Posted: 2/2002

Know the Flow
Supply Chain Management Closes the Loop

with Service Delivery Management

By Peter Lambert 

Can a network service provider’s right hand ever really know what the left hand is doing?

For the majority of service providers, hobbled by disconnected “silos” of mutually inaccessible information, the answer is a resounding, “No!” With dozens of departments, hundreds of suppliers and thousands of processes and transactions from equipment and service purchasing and approvals to service sales and order processing to network provisioning and maintenance and service billing — achieving uniformity of information or even a 360-degree view of it all is no mean feat.

Fortunately, other supply-chain-oriented industries have worked the kinks out of a combination of workflow management, data warehousing, enterprise performance management (EPM) and supply-chain management (SCM) and analytics tools that reduce capital spending and operational costs to optimize income through smarter service delivery and pricing.

Now economics de-mands their wider implementation in telecom operations too.

“There is a large shift going on in the way service providers view infrastructure spending, due to a shareholder shift from looking at market share and capacity to looking at profitability,” says David Fisher, director of PeopleSoft for Communications, the product line of PeopleSoft Corp.’s communications industry team, one of the company’s two largest vertical customer segments. “Service providers are coupling supply-chain tools with service and capacity planning and other functions, because they have to cut spending and figure out how to do more with less.”

Flow Through

Such accountability requires answers to a plethora of daily workflow and task-fulfillment details. Has a local loop been secured before a broadband modem installer visits the customer site, or before accounting sends the poor customer a bill? Is a field technician team producing at promised speed? Is a sales team promising a customer a service implementation time shorter than current practice? Is an equipment vendor matching the on-time efficiency of a competitor in the same category? Is the price of a new service informed by actual insight into infrastructure resources used to deliver it? Is the salesperson certain that all those resources are even available? In the past, many operations software vendors worked blind to one another, developing independent order management, supply-chain interconnection and provisioning workflow products. Now, a new layer of “middleware” software products are emerging to manage the logic of a common information repository — to ride herd on all the piece parts.

John Konczal, vice president of product marketing for Telution Inc. says installers for one unnamed data communications provider were finding themselves delivering fiber-optic gear to the carrier’s remote facilities that lacked the power equipment to run that gear.

“The order would be stopped flat,” Konczal says. “They had no record of the need for power or of any relationship or transaction with a power equipment supplier. With us, if they find such an exception, we can dynamically inject that exception into the workflow.”

Telution, which bills itself as a “coordinated service delivery” solutions vendor, promises to automate the flow through which one completed step in service delivery triggers the next step and to oversee completion of them all.

To help a broadband carrier customer like CIMA Telecom Inc. provision a digital subscriber line (DSL), Telution mapped out a 15-step process, beginning with half a dozen transactions with the incumbent copper loop supplier, including separate local service request (LSR), LSR completion date and LSR completion notice transactions.

Those steps are followed by transactions within the requesting DSL service provider’s infrastructure, including the activation of DSL and cell relay switch ports to link the customer, as well as transactions with DSL modem installers and other outside contractors.

Now, Miami-based CIMA Telecom no longer has to execute each step manually, and the logical flow of one step to the next also is automated.

CIMA CEO Enrique Yunis says, “We are able to market, provision and deliver service, whether wholesale or retail, more quickly and cost effectively. We’re able to automate processes that traditionally were barriers to delivering superior customer service, and now those processes will be a positive differentiator for us.”

While physical device provisioning is complicated enough, “the logical transactions involved in local loop provisioning are where management of supplier transactions become incredibly complex,” Konczal says.

“The first wave of DSL carriers failed because they were managing too many of the transactions manually and separately from the supply chain as a whole,” Konczal explains. Because the “bottom line is a total service completion date, there can’t be separation between supply-chain and provisioning management any more.”

Executives at CIMCO Communications Inc., a Midwest reseller of local and long-distance voice, Internet and private data services, echo that sentiment. Rather than buying its own network infrastructure, CIMCO has spent its capital on engineering, sales, support and other staff, as well as substantial in-house, back-office software development.

