Is OSS Worth its Weight?

Why OSS is Undervalued and What to Do about It

By Edward J. Finegold, Editor-in-Chief

In places like Telecom Italia and British Telecom, OSS is beginning to be recognized for delivering value. But the sector still struggles to send a consistent value message to its primary customers – telco executives. Pricing models and contracts for OSS suggest that whatever the value of an OSS solution is, it is not agreed upon across the industry. Further, OSS hasn't yet become a top strategic priority for a majority of telecommunications providers. What's missing is direct communication of clear messages and measurable benefits between the OSS sector and many senior telco executives.

Some vendors have also been guilty of undercutting the market in “all-in” attempts to earn accounts, but these are fading due to negative cash flow and wary buyers. “Pricing is starting to stabilize in the OSS sector. I think operators are being more sophisticated in looking at who best meets their needs - not just in capability, but in stability and financial breadth and depth. Those that are under-cutting have neither,” says Sharpley.

The OSS Value Problem Defined*

• OSS lacks a common, measurable value proposition that matters to executives..
• Service providers too often dismiss OSS as something technical.
• Billing and CRM provide tangible benefits and are more highly valued than OSS - sometimes by a factor of ten or more.
• Vendors' business messages are too often lost in technology or operational specifics.
• Service provider managers lack a clear mandate from executives to adopt new, efficient processes.
• Vendors have not yet convinced most service providers that OSS is necessary to make their latest services – like DSL and IP – deliverable and profitable.

Not As Valued As Billing
Even as OSS pricing stabilizes, there will still be an issue of determining their real value. For example, OSS systems consistently command smaller investments from customers than do BSS vendors. “Service providers spend hundreds of millions of dollars on CRM and billing initiatives,” says Julie Wingerter, chief strategy officer with NetCracker Technology Corp., “but are willing to invest only tens of millions of dollars in OSS.” The cost to produce billing or CRM software isn’t any greater than that of OSS, yet the price is far higher due to a far greater perceived value.

OSSs aren't as easy to understand as billing systems, which sit directly in the revenue stream. Billing is easily embraced because it delivers measurable results and executives recognize they can't operate without it. Rarely is any OSS solution's impact so readily identified or highly regarded. For OSS to achieve 9-figure recognition, the sector needs to measure and show the value it delivers in the way billing does – through dollar figures. It's important to keep the message clear and profit-oriented because many telco executives maintain a monopoly mentality that isn't interested in cost saving efficiencies.

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