Tackling The Telcos
The telecommunications market may be down, but a $77 million service line of Cap Gemini Ernst & Young has found one technology this market is still willing to spend money on.
Achilles' mom had good intentions. After all, as the mythological tale goes, she dipped an infant Achilles in the magical waters of the river Styx in an effort to make him immortal. As she immersed him, she held him by one heel. Unfortunately, she forgot to dip him a second time so the heel she previously held could also get wet. As a result, to this day, any vulnerable point is known as an Achilles' heel.
Greg Douglass knows what this vulnerability is for the telecommunications (telco) industry. According to Douglass, VP of Cap Gemini Ernst & Young's (CGE&Y) Telecom Media Networks Operations Support Systems (OSS) service line, this industry's weakness is the management of its field service force. "In 2000, many of our telco clients began saying they were having problems with the final part of an order - namely, managing the field forces which turn on or install the service," he said. "This was, and still is, the Achilles' heel for these companies."
Growing From 5 To 225 Employees
In 1996, Cap Gemini and Ernst & Young were competitors. That same year, with the deregulation of the telecommunications industry, each company added an OSS service line. At Ernst & Young, where Douglass was employed, that department employed only 5 people. Today, the combined CGE&Y OSS service line has 225 employees. Of course, this dramatic growth was in proportion to the number of new telco carriers that were launched during the early years of deregulation. These new start-ups needed software to manage their infrastructure, and companies like Cap Gemini and Ernst & Young were there to meet the demand.
By definition, an operational support system (OSS) is a set of programs that helps a communications service provider monitor, control, analyze, and manage problems with a telephone or computer network. CGE&Y's OSS service line offers "custom off-the-shelf software installation and integration," Douglass said. "We perform all of the associated data migration and then integrate the data into other software systems/packages (e.g. billing, order management). However, we do not develop our own software or write code."
Originally, the OSS service line focused on integrating a product from MetaSolv (Plano, TX). This order management and network inventory software tracks all of the circuits and the fiber optic cables in the ground. It then enables a client to place orders for service pertaining to that inventory. Gradually, the OSS division began branching out into similar areas such as mobile computing and workforce management.
Accurate Inventory Is What Telcos Want - And Need
"With the stock markets tanking so badly, everyone is looking for ways to cut costs," stated Douglass. "The telco market is down right now and a lot of carriers are merging or going bankrupt. The ones that remain are spending less because their revenue coming in is less. Unfortunately, we don't see that trend improving for the next four to six months."
Despite the telco market's current buying constraint, Douglass has noticed that CIOs and CFOs are now more willing to invest in field force automation and inventory control software. This is due to the fact that many telcos don't have an accurate count of their inventory (e.g. switches, underground cable). They may, in fact, have cable in the ground that they thought was being used but is actually available.
This inventory nightmare is further complicated by poor field service data collection. For example, the most common scenario involves a field technician who is supposed to unhook wire A and put it into slot B. At the site, the technician notices slot B is already taken. So, he shoves wire A into slot C because that slot is open - and because his boss told him to get the job done in 30 minutes. He doesn't bother to call back to the office and explain what was wrong at the site, nor how he made it worse. Instead, he hopes the next guy can figure it out. "The single largest problem telcos have today is they don't have an accurate understanding of what their inventory looks like," Douglass said.
An ROI Analysis Like Never Before
Although telco CIOs and CFOs are more interested in field service and inventory management solutions, Douglass cautions that proving an ROI can be more difficult than in recent years. In fact, he stated the sales cycle is now 90 to 120 days as compared to the 30 to 60 cycle of a few years ago. "In 1999 and 2000, customers just wanted to know the price of these solutions," Douglass said. "There usually wasn't an elaborate ROI explanation needed to make a sale. Now, you almost have to do a Harvard MBA case study analysis to show them their ROI."
According to Douglass, with field service, much of the ROI a telco company experiences comes from the decreased time a technician spends in the field and the accuracy of the tasks performed. To help develop a better ROI model for field service solutions, CGE&Y's OSS team began analyzing the workload and attitudes of the telco field service workers. OSS staff members began riding along with telco technicians on service calls. These same telco personnel were interviewed to find out what type of software would make their jobs easier. Most importantly, these staff members were asked what software features they would be willing to accept.
"If we can install a software system that allows a telco company to activate a customer in 30 days rather than 60 days, that's a significant ROI," Douglass stated. "If the customer is a million dollar a month customer, that's an additional million bucks in revenue we've provided."
When validating a system's ROI, Douglass' department explains how installation delays caused by inaccurate inventory or incorrect hookups translate to lost revenue. However, he says many telcos today want a solution that doesn't allow operations to regress to their former inefficient state.
Back Office Integration Is The Future
Traditionally, telco companies use a dispatcher to disperse orders to field personnel. This function is done electronically with the type of software solutions CGE&Y's OSS division installs (see sidebar on page 82). Once the order is received, it is sent hands-free to the workforce management system which decides who should complete the job. "This is the holy grail for a lot of companies," Douglass said.
The integration of field service software with other back office business systems (e.g. inventory management, billing) is what Douglass says is the biggest movement in this market. This expertise is especially important as telco companies continue to merge and attempt to assimilate disparate software products. CGE&Y has this knowledge due to its experience with the MetaSolv product.
Today, Douglass says his toughest competitors are still the smaller (50-person or less) integrators that focus on a niche application. Because these companies have a lower overhead than a global business such as CGE&Y, they are often able to underbid Douglass' team. However, these companies usually lack the back office integration expertise telcos ultimately desire. "You can't just focus on a niche software application like workforce management," he explained. "You have to understand the whole OSS environment and all of the interrelated systems (e.g. MetaSolv)."
Douglass' objective is to have workforce management and mobile computing account for 10% of his service line's annual sales revenue (it is currently 4%). CGE&Y's OSS has only three salespeople. However, Telecom Media Networks has 30 salespeople who are always looking for telco opportunities in general. But, as telcos continue to lay off thousands of employees and scale back operations, these opportunities are becoming scarce. "We're focused on the functional areas within the telcos that executives still believe can drive new business or squeeze out costs," he said. "These companies are willing to spend $2 million on a solution that will solve a $15 million problem."Questions about this article? E-mail the author at DanS@corrypub.com.