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Guest post: Product Management Transformation

To make the ‘two-sided’ telecoms business model a reality telcos need to become better retailers (to create one sticky side that third parties on the second side will pay to interact with). In this guest post, Ernest Margitta from product management specialists Tribold, looks at how telcos need to transform their understanding of products.

In running a retail store, there are some basic principles that everyone understands about products and inventory. For a start, the Sales staff rely on knowing exactly what they have to sell - what is in stock, what options are available and to whom, what the lead times are for special orders, etc.

Purchasing needs the same information to know when to source additional stock to match customer demands and to find suppliers that can deliver. And Marketing and Product Management need to know which products are doing well, which ones need refreshing or retiring and where to focus their next product campaigns and development ideas. The common thread across these departments is the need to service the customer with the right products.

To that end, the idea of product is at the center of the retail universe. The retail business is all about procuring, marketing and selling products, with business success clearly linked to product success. Retail success is therefore heavily dependent on factory supply - the product design, build, warehousing, and distribution tasks associated with making the products the retailer wants to sell.

Communication Service Providers (CSPs) certainly share the same challenges of the physical product retailer, especially when it comes to determining and then supplying the products that customers will find attractive and want to buy. There a few important differences for a CSP, given the fact that CSP products are mainly service offerings that they often supply themselves. Services are not lined up in boxes on shelves. Services are not shipped from distant factories whenever stocks run low. Still, services are products. They must be designed, manufactured and packaged.

The underlying service delivery capability must be in place before the services can
be delivered, just as the factory for the retailer’s product must be operational before
a retailer can expect to have that product to sell. And like any other products,
services are subject to supply limitations - their delivery is constrained by network
and systems capacity and capability, and by the ability of the organization to
manage the delivery and support of those services.

With this dual role as Wholesaler and Retailer, CSPs have all the same requirements
as an automotive company for the manufacturing, management and supply of
products, on a day-to-day basis as the orders flow in from the customers and on a
longer term basis as products are created, delivered, and eventually retired. But
while everyone in most any CSP company understands the primary importance of
products, too many CSPs continue to manage products across this chain in a
fragmented and unfocussed way. They simply do not have either the day-to-day or
long term visibility of their products that is essential for profitable performance.

So whilst price and speed-to-market pressures exist across all industries, there are
clearly many aspects of the communications industry business model that make life
complicated and confusing for CSPs in ways different to that of an automotive
company or retail store. For example:

• Services, by definition, involve actions and decisions by people and systems,
not just the delivery of tangible items. Retailers have the luxury of being able
to separate, in concept and in practice, key stages of the value chain - the
factory, the distribution to outlets, and the retail operation itself. In a
communications company all of these boundaries are blurred.

• ‘Manufacturing’ of brand new services often requires retooling of the factory
(network and IT infrastructure). But due to the way the CSP factory has
evolved over time, each part of the factory (individual networks, BSS/OSS
systems) has their own unique way of defining and independently managing
the notion of products and services. It is not connected like a seamless auto
assembly line.

• Customers expect that the majority of the end product they buy from CSPs
will be delivered in an automated and instantaneous fashion, while the reality
is that many of the processes, from the factory to the retail outlet (e.g. web,
phone, store) are manual and error prone.

That brings us to the broader situation faced by most CSPs today: every department
involved in delivering products and underlying services to customers has individual
custody of product information, relevant only to their job. From initial product
concepts through to the purchase of material, network configuration, pricing policy,
customer service policy, ordering and billing, each group has visibility and control of
the elements only it needs.

Many of these elements are relevant to multiple areas, like prices. Others are unique to the particular business function, like the serial
number of a particular device.

Over the years, this approach for each department to have control over its own
subset of product information has led to a myriad of business and operations
support systems having some view of product, but none having a complete view of
product. Multiple parallel systems handle different functions: billing, order
management, trouble management and so on.

Often, the entire suite of systems is replicated to support a specific network or
service delivery technology too. This creates a further proliferation of product views,
duplication of product information, and, in many cases, confusion over product data
ownership.

