Outsourcing has the potential to save costs and improve service for telecom operators. Head of Outsourced Operations for software vendor Martin Dawes Systems (MDS), Andy Peers, argues that the future of outsourcing looks bright.
In Europe, telcos have traditionally been more reluctant than their North American counterparts in adopting outsourcing for non-core business activities. However, an industry survey from Chorleywood Publications suggests that this cultural difference is in the process of changing and that European operators too are waking up to the potential benefits of outsourcing.
In the current economic climate, budgets continue to be constrained and there is an increasing need for operators to be innovative and launch new products and services quickly. The demand for improved service levels combined with a re-focus on core business and pressure to reduce costs, mean that operators are increasingly considering the following outsourcing models:
Facilities management, including the outsourcing of the planning, designing, and managing of buildings, equipment and systems: CRM, Billing, Call Centre, payment processing and all third party connections.
A facilities management agreement is a key enabler for companies looking to penetrate new markets. For example banks and retail organisations looking to launch as an MVNO will need the experience, expertise and capacity provided via a facilities management agreement.
Service bureaus, including the outsourcing of service functions, such as billing or certain niche services: mobile, fixed line and internet.
Build-operate transfer solutions, which involves the initial outsourcing of functions to a vendor, before folding the service back in-house.
Joint ventures, which are separate outsourcing initiatives involving both operators and vendors.
Key Drivers
While operators are interested in the strategic outsourcing of non-core activities, there is still concern over the loss of control and lack of confidence in vendors and their ability to carry out functions as effectively as the operators themselves.
Vendors therefore have a responsibility to educate the market in terms of outsourcing benefits, including access to expertise, flexibility of service offerings, operational efficiencies and cost savings.
The telco market in general has entered a period of dramatic change signified by mass-market consolidation. Operators have and continue to buy up bases in order to increase subscriber numbers. A consequence of this is the operator inherits a number of disparate systems. To improve control and efficiencies a key objective for the operator is to migrate these customers to one central base. Capacity and skill set make this a much harder objective to achieve and migrations are a prime area where a outsourcing partner help achieve this objective quickly and with limited time and resource requirement from the operator.
Expertise
When outsourcing services, operators must be convinced that they have got access to experience and expertise from companies they can trust. It is vital that operators are confident that their customers are being managed by a team of people who know the operator business, understand the challenges and know how to ensure the organisation meets its business objectives.
Flexibility
Outsourcing is ideal for operators who are struggling to gain the freedom they need to be innovative and competitive when packaging communication service and tariffs. However, it is important that flexibility is built into outsourcing partnerships to suit operators' current needs and future requirements.
Efficiency
Outsourcing has the potential to free up time for companies to concentrate on core business and developing its future. Companies may also reap the rewards of additional efficiencies, such as a streamlining and standardisation of procedures and business rationalisation, all of which can bring tangible savings.
No Compromise Necessary
Success in outsourcing is about long-term partnership. By understanding how to meet a customers' specific needs, both now and in the future and applying the right mix of people, processes and technology.
Quality outsourcing partnerships allow operators to focus their attention on developing their business, secure in the knowledge that the back office is taken care of and that their customers will get a quality service based on the highest industry standards.
In this challenging climate, with increased focus on the bottom line, it is essential for operators to improve the cost effectiveness of their service offerings. At the same time there can be no compromise on the level of service their customers receive if they are to remain competitive and develop in their market.
About MDS Global:
Martin Dawes Systems specializes in delivering advanced billing, customer management and data analytics solutions to the convergent communications market. We consistently deliver complex projects on time and to budget.
Combining process innovation with robust and proven systems, Martin Dawes Systems offers attractive propositions that help build customer loyalty, improve efficiency and increase.
Headquartered in the UK, we have offices in North America, Europe and Asia-Pacific from which we support customers, including Vodafone and BT, internationally.
Published: Friday, May 28, 2004
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