProductDefinition 643.3.1 FeatureMappingtotheExistingPortfolio 643.3.2 SubstituteProductDefinition 65

3.3.2.1 FactorsImpactingDecisionson theProductPortfolioDefinition 66

3.3.3 AnnouncementtotheNRAandChangingof theT&CandSubmissionoftheRO 673.3.3.1 ChecklistforPotentialRegulator

ApprovalandBestPracticesonthe T&C 68

3.4 RealizationoftheNewPortfolio 683.4.1 PrioritizationoftheDevelopmentand

Launch Sequence 693.4.2 PlanningoftheLaunchandExecution 69

3.5 CommercialOpportunitiesinB2Band B2C duringandafterMigration 69

chaPTer 4 nT/IT roadmaP 714.1 TargetArchitectureandTechnicalProductDevelopment 71

4.1.1 TargetArchitecture 724.1.1.1 TheCollectionandComparison

of NetworkStrategyDocuments 734.1.2 TechnicalProductDevelopment—Information

Preparation 754.1.2.1 End-to-EndTechnicalSolutions

forBasicVoiceService 774.1.2.2 PreparingaListofAvailable

TechnicalIP-BasedFeatures 814.1.2.3 IdentificationofDifferences

in ServiceErgonomicsDuetothe IntroductionofIP 82

4.1.3 TechnicalProductDevelopment—TechnicalProductDesign 874.1.3.1 AssessmentoftheCurrentStatus

of Network/PlatformResources 874.1.3.2 PreparationoftheTCO

and TechnicalSolutionDocuments 88

viii Contents

4.1.4 TechnicalProductDevelopment—ProductImplementation 904.1.4.1 StartofTechnicalProduct

DevelopmentImplementation 904.1.4.2 IntegrationofNewPlatforms or

theExtensionofExistingPlatforms,QualityControl,andHandover 92

4.2 NTRollout 964.2.1 NetworkandTechnicalProductReadiness 96

4.2.1.1 DefinitionoftheMigrationEnabler 964.2.1.2 MajorNetworkDeploymentPlans 98

4.2.2 InternalResourcesPreparationandPlanning 1004.3 ITRoadmap 101

4.3.1 ITApplicationandProductReadiness 1014.3.1.1 IdentificationoftheRequired

ChangestoITApplications 1014.3.1.2 AdaptationoftheExisting

IT Systems/Developmentof New IT Systems 104

4.3.1.3 AdaptationofInterfacestoward theNetwork 109

4.3.2 CustomerMigrationProcesswithinIT 1124.3.2.1 Developmentofthe

Migration Process 1134.3.2.2 DevelopmentofAll

Regular Processes 1174.3.2.3 EnableMigrationReporting 120

4.4 InterdependencieswithOtherGeneralProjects 1254.4.1 IdentificationoftheInterdependencieswith

the CurrentIT/NTCorporateProjects 1254.4.1.1 Identificationofthe

InterdependencieswiththeCurrentIT/CorporateProjects 125

4.5 EvolutionoftheNetworkfromLegacy (PSTN/ISDN)totheNewIPPlatform 129

chaPTer 5 busIness case framework 1335.1 CalculationMethods 135

5.1.1 CalculationRules 1355.1.2 ScopeofBusinessCaseItems 1365.1.3 FinancialImpactCalculations 136

5.2 ProjectAssumptions 1385.2.1 ScenarioDefinition 1415.2.2 InputNeedfromWorkStreams 144

5.2.2.1 MilestonesofBusinessCaseCalculations 144

5.2.2.2 InputfortheMigrationScenario 1465.2.2.3 InputforInterimSolutions 154

ixContents

5.3 BusinessCaseStructure 1555.3.1 RevenueandCostBaseandBusinessCase

Baseline 156

chaPTer 6 go To markeT 1576.1 CommunicationPlan 157

6.1.1 CommunicationStrategy(Including Benefit Story) 157

6.1.2 CommunicationPlan 1606.1.2.1 ExternalCommunication 1616.1.2.2 InternalCommunication 167

6.2 SalesChannelPlan 1686.2.1 SteeringandOrchestratingtheSalesChannels 168

6.2.1.1 PreferredSalesChannelsasCustomerTouchPoints 168

6.2.1.2 ChannelFocusperMigrationPhase 1726.2.1.3 Reporting 178

6.2.2 Cross-Sell,Upsell,andRetention 1786.2.2.1 Retention 181

6.3 Training 1826.3.1 SalesForceTraining 1846.3.2 KeyAccountManager(KAM)Training 1846.3.3 General“All-Employee”Training 185

6.4 MigrationSupportCustomerCareand Technical Service 1866.4.1 InvolvementofCustomerCare

and Technical ServiceinthePSTNMigrationProcess 186

6.4.2 PlanningofDemandVolume 187Index 191

xi

Preamble

TheIPtransformationblueprintdescribedinthisbookistheproductof countless hours of hard work by hundreds of individuals overalmost2 years.Itisnotjustatheoreticalcookbookthattellsyouhowthis could work. This actually happened—we at Deutsche TelekommigratedtheentirepublicswitchedtelephonenetworkinMacedoniatoanInternetprotocol-basedplatform.OurcolleaguesinMacedoniaandeveryoneelsewhosupportedthemarerealpioneers,withintheDeutscheTelekomGroup,andwithintheentireindustry.Wearepub-lishingourIP transformationblueprintbecausethelessonswelearnedandtheexperiencewegainedinMacedoniacaneasilybescaledupandappliedinothermarketsaroundtheworldtobenefiteveryone.

Totheuntrainedear,itsoundssimple:youswitchthephonelinesfromonetechnologytotheother.Nothingcouldbefurtherfromthe

Claudia Nemat, Board Member, Europe and Technology, Deutsche Telekom; and Kerstin Günther, Senior Vice President, Technology Europe, Deutsche Telekom.

xii Preamble

truth. Our experience has shown that a successful migration relieson key aspects beyond the technological side. Therefore, this workalsoincludesaproductportfolioroadmap,acommercialroadmap,anNT/ITroadmap,andseveralbusinesscases.ItisourfirmbeliefthateverythingwelearnedduringthenetworkmigrationinMacedoniacanbeappliedtoothercountriesaroundtheglobe.Itissimplyaques-tionofscale,oftakingwhatwedidthereandscalingituptolargernetworkenvironments.InMacedonia,weencounteredeverytypeofchallengeimaginable,especiallyinintegratingcomplexsystemssuchasflightcontrolattheirairports,alarmsforfireandpoliceresponse,largeenterprisecustomers;thelistgoeson.

At its core, this is a question of cooperation and collaborationacrosscorporatefunctions.Projectslikethisoneshowwhatwecandowhenourpeopleworkcloselytogetheracrossbordersandfunctions.Itenablesustoproperlyapplyourskillandknowledge—regardlessofwheretheyare.ThisclosecollaborationisinherentinanIPnetwork.

An IP network is a unified, future-oriented system with anunprecedentedcapacityfortheever-growingdemandforbandwidth.It also further strengthens our position in Europe as a technologyleader. It brings us closer to our customers, who can now activatenew services within hours; to our partners, who can connect theirvalue-addedservicestoournetworkwithinweeks;anditbringsourlocaloperationsclosertoeachother.

Our ultimate goal is a fully integrated pan-European networkwhere the technology speaks the same language no matter whereit is.ThatlanguageisIP.Thisnetworkwillonedayintegratemobileand fixed-line technology and enable a new cloud-based produc-tion model. It will eliminate redundancies, increase efficiency, andpavethewayforthevalue-addedservicesandsolutionsofthefuture.Thisblueprintistherefore,thefirstvitalsteptowardcreatingatrulypan-European network.

Itisjustamatteroftime.Untilthen,pleasereadonandlearnallaboutwhatourIPtransformationmeantandmeanstous.

Claudia Nemat Kerstin GüntherBoard Member Senior Vice President

Europe and Technology Technology EuropeDeutsche Telekom Deutsche Telekom

xvii

Introduction

Next-generationnetworking(NGN)describeskeyarchitecturalevo-lutions in telecommunicationcoreandaccessnetworks thatwillbedevelopedoverthenextyears.ThegeneralideabehindNGNisonesinglenetwork forall informationandservices (voice,data, andalltypesofmedia,suchasvideo).

Therequiredshifttowardstandards-basedarchitecturesallowingserviceproviderstocreatemultipurposeplatformsthatshareacom-moninfrastructureiscalledIP transformation.Itensurestechnologicalleadershipforminganewparadigmfortelecommunicationbusinesseswithhigherservicequalitystandards(seeFigureI.1).

