Managed Services as the Key Catalyst of the Communications Industry Transformation Paolo Sidoti Executive Partner Accenture Communication & High Tech EALA.

Managed Services as the Key Catalyst of the Communications Industry Transformation

Paolo SidotiExecutive PartnerAccenture Communication & High TechEALA Network Lead Milan – April, 13th 2010

Copyright © 2010 Accenture. All Rights Reserved.


2

• New competitive pressure

• Traffic growth, revenue decline

• High network costs and

reduced budgets

• Dual focus: maintain

legacy networks and

support next-generation

network build-outs

• Rapid pace of technology

and business change

Today’s Challenges for Telco Operators

How to achieve profitable growth and higher operational efficiency?


3

The Cost Pressure and the Need to Change Require a New Transformation Approach

High pressure on costs and the need to rapidly transform network

operations are fostering the demand for Network Managed Services

as the catalyst to achieve immediate and sustainable cost

reduction and long term operational efficiency.

Strategic Transformation“Lower bad cholesterol by eating better”

Traditional Cost Cutting“Lower cholesterol by eating less”

Value Added Activity Non-Value Added Activity

Operating model optimization. Capability driven. Focused on cutting costs on

non-value added activities. Value-adding resources are

maintained or grown. Long term cost structure

improvement.

Headcount reduction. Budget driven. Cuts both non-value and

value added activities. Fewer value-adding

resources available. Root causes remain, costs

grow back.

Accenture and TM Forum have recently conducted a survey that confirms the increasing interest of communications industry executives in Network Managed Services.


4

Which Benefits do the Operators expect from Network Managed Services?

Immediate Cost savings

Improved efficiency

Predictable costs and service levels

Strategic sourcing

Business flexibility

Ability to rapidly scale

Reduced Time to Market


5

Managed Services Market Outlook

The Managed Services market for Telco Operators and Media is expected to grow from $ 4.9 bn in 2008 to $ 7.9 bn in 2012.

Managed Services are showing the highest CAGR (12,6%) in the area of services for the communications industry.

2008 2009 2010 2011 2012 2008-2012 CAGR %

Americas 930.5 1,039.3 1,174.4 1,333.0 1,516.9 13.0%

Asia Pacific 1,837.9 2,159.5 2,509.3 2,883.2 3,269.5 15.5%

EMEA 2,154.3 2,363.9 2,594.2 2,852.5 3,128.1 9.8%

TOTAL 4,922.6 5,562.7 6,277.9 7,068.7 7,914.5 12.6%

Worldwide Managed Services Spending for the Telecom and Media Market ($M) *

* Source: IDC - “Worldwide Managed Services for Telecommunications and Media 2008-2012 Forecast and Analysis” - February 2009


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Managed Services Market Outlook (…continued)

2008 2012

M$ % M$ %

Managed Operations

3,944.2 80% 5,717.1 72%

Hosted Services 978.4 20% 2,197.4 28%

Totals 4,922.6 100% 7,914.5 100%

* Source: IDC - “Worldwide Managed Services for Telecommunications and Media 2008-2012 Forecast and Analysis” - February 2009

Managed Operations represented approx. 80% of the market in 2008, but Hosted Services are expected to grow in the next years.

2008 2012

M$ % M$ %

Wireless 3,446.1 70% 5,488.1 68%

Wireline 1,476.5 30% 2,426.4 32%

Totals 4,922.6 100% 7,914.5 100%

Wireless Operators have been predominant so far, even though Wireline share is expected to increase in the near future.


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Network Managed Operations Services

Source: Accenture elaboration based on Gartner market research data, 2009

Which processes within the Network Operations Management are typically outsourced?

Network Operations Managed Services and BPO - % On Total, 2009

The service areas with the highest CAGR (’08-’12) are:

• Next Generation SDP (+15,6%)

• Provisioning & Activation (+7.1%)

• Network Management (+7.6%)

•


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A Network Transformation and Outsourcing Program is a Long Journey….

Planning /Desing

NTW Security Planning

NTW Tuning/ Testing

Site & NOC preparation

NTW Deployment

Operations Optimization

Field Operations & Maintenance

NOC Operations &

Help Desk

Performance Mngm &

Optimization

Vendor Management

OSS Operations & Maintenance

OSS design and plan

OSS Optimization

Service TransitionHR transition

Communications

Management

Knowledge transfer

OSS implementati

on

Business Case

Strategy definition

Partner SelectionDue Diligence

Strategy and Planning Transition Transformation

Transition Planning

Contract negotiation

SLA Management

Contract Management

NTW Security Operations

NOC Operations &

Help Desk

Operation


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…starting with the key step of assessing in which areas Managed Services would provide more benefits

Tech

nic

al

Organizational

Readiness

Tech

nic

al

Business

Suitability Value

Per

form

ance

Savings

Risk

Which functions, activities and groupings should we consider?

