Two Cases from Telecom Petter Nielsen ([email protected]) 05.11.2012, INF3290

Agenda • Two Cases from Telecom – CPA – the Content Provider Access platform – eCommerce in a Telco

CPA

The Content Provider Access (CPA) Platform • What is it? • And why/how did it come about? • CPA as generative II

Some “CPA services”

- Payment solution - Short-number - Coordination – one price, one number

What is CPA? • Platform, standard, business model … – Enables premium SMS services – Revenue share – ‘Open Garden’

Telenor

Subscriber 1

NetComSMSC 2

SMSC

6

CPA

3

2 and 6

CPA

4

7

Billing system 5 Billing system

Content provider

The historical context of the CPA Teletorg • The idea of information based value adding services (VAS) – Third party content providers – Premium billing

• New formal and informal institutions

MobilInfo and SMSInfo • The idea of information based VAS for mobile phones • A “walled garden” approach – Differentiation

• Telco approach • The experiences: – Opportunities – Challenges (no premium billing, no access to full market etc.) – Failure

The brief history of the CPA • An extension (, and devolution) of previous approaches – – – – –

Small-scale, bottom-up, flexible, external inputs Learning from previous platforms Drawing upon the installed base New strategy – or rather lack of strategy New actors, roles and responsibilities Risks - No differentiation - Services harming the brand - No business case - No control - Teletorg regulation

CPA: Roles and value network Content producer

Roles:

Content producer

Network operator

Content production Service innovation Branding Advertising Pricing Billing Transportation

Content provider

Aggregator

Application house

Integrator

Subscriber

Media window Network operator Network operator

MobilInfo/SMSinfo

CPA

Subscriber

Media windows

TONO/NCB

Composers

Consumers

Content providers

Network operator

‘a shared, open (and unbounded), heterogeneous and evolving socio-technical system (which we call installed base) consisting of a set of IT capabilities and their user, operations and design communities’

Some reflections

• An Information Infrastructure

• The ‘paradoxes’ of the CPA – Lack-of-control as control – Lack-of-strategy as strategy – Lack-of-resources as a resource Telenor

Subscriber 1

NetCom SMSC SMSC

CPA

2

2 and 6

6

CPA

3

4

7

Billing system Billing system

5

Content provider

Generativity • Generativity defined (Zittrain 2006):

‘denotes a technology’s overall capacity to produce unprompted change driven by large, varied, and uncoordinated audiences’ – – – –

Capacity of leverage Adaptability Ease of mastery Accessibility

• Open vs Generative?

The CPA as a generative technology • CPA and generativity: Leverage:

Premium billing of content services, access to full market

Adaptability:

Extensions to be added on the fly by anyone

Ease of Mastery:

Simple technical interfaces, aggregators provide even simpler

Access:

Available for anyone

Telenor

Subscriber 1

NetCom SMSC SMSC

CPA

2

2 and 6

6

CPA

3

4

7

Billing system Billing system

5

Content provider

eCommerce in a Telco • System • Information Infrastructure • Global Information Infrastructure

eCommerce as a System

eCommerce • Sales of products or services over the Internet – webshop • Sales-part of eBusiness • Mature COTS platforms in the market

Platform functionality (example)

Stand-alone eCommerce Systems Strengths • Short time-to-market • Control • Flexible • Low-cost

Weaknesses • Requires manual and double work, e.g. populating product database and fulfilling orders • No information available about online transactions in other channels – no coherent user experience • Without integration, no payment solutions and personalization etc.

eCommece as Information Infrastructure

Cross-channel is a key challenge

Platform integration (example)

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Integration is a challenge – multiple points Business Support Systems (BSS)

External systems

•

• •

• •

• • •

CRM (Customer Relationship Management) Warehouse (ERP) for inventory management and fulfillment Recommendation engine for personalized product/plan recommendations Product catalogue Analytics Business Intelligence

• • • •

Number portability database Logistic/ Shipping providers for delivery Payment provider Address validation Credit check Geo-location

According to vendors, integration accounts for 80% of the costs

Functional architecture (example)

eCommerce thin or fat?

Customer and Product Data Mastering • eCommerce data - relevant only for Online – E.g. 3D images and browsing behavior

• Other data – Relevant for multiple (all) channels such as eCommerce, call-centers and retail shops – Global data must be cached for eCommerce channel to avoid latency – What happens if systems with masters are out of operation?