WhilethereareseveralenablerssupportingtheIPtransformationasabroadbandrollout(xDSL,FTTx)andIPnetworkoptimization(e.g.,BNGandTeraStream),abasicbutchallengingrequirementisan all-IP infrastructure and thus the decommissioning of PSTN.To reach thisgoal, customersandproductsof thePSTNnetworkneed to be transferred to the IP network. This process is calledPSTN migration.

AsanenablerforIPtransformation,PSTNmigrationisprimarilyfocusedoncost avoidance,network stability, andminimizedchurnduringthemigrationprocess.PotentialrevenueincreasesfromnewIPservicesorvaluecreationforcustomersandfurtherefficienciesfrom

xviii IntroduCtIon

processimprovementsarenotwithinthescopeofPSTNmigrationprojects.Theyneedtobeaddressedseparatelyinalong-termperspec-tiveofIPtransformation(seeFigureI.2).

PSTNmigrationimpactsthewholecompanyforallbusinessfunc-tionsandwithacompletefixedcustomerbase.Thelargestpartofthischallenge is posedby the legacyTDMvoiceplatform, thePSTN.AllincumbentoperatorsarestrugglingwiththeirPSTNmigration,mostlybecausetheyhadinitiallyunderestimatedthecomplexityandcriticalityoftheissueandasaresult:

IP Transformation

New IP services/products

One IP infrastructure

• Shut down old platforms and architecture reaching end of service to avoid increasing risk of network outages• One future-proof platform for voice and data• Reduction of CAPEX and operational costs (e.g., SLA, energy, equipment)

Value for customer• Instant provisioning and faster customer service• Higher stability of the network• Clear voice quality

• Accelerated time-to-market• Future-proof product concept• Enables convergent solutions

• Enables Zero Touch (provisioning; repair)• Increases self-provisioning capabilities

Improved processes

Figure i.1 Benefits of IP transformation.

€

Cash in

PSTN migration enables one IPinfrastructure

Midtermperspective

New IP serv./products

Value forcustomer

Improvedprocesses

Risks from do nothing• Revenue loss from outages after EoS1

• PSTN end-of-life cost increase

Long-termperspective

In�uencingDo not caseMigration

t

Cash out

Figure i.2 PSTN migration as an enabler for IP transformation.

xixIntroduCtIon

1.They were not clearly focused on the core purpose of thePSTNmigration—whichistoavoidcostswhileminimizingchurn—andthereforeallowedthemselvestobedistractedbypossiblerevenueupsides.

2.Theytriedtoapproachtheproblemina“80/20”fashion,sawsome initial success on simple products in simple customersegments,andfinallygotstuckonthemorecomplexproducts.

3.Theysetambitioustop-downtargetswithoutpriorthoroughanalysisoftheconstraintsandoptionsathand,targetswhichsubsequentlyhad tobe revisedoverandoverandthereforelostcredibility.

4.Theyframedthe issueasdecommissioningofa technology,tobeledbythechieftechnologyofficer(CTO),ratherthanmigrationofcustomers,withheavyinvolvementandcommit-mentofallfunctions,particularlythechiefmarketingofficer/chiefoperatingofficer(CMO/COO).

During the PSTN migration project within Deutsche Telekomandsevencountries,wedevelopedareferenceblueprint,summingupthestateoftheartknowledgeonPSTNmigrationsandkeylearning.

Here,weprovideanoverviewofthisblueprint,sortedbythethreekeyproblemareas(FigureI.3):

1.HowtocapturethefinancialbenefitofthePSTNmigration 2.Howtorealizea100%completePSTNmigration 3.HowtoenableandsupportthePSTNmigration

I

II

It is not about additional revenues;it is about cost avoidance and churnminimization.

It is not about 80/20 planning,it is about migrating 100%.

III

IV

It is not about setting ambitioustargets, it is about hitting the targetsas planned.

1

2

How to capture the �nancial bene�tof PSTN migration?

How to realize a 100% complete PSTNmigration?

3 How to enable and support the PSTNmigration?

It is not a pure technical approach;it is about cross-functional enablingof products, systems, and processes.

Figure i.3 The PSTN migration challenges, grouped into three key problem areas.

xx IntroduCtIon

How to Capture the Financial Benefit of PSTN Migration

As a key requirement for IP transformation, PSTN migration is anecessitywhichhastoberealizedinafinanciallyoptimalwayconsid-eringbothcostsandpotentialrevenueloss.Thus,itisnotaboutaddi-tionalrevenues,itisaboutcostavoidanceandchurnminimization.

The financial benefit of PSTN migration is impacted by threedimensions—costs,churn,andtime.Themanagementofeachdimen-sionandtheirinteractionishighlycomplexandprovideschallengesineverymigrationproject(seeFigureI.4).Allthreedimensionsneedtobereflectedinthebusinesscasemodel.

Thebusinesscasecanbesimplyconstructedbycomparingmigra-tion costs to cost savingsdue to the shutdownofPSTNplatforms.Experience shows migration from PSTN to IP technology costsaround 30€ ($38) to 60€ ($75) per subscriber, distributed over 3 to5 years,whiletheexpectedcostbenefitsfromswitchingoffthePSTNplatformarearound10€ ($13)per subscriberperyear.

However,thesefiguresonlyprovidearoughorientationandithastobekeptinmindthat

• Itisoftenunclearwhichcostsaremigrationrelatedandthuswithinscope.

Minimize costs Avoid churn

Maximize�nancialbene�t

Optimize time

• Avoid unscheduled investment to enable migration and related costs• Resource need for migration/after migration support is underestimated• Unclear migration strategy limits transparency on migration cost and its optimization

• Churn needs to be considered carefully especially during forced migration• Impact of PSTN migration on churn is not transparent• PSTN migration is not about 80/20 planning, it is about migration of 100% of customers while avoiding churn

• Top-down targets need to be veri�ed and aligned by all involved functions• Migration timing is impacted by several interdependent factors, making planning dicult• Delay risk is high with drastic impact on cash line

Exhaustive migration plan required to ensure 100% customermigration with maximal �nancial bene�t

Figure i.4 Triple constraints of PSTN migration.

xxiIntroduCtIon

• Migrationcostsareheavilyinfluencedbyrequiredresourcesfor each customer segment, especially toward the end ofcleansinganarea.

• SavingsofPSTNmigrationmaybeunderestimated,becausethey do not account for an avoidance in cost explosion orchurn if someof the switches actually do reach the endoftheirusefullifetime.

• Businesscaseresultsarehighlysensitivetomigration-relatedchurn;already2%oftotalcustomerbasechurncanalienatethefinancialbenefitofthebusinesscase.

Hence,thebusinesscasehastobeextended,takingvariousaddi-tionalfactorsintoaccount.

Additionally, fordecision-relevantbusiness cases, thequestion—whattocomparePSTNmigrationwith—isnotaneasyone.Compar-ingittoanimaginary“flatline”do-nothingscenarioisnotrealistic,asdonothingyieldsastrongrise incosts,aswellasahighriskofnetworkfailuresandatotalfailureofthePSTNinthelongrun.Thus,it is not a real option and the comparisonof thePSTNmigrationscenarioshouldbeconductedagainstarealisticscenarioorminimalchange—usuallyamidterminterimsolutionsuchasprolongedPSTNusageorsoftswitches.

Hence,thebenefitofPSTNmigrationneedstobecalculatedbycomparingincrementalfinancial implicationsofthespecificinterimandfullmigrationoptionsofthecountrieswithregardtorevenue,opera-tionalcostdevelopment,andCAPEX(capitalexpenditure)investment.Havingtransparencyintheseoptionsaswellasparallelenablerprojects(e.g., investmentsintohigherbroadbandcoverage)arekeychallengesandprerequisitesforsolidandnon-overlappingbusinesscasecalculations.

The financial benefit of a full migration scenario versus interimsolutioncanbeinfluencedbyfourmajordrivers:

• Minimize churn: A customer facing problems, while beingmigratedorlaterusingIPservices,willalwayschurnwithhisfullcontractrevenuefromvoice,broadband,TV,andotherservices.

• Migration costs:Thelevelofmanyexpenditures,suchasIMSoraccessnetworkinvestment,isdeterminedbythetechnicalstartingpointofthecountry;butresourceneedsforcustomer

xxii IntroduCtIon

migrationandleversforoptimization(e.g.,remotemigration)shouldbecarefullyconsidered.

• Migration timeline:Migrationofthefullcustomerbaseshouldalwaysbeaccomplishedinanambitioustimeframetomini-mizetheperiodswithnegativecashflow.

• Long-term savings: The main expected benefits of switchingoff the PSTN platform are savings in energy costs, servicelevelagreements,andpersonnelcostsinplanning,assembling,and maintenance.

Tosupporteachcountrywith thischallenge,wehavedevelopedastandardizedbusinesscaseframework.Besidesoverarchingbenefitcalculationsthishelpsto

• ProvideasolidandcomparablebasistoorchestrateCAPEX,OPEX (operational expenditure), and revenue discussionwithin and across all functions (e.g., marketing, sales, cus-tomercare,NT,IT,regulatory).

