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MANAGED
SERVICES
QUICK INSIGHTS

STRATEGIC CHOICES,
BIG BUSINESS IMPACTS
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MANAGED SERVICES:
STRATEGIC CHOICES, BIG BUSINESS IMPACTS
TM Forum’s research reports are free for all employees of TM Forum’s member companies to download by registering on our website.

Report author:
Rod Newing
Independent researcher and writer
rod@newing.co.uk

Editorial Director:
Annie Turner
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Editor
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Page 4 Executive summary
Report Design:
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Page 5 Section 1
Senior Vice President, Research & Publications: The new digital world
Aileen Hurley
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Advisors:
Page 8 Section 2
Keith Willetts, Chairman and CEO, TM Forum Getting to the core with managed services
Nik Willetts, Chief Strategy Officer, TM Forum
Rob Rich, Managing Director, Insights Research, TM Forum
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www.tmforum.org QUICK INSIGHTS 3


MANAGED SERVICES:
STRATEGIC CHOICES, BIG BUSINESS IMPACTS
Executive summary
With mounting competition, exponential
growth in data traffic and rapidly evolving
technology, the days of a fully integrated
communications service provider which
controls its own services end to end have long
passed. In the modern digital world, if service
providers are to succeed, they must transform
into digital service providers.
They need to provide customers with a
constantly growing and increasingly diverse
set of content and services. They must supply
these quickly and seamlessly, while improving
the quality of the customer’s experience.
The only way to do this is to create multiple
partnerships with third parties specializing in
applications, services and content. Service
providers must also hand over responsibility
for non-core parts of the business, including
network infrastructure, to specialists with
expertise in managing that infrastructure.
These managed services partnerships were
traditionally aimed at reducing the cost of
running a business process. They took months
to negotiate, required large teams to set up and
were fixed for a period of five to seven years.
Greater speed and agility is now available via
new iterations of these partnerships.
It is essential for digital service providers
to develop an effective strategy for managed
services that is based on improving customer
“It is essential for digital service providers to develop an effective
strategy for managed services that is based on improving customer
experience, growing revenue and dramatically reducing costs.”
4 QUICK INSIGHTS
Report prepared for Tomasz Fidecki of Cisco Systems. No unauthorised sharing.
experience, growing revenue and dramatically
reducing costs. The whole process of managing
the lifecycle of partnerships needs to be as
automated as possible, so it is quick to establish
and implement, based on generic tools.
In Section 1 we look at the pressures that
digital service providers face in the current
marketplace and business climate. We also
look at the role of managed services and the
results of research carried out by TM Forum.
A short history of managed services in
Section 2 lays out how it has developed
in three waves, from simple labor savings
to business transformation. It also gives
guidance on what areas are most appropriate
for partnerships, based on what is core and
should be retained within the service provider’s
organization, and what is not critical and
would be better managed in partnership with
a third party.
Section 3 covers the critical role of customer
experience in managed services, once again
drawing on TM Forum research, while Section
4 looks at the importance of using available
tools, explaining how it is becoming possible
to industrialize using TM Forum’s Partnership
Accelerator. This section also looks at key
quality indicators, gives examples where tools
have improved business outcomes, and offers
conclusions and recommendations.
www.tmforum.org

Service providers are expected to make every aspect
of this new digital life simple, efficient and effective
Section 1
The new digital world
The world is rushing toward digitization of
products and services, with every task possible
becoming automated. An open and vibrant
digital economy is rapidly emerging, as digital
channels replace traditional channels to market.
This digital revolution is transforming the
way people communicate, consume
information, conduct business, entertain
themselves and manage their busy lives. As
they explore the new digital world, people are
discovering many new activities they would
like to perform online.
Service providers are expected to make
every aspect of this new digital life simple,
efficient and effective. In particular, people
expect a constant stream of powerful and
diverse new services that work together
seamlessly to create an engaging customer
experience.
This requires service providers to transform
themselves from communications service
providers into digital service providers, and
it demands massive changes in business
models in order to increase the complexity of
the underlying digital network infrastructure.
The investment required to support these
digital ecosystems is huge, and even the
largest service providers will have a hard time
justifying the expense without huge revenue
increases to offset the costs.
“The investment required to support these digital ecosystems is huge,
and even the largest service providers will have a hard time justifying the
expense without huge revenue increases to offset the costs.”
www.tmforum.org
Report prepared for Tomasz Fidecki of Cisco Systems. No unauthorised sharing.
Under pressure
Service providers are facing pressure on
several fronts. They face increasingly fierce
competition from new entrants and over-the-
top (OTT) players like Amazon and Google.
This is exacerbated by regulation, which
demands increased investment, higher levels
of service and lower prices.
Continuing global economic woes are also
squeezing prices and limiting usage, which
reduces revenue. And the exponential rise
in data traffic, fueled by OTT players, is
demanding massive investment in capacity
with little promise of the additional revenue
needed to maintain an acceptable quality of
online service for customers.
Customers are also demanding a better
experience. ‘Customer service’ is a measure
of how products and services meet or
surpass customer expectations in a single
interaction. In contrast, ‘customer experience’
embraces the entire customer lifecycle over all
interactions with the operator.
Business functions affected include
recruitment, provisioning, quality of service,
billing accuracy, relevant spread of products
and services, support, upgrade and termination.
This has to cover contacts with websites,
shops, call centers and so on, with each
activity requiring integration with the others.
QUICK INSIGHTS 5