The result: in most CSPs, product information is fragmented, inconsistent and prone
to errors; product management is seriously sub-optimal and is reflected in low
productivity, extended times-to-market, duplicated effort and mistakes. The
Wholesale/Retail chain does not function in a best practice factory-to-store-to-
customer mode.

csp-chart.png

Products still of course can be launched, and customers still can buy them…
eventually. But many CSPs achieve launch and manage products successfully only
because of the persistent efforts of people across the organization: people who
know how to deliver results in spite of the inadequate systems and inaccurate
information with which they have to work. If the systems environment actually
helped all of these people in their efforts, they could be much more productive, and
much less frustrated.

“Carriers today have a strong need to implement a single product catalog. This becomes even more crucial as carriers need to increase operational efficiency to be
competitive. Moreover they need to prepare for more complex customer-centric
services today as well as in the future.” Martina Kurth, Research Director, Carrier Operations & Strategies, Gartner

So having lived for years with the results of such confusion, no one in the CSP
industry today seriously debates the benefits of a unified product catalog and a fully
integrated approach to product management. But conventional approaches have
not sufficed. On the one hand, it is simply not practical or economical to scrap the
entire systems environment and start again.

On the other hand, many attempts
have been made to overlay new process workflows that reach out to product data
wherever it is held, but these workarounds always struggle because the definition of
product and service is not coherent and unified. Yet, the prospect of incrementally
migrating and consolidating product information to a single location has traditionally
seemed to most people like an operational and technical nightmare.

The troublesome truth? No matter how streamlined and efficient the product
management processes are, they will fail to deliver results as long as they have to
operate with defective, fragmented and inconsistent data. Equally, efforts to
rationalize, normalize, and unify product data will deliver only partial benefits in the
absence of well thought-out processes that work on that data.

Everyone in other retail and wholesale industries understands the central
importance of products. None could survive for long without the ability to see and
manage the entire portfolio of products from either manufacturing or selection
through sale. People in the CSP industry increasingly realize that they need much
the same sort of focus on product capability. They know a big change is needed.

The solution for CSPs is now within reach

Moving to a seamless ‘factory floor-to-store shelf’ chain for CSPs does require a
transformation of sorts around Enterprise Product Management. But it does not
need to be a disruptive transformation. To that end, the industry needs more than
just smart technology to achieve real change in how products and services are
managed; it needs smart technology coupled with a smart implementation
methodology that together provide a practical, incremental approach to
transformation.

The methodology must encompass a few core principles to ensure transformation is
achievable whilst business-as-usual continues:

• Product data is key… but don’t forget about the process
• Incremental transformation is not an oxymoron
• Greenfield is not a prerequisite

The details of the scheduled path to transformation should depend on the exact
nature of the legacy configuration, specific applications in use, and the priorities of
the CSP. But while the details may vary, the broad approach required is likely to be
much the same for all CSPs.

Product data is key… but don’t forget about the process

The solution for CSP enterprise product management must address both product
data and product process in a holistic manner. The principle underpinning the
approach to CSP enterprise product management is that every person and every
application across the enterprise should have just one place to go to see what
products and services are actually available. At the heart of the solution is a central,
unified product catalog that maintains a consistent, closely managed and definitive
view of the company’s products.

The product catalog must contain product offer information and commercial product
and technical service specifications, all in a componentized fashion. Specifications
reflect the service delivery capability of the service providers’ platforms and are the
basic building blocks for the end-products they sell.

By logically decomposing
products into componentized specifications, product and service engineers can
expose to product managers the full service delivery potential of their platforms,
enabling product managers to readily identify and assemble new market
combinations of available capability.

The centralized catalog enables the CSP to decouple the business definition of
products from the functional IT applications that need to know about products. This
break with tradition delivers dramatic benefits enabled by the ability to see all
products and system capabilities in one place, the assignment of unambiguous
ownership of product data, and a platform for rapid yet tightly managed product
evolution.

Let’s get organized

The need to get CSP product information organized across the factory and into the
store has become more and more apparent for years. What has not been apparent,
or available, is a fully coordinated plan to take control of product data and product
processes, and the tools with which to do that.

CSPs have also had to face the challenge of ensuring that legacy systems are able
to operate and carry out their roles while those data location and ownership
changes are implemented.

Now the approach for successful enterprise product management transformation
has been mapped out. Now there is a repeatable methodology to effect the factory
floor-to-store shelf transformation in easy low-risk steps, and well-defined principles
to guide architecture and deployment. Now there are tools that make it possible to
create that unified product catalog and manage it effectively.

Now is the time to organize the CSP Factory and the Store.

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