Cloud has become big business for Tier 1, 2 and 3 telco Service Providers. A new white paper by Eastern Management Group reports that these carriers have spent billions of dollars on cloud architecture, services, and operations to support a large market for their cloud services. With that much at stake, they won't be willing to settle for disappointing results.
Our research has also found that businesses from large and medium enterprises to SMBs are spending tens of billions of dollars on public and private clouds, with much more to be spent in the future. Telco service providers are thus in a good position to take a significant share of the cloud market. They bring with them assets, customers, networks, systems, staff, practices, as well as business experience with recurring-revenue models, an issue that has proved challenging for newcomers entering the cloud market from the CPE business.
From our experience consulting to Service Providers, there are already many good operating models to be found among Service Providers' cloud businesses. Some rely on the strength of their exemplary product portfolios, or outstanding channels, or branches, or marketing, or systems. Not surprisingly, we have found that there is a correlation between companies that have exemplary or model operations, and high levels of achievement by these carriers.
Even providers that don't currently have model operations may still be able to develop and roll out such processes. For them to do so, however, they need a best practices foundation. The carrier's starting point is determining which elements of their business' operations require process improvement. Is it validating the best way to go-to-market? Is it the sales force performance? Is it recovering a now-at-risk business plan?
A carrier's business operations in need of improvement, and any resulting process improvements and best practices, should be confined to areas affecting the desired outcome. As an example, a client of ours wanted to create a model field sales office that could be implemented and replicated throughout the Service Provider's territory. Although sales targets were being met, certain operating efficiency was being sacrificed, and many processes varied by geography.
Another Service Provider client wanted a new pricing structure for their cloud offers that properly reflected the carrier's value proposition and brand. In each of these examples the operations that were examined, the processes that were improved, and best practices outcomes were substantially different from one another, because the problems were dissimilar to begin with.
Where do the model operations and best practices for cloud services come from? They're influenced by different sources, usually in some combination. For example in our practice, in addition to our consultants' experience, we will get input from the Service Provider's staff, their peers (similar Service Providers), vendors, and customers.
Eastern Management identifies nine business operations as having a substantial though different influence on the Service Provider's cloud results. Which levers to pull, in other words which discrete operations to examine and implement for best practices, is governed by the objective (e.g., model marketing). The operations to be assessed are selected with the goal of putting in place process improvements and best practices for the initiative. They are grouped under three headings: 1) Organization; 2) Effectiveness; and 3) External Influences.
Our research shows there are billions of dollars of potential new cloud sales every year that Service Providers may miss out on for want of best practices. Eastern Management's white paper detailing what's involved in a Service Provider process improvement initiative is called Best Practices to Grow Service Provider Cloud Revenues and it is available on request.
The Eastern Management Group has served as a management consultant to more than 400 communications industry clients worldwide including all classes of Service Providers (ILECS, IXCs, Wireless, Cable), equipment manufacturers, software and Operations Support Systems (OSS) vendors. John Malone is the Company President, and he also leads the Service Provider consulting practice.