MANAGED SERVICES:
STRATEGIC CHOICES, BIG BUSINESS IMPACTS
This calls for massive investment in systems,
call centers, retail outlets and salesforces.
New technologies like virtualization must also
be incorporated into the network infrastructure,
and cloud services must be adopted, both as a
source of content and services, and as a service
offering to retail and business customers.
The Internet of Things is connecting
a wide range of devices to the network,
including televisions, radios, home appliances,
fitness, health monitoring and assisted
living equipment, and heating, ventilation
and security systems. These will all require
investment in additional capacity.
Individual service providers also face specific
challenges that need to be addressed. An
operator may have invested heavily in building
well-established infrastructure and systems
in one country, but may not be able to invest
equivalent sums to replicate it when moving
into another territory. Similarly, some operators
may not be able to justify the heavy investment
required to introduce new services or content.
For example, services like telepresence,
videoconferencing and unified communications
are being driven by new user groups, often in
new regions.
How to manage it all?
Pressure from all sides is leading network
operators and other service providers to
“In a managed services arrangement, third-party specialists perform
activities, processes or functions, which, in a classical operator/supplier
model, are carried out within the operator’s own organisation.”
1
The report is available to download free to all employees of TM Forum member companies by registering on our website and can be purchased by
non-members from www.tmforum.org/IRmanservices2013
6 QUICK INSIGHTS
Report prepared for Tomasz Fidecki of Cisco Systems. No unauthorised sharing.
consider more partnerships with third-party
managed service providers. In a managed
services arrangement, third-party specialists
perform activities, processes or functions,
which, in a classical operator/supplier model,
are carried out within the operator’s own
organization. Managed services are closely
aligned with outsourcing and the two terms are
often used interchangeably.
According to TM Forum’s Business
Partnering Guide (TR211), which was revised
in Septmber 2013 and is part of TM Forum’s
B2B2X Accelerator Pack (see page 13), “It
is crucial that organizations focus on core
competency and partner to gain access to the
competencies outside of that. In today’s digital
services economy no single company can now
survive as an independent entity and succeed
for a sustained period.”
The industry has embraced managed
services for many years. According to the
Information Services Group Outsourcing
Index, formerly the TPI Index, average value
of managed services contracts in global
telecommunications and media in 2013 was
$2.59 billion. This is the third largest industry
segment, behind financial services ($5.3 billion)
and manufacturing ($3.48 billion).
TM Forum has conducted extensive research
into managed services in the communications
industry for several years. Our Insights
www.tmforum.org
 Report prepared for Tomasz Fidecki of Cisco Systems. No unauthorised sharing.

The new objectives of improving customer experience

and enabling new business opportunities are increasing

Research report, Managed services: Assuring Figure 1-2: Overall drivers for managed services engagements
customer experience from end-to-end 1, finds
that the main drivers for managed services Improving operational
are still the traditional objectives of improving excellence
operational excellence (88 percent), reducing
operating expenditure (54 percent) and Reducing OpEx

improving network/service performance

(44 percent). However, the new objectives of Improving customer
experience
improving customer experience (52 percent)
and enabling new business opportunities Enabling new business
(50 percent) are increasing over previous years. opportunities

(See Figure 1-2.)

Improving network /
This is a major change from the traditional service performance
model of providing all services in-house. In
the new digital world, service providers will Reducing CapEx
bundle internal and external services, either
direct to customers or through an industry 0% 20% 40% 60% 80% 100%
specialist provider.
The pace of communications and digital
services has changed so much that no single
organization can deliver everything their
customers want without forming partnerships.
However, the historical approaches to
establishing partnerships are slow, complex,
expensive and brittle, and they’re not useable
in the new digital ecosystem.
In the next sections, we will discuss the
new industrialized approach that’s needed for
network operators simultaneously looking for
ways to improve their business and reduce
operating expenditure.

“The historical approaches to establishing partnerships are slow,

complex, expensive and brittle, and they’re not useable in the new
digital ecosystem.”

www.tmforum.org QUICK INSIGHTS 7


MANAGED SERVICES:
STRATEGIC CHOICES, BIG BUSINESS IMPACTS
Section 2
Getting to the core with managed services
Managed services started off in the early
1980s mainly as outsourcing of the IT function.
IT remained on premises and was largely
unchanged, but was managed at lower cost
by a managed service provider. In the 1990s
offshoring was introduced, which led to entire
business processes being transferred to a
facility operated by a managed service provider
in a foreign country with lower labor rates, with
little change in the actual processes. These
early approaches are sometimes described as
‘Managed Services 1.0’.
The second wave of managed services,
‘Managed Services 2.0’, emerged in the mid-
2000s as a continuation aimed at using the
managed provider’s skills to improve efficiency
and further reduce costs. There was particular
focus on the network infrastructure and related
processes. Contracts also included some
modernization of systems originally provided
by the managed service provider. They were
technical in nature and based upon operational
service level agreements (SLAs), such as
system availability, responsiveness
and defects.
Although the drive to improve efficiency
and cut operating expenditure remains, more
advanced organizations are now gradually
moving to ‘Managed Services 3.0’. This is
aimed at improving the operator’s business
performance by enhancing the overall
customer experience, in order to protect and
grow revenues. It builds on the operational
excellence of the previous wave, rather than
replacing it.
The focus is on adding value for customers
by introducing new lines of business,
applications, platforms and content. This
involves managed service providers taking
responsibility for entire parts of the operator’s
infrastructure and business processes, and
sharing the risk. This is essential in order to
8 QUICK INSIGHTS
Report prepared for Tomasz Fidecki of Cisco Systems. No unauthorised sharing.
meet the major business objectives of the
operator, not just its operational objectives.
The managed service provider acts more
as a business partner than a supplier. Each
party’s strategy and objectives must be aligned
with each other. Key performance indicators,
key quality indicators and SLAs are aimed
at achieving tangible measurable business
outcomes.
What is core?
The first step in considering the use of
managed services is to make hard decisions
about what is core to the business and should
be retained, and what can be better handled
by third-party specialists. Telecommunications
was one of the first industries to aggressively
adopt offshore and lower cost delivery models,
sending many back office functions overseas.
However, the industry has lagged behind other
sectors in recent years.
In the past, companies delivering consumer
goods considered manufacturing to be core.
However, they came to realize that it adds little
value for the customer, so they outsourced
the entire manufacturing business process to
contract manufacturers, who bring economies
of scale and specialist manufacturing
expertise. Those companies were then free
to concentrate internally on innovation and
design, brand building and marketing, which
were core to their businesses.
It is harder to determine what’s core and
non-core in telecommunications, but the
industry is working on it. For example, British
service provider EE has struck a $414 million,
multi-year contract with Nokia Solutions
and Networks (NSN), under which NSN will
modernize EE’s 2G network (a Managed
Services 2.0 approach). It will also provide the
antennae and network security software for the
next stage in the expansion of its new 4G LTE
www.tmforum.org

