detecon opinion paper ngn migration score card

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NGN Migration Scorecard

2008 / 07

NGN – Migration Score Card

Opinion Paper 2 Detecon International GmbH

Table of Contents

1 Executive Summary ............................................................................................ 3 2 How to master NGN complexity .......................................................................... 4

2.1 Handling the big black box NGN ................................................................. 4 2.2 Migration KPIs and their dependencies....................................................... 5 2.3 Derivation of strategic directions of impact.................................................. 5 2.4 How to control the migration process .......................................................... 6 2.5 The project management set up.................................................................. 7

3 Conclusion & Recommendations ........................................................................ 8 4 The Authors......................................................................................................... 9 5 The Company.................................................................................................... 10



1 Executive Summary

It would be difficult to find a telco player who still doubts that NGN will dominate the technological future of the telecommunication industry.

So, one might assume that the “correct” path to be taken to NGN is now also known. But in fact finding this path is one of the biggest challenges facing telco players these days. Looking at the current NGN developments worldwide the observation is that the migration process has already started but is at different stages of progress in different regions.

The progress varies depending on the motivation to migrate. This is influenced by a variety of factors including the network lifecycle, the stage of market maturity, and the company's ability to push migration (financial and personnel resources).

These factors and their interdependencies have to be considered by every ICT provider contemplating migration to NGN.

The biggest obstacle to a migration from a legacy to an NGN network is the insecurity arising from the complexity of the topic. Detecon’s NGN Migration Scorecard can help carriers to make the correct strategic decision concerning the two major questions: when and how to migrate. It also supports carriers in the monitoring of the NGN migration throughout the entire migration process.

This paper introduces Detecon’s recommended approach to defining a ‘tailor-made’ migration strategy that reflects a carrier’s individual circumstances.



2 How to master NGN complexity

IP technology confronts carriers with various technological and commercial challenges. Former vertically integrated carriers covered the whole spectrum of the telecommunication value chain by owning a network platform, generating services, and maintaining customer relations. The progressive disintegration of the transport and service layers is forcing carriers to face up to new competitive environments which can be clustered into NetCo, ServCo and SalesCo. A loss of technical sovereignty and increased competition on the service layer are the major consequences that carriers have to deal with.

New players like Skype have entered the market and captured direct customer contact by offering attractive telecommunication services and content without having to run their own network infrastructure. In order to retain market power and revenue integrated carriers have to restructure and redesign their business models by, for example, strengthening or expanding their wholesale business.

Altogether the migration from legacy to next generation networks is accompanied by a huge range of complex strategic decisions and changes at different levels. None of these strategic decisions can be seen individually but always in terms of their interdependencies. Therefore handling an NGN migration requires a holistic approach.

2.1 Handling the big black box NGN

In order to reduce the complexity of an NGN migration, four main ‘topics’ are introduced: production and delivery, market and service portfolio, management and organization, and financial performance. Each migration topic has its specific characteristics in a legacy and next generation network.

Figure 1: Scope of NGN migration

2.2

2.3

2.4

2.5

2.6

2.7

2.8

2.9

Figure 1: Scope of NGN migration

Legacy network

Vertical integrated provider

ServiceServiceService

SalesSalesSales

Network NetworkNetwork

ServiceServiceService

SalesSalesSales

Network NetworkNetwork Network

Services

Brand and sales

Horizontal integrated provider

IP VPNWLANContent

LESMEResid.

Fixed DataMobile

IP VPNWLANContent

LESMEResid.

Fixed DataMobileManagement and organization

Market and service portfolio

Next generation networkMigration topicsMonolithic platform structure Layered structure (NGN)

Production and delivery

Cen

tral

Func

tions Service/Application Layer

Control Layer

Transport LayerCen

tral

Func

tions Service/Application Layer

Control Layer

Transport LayerCen

tral

Func

tions

ControlServices

ControlServices

Transport

Control

Services

Cen

tral

Func

tions

ControlServices

ControlServices

ControlServices

ControlServices

Transport

Control

Services

Multiple platform costs Long-term cost reduction

Financial performance

Increase in Platforms 1980-2005

Voice

Business customers

Internet

Mobile

No.

of p

latfo

rms

1980 1985 1990 1995 2000 2005Legacy Platforms NGN Platform

%

100

CAPEX

OPEX

CAPEX

OPEXCAPEX

OPEX

Migration



2.2 Migration KPIs and their interdependencies

The Detecon NGN migration concept is based on a scorecard which supports carriers in their decision-making concerning identification of a successful NGN migration strategy.

