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Cable operators have a big problem with silos. Not the pretty cylindrical buildings in which farmers store corn, but the kind that segregate various areas of an MSO's business.
The incremental way in which the cable industry has evolved - adding services and gradually consolidating with other operators over time - has left it with an infrastructure characterized by a series of self-contained and for the most part proprietary operational elements that are largely separated and isolated - in other words, siloed - from each other.
Silos can be defined as self-contained centers of functionality that can't easily interface with other systems. There are several overlapping types that operators battle against, often on a daily basis.
- The first type of silo separates business elements such as marketing, engineering and sales.
- The second separates applications centers, such as high speed data, voice and video service offerings. If operators don't act proactively, wireless will soon have its own silo.
- The third are the devices between systems originally put in place when the operators were separate companies. Consolidation has put them on the same team, though they are playing with different equipment and, to a great extent, by different rules.
The lack of coordination between the back office operational support systems (OSS) and front office business support systems (BSS) may not technically qualify as a silo, the same difficulties in communications exist.
There are cultural and physiological issues as well. The demarcation lines between each of these technologies can be accompanied by a less tangible but real dividing wall between the staffs that work on each side.
Perhaps the most common silo is the one that separates different departments, such as engineering, billing and marketing, from each other. An offer developed by the marketing department is difficult to quickly put into action because it requires the combination of elements that are buried elsewhere in the organization.
Stephane Bourque, the President and CEO of Incognito Software [www.incognito.com] - which conducted a survey this spring that the company says revealed operators' understanding that silos are a problem that must be confronted - suggests that they seriously limit flexibility. "The take away for us is that there is a large disconnect between what sales and marketing want to offer and what engineering is able to provide in a timely fashion," he said by way of an example.
The industry long has had an issue with silos. It has blossomed into a problem that threatens its future as cable operators evolve to triple and quad play status and the need to customize service offerings for subscribers being courted by the telcos.
The problem is deeply engrained in how the industry operates. "Yes, they have siloed systems," said Michelle Nowak, the Director of Cable Strategy for billing vendor Convergys [www.convergys.com]. "It is not only in the order and billing systems and product catalogs. There are even further silos in having multiple vendors in the same departments doing the same thing."
In some cases, Nowak said, the operator may have not been totally committed to settling on one vendor. Having competitive companies installed in the same MSO - for instance after an acquisition -- tends to send the message to both that they are not indispensible. Thus, the motivation to centralize on one platform isn't always strong.
Now, however, operators are facing increased pressure in at least three areas: the number of services and applications they are called upon to deliver, the competition from telephone companies and the demands of ever-more sophisticated subscribers. This means that operators must be more strategic and less tactical. A less polite way of putting is that operators must stop playing games.
In addition to special offers and other customer facing elements, breaking down the silos and creating a flat operational structure is important because of the need to keep exceedingly close tabs on network resources.
The level of information necessary to keep things running smoothly has grown far deeper as operators got into the high speed data and voice. Another leap will be taken when they inevitably begin offering wireless services. Offers thrown together by marketing - which result in a spike in take-rates - could have consequences on the ability of the operator to provide adequate service.
"What you really want in the end state architecture is to know who the sub is, what he has purchased and what resources are used to supply that service," said Rich Mallon, the Vice President of Product Management for Sigma Systems [www.sigma-systems.com]. "For voice services, for instance, operators need to know what he bought, what telephone switch he is using, information about the MTA [and other elements] to provision him properly."
The good news is that the industry appears to be responding to the need to create systems capable of seeing the big picture for each subscriber. "We are seeing a lot of cable companies looking at their operational models and reevaluating how to compete in the next wave of innovation and service offerings," said Arturo Pereyra, the marketing and business development director for Oracle [www.oracle.com]. "What is driving this is the shift to IP networks and IP-based services."
Not an Overnight Sensation
The change is long term. It increasingly looks like it will be based on standards, and it is a good bet that the TM Forum [www.tmforum.org] will have a hand in creating them. The cable industry is a growing presence in the IT standards group. "Over the last year or so, the cable industry has really begun to adopt [the forum's] tools and frameworks and participate in the forum," said Craig Bachmann, who is the head of the Forum's Cable Market Support Center.
It's a long road from a series of proprietary systems thrown together haphazardly over time to a standards-based infrastructure in which data flows seamlessly to wherever it has to go. Bachmann said that the forum will help the cable industry create common data models, common process models, common application programming interfaces (APIs) and common architectures. Those, he said, will be used to create a common framework from which bridges between operating structures can be created.
There are five active programs in the TM Forum that involve the cable industry. They focus on business processes; the increased use by the cable industry of business intelligence, data analytics and benchmarking; the creation of updated OSS/BSS; increased flexibility for business class services and standardization of call detail records.
This is a complex undertaking, of course. But the bottom line is relatively simple: The TM Forum - which works with CableLabs [www.cablelabs.org] and, of course, individual operators -- is working to create an overall infrastructure in which data can be trafficked seamlessly and operators can put together best-of-breed systems spanning native systems and systems acquired in the past and future. This approach will be enable services to be brought to market much more quickly, Bachmann said.
The increase in sophistication even is apparent at smaller operators, said Alan Creighton, the President and CEO of Momentum [www.momentumwholesale.com], a company that offers cloud-based telephone and related services to service providers, including tier two and three cable operators.
Many of these companies have rudimentary and antiquated systems - but show signs of the desire to change. "The more sophisticated operators are asking the right questions now on the integration in terms of willing systems: What level of integration, what data should be shared," he said. "I would say that in the last year-and-a-half there have been more frequent questions and more important questions."
Oracle's Pereyra suggested that the industry may be at something of a crossroads. Instead of retrofitting existing services immediately to a standards-based status, operators may implement the new approach as it begins to offer wireless services and next-generation video and circle back to older services at some point in the future. "They may want to get services right for one of those and over time migrate the others to it," he said.
The key, according to rob Kunzler, the Vice President of Marketing at CSG Systems [www.csgsystems.com], is that operators have to focus on the customers. "Continued pursuit of customer intelligence solutions is key," he wrote in response to emailed questions. "What's more, leveraging intelligence to then better - and proactively - communicate with customers via highly personalized channels where the customer is treated as a 'customer of one' is vital."
The good news, echoed by Kunzler, Bachmann and Creighton, is that the growing importance of leaving silos to the farmers is apparent to cable executives. Integration of billing, broadband and voice systems has been an issue in three major meetings during the past couple of months for Momentum, Creighton said. "Front and center as part of the discussion is the integration of billing systems, broadband and voice and what we can do [for the operators] on the marketing side," he said. "All elements are topics of concern for some of the largest customers we have."
Carl Weinschenk is Broadband Gear Report's Features Editor.