The biggest issue for most network operators is
ownership and management of the physical network
network (a Managed Services 3.0 approach).
EE shares basic cell tower infrastructure with
its rival, Three, so the infrastructure itself is
clearly non-core. However, as a core activity
EE seeks to provide different services to its
customers, based on the speed of rollout,
spectrum and core network functions.
Setting goals
The next step is to consider what business
goals the service provider wants to achieve.
The goal could be better customer experience,
getting a new service to market quickly,
making new content available, shorter
resolution times/more one-stop resolutions
rather than escalation, or reduced churn rate.
The goal could be achieved by leveraging
specialist expertise, economies of scale,
access to or ownership of content, or local
presence. For instance, it may not be financially
viable to locate field engineers in every
international territory, so the network operator
might turn to a partner who could provide
specialists in each local territory.
The biggest issue for most network
operators is ownership and management of the
physical network. Many service providers have
chosen to concentrate on extracting value from
their brand and customer relationships, so they
are outsourcing their networks, which is how
Ericsson, traditionally a telecommunications
hardware supplier, became a managed service
“It is absolutely essential that operators seek continual improvement in operations
and business outcomes throughough the life of the partnership.”
For a closer look at Ericsson’s managed services business, please see the Case Study Handbook 2014: www.tmforum.org/CSH2014. It is available free for everyone to download.
2
The report is available free to download to all employees of TM Forum member companies by registering on our website and can be purchased by non-members from
3
www.tmforum.org/QImanagedservices2013
www.tmforum.org
Report prepared for Tomasz Fidecki of Cisco Systems. No unauthorised sharing.
provider and the largest network operator in
the world.2
When it comes to more strategic
partnerships aimed at achieving business
outcomes, TM Forum’s Quick Insights report,
Managed Services: What’s Hot and What’s
Not 3 gives examples of non-core, but critically
important, areas in which strategic partnership
relationships have been created. These include
opening a new line of business for a mobile
provider in the pay TV domain; setting up,
operating and managing a wireless line of
business for a cable company; finding the
most sensible way to integrate the cloud in
the operator’s infrastructure; establishing and
managing a supply chain for new content;
bringing a machine-to-machine product to
market; and designing and operating a new line
of business for eWallet and digital payments.
Optimization and innovation
In order to respond effectively to the pressures
outlined at the beginning of this report, it
is absolutely essential that operators seek
continual improvement in operations and
business outcomes throughout the life of
the partnership. Merely getting the managed
service provider to do the same for less will
miss most of the potential for customer
experience improvement and cost reduction.
It is critical to carefully review documentation
on any existing business processes to be
QUICK INSIGHTS 9

MANAGED SERVICES:
STRATEGIC CHOICES, BIG BUSINESS IMPACTS
handed over. Merely transferring responsibility
for inefficient, ineffective or incomplete
processes will achieve only a fraction of the
improvements and savings available.
It is also essential that partnerships are
set up to require the managed service
provider to update processes and systems
to industry-standard or above. TM Forum’s
Business Process Framework (eTOM), part
of the Frameworx suite of best practices and
standards (see page 17), can play a crucial role
in this task. It enables both parties to map the
processes onto the Framework’s templates,
allowing them to understand what is missing
and where there are overlaps or duplications.
This involves taking all opportunities to
harness available innovation. One of the
most powerful aspects of the best managed
services partnerships is the expectation that
the managed service provider will transform
the business it’s managing. The managed
service provider often takes over responsibility
for dozens, if not hundreds, of aging legacy
systems, moving an entire part of the business,
including the underlying infrastructure, onto a
simpler, modern platform.
“One of the most powerful aspects of the best managed services
partnerships is the expectation that the managed service provider will
transform the business it’s managing.”
10 QUICK INSIGHTS
Report prepared for Tomasz Fidecki of Cisco Systems. No unauthorised sharing.
Service providers need to ensure that
their managed service provider has teams
responsible for driving innovation. They must
understand the service provider’s business
challenges and objectives, and they must
incorporate innovative new products, services
and processes into the service provider’s new
offerings. This will add value and enhance
customer experience, which we will discuss in
more detail in the next section.
Taking this sort of Managed Services 3.0
approach requires a shift in internal
management of the partnerships. There has
been a tendency in the past for management
teams to decide to embrace managed
services in a particular area and then delegate
implementation to operational staff. This can
lead to implementation of a solution away
from the business objectives sought by
management and toward Managed Services
2.0-type contracts.
This will not achieve the sort of
transformation required, so it is important for
management to oversee implementation to
ensure that the partnership created will meet
all their required objectives.
www.tmforum.org
 Report prepared for Tomasz Fidecki of Cisco Systems. No unauthorised sharing.