• Ensure cross-functional alignment for target settingduringtheconceptionphaseoftheprojectandrolloutpreparationaswellasfinalexecutionofthemigrationplan.

• FasteralignthecountrybusinesscaseresultswithshareholderDeutscheTelekomAGthroughacommonunderstandingoftheimpactfromPSTNmigration.

How to Realize a 100% Complete PSTN Migration?

OnekeychallengeofPSTNmigrationisthatitisnotabout80/20planning, it is about migrating 100%. This holds true not only forthetotalprojectandthePSTNshutdownbutalsofortheindividualareashutdown.However,theseareashutdownsarethemaindriverofsavings.Thus,thequestionisnot,howfastcanyoumigratealargenumberofcustomers,buthowlongdoes it taketomigratethe lastcustomer. It also shows the migration status in 2012, which hadalreadymigrateda largenumberofcustomers,butstillhas left themorecomplexbusinessandwholesalecustomers,whomightblocktheshutdownofthefocusareas.

To mitigate the resulting risk, careful planning has to be done,which isnotabout settingambitious targets; it isabouthitting thetargetsasplanned.

xxiiiIntroduCtIon

Consequently, migration planning needs to realistically detailhow tocontactandmigratecustomers,andalsowhentomigrateeachcustomer.Torealizethisandoptimizethetrade-offbetweencosts,time,andchurn,somekeylearningisappliedinthemigrationplan-ningframeworkpresentedintheblueprint:

• Migratebyareatomaximizesavings,migratebyproducttoleveragespareresources(costsandtime).

• Startearlywithcustomizedsolutionsandwholesalesolutions,astheyoftenblocktheclearanceofareas(time).

• Maximize leverage of natural migration (NM), as it is themost optimal resource and most customer-friendly way formigration(costs).

• Managealltypesofresourceschoosingatrade-offonchurn,cost,and/ortime,andcheckreadinesstomakethosesacrifices(costs,time,andchurn).

Toensuretheimplementationoflearningandasmoothmigrationprocess,theframeworkfocusesonthetwomajorresourceconstraintsofproductdevelopmentandmigrationresources.Theresultingmigrationplan comprisesnotonly the sequencingofproductdevelopmentbutalsotheplanningofthemigrationitself,defininghoweachcustomerismigrated(migrationstrategy),andwhen(migrationsequence).

The planning process starts with the optimization of productdevelopment,definingnotonly thedevelopmentstartdatebutalsothedateofsubstitutereadiness.Theprioritizationofproductsfollowstwoimperatives:

• High-volume mass products first as their early readinessincreasesnaturalmigrationandresourceleverage.

• Complexproductsfirstastheytakea longtimetodevelop,migrate,andformthemajorroadblocks.

The migration sequencing approach strives to maximize savingswhilemanagingavailablemigrationresourcesandreducingthedelayrisksoftheproject.Assavingsaremainlydrivenbytheshutdownofanarea,migrationshouldbedoneinanarea-by-areaapproach.How-ever,to leveragespareresourcesbeforeandduringanareamigration,a migrationbyproductisusedaswell.

xxiv IntroduCtIon

Identifying the product sequence within the product-by-productapproach, a framework isprovidedbymainly applying two recom-mendations:

• Complex products: Start with multiarea products to reduceroadblocksforareacleansing,startwithcomplexproductstomitigatelongmigrationduration.

• Standard products:Focusonmassproductswithexpectedlim-itedsuccessofnaturalmigration.

Areasequencingformsthemostcomplicatedtask,asmanyresourceand timing constraints are implied on the area-by-area migrationcombinedwithstronginterdependenciesofsequencingandresourcerequirements.Tobreakthiscircularityissue,thesequencingisdoneinascenarioapproachtakingtimingconstraints,savingsonmigra-tion costs, and early migration savings into account. The scenariosare combinedandoptimizedbydifferent levers to ensure sufficientresource availability on different dimensions (CAPEX/OPEX,customercareFTEs,regionaltechnicalservicesFTEs).

How to Enable and Support the PSTN Migration?

In preparation of PSTN migration three major adjustments arerequired,notonly inNTandIT,butalso in theproductportfolioand processes, which can impact various functions. Hence, PSTNmigrationisnotapuretechnicalapproach;itisaboutacross-functionalenablingofproducts,systems,andprocesses:

• ThePSTNproductportfolioneedstobetransferredintotheIPworldandthusthenewvalue-cost-optimizedIPproductportfolioneedstobecreated.

• NT/ITneedtobeenabledforIPandthemigrationdemandsvastadjustmentsinsystems.

• ITprocessesformigrationneedtobedefinedandthemajor-ityofexistingprocessesadapted.

ThedevelopmentofthenewIPproductportfolioiscomplexandcrucialduetothelargescalecoveringallPSTNproductsubstitutesandduetothestrongregulatoryinvolvementthroughoutthewhole

xxvIntroduCtIon

process.Bothaspectsimposenotonlyhigheffortandhugeprojectrisksbutalsohaveamajorimpactonfuturepositioningandrevenues.Thus,anapproachmustbeusedensuringacarefullycost-benefit-optimizedandapprovedproductportfolio.

Asabasisforallconsideration,transparencyregardingthecurrentPSTNproductportfolioanditsfeatures,aswellastheexistingoptionsforthenewportfolio,havetobegeneratedallowingthedeductionofrequiredactionsperfeature.

Oneof theseactions is a cost-benefitanalysisof thepossible fea-turestobeinvestedin.TheblueprintprovidesanevaluationframeworkassessingfeaturevalueandcostsresultinginthelistoffeaturestobeimplementedintheIPworldandidentificationoffeaturestoberetired.

BuildingontheIPfeatureportfolio,thenewproductportfolioneedstobecreatedandoptimizedalongwithvariouscriteria,suchasfinan-cialadvantagesandcustomerexperience.Afterdefiningeachproduct,theapprovalbytheregulatorisrequiredforresultingadjustmentsanddocuments(e.g.,termsandconditions,referenceoffers,pricing),whichforbestpracticesandargumentationlinesareprovidedintheblueprint.

Furthermore,theselectedproductportfolioneedstobetechnicallydevelopedand implementedaswellas launched.Inadditiontothedefinition of the new product portfolio, NT and IT infrastructureneedstobeadjustedtoprepare for theIPworldandthemigrationitself.This requirescarefulplanningaslargepartsofthenetworkareimpacted creating high effort and high risks. Also, process adjust-ments are characterized by large-scale, high business risks, and astrongimpactonmigrationsuccess.

Book Structure

Ingeneralthebookisdividedintosixchapters,includingfivefunctionalwork streams embedded in an overarching work stream. The maintopicsoftheseworkstreams,whichwillbepresentedinthefollowingchapters,are:

1.“OverarchingTopics”provideanoverviewofmajororgani-zationaloverarchingtopics,forexample,theprojectstructurewithrolesandresponsibilities,thePSTNmigrationprocess,

xxvi IntroduCtIon

as well as a checklist of the main questions and risks thatshouldbeconsideredduringtheproject.

2.“Migration Plan” within a three-step approach includingprioritizationlogictoensureefficientrolloutplanning.

3.“Product Portfolio Roadmap” describes the necessary pro-cessesandstepsfortransferringthePSTNproductstoanIPworld.Thisincludesboththeanalysisofthefeaturesandtheproductdefinition.

4.“NT/IT Roadmap” consists of three substreams: networktargetarchitectureandtechnicalproductdevelopment;NTrollout—adapting the current network structure to enablePSTNmigration includingrolloutplanningandtechnicaltraining; and IT roadmap—adapting current systems toenablenewIP features/products.

5.“BusinessCaseFramework”definesacommonbusinesscaseframeworkenablingcross-functionalsteeringduringconcep-tion,rolloutpreparation,andexecution.

6.“Go to Market” ensures a value-based migration of thefull customerbasewithanefficientrolloutplanaswellasadetailedplanformarketingintroduction,asaleschannelplan,andmanagementoftheresourceneedsduringmigration.

1

1Overarching TOpics

Themaintopicsoftheoverarchingworkstreamincludethefollowing:

1.ThePSTNmigrationprocessandinterdependenciesgiveanoverviewofIPtransformationprojectsteps,mainmilestones,thetimeline,andshowtheinterdependenciesbetweenallstreams.

2.Projectorganizationdescribestheprojectorganizationstruc-ture,rolesandresponsibilitiesofeachstreamduringdifferentphasesoftheproject,keymeetings,aswellasescalationanddecisionprocesses.

3.Environmentalstatusquoliststhemainelementsandques-tionswhichrequireattentionfromtheexternalandinternalpointsofview.

