Table of Contents

Executive Summary

Challenges in Existing Telco Architecture

Architecture Considerations

Next Generation Telco Reference Architecture  — Conceptual View

Architecture Principles

Microservices in Next Generation Telco Reference Architecture

Next Generation Telco Reference Architecture — Implementation Approach

Conclusion

References

Executive Summary

The telecom industry is changing. Customers are empowered and always connected. Network technologies are evolving (4G, 5G and software-defined networking/Network Functions Virtualisation (SDN/NFV)). Over-the-Top (OTT) players like Google, Facebook, Amazon and Netflix are grabbing a major share of the telecommunications companies’ (Telco’s) revenue. While the Telco provides the network infrastructure, the major share of the engagement on the network and devices goes to the OTT players.

To meet the above challenges, Telcos have started the transition from basic telecom provider (voice, SMS, data) to digital service provider (rich media like music, video, games, Cloud-based services, and machine-to-machine (M2M) services). The next wave of this digital transformation journey is for the Telco to become a cross-industry, multi-play service provider wherein it competes to provide a variety of digital services that customers require such as home security, banking, insurance, retail, energy & utilities, transportation, etc. Telcos will deliver these digital services in partnership with multiple parties with many possible flows of money and settlement scenarios between them. These services would be offered via multiple channels (device App, social media, web, retail, and call center), delivering omni-channel customer engagement across channels.

The transformation to cross-industry, multi-play service providers requires not only cultural transformation within the Telco organization but also replacing the monolithic siloes of business and operations (BSS/OSS) systems with next-generation systems that will provide agility, speed, and operational efficiency. Customer centricity, time-to-market (TTM), new business models, and operational efficiency are driving Telco’s digital transformation strategies.

This white paper provides an overview of next-generation reference architecture that will help Telcos meet the needs of the digital era.

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Challenges in Existing Telco Architecture

There are several limitations in the current BSS/OSS architecture of Telcos:

  • Lack of Converged IT Ecosystem – The majority of Telcos have multiple siloes of BSS/OSS systems for different lines of business. Telcos have different sets of business processes for different lines of business, no single product catalogue, dispersed customer information, complex sales and delivery processes with many exceptions, and per-product variations resulting in complex and expensive development and testing and challenges in supporting next-gen telco products and non-telco products.
  • Lack of customer centricity – Telcos currently have a product-centric approach to customer experience. There is lack of unified experience while ordering a bundle of products from the Telco. Telcos have a highly inside-out approach to a customer across the journey.
  • Lack of partner management capabilities – Delivery of digital services will require partnership with multiple vendors, and the current Telco BSS/OSS systems need to be upgraded to support the complex partner management and revenue share models. Both Telco (owned) and non-Telco products (from partners) should be managed via an agnostic set of standardized processes through common systems of customer engagement.
  • Lack of Agility – To compete with OTTs, Telcos must be able to quickly launch new digital services along with traditional telco services and be able to “Fail Fast to Innovate Faster.” Telcos have huge legacy product portfolios and siloes of monolithic systems with lots of resistance to change.

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Architecture Considerations

BSS/OSS Digitization

To meet the needs of the digital era, Telcos need to establish Digital Core capabilities in their BSS/OSS stack with the following attributes:

  • Simple architecture and technology stack
  • Enterprise data model
  • Real-time capability
  • Based on industry standards
  • Micro-services & Cloud ready infrastructure
  • Enhanced Customer Engagement and Experience
  • Process & System Rationalization
  • Reduced Total Cost of Ownership (TCO) with faster TTM

Service Innovation

To compete effectively with OTTs, Telcos must manage and seamlessly deliver high quality digital services to customers in partnership with ecosystem partners. This requires that the next generation Telco BSS/OSS must:

  • Simplify business offerings – Able to combine both Telco and non-Telco products and services from partners into a unified offering for the customer
  • Streamline business processes – Unified B2B and B2C customer-centric process for both Telco and non-Telco offerings
  • Seamless partner experience in onboarding, provisioning, monetizing, and settlement of partner digital services
  • Exposure of Telco IT and Network capabilities to partners/developers through application programming interfaces (APIs)

Operation Innovation

To optimize the cost and improve the agility of operations, Telcos need:

  • Centralized & real-time operation & maintenance
  • Virtualization & Cloud
  • Digital Operations – use of automation and digital technologies in operations

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Next-Generation Telco Reference Architecture — Conceptual ViewNgt 1

The high-level description of the reference architecture is described in product neutral way in the following sections.