Customer satisfaction was the key goal, with every

single respondent citing it as a top concern

Section 3

Managing customer experience

As competition continues to intensify, Figure 3-1: Top three drivers for current customer experience programs
improving customer experience is high
on the agenda of all service providers.
Increase customer
TM Forum’s Insights Research report, satisfaction
Customer experience: Hitting a moving target 4,
surveyed 18 network operators and asked
Reduce operating costs
respondents for the top three drivers of their
customer experience programs (see Figure 3-1).
Not surprisingly, customer satisfaction was Increase revenues
the key goal, with every single respondent
citing it as a top concern. Reduction of
operating costs, increasing revenue, Differentiate from
competitors
differentiating themselves from competitors
and improving brand equity were important too.
“Markets have increasingly matured, Improve brand equity
and service providers have become much
more aware of the importance of customer 0% 20% 40% 60% 80% 100%
satisfaction, the differentiating capability of
Source: TM Forum, 2013
customer experience strategies, the potential
for longer term profitability, and the impact on
Figure 3-2: Top three challenges for customer experience programs
brand,” the report explains. “In addition, there
is more recognition that customer experience
spans many of the functions in a service Data integration
provider business, not just the contact center
and retail.” Legacy systems
integration
However, many service providers are still
struggling with customer experience. Some Cross-organization
of their top concerns include the difficulty priorities

of integrating data, organizational issues,

End-to-end control
operational silos and a lack of skills (see
Figure 3-2).
The difficulties of managing customer Critical skills availability
experience are prompting some operators
to turn to managed services. TeliaSonera, Meeting cost/time goals
for example, is using Ericsson’s Customer
Experience Management solution, which COTS functional fit
includes services such as business process
refinement and systems integration. 0% 10% 20% 30% 40% 50% 60%

Source: TM Forum, 2013

The report is available free to download to all employees of TM Forum member companies by registering on our website and can be purchased by non-members from
4

www.tmforum.org/insightsCEM2013

www.tmforum.org QUICK INSIGHTS 11


MANAGED SERVICES:
STRATEGIC CHOICES, BIG BUSINESS IMPACTS
The partnership will address subscribers’
demand for high levels of service quality and
user experience by more efficiently resolving
customer experience issues arising from
network quality and customer support issues,
according to the companies. The result
includes reactive practices, designed to handle
particular network incidents or customer issues
and resolve them in a timely manner. More
importantly, it involves proactive practices
intended to prevent service quality deterioration
so as to avoid users being affected.
TM Forum offers help to service providers
and their partners through the latest version
“The result includes reactive practices... More importantly, it involves
proactive practices intended to prevent service quality deterioration so
as to avoid users being affected.”
12 QUICK INSIGHTS
Report prepared for Tomasz Fidecki of Cisco Systems. No unauthorised sharing.
of the Customer Experience Management
Guidebook. The guidebook documents the
recommended approach for transitioning from
managing the customer’s experience at any
given instant in time at distinct touch points
to proactively managing engagement – that is
every interaction with a customer – over time.
A new Customer Experience Lifecycle
Model defines interactions with the customer
across multiple phases, and 250 new metrics
enable actionable insight. Both can be
downloaded by all employees of TM Forum’s
member companies from www.tmforum.org/
customerengagement
www.tmforum.org
 Report prepared for Tomasz Fidecki of Cisco Systems. No unauthorised sharing.

The partnering process has to be repeatable,

scalable and industrialized

Section 4

How to build a successful managed services partnership

The days of setting up internal teams to Figure 4-1: Overview B2B2X Accelerator Document Pack
negotiate managed services contracts and
large project teams to implement them are B2B2X Accelerator Schematic
long gone. Speed and agility are essential in
the new digital world. Using established tools B2B2X
can save a lot of time and effort, reducing risk Business Pack Accelerator Developer Pack
and keeping the costs down. Introduction

In the past, managed service agreements

have taken up to 18 months to negotiate
B2B2X Partnering Guidebook: B2B2X Developer Pack
and implement. Large teams of people have Concepts and examples Part 1: Concepts
developed a unique solution designed to meet (TR211) Part 2: Step by step guide
the specific needs of a service provider and the Part 3: Where to find what
particular business process or service covered.
B2B2X Partnering Guidebook:
It’s a slow process, which can lengthen time Step by step guide
NBN Co
Contributions Digital Services
to market. That’s simply not a sustainable
API Specification
business model in a digital world. BT/NICC SM-API
In a digital services ecosystem, agreements White paper: Contributions
Implementing Wholesale
with many partners may be necessary to
B2B for a Network Operator NTT
deliver a single service. That means the DBP2 Contributions
SM API materials
partnering process has to be repeatable,
scalable and industrialized. It’s the only way for
service providers to remain competitive.

B2B2X Partnering Accelerator

TM Forum’s Collaboration Community has
developed a comprehensive set of tools
and best practices in the Forum’s B2B2X
Accelerator Pack (see Figure 4-1). It’s full of
guidance drawn from real-life deployments,
including the B2B wholesale model, developed
within the Forum, parts of which are used by
some 200 operators worldwide in their day-to-
day operations.
The Partnering Accelerator aims to support
business goals by enabling:

n quick set-up of partnering arrangements

n efficienton-boarding of new partners through
a consistent, repeatable process
n partners to swap out the products
n evolving partnerships.

