The OSS market has changed… Part 4 of 4. This series of four blog posts is a synopsis of my contribution to a discussion I chipped in to on LinkedIn’s ‘OSS Gurus’ group.
Economics? RoI? Plain common sense? These won’t sell your OSS products.
So I talked about business benefits, CAPEX and OPEX savings last time. And you probably assumed the OSS buyer will primarily be driven by one or both of these KPIs when selecting OSS products and running OSS projects, right?
In lean times you’d think cost saving would be A Big Deal. If you can save the telco $100 million per year for just $500,000 investment, they’d bite your arm off. Not always. Rarely, in fact.
Pure economics common-sense and individual telco manager's KPIs are not always aligned. If they're measured on ARPU (average revenue per user), then they'd be buying solutions that increase revenue, not drive down costs. A manager/director in Retail, Products, Sales or Marketing will likely be measured primarily on customer growth numbers and ARPU, not CAPEX and OPEX savings.
Yes, someone cares about cost in the telco, and I think most of those guys would be buying more OSS if they had the budget. But they don’t have the budget if the business is losing customers or revenue. It tends to be the successful telcos that spend more on OSS. Obvious really:
1. They have more money to spend across the whole business
2. They have growing customer demands and service fulfilment pain that high-lights any OSS weaknesses
3. What’s the point in investing in OSS at the back-end unless you have customers coming in at the front-end?
It comes down to the CEO who decides where the bulk of the budget goes: To sales/marketing initiatives or network efficiencies? And again, she may be driven by something other than common-sense long-term economics because that's business, right? The financial market says you're a more valuable telco if you have stuff like:
1. An LTE license
2. Growing smartphone up-take
3. Increasing ARPU…
So that's where the budget goes this year, then a bit later on you get…. Profit!
Of course a CEO will know that you need a margin on that ARPU, but if she can dictate that cost-saving OSS initiatives must *also* have an ARPU up-side then that's where the budget will go before a pure cost-saving project.
In summary, you’re doing OSS so you’ve got a cost-saving story. That’s a given. Where’s the upside for the rest of the business? The City doesn’t give the CEO a pat on the back for making her planners and engineers jobs easier.