4.Scenario analysis assesses the different migration scenarioswithaqualitativeassessmentofscenarios.

5.Alistofstandardkeyperformanceindicators(KPIs)providesmandatoryandoptionalKPIsthatshouldbeconsidereddur-ingthePSTNmigrationprocess.

6.Thesectiononrisksisdedicatedtoprojectrisks,theirmultipledimensions,andimpacts.Asanoutputfromthissection,therisklistwithpossiblemeasuresformitigationsisdeveloped.

7.End-to-End(E2E)processadjustmentsprovideexamplesofprocessesthatshouldbechangedduringthemigrationaswellasnewprocessesthatcouldorshouldbeintroduced.

1.1 The PSTN Migration Process and Interdependencies

TheoverallPSTNmigrationprocessshowsthemajorprocessstepsand the interactionbetweenwork streams.First, it shouldprovideahigh-level viewof the total process duration; and second, it shouldpoint out main interdependencies between the streams. Theseinterdependenciescanbedueto input/outputrelationsbetweenthe

2 managIng the Pstn transformatIon

streamsaswellasintermsofmilestonestobeprovidedtoensuretheoverallprojectsuccess.Thekeymilestonescanbeusedasscheduledcheckpointsformainmanagementdecisions.

TheoverallPSTNmigrationprocess is anoverviewofallmajorproject steps describing what to do during PSTN migration (seeFigure 1.1).

ThePSTNmigrationisdividedintothreegeneralsteps:“conception,”“rolloutpreparation,”and“execution.”

Withintheoverallprocessfourmainprojectgateshavetobepassed:

• Gate I: The first board of management (BoM) decision con-firmsthegeneralprojectstartandtheprovisionofafirstbudgetindication.

• Gate II:After approximately6months, itprovides thefirstinsightoninitialmigrationplan,technicaltargetpicture,andfinancial impact (top-down aspiration, for more details seebusinesscaseworkstream,inSection5.2.1,Chapter5).Themaingoalistogetthecommitmentofinvolvedfunctionstostickwithbasicinputandassumptions.

• Gate III:Afterthefinalizationoftheproductfeatureportfolioandthefinalmigrationplan,thebusinesscasewillbevali-datedbasedonabottom-upcalculation.TheseresultsarethebasefortheBoMdecisionoftherolloutstart(gateIII).ThisgateprovidestransparencyonthebenefitofPSTNmigrationbeforemajorinvestmentisdone.Inaddition,thefirstdraftsoffunctionalrolloutplansarereadyandthemaingoalistosecurecommitmentofinvolvedfunctionsforrollout.

• Gate IV:ThelastgateaftertherolloutpreparationofallworkstreamsistheBoMdecisionofthemigrationstart.

The overall timeline is shown in the PSTN migration processandtheapproximatedurationfromprojectstarttomigrationstartis20months.Itisonlyanillustrativeprojectprocess;durationdiffersbetweencountries,depending,forexample,on:

• Networkstatus,broadbandcoverage,andpenetrationpriortomigrationstart

• Sizeofcustomerbasethatshouldbemigrated• Existingproductportfolioandregulatoryrequirements

3overarChIng toPICs

Ove

rarc

hing

1

Mig

ratio

n Pl

an2

Prod

uct P

ortfo

lio R

oadm

ap3

NT

and

IT R

oadm

ap4

Busi

ness

Cas

e5

Go

to M

arke

t

Proj

ect s

tart

Gat

eway

sM

ajor

mile

ston

e

BoM

rollo

ut d

ecisi

on(b

otto

m-u

p va

lidat

ed)

Conc

eptio

n

Input for BC

Fina

l mig

ratio

n pl

an

Fina

l pro

duct

por

tfolio

Go

live m

ajor

mas

s pro

duct

s

IT sy

stem

s rea

dyIM

S re

ady

Mig

ratio

n pr

oces

s rea

dy

incl

. Tra

inin

g

Mon

ths

• Pro

ject

setu

p• S

cena

rio an

alys

is• E

nviro

nmen

tal s

tatu

s quo

• De�

ne in

itial

mig

ratio

n pl

an• D

e�ne

�na

l mig

ratio

n pl

an

• De�

ne p

rodu

ct p

ortfo

lio

• Rea

lize p

rodu

ct p

ortfo

lio

• De�

ne te

chni

cal a

rchi

tect

ure

• De�

ne te

chni

cal p

rodu

ct

• Pre

pare

NT

rollo

ut• P

repa

re IT

rollo

ut

• Sup

port

mig

ratio

n (C

C, T

S)

• Pre

pare

sale

s cha

nnel

s• C

reat

e com

mun

icat

ion

plan

• Con

duct

�rs

t rou

gh es

timat

e• S

uppo

rt ro

llout

dec

ision

• Pre

pare

mon

itorin

g/iP

F re

view

• E2E

pro

cess

adju

stm

ents

0102

0304

0506

0708

0910

1112

1314

1516

1718

1920

2122

2324

25

Rollo

ut p

repa

ratio

nIll

ustr

ativ

eEx

ecut

ion

BoM

info

rmat

ion

mig

ratio

n st

art

BoM

dec

ision

(top-

dow

n as

pira

tion)

6

Input for BC

Figu

re 1

.1

Over

all P

STN

mig

ratio

n pr

oces

s.


• Managementexpectationforfinalizationoftheproject• Handlingofproblemsandrisksduringtheexecution• Availableresources(e.g.,FTE,CAPEX)

Duringtheexecutionphase,thereshouldbeacontinuousmoni-toringofdefinedKPIs,updatesofthebusinesscaseincaseofbiggerchangesofassumptions,andalignment.

1.2 Project Organization

PSTNmigration requires anefficientproject structure, involvingacross-functionalandhighlyintegratedprojectteam.Rolesandrespon-sibilitiesinsidetheinitiativeareestablishedaswellasthegovernancestructure and an escalation model. Due to its complexity, it needsabsolutecommitmentfromallareasinthecompanyandsupportfromtopmanagement.

1.2.1 Project Structure: Roles and Responsibilities

IPtransformationisacentralinitiativeofDeutscheTelekom(Europe).Withinthatinitiative,acentralteamisformedtocoordinatewithinthe European countries all IP transformation topics referring toPSTNmigrationaswellasBNGandTeraStream.Accordingly,theinitiativeorganizationisdividedintoPSTNmigrationwithitsfunc-tionalandbusinesscaseworkstreamsdevelopedin theblueprintandinto two work streams for BNG and TeraStream (both BNG andTeraStreamarenotpartofthisbook).

Everystreamhasaleadresponsibleforthefunctionaltopics(productportfolio roadmap,migrationplan,go tomarket,NT/ITroadmap,businesscase).Inaddition,thetworesponsibleforthePMOactivitiesarerequiredforcoordinationofthecentralteamandcommunicationtoward thecountries.AsacommondecisionandsteeringplatformanIPtransformationEUcoreteamandanoverallSteerCoteamareestablished(seeFigure 1.2).

Onacountrylevel,localIPprojectsaresetuptointeractwiththecentralteam.Inthisbook,thefocusisonPSTNmigration,omittingfurtherIPtransformationtopics.

5overarChIng toPICs

IP T

rans

form

atio

n EU

Ste

erin

g C

omm

ittee

IP T

rans

form

atio

n EU

Cor

e Te

am

Mig

ratio

n pl

an(1

FT

E)

HT

HT

Stee

rCo

HT

core

team

MK

Ste

erCo

MK

core

team

MT

Stee

rCo

MT

core

team

Local IP Projects

Prod

uct P

ortfo

lioRo

adm

ap (2

FT

E)G

o to

Mar

ket

(1 F

TE)

NT

/IT

Roa

dmap

(1 F

TE)

Busi

ness

Cas

e(1

FT

E)H

uman

Res

ourc

es(1

FT

E)

MK

TO

TEST

CT

RTM

T

One DT (Europe) IP Transformation

PMO

(1 F

TE)

Figu

re 1

.2

Initi

ativ

e st

ruct

ure.


TheexperiencefromthecountrieshaveshownthatPSTNmigra-tion is a complex project that requires aligned involvement of allfunctions, which has proven to be highly complex and difficult tomanage.Thus,allbusinessfunctionsneedtocollaborateinanefficientway—untilallcustomersaremigrated.

Basedonthisdiscussion,theinvolvedpartiesarestructuredintothe functional topics represented by the work streams (overarchingtopics,productportfolioroadmap,migrationplan,NT/ITroadmap,businesscase,gotomarket)leadingtoacross-functionalprojectorga-nization.Humanresourcesmustbeintegratedfromthebeginningtosupportandassureacomprehensiveresourceplanninginthemigra-tionplan.ThestructureiscompletedbytheE2Eresponsibleforthecustomersegment(business,residential,andwholesalecustomers)inordertoensuretheoverallcustomerperspective.