www.tmforum.org QUICK INSIGHTS 13


MANAGED SERVICES:
STRATEGIC CHOICES, BIG BUSINESS IMPACTS
It introduces the concept of PaDIOM – a
generalized lifecycle model that covers
partnering, design, integration/implementation,
operations and monetization. Partnering and
monetization are very much the responsibility
of business managers. In contrast, design,
integration/implementation and operations are
the responsibility of technical teams.
The process of handover from the business
functions to the technical functions so that
they can initiate design is a critical step. This is
best documented in a partnership or business
collaboration agreement, which describes what
has been agreed from a business point of view.
The technical people then build an operational
solution from pre-built software components
and business process patterns.
According to the Partnering Accelerator,
partnerships should include business,
commercial, financial and operational models,
and should include a technical collaboration
agreement, which specifies application
program interfaces (APIs), and information and
integration technology patterns and profiles.
The Collaboration Community’s partnering
work has produced close agreement on the
operational processes needed for any sort
of managed service, and these have been
systematically documented. Procedures such
as billing, repair, provisioning and modifications
are expressed in templates that ask a set
of questions, which are answered by either
ticking boxes or selecting from a drop-down
list of prepared answers. Completing this
process generates a description of the service,
including components, business agreements,
constraints that must be addressed and
interfaces needed to support it.
The output from this process is a partnership
agreement that is distributed to technical
departments, which then use it online to
configure existing reusable components to
14 QUICK INSIGHTS
Report prepared for Tomasz Fidecki of Cisco Systems. No unauthorised sharing.
create services. The result is a well thought-
out business collaboration structure that is
repeatable.
In the new digital economy it is crucial to
set up a partnership platform that will allow
multiple parties to work together. The tools
and patterns must, therefore, allow additional
parties to join, operate for a period, and then
leave, quickly and easily, without absorbing
significant management, technical and
administrative effort.
As well as individual partnership lifecycles,
individual services may be added, marketed,
operated and replaced by others. The
Partnership Accelerator provides a generalized
lifecycle that can handle any reasonable
concurrent mix of partners and services.
For more information about the B2B2X
Partnering Accelerator, please go to
www.tmforum.org/B2B2XPartneringAccelerator
to download the documents, or contact Dave
Milham, Chief Architect, Service Provider
Engagement, TM Forum, via
dmilham@tmforum.org
Building SLAs
The move away from operational objectives
to business objectives based on customer
experience renders traditional service
level agreements (SLAs) inappropriate for
measuring performance of a managed services
partnership. TM Forum’s Service Level
Agreement Management Handbook (see panel
opposite) says that, “Modern communications
products have led to a requirement for
indicators that are focused on product quality
rather than network performance; the focus of
customers has become quality of experience.”
Key quality indicators (KQIs) are metrics
which capture aspects of service performance
that are made available to customers and are
expressed in terms that are meaningful to
www.tmforum.org
 Report prepared for Tomasz Fidecki of Cisco Systems. No unauthorised sharing.

SLAs document the common understanding

of all aspects of the service

them. They are simple to understand
and avoid technical jargon specific to the
service provider.
KQIs draw their data from a number of
sources, including key performance indicators
(KPIs), which are metrics that capture some
aspects of the performance of one or more
resources, including managed services.
Both KQIs and KPIs make use of underlying
SLAs, which are formal, negotiated commercial
contracts between partners. SLAs document
the common understanding of all aspects of
the service, and the roles and responsibilities
of both partners, from product ordering to
termination.
Operational KPIs are still relevant in modern
partnerships, as they underpin the business
outcomes. However, they are no longer goals
in their own right. SLAs can include many
underlying operational aspects of a partnership,
such as performance objectives, customer
care procedures, billing arrangements, service
provisioning requirements and so on.
Setting an example
TM Forum’s Case Study Handbook 2014 5
gives examples of the huge improvements
that are possible when the the right SLAs are
put in place. Although not specifically related
to managed services, they indicate the sort of
results that can be expected.
Reliance Communications, an integrated
telecommunications service provider with a
customer base of more than 134 million, mainly
in India, wanted to improve quality of service
for subscribers to help to differentiate itself in
the market. In particular, it wanted to attract
and retain customers.
It began a project in 2012 to use
TM Forum’s Frameworx suite of best practices
and standards (see page 17) to help design
architectural changes to allow it to transform

Using established tools saves time, effort and money

This release of TM Forum’s Service Level Agreement Management Handbook (GB917 3.1)
provides a full set of harmonized definitions of terms used in the field of SLA management to
simplify the wide range of interpretations in use today.
This single volume is designed to offer pragmatic, comprehensive guidance and can be
applied to SLA lifecycles of any type of service or product. The updated edition includes support
for modern, complex services, especially those that are not inherent in networking services and
services that are provided through a value chain of partners.
The handbook provides a full set of definitions, and updates on rules and methodology, for
the specification and development of SLAs, as well as useful tools such as matrices and
checklists for use in SLA management. It can be used by customers, users, user communities
and other consumer groupings, as well as service providers and solution vendors. In particular,
the standardization of measurements and methodology provides for more meaningful
comparisons between service providers and makes it easier for service providers and
customers to exchange SLA reports.
All employees of TM Forum’s member organizations can download it free of charge from
www.tmforum.org/SLAHandbook3.1, by registering on the website.

