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Networks & Infrastructure
B2B and Enterprise commoditization
CSP successes within B2B have seen its fair share of problems
by Catherine Michel, CTO and cofounder, Tribold Limited
Communications Service Providers (CSPs) have a long history of successfully providing and running some of the most complex corporate enterprise and government network/data infrastructure combinations. Now non-traditional CSPs are taking on the same challenge. The advent of the Cloud is the latest example.
As a lesson to many, however, the track record of CSP success within the B2B market has also been littered with its share of problems, primarily around the degree and cost of product customization. These customized product offerings are a combination of the specific hardware and network deployments and the myriad of simple and complex data services that run on them. However, each product is the equivalent of a specific customer order, where the product offer is built as part of the sales process and therefore heavily bespoke in its definition and combination of features, services and charging structures.
All very lucrative for the provider, but also hugely expensive to devise, deliver and manage the customer’s specific configuration. Primarily because, in contrast to Consumer offerings, Enterprise and B2B offerings are constructed with low commoditization and therefore, low reuse. As a result, every new instance of a B2B product ends up being an extensive exercise for operations and IT.
So the trick is keeping the cost of doing business as low as possible with what is seemingly a heavily customized proposition.
As it turns out, there is actually a major opportunity here for B2B suppliers to exploit reuse across their offerings, turning what is typically customization into configuration, thus reducing the cost of delivery and maintenance. It can be found in the science of componentization.
When you examine product offerings at their lowest level, the physical data level – the level that drives the operational processing within the BSS & OSS which are responsible for delivering and running the B2B products – you will quickly find a high degree of commonality between one Enterprise customer’s offering and another. This data will start to reveal repeatable patterns that ultimately drive the definition of features and service combinations across specific customer product configurations.
Mapping these repeatable patterns and modelling them into predefined data constructs (e.g., service features, compatibility/eligibility relationships, configuration options, etc.) for reuse across offerings is componentization. Establishing these componentized patterns as common definitions in your BSS & OSS – and centralizing the common, componentized models into a reusable product catalog – enables commoditization. Commoditization is where the bulk of your service capabilities are pre-defined, including their compatibility/eligibility relationships with the physical deployment.
Conventional wisdom would have you believing that this is not possible for Enterprise and B2B offerings. However, you only need to cast your eyes across the volume of individual spreadsheets maintained for each Enterprise customer’s product configuration to start to pick up on these patterns. Particularly since a significant chunk of the services utilized are, at their core, based upon Consumer product capabilities.
Whilst the physical deployment of Enterprise products will continue to be customized, the selection of the services and features and their set-up in the BSS & OSS for each specific product will become much more routine.
The ability to execute some semblance of routine operations for Enterprise products is where the benefits of componentization reveal themselves. Cost control through configuration is the core driver: Enterprise products will no longer be custom-built from the ground-up for each customer, but rather constructed from re-usable assets within the product catalog. As such, core capabilities must be re-usable across Enterprise product offerings, where the traditional complexity of Enterprise product offerings are simplified into componentized options. However, offerings can still allow for a combination of pre-packaged products and specialized add-ons.
The enablement of more manageable customer personalization comes next. Enterprise customer agreements will no longer require complex spreadsheets to manage, but rather centrally maintained with all the possible permutations and options readily available to tailor accordingly. Of course, customer-specific configurations of various product offerings and add-ons must be supported. But the multiple configurations are more easily manageable by the organization and visible across key BSS & OSS constituents (e.g., Sales, Account Management/CRM, Fulfillment, Customer, etc). In the end, customer specific pricing and service agreements (i.e., contracts) can still be supported within each customer configuration, but from predefined available options, the price being the customization rather than the charging structures themselves.
Finally, ultimate commoditization is realised through an assembly line level of efficiency. Quoting and configuration of Enterprise customers’ products will no longer be unpredictable in time and outcome, but rather follow pre-defined fulfilment processes that minimize errors and maximise feasibility of the offerings. Data underpinning the customer configurations must be integrate-able to the BSS & OSS, where it adheres to a common bill-of-material.
As more companies enter the Enterprise market, no provider of such products can afford to operate at the traditionally high levels of cost. Commoditization through componentization is the best way to address that challenge.
Catherine Michel is CTO and cofounder of Tribold Limited. She is the principal architect of the company’s product and solutions portfolio. Her extensive experience in CSP transformational strategy and systems development has made her a recognized authority in the industry. Prior to co-founding Tribold, Catherine was a senior executive in Accenture’s Communications & High Tech practice, devising and delivering business strategy and large-scale BSS / OSS projects. Catherine also sits on the TM Forum Executive Committee.
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