Which functions are appropriate for alternative sourcing model?

Which groups are ready for a change in sourcing model?

Risk(“Why not?”)

Value(“Why?”)

Readiness(“When?”)

Suitability(“What?”)

Network Functions

What are the objectives for alternative sourcing?

Cri

tica

lity

Mitigations

What are the options to manage risk?

Accenture has developed a patented methodology (ABOM – Accenture Business Operations Modeling) to help identify which network functions would support a Business Case for Managed Services based on clearly defined criteria.


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Accenture has Developed a Portfolio of Managed Services and Solutions…

…targeting specific processes where business value can be most effectively generated.

ProvisioningServices

Network Testing

Services

Network Planning & Engineering

Solutions

Service Accelerator Solutions

Managed Field Force

Service

Rental & Power Contract Manag. Global

Reach & Scale

Industry Expertise & Consulting

Skills

Leading Assets &

Resources

Trusted ServiceProvider

ENABLERS

SERVICES• Administrative management of rental contracts and power supplies (existing and new)

• Optimization of related costs

• Industrialized service development and launch capability

• Field Force Managed/Hosted Solution

• Field Force Transformation Solution

• Network & Service Provisioning• Porting Service• Order Fallout Management

• Handset and CPE Testing• Services and Application

Testing• Network Equipment Testing

• Outside Plant Engineering• Access Network Technology &

Capacity Planning• Leased Lines / Backhaul

Optimization• Wholesale Cost Management

International Association of Outsourcing ProfessionalsTM named Accenture #1 best outsourcing provider for 2009.


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Accenture Mobility Operated Services

Accenture Mobility Operated Services give the opportunity to expand the product portfolio with a “service store” via the mobility channel.

The managed services approach helps companies define, develop and run the right mobility solutions, resulting in new revenue streams, lower operating costs and reduced risk and complexity.

• One-to-many platform • Managed services business model• Industry-specific solutions• Transaction-based pricing


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Accenture Mobility Operated Services Vertical applications on top of a proven enabling platform

Mobile Data

Collection

Mobile

Marketing

Services

Mobile

Voucher Infomobility

Mobile

Enterprise

Apps.

Mobile Money

Managemnt

TelematicsMobile

Loyalty & Rewarding

Managed Services Components:

Define – mobility strategy, products and

business model, including vendor selection

Develop – architecture assessment and

design, and integration with third parties

including Mobile Network Operators,

business partners and vertical vendors

Run – ongoing operations and management

of the mobility solution via a managed

services

AMOS Framework

Mobility Platform (Service Delivery Platform

with Open SDP)

Mobility Platform

Vertical Applications

Reduced time to market and simplified third party integration

• Simplified Infrastructure• Standardized Design and Interfaces

(SOA)• Open Solution• Streamlined Delivery process


13

Accenture Mobility Operated Services Business Model

Accenture Mobility Operated Services platform is integrated with leading communication service providers and business partners.

Accenture Mobility Operated Services enables enterprises to launch services through our platform while reducing the high initial costs of IT and infrastructure set up, and by minimizing the burden, risk and complexity of managing multiple connections to third parties.

Network of Mobile

Operators

Markets

ConsumerContent Provider

Service Provider

Business PartnersBusiness

Accenture Mobility

Operated Services

Copyright © 2010 Accenture. All Rights Reserved. 14

…Conclusions

► The Communications and High Tech market is now consolidating

under a strong competitive pressure.

► Managed Services are becoming the key catalyst of the

transformation process of Communication & High Tech Industry.

► Accenture wants to play a distinctive role in this transformations

leveraging its Network Consulting and Vertical BPO capabilities

and act as Trusted Advisor, Innovative Service Provider or Partner

for Network Equipment Vendors.


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Q & A

ANY QUESTIONS

?

Copyright © 2010 Accenture All Rights Reserved. Accenture, its logo, and High Performance Delivered are trademarks of Accenture.

Thank You !

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Managed Services as the Key Catalyst of the Communications Industry Transformation Paolo Sidoti Executive Partner Accenture Communication & High Tech EALA.

Documents

network managed services

areas managed services

managed services spending

network operations management

hosted services

network management

area of services

network transformation