5
The handbook is available free for everyone to download from www.tmforum.org/CSH2014

www.tmforum.org QUICK INSIGHTS 15


MANAGED SERVICES:
STRATEGIC CHOICES, BIG BUSINESS IMPACTS
customer experience, particularly through
much better use of SLAs. The result was:
n Better control of payments, leading to faster
barring and un-barring of services. Previously
95 percent of cases were handled within five
minutes. Now 95 percent are handled within
two minutes
n The systems responsible for updating post-
paid customer agreement forms are now
much faster and 99.99 percent are dealt with
inside two hours. Previously 95 percent were
dealt with inside three hours
n The SLA governing the mean average
convergence/divergence for service closure
was improved to handle 95 percent of
instances in 30 minutes, up from 89 percent
in 30 minutes.
Similarly, Wellink, which specializes in
the development of software and process
applications for telecom operators and other
major organizations, used TM Forum’s
Business Process Framework, part of the
Frameworx suite, to improve service quality
monitoring for IP services for Rostelecom,
Russia’s largest communications operator.
The main goal of the project was to increase
customer loyalty and enhance the competitive
differentiation of Rostelecom’s services,
including addressing customer dissatisfaction.
The company lacked the tools to monitor and
visualize end-to-end customer service quality,
while localizing problems was taking longer
than was acceptable.
The project gave customers access to a
service quality view and real-time statistics, as
well as improved monthly SLA reports. This
visibility helped to more easily resolve conflicts
between the provider and consumers.
As a result, Rostelecom raised its standards
of service quality for several offerings,
16 QUICK INSIGHTS
Report prepared for Tomasz Fidecki of Cisco Systems. No unauthorised sharing.
enhanced its competitive position, clearly
delineated service responsibility, provided
transparent service quality management and
decreased operating expenditure.
Conclusions and recommendations
Building an effective managed services
partnership strategy is essential for
communications service providers to transform
into digital service providers. Choosing the right
non-core areas of the business in which to set
up managed services partnerships is essential.
Choosing the right partner to take
responsibility for the whole area and share
responsibility for achieving a clear, measurable
business outcome is key. This involves
transformation of that area to improve the
customer experience and grow revenue, not
just reducing costs.
Service providers should use established
tools to save time and effort, reduce risk and
keep costs down. They can make the whole
partnership lifecycle an industrialized process
that harnesses pre-built components. They
should establish a platform on which they can
create an entire ecosystem. This will allow
them to manage a mix of partner and service
lifecycles and give them the speed and agility
they need to compete.
As a fully digital industry, telecommunications
has more opportunities to gain from effective
managed services partnerships than other
industries. However, having pioneered the
use of managed services, it has fallen behind
other industries, who are moving to Managed
Services 3.0.
It is essential that service providers move
quickly toward establishing managed services
partnerships based on business outcomes.
However, the whole lifecycle must be managed
to realize significant benefits and complete the
transformation into a digital enterprise.
www.tmforum.org
 Report prepared for Tomasz Fidecki of Cisco Systems. No unauthorised sharing.

What’s new in Frameworx 13.5 and how can it help you?

Frameworx 13.5 centers around the crucial issues facing
service providers of all kinds in an open digital economy.
These are reflected in TM Forum’s three Strategic Programs:

n Agile Business and IT Program focuses on improving

operational agility while reducing cost and risk
n Open Digital Program is designed to drive revenue growth
for new digital services
n Customer Engagement Program targets better market
share retention and greater growth.

Frameworx was created by and is constantly evolved to meet

the changing needs of TM Forum’s members, who include
all sorts of service providers, software suppliers, integrators,
universities and enterprises. Members set priorities and
lead collaborative project groups to implement the work, and
create updates to the standards and best practices.

While Frameworx major releases are published every six
months, some features in Frameworx 13.5 were developed
in short-term, agile-style development projects and have
been made available to the broader membership several
months in advance.
Frameworx releases cover the full suite of TM Forum’s best
practices and standards, including our core Frameworks –
Business Process, Information, Application, and Integration
– as well as our Business Metrics and our broad range of
best practices. Frameworx 13.5 is no exception, with 47
new items introduced across the full range.
Facts about Frameworx 13.5:
n 27 projects were chartered to create this release
n 141 companies participated in creating the deliverables
n About 380 individuals joined projects in the community –
approximately 40 percent of them were active contributors,
while the rest had the opportunity to observe and review,
comment or ask questions.
New B2B best practices and APIs
TM Forum has defined a comprehensive set of Accelerators
– tools, methodologies and standardized interfaces for
creating and managing partnerships in a B2B2X environment
with multiple partners, in a repeatable manner, and at
industrial scale. They include new REST 2 application
program interfaces (APIs) for catalog management, trouble
ticketing and partner ordering.
Big Data Analytics Guidebook
Unleash the power of big data held by service providers
using the new reference model, methodology and more
than 30 use cases. This document defines a crucial linkage
between the business value that analytics can unlock
and the big data technologies and information sources
represented in the document’s Big Data Reference Model.
Threat Intelligence Dashboard and ROI Calculator
The Cyber Security Readiness Dashboard uses newly
defined metrics to communicate cyber security readiness
for C-Level management. The dashboard reduces risk by
providing insight into issues that could have financial, legal/
compliance and human safety impacts.
Customer Experience Management
Take a new approach to managing customer engagement
with integrated Maturity Model, Lifecycle Model and
Metrics. This new version of the guidebook (incorporating
250 new metrics) marks the first step in the transition from
managing customers' experiences in a snapshot, piecemeal
way toward managing engagement with customers across
their entire lifecycle.
Core Frameworks Enhancements
There have been key new additions to all four Frameworks
to extend their application and make them more immediately
useful. For more information about how they apply to you and
your business, please see www.tmforum.org/Frameworx13.5

www.tmforum.org QUICK INSIGHTS 17

 Report prepared for Tomasz Fidecki of Cisco Systems. No unauthorised sharing.

Sponsored feature

Outcome based Outsourcing

Managed Transformation - A “failsafe” IT-Business alignment Journey
By Emmanuel Amamoo-Otchere, Director, BSS Professional Services