1.2.2 Escalation

In the first escalation instance within the local IP projects for anyriskorissueisthecoreteam.Itimmediatelyreviewsandassessestheescalation.Theevaluationwillberecordedintheprojectmanagementriskregisterorissuelog.Mitigatingactionswillbetakenandtrackedby theprojectmanagementuntil the issue is resolvedor the risk isreducedtoanacceptablelevel.

Thenextescalationstepinvolvesthelocalsteeringcommittee.TheultimatepointofescalationistotheIPtransformationsteer-

ingcommittee,but thismustpass throughtheescalationchannels:project/stream leader→ program management→ local core team.Projectescalationsthatarenotraisedtotheproject/streamleadermaynothavetheappropriatesupporttoresolvethem.

1.3 Environmental Status Quo

Inthebeginningofthepreparationphase,ananalysisoftheenviron-mentandthesituationofthecompanyanditscompetitorsisrequired.Several internal and external factors impact the IP transformation;consequentlyallpossibleelementshavetobeconsideredanddefinedthroughachecklistpriortothestartofthemigration.However,thesefactorsvarybycountryandneedtobeadjustedandcomplementedby countryspecifics.

7overarChIng toPICs

Environmental factors can be divided into external factors andinternal factors.External factorsare related to themarketenviron-ment, customers, and regulatory conditions. Internal factors andquestionsarerelatedtoallareasofoperationofthecompany:techni-cal,marketing,sales,finance,andhumanresources(seeFigure 1.3).

1.3.1 External Factors

The market environment should be carefully monitored becauseit hasseveralconsequencesonthePSTNmigrationprocess.First,the telecommunication market should be considered in terms ofbroadband penetration and fixed/mobile penetration as well asdevelopment trends.These factorshavea tremendous influenceonthe number of customers that should be migrated over the years,possiblenaturalchurn,andthenumberofbroadbandcustomersthatshould be forecasted. In addition, the customer structure dependsoncompetitionmovementandthegeneralmicroeconomicsituation,whichinfluencethepurchasingpowerofthepopulation.Alltheseelementshaveanimpactoncostandontherevenuesideandshouldbecarefullymonitored.

TheregulatoryenvironmentisoneofthemainriskdriversforPSTNmigration.Itcanimpactthetimelineoftheprojectanditsfinancialbenefits,forexample,byrevenuedownsizingwithpossiblechangesintheinterconnectionfeesorchangesinwholesaleproducts.Theregu-latory requirements can also indirectly impactPSTNmigrationby

External factors Internal factors

Technical conditions

Marketing and sales

Finance

Market environmentand customer

Regulatory requirements

PSTN migration

Human resources

Figure 1.3 External and internal factors.


affectingotherenablerprojects,forexample,theregulationoffiberintheaccesscouldinfluencetheestimatedbroadband penetration.

Aspecialfocusduringthemigrationshouldbeplacedonwholesalecustomers because of the complexprocesses of negotiation and thecomplexityoftheproducts.Adelayinmigrationofwholesalecustomersformsahighrisktotheprojecttimelineanditscosts.

1.3.2 Internal Factors

Internal factors that should be considered during the PSTN migra-tionarerelatedtotechnical,marketing/sales,financialtopics,andHR/stakeholderanalysis.Moredetailsoninternalfactorsarelistedhereafter.

Fromatechnicalpointofview,themainaspectsare:

• StatusofthenetworkandITapplications,consideringboththeavailabilityandthereadinessbeforetheactualstartofthemigration

• ProvisioningofHRresourcesfortheperiodofmigration• Alignmentofmodifiedprocesseswithallpartiesinvolved• Validationofservicesthroughtestspriortothecommercial

launch• Follow-uponperformance,throughregularreportsandKPIs

Fromamarketingpointofview,themainquestionsarerelatedto:

• Alignment of the product portfolio for each customer seg-mentandharmonizationwiththetechnicalarea

• Possibilitytodevelopnewproductsasasourceofadditionalrevenue

• Marketingcommunication,withastrategyandplanforbothaninternalandexternallevel

Marketing and sales are strongly involved in the PSTN migra-tion process, especially customer care and sales needed to managethecontactswithcustomerswithindifferentchannels.Thisinvolvesbothathoroughplanningofcustomercontactsandafollow-upontheperformanceaccordingtotheestablishedKPIs.

Theregulatoryandfinancialenvironmentshouldalsobecheckedpriortomigration.Questionsfortheregulatoryareaaremainlyrelatedto on-time communication with the regulatory agency, wholesale

9overarChIng toPICs

matters,aswellason-timepreparationofallthenecessarydocuments,especiallythetermsandconditions.

Financequestionsarerelatedto:

• Input for the business case in terms of cost/savings andrevenuepotential

• Permanentmonitoringofsignificantchangesinestimations• Permanentmonitoringofrisk• Alignment of the PSTN migration project with financial

planningcyclesandwithotherenablerprojects

Finally,thehumanresourcesenvironmentshouldbecheckedandastakeholderanalysisshouldbeconducted.Humanresourcesissuescanheavilyinfluencethesuccessofthemigration.Restrictionsregardingtheflexibility of resource allocation canoccur from several sourcessuchasinflexibleagreementswithsocialpartnersorongoinghead-countreductionprograms.

Athoroughanalysismustbecarriedouttoidentifyalltherelevantstakeholders who will support the migration and those who mightslowitdownorwilltrytoavoidit.Throughthisanalysis,thevisibleriskscanbepreventedandmitigated.

Somegenerallessonslearnedintheareaofhumanresourcesthatshouldbeconsideredformigrationplanningare:

• PSTN migration requires additional resources (internal/external)duringthemigrationphaseandadditionalOPEXfortraining,upskilling,andreskilling

• Additional resourcesarenotonlyneeded in the technologyareabutalsointhecommercial/customer-relatedareas

• Significant savings within the HR focus (FTE, OPEX)cannotbeexpectedbeforetheendofthemigration

• Severalcountrieshavetrainedtheirtechniciansas“universaltechnicians”(legacyandIP)tohavebothskillsetsavailable

• Cross-functionalprojectteamsetupismandatorytoachievethetargets

1.4 Scenario Analysis

Through a scenario analysis, it is possible to evaluate the differentalternativestatesandinterimsolutionsthatareavailabletoreachan


optimalsolutionforeachcountry.Thiscandifferaccordingtoseveralvariables,includingtheleveloftheexistingnetwork,markettrends,managementexpectations,andcoststhatneedtobeconsidered.Byconsidering alternativepossible outcomes and futuredevelopments,ananalysisofpossiblefutureeventsisconducted.

PSTN/ISDNisapredominantlegacyplatforminwhichhugeinvest-mentshavebeenmadeinthepastandwhichcurrentlyisstillonemajorfixedrevenuesourceforoperators.Duetothis,itislogicaltofocusontheevolutionandfurtherdevelopmentofthevoiceservicearchitecture.

Thecurrentnetworkarchitecture is complex andconsistsofdif-ferentnetworksandnetworklayers.PSTN/ISDNarepredominantlyvoicenetworksandarecompletelyseparatefromdatanetworks.Thedouble operation of networks leads to higher costs in maintenance,operation,anddevelopment.Furthermore,PSTN/ISDNhavereachedtheirendofservice(EoS),whichleadstoincreasingoperationcosts,limited availability of spare parts, and thus an increasing risk offailure.TransformingthisarchitectureandmergingthenetworkstoastandardizedandleanIP-basedarchitectureisachallenge.However,thesimpleandmoderntechnologylandscapeshouldleadtodecreasedcostsinmaintenance,newpossibilitiesbasedonconvergenceofvoice,data,andvideoservices,andfastertimetomarket.

Inorder to identify theoptimalway forhowto reach the targetarchitectureconsideringtechnicalandfinancialimpacts,thefollowingscenariosarepossible:

0.Do-nothingscenario:

• Noactionandinvestmenttaken• Leading to network failure, resulting revenue loss, and

eventuallythenetworkbreaksdown• Notconsideredasarealisticoption

1.Interimsolutions:

• Adaptationofcurrentarchitectureorreplacementbysub-stituteversion,butnomigrationtoasinglenetworkandplatform(IMS)

• Definedasaminimumrequirement• OnlydelaysPSTNmigration

11overarChIng toPICs

• Twopossibleoptions:ProlongPSTNusagewithplatformupgradesrequiredorimplementationofsoftswitchsolu-tion(replacingPSTNnetworkwithaseparatenewone,nocustomercontractrequired)

2.One platform (IMS)/full PSTN migration toward NGNIP-basedarchitecture:

• Onejointcoreplatform(IMS)• FullretirementofPSTNwithonlyonenetworkremaining• MigrationofallPSTNcustomers• Twopossibleoptionsforvoice-onlycustomers:Migration

to MSAN POTS card (emulation of PSTN with nocustomer impact and contact required) or migration tobroadbandport(fullIPsolution,butcustomercontactandactionrequired)

Combined approaches of interim solutions and full migration atdifferentareasarealsopossibleandformspecialcases.