For each of the scorecard topics ‘market and service portfolio’, ‘management and organization’, ‘financial performance’ and ‘production and delivery’ specific KPIs are defined that measure success along the migration process.

In order to derive the right NGN migration strategy for the carrier in question the various interdependencies between the key performance indicators have to be taken into consideration.

KPI scores are thus derived from actual company performance and then adjusted according to the interdependencies between the individual KPIs.

Figure 2: KPI valuation and adjustment

Based on related migration project experience the characteristics of the carrier’s network, organization, and market performance are translated into scores, giving the relative performance of a specific company area.

Interdependencies between KPIs (e.g. positive correlation between market share and SLA fulfillment) are then taken into account and the affected KPIs are adjusted by eliminating these cross-correlations.

2.3 Derivation of strategic directions of impact

The NGN migration scorecard delivers key migration drivers. These can then be clustered into a four field strategic matrix. Each field requires different action. The consideration of both the KPI score and the adjusted KPI score (isolated performance) helps ensure that the KPI is classified into the appropriate strategic field, and that the right action is initiated at the right time.

Sample definitions of KPI scorecard values Key migration drivers derived from adjusted KPIs

KPI 32

KPI 21

KPI 13

3

2

-2

more than 40%

35 - 40 %

30 -35%

25 - 30 %

25 %Number of households with broadband access

Network status

more than 15%

10-15%

5-10%1-5%0%Market share of carrier’s IP based service offering

NGN......Legacy network

KPI score

Number of migrated subscribers

> 10 Mio.> 7.5 Mio.

> 5.5 Mio.

>2.5 Mio.

0

54321

more than 40%

35 - 40 %

30 -35%

25 - 30 %

25 %Number of households with broadband access

Network status

more than 15%

10-15%

5-10%1-5%0%Market share of carrier’s IP based service offering

NGN......Legacy network

KPI score

Number of migrated subscribers

> 10 Mio.> 7.5 Mio.

> 5.5 Mio.

>2.5 Mio.

0

54321

KPI score KPI dependency



Figure 3: Strategic fields

2.4 How to control the migration process The NGN migration scorecard enables the monitoring of the right migration path (e.g. by tracking CAPEX/OPEX development) during the entire migration process. Here the performance during the implementation is compared with the target performance agreed with the carrier at the beginning of the project.

Figure 4: Monitoring method

012345

2005 2006 2007 2008 2009

012345

2005 2006 2007 2008 2009012345

2005 2006 2007 2008 2009

012345

2005 2006 2007 2008 2009

-

Migration deviation

< 0% -< 5% > 0%

<

Planned migration pathActual migration statusPlanned migration pathActual migration status

Production and delivery

Financial performance Management and organization

Marketing / service portfolio




low

high

low

Act immediately!

• Undue delay of migration progress

• Strongest need and potential for improvement

Avoid wrong actions!

• Weak present performance is caused purely by dependencies between KPIs

• So isolated KPI performance is above average

Never change a winning team!

• Substantial migration progress• Monitor impact from actions in

other fields

Don't let yourself be blinded!

• Good present performance is caused purely by dependencies between KPIs

• So isolated KPI performance is below average

high

Adj

uste

d K

PI s

core

(Key

mig

ratio

n dr

iver

)

KPI score(Present migration status)

low

high

low

Act immediately!

• Undue delay of migration progress

• Strongest need and potential for improvement

Avoid wrong actions!

• Weak present performance is caused purely by dependencies between KPIs

• So isolated KPI performance is above average

Never change a winning team!

• Substantial migration progress• Monitor impact from actions in

other fields

Don't let yourself be blinded!