Changing Times
The age of Communications has opened
up new challenges for telecom operators
with intensified competition from
alternate service providers, i.e. Over The
Top, Applications Specific Providers etc
and led to an ever-changing Information
& Communications Technology
environment. This has created and
continues to deliver enormous and
pressure on Telecom operators
businesses by constantly adapting.
Conversely, this development has
motivated businesses to seek out new
business models and radical ways of
managing communications technology.
Similarly, vendors and partners that
work with Communication Services
Providers (CSPs) are turning towards the
usage of flexible and hybrid Outsourcing
business models to align, respond better
by being agile to create better value from
partners.
Change Management Projects
(Transformation) Vs. Managed
Transformation (MT) Journey
Today, the ability to manage business
evolution quickly, effectively and
confidently is key to organizational
success. Yet change is complex
and affects business operations in
significantly unpredictable ways, however
an almost stagnant and non-competitive
telecommunications environment,
but unsuited for this new age where
dynamism, agility and responsiveness are
not only characteristics of a BMW vehicle,
but of telecom businesses as well.
Alternatively, Managed Transformation
(MT) is a new form of hybrid service
relationships that bring agility and
responsiveness at the partnership, delivery
and operations level in order to manage
ingress activities and egress to business
results as part of ensuring that changing
operational strategy to deliver the vision of
CSPs can be consistently fulfilled.
Combined with flexible Outsourcing
models, the value proposition for MT
keeps the CSP truly focused on its
core by ensuring alignment to business
strategy is ingrained into the engagement
model. Two-sided proactive engagements
gives rise to the new wave of Managed
Services (Outsourcing) founded on
outcomes, alignment and enablement.
This ensures partnerships struck between
CSPs and Vendors/Partners leverage
competencies to diffuse challenges,
Figure 1: Varying Transformation needs for BSS for CSP (will differ based on market conditions)
Market Position Market Leader
BSS State 
   
  

create new avenues of serving customers
and drive “WIN-WIN” cooperation.
MT Journeys
Is there readiness for a paradigm shift in
CSPs’ business-technology management
program from Transformation Projects
to MT Programs? Yes! Uptake in MT
programs as an embedded component
of Outsourcing models has steadily
increased from what can be referred
to as the first formal engagement in
2003/4 between Airtel India and IBM. An
MT governance and business operating
model offers the potential for higher-value
benefits that go beyond pure cost savings
with the capability to track and manage
resources and outcomes. It also allows
Partners greater freedom to leverage
capabilities and sub-vendors to derive
solutions that fulfill strategic outcomes.
MT views
Strategies are key starting points to true
transformation journeys. The market
conditions and state of operations of
CSP will vary (see Figure 1 – Reference
Green Field Niche Innovation Leader
    
      
 
 
  
 
 


it remains largely as the traditional   

 

 
  

approach with a as a start-to-end plan of
handling evolution or revolution.
Change management when seen as
a plan to complete is typically flagged

   
 
  
 
  

 
      
     
 

 
  
  


 


as a Transformation. It is implemented
through discrete projects (the Change-as- 
        
a-Transaction approach) tied with specific     

milestones and delivery factors that are         

cast in ink from planning stages. This Transformation Evolve Evolve Revolution Revolution

approach has been a success in the era of Strategy

18 QUICK INSIGHTS www.tmforum.org

 Report prepared for Tomasz Fidecki of Cisco Systems. No unauthorised sharing.

to Business Support Systems of
various CSPs) based on the competitive
landscape they operate in.
There is no clear and single MT
offering that can be considered as a
standard offering to be applied to all CSP
situations. MT has to be driven based
on the understanding of CSPs business
strategy and the expected outcomes and
results required to driving the strategic
vision. Combining the key facilitators for
Managed Services and Transformation
a CSP can practically increase the
Total Value of Ownership (TVO) of
Outsourcing.
CSPs seeking to increase monetization
and commoditization of technology
services in order to align technology
investment with growth are adopting
MT to replace the complex silos of
engagement that constrict IT from being
agile and responsive to business. With
focus shifting to scores of new service
models, CSPs need to manage greater
complexity, flexibility, and in tandem,
a variety of technologies to serve their
customers. Achieving the feat of the
combined “complexity management”
in today’s CSPs environment with
maximizing return on investments and
capacity is exactly where MT shines.
Managed Transformation, the
Outcome Model
As CSP spending on external services
increases to about 70% (Reference
Gartner 2013), MT variants of
Outsourcing will become the choice of
smart CSPs seeking to truly maximize,
guarantee and reduce the business risk
Outsourcing and its benefits.
The outcomes promised through an
MT Outsourcing service delivery model
are driven heavily by joint responsibility
though, similar to Outsourcing
governance structures, but wit better
enablement of both parties to freely focus
on their cores without “baby sitting”.
The success of an MT type
engagement is bound on willingness
and trust, the Vendor or Partners ability
to focus more on outcomes rather than
project based transformation activities
is what results in the translation of
challenges into realized opportunities.
This outcome based Outsourcing model
positions IT as a service-center aligned to
growth.
MT as a catalyst for New Services
Creating new services is a complex
venture in this age by comprising
technology capability and business
flexibility as joint ventures. New
generations of growth services are
increasingly driven by OTT players
who are leveraging the Internet as a
platform to initiate cross boarder social
interactions.
Using the MT engagement approach
(Figure 2), CSPs can embark on rolling out
new services more easily with less risk.
TMForum frameworks brings enabling
digital services blueprints and roadmaps,
well mapped out into applications and
integration needs to enable CSPs embark
on the journey to digital realization and
richer services.
With partners like Huawei’s, with
strong and continued alignment to
frameworks such as eTOM, a global