“Being nonfacilities-based is an advantage in terms of our assets being our people, our systems, our suppliers and our relationships with them,” says co-founder and CEO Bill Capraro Jr. “The solutions we engineer for each customer can go beyond the limits of physical assets.”

Two years ago, CIMCO acquired a software development firm to develop the Mercury Express database that bridges provisioning data into billing and other systems, including a self-service trouble-ticketing trial now underway with several customers. According to Capraro, 85 percent of its provisioning transactions are now electronic, compared with 30 percent eight months ago.

For customers with 300 lines and up to 75,000 calling feature options to provision, as well as a growing customer base for Internet, private data, security alarm and other services, errors are reduced, and “the days of manual entry for customers with 50 or 100 bills are long gone.”

Telution also pitches its solutions as infrastructure and service agnostic. Konczal says its COMX system already marries service delivery and supply-chain management for voice, DSL, cable and optical and low-speed data providers. He expects that content delivery networks (CDNs), with their complex partnership structures, will demand such solutions too.

Further, as a by-product of its coordination tasks, COMX collects data on supplier performance and order fulfillment time and cost cycles — data that can be shared via Telution’s extensible markup language (XML) interfaces and crunched by analytic applications from vendors like PeopleSoft Inc. and SAP AG.

Optimization

PeopleSoft boasted a 26 percent increase in communications industry license sales and acquisition of 35 new communications customers in 2002.

Shipping this quarter, PeopleSoft’s Supply Chain Insight Analytics 8.3 is a component of its broader EPM (enterprise performance management) suite, which leverages the company’s core know-how in extracting disparate data from disparate sources, correlating it, applying analytical tools to the data and exposing the results to multiple interested parties via Internet access and presentation technologies.

Sprint Corp. became the trail-blazing user of the supply-chain product last April, creating more than 40 multidimensional web report templates that use some 80 metrics to analyze procurement based on cycle-time, demand-met, spend and other metrics, according to Andrew Spidle, business systems manager, reporting, Sprint Corporate Center.

The analysis is performed on behalf of a dozen different reporting groups, based on more than 10 million record details per month — including every requisition, delivery and payment on every wireless handset and transmission tower, network switch, drop wire and the rest — via 75,000 purchase orders per year throughout the company.

Because of the ubiquitous reach of Internet addressing, reports can be made available to outsiders, including vendors for a kind of ongoing, “How am I doing?” feedback.

“What has really changed is our ability to get the information to the desktop,” Spidle says. “Before, it would take days, especially for ‘Top-10 Vendors’ or other enterprisewide reports. Now that report runs in two to five minutes, even with procurement data, where you need a lot of multidimensional analysis.”

EPM is now “the center of our reporting,” and moving forward, Sprint will migrate all its enterprise resource planning (ERP) to the platform, he says.

More Money

The revolution in cross-system data correlation and analysis can impact the revenue and cost side of the equation. For example, two-year-old France Telecom spin-off HighDeal Inc. won 20-some customers and an original equipment manufacture deal with Hewlett-Packard Co. with its service pricing and rating engine, which is designed to provide a kind of dynamic staging area for new pricing models.

The HighDeal Software Suite enables service providers like Telecom PARTNERS, which adopted it in December, to simulate new pricing models and check their profitability in real time, even before they are implemented in the billing system. The system also models and automates revenue sharing payments across any number of supply-chain partners.

“One player is typically in position to bill, or it can happen in a distributed way,” says HighDeal president Lubomir Morchev. “We can build a representation of this value chain such that one party might pay the end customer fee and a supplier in the middle of the chain might pay a royalty to another party on the other end of the chain. We have automated royalty and commission and sponsorship payment mechanisms.”

While the HighDeal system can operate mainly on data extracted from a single customer relationship management or billing system, it also can correlate data across multiple operational support systems where those systems play into the pricing of a service.

“If the network device is measuring frames per second, number of downloads, content type or some other metric for quality-of-service rating, we can get information from the device to incorporate in the rating and billing.”

With shareholders pressing for cost-efficient operations and new revenue streams, these solutions may be arriving none too soon for the networked services market, where left and right hands need more than ever to work in tandem.