ERPTechNews

The telecommunications industry is characterized by new technologies, new services and huge capital investments to make content accessible by any device, anywhere. Market players frequently develop new products, services and tariffs to increase their market share in this fiercely competitive industry. With these developments comes the realization that market players have to make their systems more effective, flexible and scalable to efficiently manage an increasingly complex product portfolio. This is a multi-dimensional problem that requires optimized processes, accurate operational data and integrated solutions.

The first critical business area to be addressed to achieve this goal is order management. This encompasses several critical touch points of direct customer experience with the organization; its proper functioning is strategic in nature.

Telecommunications Industry Overview

The telecommunications industry provides data, voice services, graphics, television and video at increasing speeds and through diverse channels. While land line telephonic communication is still the core service mode, wireless communication, Internet, cable and satellite program distribution are increasing their share in overall industry earnings. The industry is experiencing rapid deregulation and technology disruption in service offerings. In many markets across the globe, governments are revoking monopolistic policies and older players face a new breed of competitors.

The market of this industry includes residential customers, small businesses and big corporate customers. In residential customers market competitors rely heavily on price to increase their customer base. Success depends on branding, reputation and investment in agile order management and billing solutions. The corporate market has different characteristics; corporate customers are ready to pay premium for the quality and reliability of their voice services and data delivery. They are less price-sensitive when special services like virtual private network, data security and video-conferencing comes into picture.

Telecom operators also provide network connectivity services to other companies that need it. The players with far-reaching networks lend circuits to heavy network users like large corporations and Internet services providers.

Figure 1: Telecommunications’ Industry Structural Analysis

Order Management – An end-to-end Perspective

An integrated order management spectrum typically comprises the following:

• Product information management (descriptions, attributes and locations)
• Vendors (purchasing and receiving)
• Marketing (catalogs, promotions and pricing)
• Customers and prospects
• Order entry and customer service (including returns and refunds)
• Financial processing (credit cards, billing and payment on account)
• Order processing (selection, printing, picking, packing and shipping)
• Data analysis and reporting
• Financial information (general ledger, accounts payable and receivable)

Figure 2: Order Management Lifecycle

The order management process in the telecom industry is comprised of a number of sub-processes. The best available documentation of these processes is provided in an enhanced telecom operations map (eTOM). Processes related to order management are well dispersed in the eTOM framework, but fulfillment under operations covers almost ninety percent of order management processes. Table 1 is an overview of critical order management processes mapping with respect to the eTOM framework.

An implemented process reference model like eTOM has the following advantages:

• Standard descriptions of management processes
• A framework of relationships among the standard processes
• Standard metrics to measure process performance
• Management practices that produce best-in-class performance
• Standard alignment to features and functionality

Standard process framework implementation, however, does not guarantee a competitive edge. A process that is standard today may become obsolete in time because of a new product launch, new technology introduction or simply by entry of a new competitor in the market. That is why the telecommunications industry faces new challenges with respect to its processes, such as highly flexible, scalable and continuously improving processes with less implementation time. Processes with these characteristics can only align with highly volatile business environments of telecom domains. That is the reason implementation of standard frameworks is recommended but not considered enough for this industry.

Order Management Challenges in Telecommunications Industry

According to the Gartner Group, about 2 to 5 percent of all services delivered by the world's largest telecom providers are not billed because of inefficient or misaligned processes. Despite significant investments in new and upgraded solutions, order-to-cash processes remain inefficient. Some of the major challenges faced in order management can be classified as seen in Figure 3.

Figure 3: Order Management Challenges

Due to the aforementioned challenges, the telecom industry is facing the following challenges in its day-to-day operations:

• Labor intensive offline order conflict resolutions
• Process delays and inaccuracies
• Customer dissatisfaction
• Billions of dollars in lost revenue and operational costs
• Penalties for being out of compliance or unmet service level agreements
• Problems in accelerated roll out of new products/services
• Spending on efficient order management solutions is exceeding billions of dollars per year

The leading trends in telecom are impacting how market players manage their customer-facing processes – like order management solutions. Some of the key change drivers are described in Table 2.

Key Solution Requirements

A robust order management solution needs to provide following functionalities:

• Automation capability: The solution has to accept multiple orders from multiple channels (Web, email, direct interface) in multiple formats (electronic data interchange, Web forms, etc.), handling them without human intervention. It then normalizes all orders and places them into a common repository.
• Speeding new product/service roll out: It must be scalable enough to add new product and service offerings in the existing environment, without consuming additional resources.
• Create cross-sell, up-sell opportunities: The solution should be capable of identifying other sales opportunities for the customer by applying various market intelligence techniques like affinity analysis, environment scanning, etc.
• Change management: Unlike traditional monolithic enterprise applications that require extensive programming to implement small enhancements, the solution should offer flexibility and speed to make changes in existing services, tariffs, etc.
• Workflow-based solution implementing complex business rules: The solution must apply business rules to the orders in a common repository and determine which ones can be processed immediately on a straight-through basis, according to particular rules. Any order that does not meet these criteria – whether it requires disaggregation, contains a wrong part number or any of a multitude of reasons – must be processed (and errors handled) on an automated basis. This level of automation also provides full visibility into an order from the moment it comes in until it has been fulfilled, allowing status to be checked at any time. In turn, order visibility also provides supply chain visibility and enables supply chain synchronization.
• Enabling straight-through processing: The solution must have the intelligence to determine when orders achieve straight-through status – upon their receipt or after exception issues have been addressed, thereby graduating an exception order to straight-through status.

Figure 4: Order Management Solution

Addressing Challenges Through Business Process Management

Leveraging his experience of working across industries and after a detailed study of order management processes the author has developed a maturity model for order management solutions in telecom. Organizations in telecommunications are currently operating on five different maturity levels, as shown in Figure 5.

Figure 5: Order Management Solution – Maturity Model

It is recommended for market players to improve maturity levels of their processes and achieve competitive edge in this highly service sensitive market. Figure 5 is a specifically derived comprehensive process improvement framework for telecom. This framework leverages the world’s best quality and process improvement methodologies (Lean, Six Sigma, etc.) and establishes their compatibility with standard driven implementation methodologies like Business Process Management (BPM) and Service Oriented Architecture (SOA).

Figure 6: Roadmap to "The Perfect Order"

Summary

The model (Figure 6) explains a framework for addressing order management challenges in telecom domain. First, processes are analyzed using process improvement methodologies and standard frameworks. Existing processes are then improved, fine-tuned and benchmarked using design of experiment and simulation techniques. After optimizing business processes, they are implemented with the help of best-of-breed process implementation methodologies. This provides an order management solution, which is specifically tailored per client requirements and is open to an accelerated roll out of new products and services.