Customer Engagement Layer

Ngt 2

Customers are no longer dealing with Telcos in only one channel. Around 74% of customers use at least three channels when interacting with the Telco for customer service-related issues (Source: Ovum). Customers expect a seamless experience across all channels: buy a product in any channel, pick it up from another channel, same price on all channels, and return products in any channel. For the customer, there could be many channels, many journeys, but there is only one Telco brand in terms of experience.

To provide a seamless omni-channel customer experience, the next generation Telco architecture provides a Customer Engagement Layer. At the top of this layer is support for different channels that a Telco uses to interact with customers. At a high level, the components in this layer provide the following functionality:

  • Single convergent catalogue of Telco and non-telco products across channels
  • Single view of customer, product/offer, order, and inventory
  • Common unified customer data model for B2C/B2B; single master data for customer information, interactions, orders, and offerings
  • Unified commerce, customer care, and marketing functionality for all customer segments replacing monolith customer relationship management (CRM)
  • Engagement with social networks for monitoring and customer engagement
  • Real-time inventory availability across channels and customer order decomposed to product orders to be fulfilled by different product factories in the Provider Layer

Integration Hub

Nextgen 3

The components in the Customer Engagement Layer are integrated with the Provider Layer through an Integration Hub that provides the following high level functionality:

  • Components in the Connectivity layer provide integration to the systems in the Provider Layer using adapters, system APIs, message bus, etc.
  • Components in the Business Process Layer transform the atomic services of the systems in the Provider Layer into business services and APIs that are exposed to external world. Orchestration and choreography of the business services into business processes is also implemented in this layer.
  • Digital SDP (Service Delivery Platform) provides capabilities for partner management and settlement such as Digital Services Partner registration, commercial agreement, subscription management, creation and provisioning of partner digital services/products, charging/billing and settlement, and Service Level Agreement (SLA) management.

The components in the Customer Engagement Layer are integrated with the Provider Layer through an Integration Hub that provides the following high level functionality:

  • Components in the Connectivity layer provide integration to the systems in the Provider Layer using adapters, system APIs, message bus, etc.
  • Components in the Business Process Layer transform the atomic services of the systems in the Provider Layer into business services and APIs that are exposed to external world. Orchestration and choreography of the business services into business processes is also implemented in this layer.
  • Digital SDP (Service Delivery Platform) provides capabilities for partner management and settlement such as Digital Services Partner registration, commercial agreement, subscription management, creation and provisioning of partner digital services/products, charging/billing and settlement, and Service Level Agreement (SLA) management.

Provider Layer

Ngt 3

The transactional core systems of record in the Telco IT environment will be part of the Provider Layer. This layer will be driven by product and service factories that provide the BSS and OSS functionality (Fulfillment, Assurance, and Billing) for Telco and non-Telco products. Any vendor product can plug into these factories and deliver the required functional output such as Product Catalog, Billing & Charging, Mediation, Inventory, Order Management, and Provisioning & Activation. There will be separate product factories for Telco and non-Telco products to enable reuse and alignment to specific processes. Similarly, there will be separate service factories for simple and complex information and communication technology (ICT) services for agility and interaction with partners.

SDN/NFV Management & Orchestration component will provide the orchestration and management functionality for virtual networks.

Infrastructure Layer

Ngt 4

This layer provides the full set of Virtual Network Functions (VNFs), physical and virtual compute, storage, and networking resources, M2M and Internet-of-Things (IoT) modules, that helps Telcos to deploy a virtualized, software-defined network, and next-generation cloud infrastructure.

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Architecture Principles

Some key architectural principles that drive the next-generation Telco architecture are specified below.