Ashortdescriptionofeachoptionandthecombinedapproachisgiveninthefollowingparagraphs.

1.4.1 Interim Solutions

A PSTN network is a time division multiplexing (TDM)-basedhierarchical network existing on international, transit, and localexchangeswherethesubscribersareconnectedtoremotesubscriberunits(RSUs)viaTDMlines.

Interim solutionoptions for securing thefixed voice service arethefollowing:

1a.ProlongedusageofPSTNnetwork. 1b.Introductionofsoftswitch(SSW)andmediagateway(MGW)

elementsasareplacementforPSTNexchanges.

Option 1a:ProlongedusageofthePSTNnetworkassumeskeep-ingtheTDM-basedhierarchicalnetworkwithinternational,transit,andlocalexchanges.Inthisnetwork,thesubscribersareconnectedtoremotesubscriberunits(RSU)viaTDMlines.Thisisadistributedservicearchitecture,whichisfromtoday’spointofview,verycomplexand cost ineffective. It is characterizedby ahighnumber ofnodes


bothincoreandaccesspart.TDM-basedswitchesareveryold,whichleadtothefollowingchallengesevenifusageisprolonged:

• No further production of hardware (processors already outofstock)

• No software supportby suppliers (even in the caseofSLAextension)

• Sourcecodeisnotaccessibleforothersuppliers• Noguaranteeforfunctioningexchangebysuppliers

Underthesecircumstances,riskoffailureisincreasedononesideandontheotherside there isnopossibility for the introductionofadditional functionalities (for example, by the regulatory body).Therefore, in order to provide a reliable voice service, this scenarioassumes that a changeof existinghardware andanupgradeof thecurrentsoftwareversionofexchangesisnecessary,whichrequiresahighvolumeofCAPEX.TheoverallnetworkOPEXcostwillcon-tinuetoincreaseyearoveryearbasedonincreasedSLA,energycon-sumption,andparalleloperationofoldlegacyandIP-basedsystems.

ItshouldbeemphasizedthatthisscenariocouldbeconsideredonlyforalimitedperiodoftimesincevendorswillstopdevelopmentandsupportofoldlegacyPSTNequipment.

Option 1b:Incomparisontothefirstscenario,thesoftswitchoptionintroducesdifferentarchitecturesbydecouplingofcontrol(SSW)andtransport layer (MGW).Thus, itenables the introductionofacosteffectiveIPtechnologyinthecoretransportlayerandSIPcommu-nicationprotocol in thecontrol layer.Thisenables the reduction inthenumberofcoreelementswheresoftswitchesandmediagatewayreplaceseveralexchanges.TDMtransportremainsonlyintheaggre-gationandaccesspart,sothatcustomersdonotneedtobetouched.However,ifthedigitallineunit(DLU)cannotbeusedwiththesoftswitches,*fullrecablinginthecentralofficetothenewequipmentisnecessary,makingitcostlyandtimeconsuming.

As an interim solution, the soft switch solution replaces the oldPSTN equipment thus leading to a longer lifetime due to newersoftswitches.However,thelifetimeofsoftswitchesandwithitthepossibleextensionofthevoiceservicebasedonPSTN(voiceservicesonly)arelimited,makingitonlyanintermediatesolutiontowardan

* DLUreusageisonlypossiblewithSiemensswitches.


SIP-basednetwork.Consequently, itcanbeusedtobuysometimeforthetime-consumingprocessofPSTNmigration.ThesoftswitchsolutionalsoprovidestheopportunitytoreplaceRSUswithH.248MSANs,whicharecapableofall-IP-basedfixedvoiceservice.

Thedownsideofthissolutionisthatitisnotfutureproof,sinceitisonlyapplicabletovoiceservicesanditcannotoffermultimediaservices.

1.4.2 Full Migration

Thefinal IP target picturehandles all types of traffic throughoneplatform,theIMS,abasicplatformfordevelopmentofnewmulti-mediacustomer-orientedservices.ItsarchitectureisbuiltfromendtoendonIPandischaracterizedbyindependenceoftheservicelayerfrom the access network. This enables the reuse of common con-trolandservice layers fordifferent typesofaccess (copper,FTTH,2G/3G/LTE, etc.), limiting costly adjustments of those layers. Itsaccessindependentcharacteristicalsoenablesconvergentservicesandserviceinteraction(e.g.,missedcallsonIPTVscreen).

Broadband customers are further serviced via broadband portsandjustneedtoconnecttheirtelephonetoaVoIPcapableintegratedaccessdevice(iAD),whichmighthavetobeprovided.Provisioningof voice via broadband line for 2play and 3play customers presentssignificantsavings,sinceoneport isusedforallservices.However,for voice-only subscribers two options are possible, leading to twodifferentscenarios:

2a.MigrationtoMSANPOTScards(emulationofPSTNservice). 2b.Migrationtobroadbandport(samesolutionforallsubscribers).

Option 2a assumes the provisioning of voice service for broad-bandcustomersviabroadbandconnection(viaiAD)andtheusageofnarrowbandMSANPOTSportsforvoice-onlycustomers.

Provisioning of voice service via MSAN POTS for voice-onlycustomersallowsfasterandsilentmigration(remoteprovisioning—noin-housework)andreductionofequipmentprovisioningcost(noiADisnecessary).However,nonewservicesareprovidedtothecustomersinceitonlyemulatesPSTNvoiceservice.Fromastrategicpointofview,voiceasastand-aloneservicewillhavenofuture,alsoshownby thepermanentdecliningnumberofvoice-onlycustomers.Thus,


MSANPOTSas a technology emulating voice-only services is aninvestmentinadyingservice.

Option 2bassumesfullPSTNmigrationconnectingallusersviabroadbandportstotheIMSformingthefinaltargetpicture:

Ashighandsufficientbroadbandpenetrationisrequired,PSTNmigrationshouldbeplannedasanintegralcomponentwiththebroadbandaccesstransformation.

AdditionalcostsforthisoptioncomparedtoMSANPOTSareinvestedfor iAD,potentialworkoncustomerpremisesandiftheinstalledbroadbandcapacitiesarenotsufficient,addi-tionalinvestmentforbroadbandports.Thus,thesecostscanbehigherthantheinvestmentinaMSANPOTScard.

Thehighercostscanbejustifiedinthecaseofupsellingpotentialduringmigrationaswellasintheyearstocome,asthecus-tomeristhenrequiredtomovetoabroadbandportanyway.

Consequently,importantparameterswhichhavetobetakenintoaccountwhendecidingbetweentwofullmigrationscenariosare:

• Currentcountry’sbroadbandpenetration• Marketingforecastoffuturebroadbandpenetration• Likelihoodofupselling• Characteristics of the operator’s copper access network

(broadbandpotentialdependsonthequalityofthephysicalnetworkandtheaveragelengthofthelocalloop)

CAPEXinbothfullmigrationscenariosisrelatedmainlytoIMS,CPE/iAD,MSANcapacities,orbroadbandports.Comparedwiththe interim solution, OPEX savings, mainly based on savings inSLA,energy,andpersonnelcosts,areexpected.Inthelongrun,itisafuture-proofsolutionthatshouldenablegreaterefficienciesatlowercostsandformabasisforvaluepropositionscentereduponapplica-tions,services,networkaccess,anddatacarriage.

1.4.3 Combined Approach (on an Area Level)

The different scenarios can also be combined on an area-by-areaapproachdefiningwhichcustomersofoneareawillbemigratedtoallIP,butinotherareasremainconnectedtooldlegacyplatforms.


Theconnectionofcustomers innonmigratedareascanbeestab-lishedinthreeways:

• ViaoldPSTNswitches,whichmostlikelyneedtobeupgraded• Viaalreadyintroducedsoftswitches• Vianewlyintroducedsoftswitches

Thisisahighlycomplexsolution:Itiscomplexfromanoperationandmaintenancepointofview,sincedifferenttypesofequipmentareimplemented in thenetwork,whichalsorequiredifferentresourcestooperatewith.Furthermore,customerscannotalwaysbeprovidedwiththesameservices.

Costsareexpectedtobehighermainlyduetothecostsforsupportcontractsandincreasedpersonnelcostforoperation.Basedonthesedrawbacks,thecombinedapproachshouldbecarefullyevaluated.

1.5 Standard Mandatory and Optional KPIs

KPIsrepresentausefultooltosteerprogressinthePSTNmigrationprojectandprovidefulltransparencyandtheachievedresults.Dataisrequiredfromallstreamstomonitortheprocesswithregardtomini-malchurn,time,andcosts/savings.ThestandardKPIsetfocusesonthetrade-offbetweenminimalchurn,time,andcost/savings.