• Good present performance is caused purely by dependencies between KPIs

• So isolated KPI performance is below average

high

Adj

uste

d K

PI s

core

(Key

mig

ratio

n dr

iver

)

KPI score(Present migration status)



2.5 The project management set up

We recommend a five phase plan in order to define a ‘tailor-made’ migration strategy reflecting the carrier’s individual circumstances:

Agree upon target: All relevant data is collected. The migration targets are identified in cooperation with the carrier. Detecon’s NGN KPI pool is adjusted according to the carrier’s individual circumstances and requirements.

Identify status: KPIs are evaluated according to a scoring model with dedicated indicators leading to derivation of the actual migration status.

Find drivers: Interdependencies are evaluated, key migration drivers identified and classified.

Define and implement strategy: Alternative strategic actions are identified, characterized and mapped to accelerate the migration process. A milestone plan is developed in order to manage and control the implementation of the migration strategy.

Control process: The implementation of the migration strategy is managed and controlled according to the defined milestone plan.



3 Conclusion & Recommendations

The migration scorecard is useful in various strategic and operational contexts, irrespective of the carrier’s position in the NGN migration process.

Even if a carrier is not yet thinking about migrating to NGN the enumeration of the carrier-specific KPIs and their interdependencies can for example also be used in order to take an inventory of the existing networks. The results can be very useful for make-or-buy decisions, supporting the pre-qualification process for proposals from network solution providers.

From the very start of migration planning, but also during an ongoing migration process the scorecard can be used for strategic decisions at management level: it can be used to ensure the right timing and pace of the NGN migration as well as supporting the qualified planning of the entire market entry strategy. On the operational level the scorecard facilitates the monitoring of progress during the entire migration process, and the identification of corrective actions if the actual figures differ from the determined targets. Delayed and particularly wrong corrective actions can be avoided due to the reflection of dependencies between the KPIs and the respective adjustments in the scorecard. The result is precise KPI monitoring.



4 The Authors

Wolfgang Löffelsender has been Managing Consultant in the Competence Practice Strategy & Marketing Management since 2004.

With more than 15 years of consulting experience for fixed network carriers and mobile operators, he has gathered substantial experience of developing and implementing migration strategies, as well as managing the launch and operational start up of IT services and IP VPN services. A further emphasis of his project work lies in the program management of complex ICT change management projects.

[email protected]

Renata Zmrzla has more than six years of telecommunications industry experience in the national and international context. She is a Consultant in Detecon International’s Competence Practice Strategy & Marketing with a bias on product (portfolio) management, market entry strategies and marketing strategies in saturated markets.

[email protected]



5 The Company

Detecon International GmbH

Detecon International is a leading worldwide company for integrated management and technology consulting founded in 2002 from the merger of the consulting firms DETECON and Diebold. Based on its comprehensive expertise in information and communication technology (ICT), Detecon provides consulting services to clients from all key industries. The company's focus is on the development of new business models, optimization of existing strategies, and improvements in corporate efficiency using strategy, organization and processes. This, combined with Detecon's exceptional technological expertise, enables us to provide consulting services along our clients’ entire value chains. Our consultants’ industry know-how and the experience that we have gained in successful management and ICT projects in over 100 countries forms the foundation of our services. Detecon is a subsidiary of T-Systems, the business customer brand of Deutsche Telekom.

Integrated Management and Technology Competence

We possess an excellent ability to translate our technological expertise and comprehensive industry and procedural knowledge into concrete strategies and solutions. From analysis to design and implementation, we use integrated, systematic and client-oriented consulting approaches. These entail, among other things, the evaluation of core competencies, modular design of services, value-oriented client management and the development of efficient structures in order to be able to distinguish oneself on the market with innovative products. All of this makes companies in the global era more flexible and faster – at lower costs.

Detecon offers both horizontal services that are oriented towards all industries and can entail architecture, marketing or purchasing strategies, for example, as well as vertical consulting services that demand extensive industry knowledge. Detecon's particular strength in the ICT industry is documented by numerous domestic and international projects for telecommunications providers, mobile operators and regulatory authorities that focus on the development of networks and markets, evaluation of technologies and standards, or support during the merger and acquisition process.

Detecon International GmbH Oberkasselerstr. 2

53227 Bonn Telefon: +49 228 700 0

E-Mail: [email protected] Internet: www.detecon.com

detecon opinion paper ngn migration score card

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