by Oded Ringer, Outsourcing and Management Services, Communications & Media Solutions, HP Enterprise Services and Jean-Charles Doineau, Strategy Lead, Communications & Media Solutions, HP.
Outsourcing both Network and IT management is not an easy task. In practice, it consists in transferring ownership of very complex systems built through the leverage of hundreds of different software components on top of which customer operations processes are modeled. In many cases, Telcos have as well funded development of adapters between these software components, monitoring and root-cause management tools, as well as optimization processes on top. Challenge is hence to improve service management quality whilst transferring operations management environment.
Over time HP has built significant experience in transformation of complex and specific customer environments through outsourcing. Its expertise in managing this transformation has been recognized by hundreds of customers. Transition management experience, handling of legalities surrounding customer operations transfer, attrition reduction, severance management, has generated a minimum of 30% cost savings on an annual basis. These persistent outcomes are also in line with TM-Forum estimate of 30-40% annual reduction of Total Cost of ownership.
But network and IT management outsourcing can even get to deliver a higher level of savings. Target environment relies on a converged IT and Network management environment, built upon a Management Software suite, used for both IT and Network management with a set of connectors adapting the products to management of real-time Telecom operations.
For teams, this means enormous gains of productivity. Leverage of single UIs, single training methods, similar data flows leads all professionals involved in managing IT environments and network environments to talk the same language. As IT and network blur, professionals naturally follow evolutions of their environments with no adaptation or training required on new systems. We observed that a few additional points of cost savings can be achieved thanks to this “mutualization” of training and experience management for the teams using them.
At a financial level, usage of a software environment similar in network and IT environments allows as well substantial benefits. Licensing costs are contained, leverage of Software License Agreements are optimized across companies or groups in both IT and Networking environments. It is typical that additional 5% savings are gained through this “contraction” of CapEx of the operation.
Finally, network and IT management convergence enable Telcos to build a single process view of all their operations. Fully leveraging ITIL methodology becomes then possible, driving better accountability and cleaner line of sight on responsibilities through contractualization of tasks supported by any function. The effect of this is hard to fully measure, but past experience shows operational efficiencies gains of about 15% in organizations which have fully adopted the ITIL methodology.
These 4 factors of saving, are pretty consistent across all Outsourcing engagements we are involved in. However, as Outsourcing is service that is extremely customized to the specific customer situations, the exact ratio of savings can differ between environments.
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