Layingabaseforprojectsteering,theKPIsshouldbeusedfor:

• Initiatingcorrectiveactionsandalterationactivitytiming• Settingtargets,andchallengingexecution• Comparing countries and standardized monitoring of the

projectonagrouplevel

ItshouldbenotedthatthelistofKPIsisnotexhaustiveandcanbeextendedfurtherbasedonoperatorrequirements.

1.6 Risk Analysis

Severalexternalandinternalriskaspects(parameters)shouldbecon-sideredintheoverallproject.Eachriskhasinherentmultipleimpactdimensionsonkeybusinesscasedriversandprojectsuccess.Therefore,


thefinancialimpactshouldbecalculatedwhentheseriskscanbefore-seenandallrisksshouldbereportedandfollowedinordertomitigatethemappropriately.Theriskqualityanalysisandassessmentisbasedonthemigrationplanfortheremainingexecutionphase.Duetothelong-termdurationof thePSTNmigrationproject, there couldbemanyrisksourcesduringthewholeprojectduration.

DuringPSTNmigration,riskscanbeinflictedbytheprojectitself,Deutsche Telekom AG or operator level (micro environment), andeco system(macroenvironment).Therefore, it is importanttoiden-tifyandstructurepotentialsourcesofrisksanddefinetheresponsiblepersonbyindicatingandquantifyingthepotentialimpactonchurn,costs,andtime(Figure 1.4).

Thefollowingparagraphspresentindetailpossibletypesofrisksaccordingtothetypeofsource.

1.6.1 Project Internal Risks

Projectinternalrisksaremainlyrelatedto:

• Commitmentandinvolvementofthefullorganization• Wrongassumptionsoftheinputs(e.g.,underestimatedcosts

orinputsreadiness),wrongestimationforFTEefficiencyorcompetencyofresourcesintheIPworld

I

II

III

Sources of risks

Eco system(macro environment)

DTAG/NatCo(micro environment)

Projectinternal

Figure 1.4 Risk sources.


• Forcedmigration(FM)process

In particular, forced migration can bear high risks—due to theproduct complexity (especially in the business segment) and thenaturalbehaviorofthecustomer;severaleventscanoccur:

• Churnabovedefinedlimits• Specificsubstitutionproductsmissing(e.g.,inbusinesssegment)• Wholesale and business customer migration process is not

readywithintheplannedtimeframe

One should be aware that churn due to the PSTN migration(except in cases of poor service quality) is hard to identify. Churncanresultfromunexpectedcustomerbehavior(willingnessformigra-tion due to a lack of knowledge) or the need for recontracting thecustomer(“forcing”customerstolookforotheroffers—especiallyinthebusinesssegment).

Additionally, the impacton thebusinesscase in termsofchurn,costs,andtimeisgivenasanindication.Thefinancialimpactshouldbeintegratedinthebusinesscase,whentheseriskscanbeforeseenandhavesignificantimpactonthefinancialresults.

1.6.2 Deutsche Telekom AG/NatCo Risks (Micro Environment)

MicroenvironmentalriskscouldbearesultofcertainactionsoftheNationalCompany (NatCo) itselforat theDeutscheTelekomAGgrouplevel.Theserisksaremainlyrelatedto:

• ChangesintheCAPEX/OPEXsuchaspossiblecutsduringtheyearorreprioritizations.Theseriskscouldhaveseveralimpacts:• Definedmigrationtimeframeneedstobeextended,which

couldleadtohigherOPEXcosts.• Possiblerevenueloss/churnduetopossiblelocalexchange

outagescausedbyprolongedtimeframe.• Lowercumulatedsavingsduetoprolongationofmigra-

tiontimeandtimedelayofsavingachievements.Amountof savings depends on investments made until the risktook place (taking into consideration the level of eachLEstatus).


• Headcount reduction could have an influence on costs, asexternal resources are needed to replace the reduced head-count.ItcanalsohaveanimpactontheprojecttimelineandthusinfluencetheexpectedOPEXsavings.

• NofulfilledexpectationsforbroadbandpenetrationrequireahigherincrementalCAPEXforPSTNmigrationandcouldalsoinfluencethetimelineoftheproject.

1.6.3 Eco System Risks (Macro Environment)

Macro environmental risks could occur because of changes in theregulatoryoroveralleconomicsituation.

Decisions of the regulatory agency have an influence on thePSTNmigrationprocessespeciallyinthepreparationphase(productdevelopment)andduringtheexecution,forexample,leadingto:

• Complexityofwholesalereplacementproducts• Complexityofwholesalemigrationprocess• IPproducts treatment (higher/lowerprices, interconnection

fees,etc.)• Additionalnotplannedregulatoryrequirementscouldhappen

Evenwhilethereisahighprobabilitythattheregulatoryagencywillcauseasignificantdelayinthedecision-makingprocess,thesitu-ationforeachcountryhastobeevaluatedseparately.Alltheeventsstatedabovecanhaveaninfluenceon:

• Prolongedmigrationtimeframe• RevenuelossduetodifferentIPproducttreatmentandinter-

connectionfees• Higher investment needed per closing down of each local

exchange• Possiblerevenuelossduetopossible localexchangeoutages

duetoprolongedtimeframe• Lowercumulativesavingsduetoprolongationofmigration

timeandtimedelayofsavingsachievements

Inadditiontoregulatoryrisks,thereareotherexternalrisksasaresultoftheoveralleconomicsituation.Forexample,inpricesensitivemarketsbroadbandpenetrationmightnotbereachedasplannedora


changeinthedemandsofexternalsubcontractorsimpactscontractoravailabilityandprices.

Macro-environmental risks have an impact on all three majordimensions:churn,costs,andtime.

Ingeneral, thefinancial impactshouldbecalculatedwhentheseriskscanbeforeseenandhavesignificantimpactonthebusinesscaseresults.All riskshave tobemonitoredpermanently, reportedregu-larlyincoreteammeetings,andmitigateappropriately.

1.7 End-to-End (E2E) Processes

IPtransformationmayrequirechangesintheprocessesorintroduc-tionofnewones.Themaingoalofthissectionistolisttheprocessesthat should be carefully considered and defined prior to the startof migration.

Eachcompanyhas itsownspecificsandprocessesdependingontheorganizational structure, the levelof automationand resources,andsoon.

Nevertheless,basedonananalysisoftheprocessesthatareimple-mented in the countries, some overall conclusions can be made intermsofchangesintheprocessesduetoIPtransformation.

1.7.1 Adjustment in E2E Processes

Ingeneral,theprocessescanbeclusteredintothreecategoriesdepend-ingontheneedforadjustmentduetoPSTNmigration(Figure 1.5).

1.7.1.1 Processes without Major Changes PSTNmigrationdoesnothaveanincrementalimpactontheprocessstructureandflow.But,PSTNmigrationshouldbeincludedintheseprocesseswithhighattention.Someexamplesoftheseprocessesincludestrategyandthebusinessplanning process, product management, billing and revenue assur-ance,customerrelationshipmanagement,andCAPEXmanagement.

1.7.1.2 Processes with Incremental Changes Theseprocessesneedtobeadapted,asthePSTNmigrationhasanincremental impactontheprocessstructureand/orflow.


Thefollowingprocessesthatneedchangesareidentified:

• Salesandserviceprovisioning• Faultrepair• Wholesaleprovisioning

Forexample,theserviceprovisioningsubprocessshouldbeadaptedtoPSTNmigrationspecificssuchasacheckofbroadbandaccessavail-ability or installationof an iAD.The fault repair process shouldbeadoptedinawaytousethisprocess forthemigrationofcustomers.Theprocesschangescouldinfluencetheworkordersdispatching,pro-visioningofnetworkprerequisites,andinstallationofCPEequipment.

1.7.1.3 New Processes Forthemigrationitself,newprocessesneedtobedefined.Theintroductionofnewprocessesdependsonthecho-sen PSTN migration type/scenario. External companies may beresponsibleforsomepartsofthecustomermigrationandon-premisesactivities and, therefore, anewprocess is introduced for contactingthe customers and on-site installation. Another example for newprocessesmightinvolveautomigrationusingtheWeb.

1.7.2 Complete E2E Process for PSTN Migration

InadditiontoconsideringwhichchangesornewprocesseshavetobeadjustedforthePSTNmigration,itisinterestingtounderstand

Type 1Processes withoutmajor changes

Type 2Processes withincrementalchanges

Type 3New processes

• PSTN migration also requires establishment of new processes that are needed in order to support the migration itself.

• �ese processes need changes since PSTN migration has an impact on the process structure and �ow and requires changes either in the �ow, in the subprocesses, or both.