Product and Service Factories

Consolidate BSS/OSS systems that provide FAB (Fulfilment, Assurance and Billing) capabilities for Telco and non-Telco products into Product and Service Factories with standardized interfaces. This will enable reuse, agility, and alignment to specific processes, and any vendor product can plug into them to provide the desired functional output.

Common Data Model

  • Establish common, unified data definitions for B2C & B2B
  • Set common, unified data definitions for offer catalogue, customer data, customer orders, customer bills, and customer interactions
  • Set common, unified data definitions for interactions with 3rd parties

Common Business Functionality

  • Support common business functionality across all channels
  • Provide consistent and seamless customer experience across all channels
  • Monitor business processes to identify user behaviour across channels

Service-Enabled Backend Systems

  • Decouple backend systems from channels and business processes through Integration Hub
  • Support a customer centric mode of operation instead of system or product centric mode
  • Link all systems to a common customer view

Omnichannel Support

  • Provide functionality via shared services and exposed via channels, without channel-specific functionality
  • Monitor and manage SLAs and performance across each channel

Security

  • Provide a centralized identity and access management solution
  • Build in fraud detection to understand threats as a whole across all of the channels

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Microservices in Next-Generation Telco Reference Architecture

Telcos usually buy BSS/SS software from third-party COTS (custom off-the-shelf) vendors. Few Telcos today develop software on their own; they do not havea in-house software culture like web-scale businesses. So, it becomes a challenge to adopt development operations (DevOps) and Microservices architecture unless there are competitive and financial pressures on Telcos to do so. Morever, Microservices are usually associated with cloud-native architecture, but cloud adoption is in a relatively early stage in Telcos.

To meet the challenges from OTTs, major Telcos have started to virtualize the networks (SDN/NFV) and embrace cloud native architecture and microservices that will create the agility to transform into Digital Service Providers. OSS and Network functions with cloud native architecture using microservices and containers will be key to SDN/NFV and 5G deployment. While OSS will need major changes to integrate with virtualized networks, BSS transformation will be evolutionary. Laws around storage of personal data and need for policy & charging functions to be close the network to reduce latency inhibit the move of BSS functions to cloud. But, many BSS vendors have started embracing microservices for the customer engagement functions such as Customer Care, Commerce and Catalog.

Telco’s have been using SOA which provides strong foundation for moving to microservices architecture. To mitigate the risk in moving to Microservices architecture, Telco’s should

  • Adopt Two-speed architecture – Adopt microservices and DevOps practices in the Customer Engagement layer and NFV domain while backend batch systems in the Provider layer may continue with legacy technologies and longer release cycles
  • Work with technology partners who bring significant Telecom, DevOps and Cloud expertise

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Next Generation Telco Reference Architecture — Implementation Approach

Transformation from legacy systems to the reference architecture is hard. To minimize the risk and cost of transformation, Telcos can take a top-down approach to digital transformation.

Telcos can execute the transformation in phases:

  • Invest first in building a differentiating Customer Engagement Layer – lean, agile, omni-channel, faster TTM, high value potential
  • Build an Integration Hub (Common Services/API Layer) to integrate the Customer Engagement Layer with the Provider Layer
  • Rationalize and consolidate the legacy BSS/OSS systems in the Provider Layer into Product and Service factories for delivery of Telco and non-Telco services

Many Telcos are also taking a fresh approach and setting up Digital-First sub-brands where the business is Digital-First/Customer-First from the start.

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Conclusion

In the digital era where customers demand reliable, personalized, and real-time services accessible anytime/anywhere, Telcos need to modernize their BSS/OSS infrastructure to stay competitive, enable new business models, and meet customer expectations. The next-generation Telco reference architecture provides the capabilities of omni-channel customer engagement, open APIs, real-time/context-aware systems, partner management & settlement, ability to launch new offers in hours, and agility to adopt new business models.

Telcos should adopt a top-down approach to implement the reference architecture that will allow them to transform in a phased manner while keeping the legacy systems in place.

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References

www.tmforum.org (TMForum Quick Insights)
www.oracle.com (Whitepaper on Customer Experience Reference Architecture)

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