• Product mastering Example: eCommerce Master

Partial eCommerce

M eCom

M eCom

Outside eCommerce

M

eCommerce as II • Summary: – Integration becomes critical to reach business goals – A range of integration points – Architecture is essential

eCommerce as Global Information Infrastructure

eCommerce status in Telco Group • 11 different Business Units run autonomous to a large extent • 11 different eCommerce platforms – To a large extent homegrown – Limited functionality for users, lack of cross-channel integration, partially manual, inflexible for business users

• Integrated (partially) with 11 different BSS stacks • No standard Enterprise Service Bus (ESB), if an ESB at all

From local initiatives to industrialization • Telco Group focus – Create top-line growth through being preferred by customers (customer centricity) – Be a highly cost efficient operator (operational efficiency)

• Industrialization/transformation initiatives – Reduction of complexity and standardization of products – Best practice sharing of processes, technology and platforms – Cross border standardization efforts in order to increasingly benefit from economies of scale and replication of best practices

• eCommerce industrialization requires global initiatives – Standardization – Global/regional operating and governance models – Industrialization agenda and coordination with other global initiatives

Standardization (and customization) •

Standards are the basic for economy of scale – Common sourcing of platforms (discounts depending on #licences) – Coordination of integration (80% is integration)

• •

COTS is never OOTB – customization is needed The balance between local and global – Business Units will (at least on short term) seek to maximize local flexibility – Telco Group will seek to minimize local flexibility and maximizing the core for synergies and sustainability

•

Customization

Assuring buy-in from the business units (live with COTS)

Customization

Customization

Telco layer

Telco layer

Telco layer OOTB OOTB

OOTB

Where to locate functionality? Local Layer

Customization

Standard Layer

Standard across units

Core Platform

Out-of-the box

eCom eCom

vs.

Standardization (and architecture)

BSS

• Mature and immature operations – Greenfield or brownfield (in general and eCommerce) – Thin or Fat

• Mature and immature markets – Different transaction volumes – Different buying behavior (PC penetration, credit cards etc.) – Prepaid mobile for consumer VS. prepaid/postpaid, mobile/fixed/TV for consumer/business – Sales or service focus – Hunting or farming focus – Varying investment horizons

BSS

Global/regional Operation and Governance models How to keep the standard?

Global Operation Center  Standardize platforms  Architecture and roadmap  Own and maintain Global Frame Agreements

Business Units

 Implement and own local solution  Localization and day-to-day operation  Own and maintain Local Service Delivery and Maintenance Agreements

Vendors  Solution Development and maintenance  Deliver according to agreed SLAs

Industrialization Agenda and Coordination • Key to become an industrialization project – To get resources – But requires a strong business case, buy-in from business units and coordination with other initiatives t

eCommerce project Digital Content Shop - Sales of digital content - Digital rights management Regional Harmonization - Harmonizing different initiatives in Asia - eCommerce initiative, based on implementation in BU Group Operating Models - Common operation model and governance structure - Establishment of Shared Service Centers Group Architecture - Common architecture across Group - See eCommerce as a potential pilot

- Integration - Architecture - Competing regional initiative - Use same vendor? - Timing - eCommerce as pilot - Timing - eCommerce as pilot - Timing

Summary: Increasing complexity

System

Infrastructure

Global Infrastructure

Development

Specification driven

Evolutionary

Generic

Architecture

Monolithic

Integrated

Adaptive

Governance

Single

Multiple

Global

Stand-alone Open and interconnected Multi-level and nested

From System to Global Infrastructure System

Development

Architecture

Governance

Infrastructure

Global Infrastructure

- Implementation based on local need for functionality - Customization where needed

- Adapt to other components, flexibility for change - Integration work (80%)

- COTS with layer easy to localize - Start in one operation, reuse in others

- Fat COTS - Monolithic - Internal mastering for product catalogue etc.

- Thin COTS - Limit customization - Mastering outside eCom - Aligned functionally with other components

- Pragmatic COTS - Limit customization - Adhere to group architecture - Global mastering?

- Local operation - Local governance - Local investment

- Local operation - Locally distributed governance - Local investment

- Shared service center - Deal with local changes globally - Global, regional or local investments