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| OSS and Productivity An Economist's View A short discussion on CLEC productivity with telecommunications economist, Ezio Subissati, M.A. Econ. Current OSS: Let's say you are an investor interested in a particular CLEC. Would you look at productivity when evaluating whether to invest in that CLEC? Ezio Subissati: Yes, I would, But first let's look at how we measure productivity in this context. The conventional measurement has to do with how hard people work, and how much they can produce in a certain period of time. But productivity is also worth looking at in a much more global sense. Productivity not only relates to the cost side — the cost of doing business — but also the service side as well. Good productivity means offering your clients the very best, far in excess of what they expect and what they are paying for. People are getting added value and it's all very customer-focused. Providing this superior service with a cost structure well below that of your competitors is what good productivity is all about. Integrated operational support systems (OSS) are vital to achieving improved productivity.
Current OSS: Are you saying that productivity is an area in which a CLEC can gain competitive advantage? ES: Yes. Let's face it, these days everyone's selling the latest telecom products and everyone's offering competitive prices too. Productivity is really the only place where you can gain the competitive edge.
Current OSS: What about competing by providing better technology? ES: In the telecommunications industry, technology is changing, yes, but all the players are aware of these changes and what's coming down the line. They know that no company is going to come out with a new telecom product that will revolutionize the industry and make them huge amounts of money. The competition in the market is fierce; companies are offering the latest state-of-the-art technology but they can't charge high prices for it because everyone's offering it. There's intense price competition. So you can't expect the profitability to be generated by either a breakthrough in technology or a huge margin caused by pricing. One of the few areas to gain competitive advantage is on the service excellence and cost side. This is where OSSs come in, because the systems not only affect your cost but also improves your service to your customers. With OSSs, you can proactively manage customers and provide them with service activation very quickly, as well as anticipate any troubles that might be brewing in the network. On the cost side, OSSs boost the effectiveness with which you use your assets and your workforce. In the end, you can offer service excellence at the lowest possible cost. Current OSS: Are we just talking about automation of business processes, that is, using employees more efficiently? Ezio Subissati: Absolutely. But this doesn't mean that employees are working long hours at a frantic pace. It means they are working smarter, communicating better, and they have better tools at their disposal. OSSs allow them to communicate within the company and with customers and suppliers very effectively, seamlessly from end to end. OSSs provide employers with tools to optimize asset deployment and asset utilization. This leads to huge savings. Does that mean you'll have more unemployment? I don't think so, because the industry will grow in total and the quality of the jobs will improve.
Current OSS: How would a CLEC begin using OSSs? Would they automate all at once or piece by piece? ES: You're stuck with the past — with what you already have — so each move you make is probably going to be incremental. You have one system and another system, and then you add yet another piece. But eventually the market will converge towards a single solution. In the optimal situation, a CLEC would not be encumbered by past decisions or a particular technology. If they could start from scratch, they would probably install integrated systems across all the business, service and network layers, even out to the front office and into customer self-service. Today, alliances are being formed among OSS companies so they can provide complete integrated systems to telcos, including CLECs. It's happening all over the industry.
Current OSS: Is it ever a wise choice for a CLEC to build its own integrated operational support systems, or should they always use third-party vendors? ES: I don't think it makes sense for CLECs to build their own. They would be outside of their line of business. They would have to set up their own IT departments. The market is changing so quickly that they wouldn't be in the business of providing service to customers, they'd be too busy becoming an OSS company. Current OSS: So, once again, as an investor looking at a CLEC, would you also consider which OSSs are in place? ES: Yes, definitely. You have to look at the whole package, the financial picture, of course, as well as the regulatory climate and the market. But I would also take a close look at the company's OSSs. Are their OSSs integrated? Do they have as complete a package as possible, from customer service right down to network management? If they do, then you can be assured that they are going to be way ahead of the market. The bottom line is this: if you're looking to invest in a CLEC, look for a company that delivers customer service exceeding customers' expectations, at a cost that provides a return to investors exceeding their expectations, as well.
From Current OSS, Fall 1999, Vol. 1, No. 1. Published by Eftia OSS Solutions. |