• For these processes, PSTN migration does not have an incremental impact on process structure and �ow. �e only impact from PSTN migration is that the existing processes activities should be considered PSTN migration.

• Type 3 examples: Web migration, automigration, customer migration using customer care.

• Type 2 examples: Sales and service provisioning, fault repair, WS provisioning

• Type 1 examples: Strategy and business planning; product management; CRM; billing quality, revenue assurance and debt management process; CAPEX management and requisition process.

Figure 1.5 Types of E2E process adjustments.


allthenecessarystepsthatoperatorshavetofaceduringthePSTNmigrationprocess.

Priortothestartofthemigration,itisimportanttofulfillseveralprerequisites. Drawing on the migration plan and all the variablesthatformit(replacementproducts,resourcesneeded,linesmigrated,etc.), the selected types and modes of migration are defined first.Consequently,theoperatorisabletodefinethesalespotentialattachedtothemigrationandthebestchannelfornotifyingthecustomeraboutthenewservices.

Once all themigrationprerequisiteshave beendefined, the IMSmigration—encompassing different stages—can take place. Themigration varies according to the customer (RES/BUS), the stage(active/forced),andthetypeofmigrationprocess(ISDN/BB).However,themigrationstartswhenamigrationticketisopeninthetelco’sdata-baseandthecustomerdataissenttotheappropriatebusinesssegment,which will prepare and send the information to the customer. Thisnotificationapproachmightbeconductedthroughstandardchannels,suchasleaflets,e-mails,InteractiveVoiceResponse,andwhitemailing(WG)inthecaseofresidentialcustomersorthroughcustomizedsolu-tionsforbusinesscustomersaslargeaccounts.

Operatorshaveaninterestinleveraginglessexpensivemigrationstrategiesasnaturalmigration(NM)andautomigrationinordertodiminishtherelatedcosts,howeverwhenthecustomer,afterseveralattempts,isnotwillingtomigrate,alternativesolutionssuchasforcedmigrationandMSANhavetobetakenintoconsideration.Therefore,theE2EprocessendswithatechnicalcomponentinordertoallowtheIPservices,whichmightbedonebythecustomerhimselforbya technician.

xiii

The Authors

Sandra DornheimisprojectmanageratDeutscheTelekom,EuropeandTechnology,withafocusongo-to-marketandlaunchmanage-ment.Overthepast2yearsshewasresponsibleforthego-to-marketwork stream within the IP transformation and PSTN migrationinitiativeatDeutscheTelekom.Sevencountriesweresupportedandinvolvedintheprojectandcolleaguesfromthesecountriesprovideduswiththeirvaluablefeedbackandinsights,whichhavealsocontributedtothebook.Aftergraduatingwithamaster’sdegreeattheUniversityofMainz(Germany) in businessandeconomics,DornheimstartedworkingforDeutscheTelekom.Shehas11yearsoftelecommunica-tionexperiencewithindifferentorganizationsandprojects;however,herfocushasalwaysbeenonmarketingandsales.Shecompletedhersecondmaster’sofsciencedegreeinstrategicmarketingleadershipattheHenleyBusinessSchoolintheUnitedKingdom.

Kerstin Groß worksatT-SystemsasaprogramdirectorinCorporateSteering,andisresponsiblefortheTransformationOfficeofT-Systems.Afterobtainingamaster’sdegreeinbusinessadministrationfromtheEuropeanBusinessSchool (EBS),Oestrich-Winkel (Germany), shewroteadoctoratethesisattheEndowedChairforCorporateFinanceandCapitalMarketsat theEBS.Followingherpostgraduatework,GroßbeganhercareerinconsultingatA.T.Kearney;specializingin

xiv the authors

threeareas:aviation,utilities,andtelecommunications.Asaresult,shedecidedtocontinueherfocusontelecommunications,andworkedasaseniorprojectmanagerattheCenterforStrategicProjectsatDeutscheTelekom’s headquarters (Bonn, Germany) for 3 years. Within thattimeshewaspartoftheteamdevelopingthefirstIPtransformationblueprint responsible for the network and IT blueprint, migrationstrategy,andframeworkaswellasproductmigration.AfterhertimeatCSPGroßchangedtohercurrentposition.

Malte Debus worksas a seniorprojectmanager for theCenter forStrategicProjectswithin theDeutscheTelekomGroup.Aspartofthe team developing the first IP transformation blueprint he wasresponsible for thebusinesscase framework.Followinghismaster’sdegree in business administration from the University of Marburg(Germany),Debuswroteadoctoralthesisontheefficiencyofsuper-visory boards in German stock corporations. He joined DeutscheTelekomin2009,andhasmorethan5yearsoftelecommunicationandconsultingexperiencewithastrongfocusonrestructuringandperformanceimprovementprojects.

Frank Achmann is vice president at Deutsche Telekom TechnicalService,whereheisresponsibleforE2Efailurecostreduction.Priorto this position, he worked at the Center for Strategic Programswithin theDeutscheTelekomGroup, as theproject leaddevelop-ingthefirstIPtransformationblueprint.Uponreceivingamaster’sdegreeinbusinessandengineeringinCologne(Germany),hejoinedtheautomotiveindustries.Asaprogrammanagerhewastechnicallyand commercially responsible for several multinational programsdeveloping fuel tank systems. After 7 years, Achmann decided tochangehisfocustotelecommunicationsandworkedasaseniorproj-ectmanagerattheCenterforStrategicProjectsatDeutscheTelekomgroupheadquarters.

Julia Hirschle isaprojectmanageratDeutscheTelekom,EuropeandTechnology,with a focuson strategic commercialprojects andpro-cesses.Forthepast2yearsshehasbeenresponsibleforEuropean-widebusinesssteeringprocessesandcommercialprojectswithinthecom-mercial area of Deutsche Telekom’s headquarters. Prior to this, she

xvthe authors

workedasaprojectmanagerintheIPtransformationandPSTNmigra-tioninitiativeatDeutscheTelekomwithafocusonaEuropean-widebest practices approach. Hirschle graduated from the University ofMannheim(Germany)withadegreeinbusinessandeconomics.Shehas4yearsoftelecommunicationandprojectmanagementexperience,specificallyinrestructuring,technology,andinnovationprojects.

xxxi

Project Team Members for IP Transformation

Sven HischkeDeutscheTelekom

Bozidar PoldrugacHrvatskiTelekom

Thorsten AlbersMakedonskiTelekom

Chapter 1: Overarching Topics

Julia HirschleDeutscheTelekom

Sandra DornheimDeutscheTelekom

Liljana NajdenovaMakedonskiTelekom

Felix FrühDeutscheTelekom

Frank AchmannDeutscheTelekom

Peter GrünthalDeutscheTelekom

Vladimir CosicHrvatskiTelekom

Marc VollweilerDeutscheTelekom

Alexandra DierkesDeutscheTelekom

xxxii ProjeCt team members for IP transformatIon

Chapter 2: Migration Plan

Kerstin GroßDeutscheTelekom


Frank AchmannDeutscheTelekom

Wolfgang HauptmanDeutscheTelekom

Malte DebusDeutscheTelekom

Chapter 3: Product Portfolio Roadmap


Peco NedelkovskiMakedonskiTelekom

Dario WinklerHrvatskiTelekom

Kai SchmidtDeutscheTelekom

Aleksandar ChekorovMakedonskiTelekom

Askan SchmeißerDeutscheTelekom

Vladimir CosicHrvatskiTelekom

Chapter 4: NT/IT Roadmap


Nikolaus GieschenDeutscheTelekom

Stefan AndresDeutscheTelekom

Laszlo HobinkaDeutscheTelekom

Dragan CorbeskiMakedonskiTelekom

Slobodanka NikolovskaMakedonskiTelekom

Dejan DabevskiMakedonskiTelekom

Natasa SamardziskaMakedonskiTelekom

Stevco DimovskiMakedonskiTelekom

Snezhana TilovskaMakedonskiTelekom

xxxiiiProjeCt team members for IP transformatIon

Chapter 5: Business Case Framework

Malte DebusDeutscheTelekom

Anja FischerDeutscheTelekom

Boris BatelicHrvatskiTelekom

Liljana NajdenovaMakedonskiTelekom

Elena CvetkovskaMakedonskiTelekom

Chapter 6: Go to Market


Miljenko KarakasHrvatskiTelekom

Irena LokvenecMakedonskiTelekom

Moritz KriegsmannDeutscheTelekom

Aleksandra JaniszewskaDeutscheTelekom

Valerie PansiniDeutscheTelekom

Hinko KalpicHrvatskiTelekom

Andrea SzirtesMagyarTelekom

Managing the PSTN Transformation - IT · PDF fileManaging the PSTN Transformation ......

Documents

Transcript of Managing the PSTN Transformation - IT · PDF fileManaging the PSTN Transformation ......