|The only publication dedicated to OSS Volume 1, Issue 4 - August 2004|
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.Pricing and Value Disparity
OSS is a buyer’s market where customers dictate pricing. “That’s been common not just in OSS, but across all the different software sectors for quite some time,” says David Sharpley, vice president of marketing with MetaSolv Software. Buyer-driven pricing has resulted in a range of models from pay-as-you-go utilities to multi-million dollar, full-service licenses. It also is not uncommon for one service provider to pay ten times as much as another for a similar solution. This disparity can be attributed partly to scope, but also to differences in budgets, spending tolerance for OSS and prior experience.
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*
Not As Valued As Billing
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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