Figure 2: Sample MT Approach

Transformation Strategy, Plan and Commit Execute & Enhance

Business

Define & Design

Business
Flow

Understanding, analysis & reference Develop Build & Operate Business

Business- Impact
assessment of Business strategy Business Milestones & Plan Architecture Roadmap Foundation
Technology assessment
& services plan (Evolution & Revolution Strategy Delivery Plan Development - Establishment
delivery model review program
Plan) (ADP) based BORD
on Business (BTDM)
finalization with (Consider
Milestones Implementation Transformation
Benefit Strategy
drops, & CSI
AS-IS prioritization Execution
Technology

program)
Technology
Program

Continual
understanding &
Define TO-BE (Transformation Technology Services
assessment Gap Technology Architecture Plan (Transformation (Transformation Foundation Technical
Build Strategy) Roadmap)
Analysis (TAP) Benefit drops) Establishment Strategy
Align to Business
implement
intentions

www.tmforum.org QUICK INSIGHTS 19


Sponsored feature
Outcome based Outsourcing
MT, a Fail-safe IT Journey
experience and continued innovation,
CSPs can fulfill their quest to launching
new services without risk of unknown
impact on business, and the requisite
competencies, skills and products to
support new services.
MT Opportunities
MT adds “flexibility” to the traditionally
“rigid” Outsourcing model using a
pyramid of result and performance-related
objectives to focus on value.
The opportunities and trends with MT
also touch on the four I’s the current
age of CIOs need to focus on; namely
– Innovation, Insight, Integration and
Infrastructure. A survey of opinions of
nearly 100 Chief Technology Officers and
Chief Innovation Officers (CIOs) revealed
key waves that will drive business
growth tilt towards more Innovation.
Key innovation domains identified during
the survey include; Customer-based
innovation; Proactive business model
innovation; Frugal Innovation to overcome
existing bottlenecks; High Speed/
Low Risk Innovation; and Integrated
Innovation. Given the complexity of
the four I’s and seeing the depth and
involvement required to actualize
strategies around these I’s, more
importantly innovation, it’s obvious that
with the average time in office of CIO’s
“Achieving the feat of the combined “complexity management” in
today’s CSPs environment with maximizing return on investments and
capacity is exactly where Managed Transformation shines.”
20 QUICK INSIGHTS
Report prepared for Tomasz Fidecki of Cisco Systems. No unauthorised sharing.
dwindling down to 1.9 years, the time
is too short a period for CIOs to really
deliver that business aligned IT.
Using MT, Outsourcing engagements
can support CIOs to translate business
strategy into technology investment
blueprint, bring ownership to execution
alignment of the blueprints as well as fast
track CIOs into championing innovation
that drive their mandate of value add.
Conclusion
The scale and granularity of MT outcomes
and value are determined by the CSPs’
strategic focus, functional objectives
feeding into the strategy and activities
that technology functions such as IT
and Business Support System (BSS) can
influence through automation to fulfill and
assure requirements of market, customer
and revenue plans.
For Partners like Huawei, MT
is about capability to actualize a
strategy plan. From the angle of BSS
and the underpinning operations
support infrastructure, bringing the
right mix of Outsourcing business
models, competencies, capabilities
and experience to partnerships of
Outsourcing is a major asset for CSPs
to realize IT-business alignment and
the responsiveness required to survive
and thrive in the era of smart business.
Supporting CSPs to architect, deliver
and operate plans of actions in a staged
manner will mean bringing partnership
that understand and work with the best
of the industry in every aspect of the
meaning of partnership, with the intention
of delivering performance results across
the TVO model.
Partners will risk too much if
investment into MT engagements
are not well planned with deep CSP
business understanding. With Huawei’s
depth of industry association and focus,
complimenting CSPs with strong and
competing products and solutions in the
domain of BSS and MT outsource models
implies a commitment to continually drive
CSP business performance and survival
through a “marriage” for WIN-WIN. Using
MT engagement, CSPs can now boldly
embark on launching or transforming
current services that can transition them
towards the digital age.
The freedom MT creates for CSPs
is significant in telecom operations
management cost reduction, richer
business-technology alignment and
proactive responsiveness of technology
to business needs.
Managing outcomes through staged
performance results is a superior
Outsourcing model to enable support
CSP business strategy.
www.tmforum.org
 Report prepared for Tomasz Fidecki of Cisco Systems. No unauthorised sharing.

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Customer experience: Hitting a moving target

This latest, in-depth Insights Research report looks at how service providers are working to
INSIGHTS improve customer experience to differentiate themselves, increase profitability and expand their
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The report offers pragmatic recommendations about how to get the biggest benefits from
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Sponsored by:
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This is a clear-eyed analysis of how the digital services market is shaping up after the initial
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at some examples.
Analysis:
What we’ve
learned from
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The regulatory and legal framework will also have a big bearing on the profitability and viability of
Insights:
M2M services of all kinds – as detailed in the second section.
Digital disrupters
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The third element looks at how a number of digital disruptors are changing lives and business
Viewpoint:
KPN Group’s
Erik Hoving on
models. Coursera’s mission is to offer a free college education to everybody and make money.
living in a world
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Sponsored by:

AFTER THE
HYPE, WHERE’S markets to reap huge rewards.
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Exploring the evolution of digital services
Everyone can download this new edition of Digital Life free from www.tmforum.org/DL2013

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This brand new edition is packed with innovative and inspirational success stories from different
CASE STUDY kinds of service providers around the world. All have used TM Forum’s assets and activities in
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Less risk, less
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Customer
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Partnerships
research in pharmaceuticals and the platform is sufficiently flexible for use by other verticals.
secure fast
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INNOVATION
Everything that can be digital will be. in that sector. India’s Reliance Communications worked to identify and fix the causes of service
AND SUCCESS
We’ve seen the future. And it’s digital. In just
ten years, the way we communicate,
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There are five core principles of the Initiative:
violations to ensure, for example, service closure was improved to handle 95 percent of instances
been changed forever. And that’s just the start.
From Argentina to New Zealand
The Digital Revolution is transforming our
within 30 minutes.
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TM Forum’s Digital Services Initiative focuses

on overcoming the end-end management
These and many more success stories are available free to everyone to download from
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challenges of complex digital services,
enabling an open, vibrant digital economy.

For more information on the TM Forum Digital Initiative visit www.tmforum.org/digital

DigitalServicesAD2012.indd 1 11/23/12 10:51 AM

Visit www.tmforum.org/researchpublications to find out more

 Report prepared for Tomasz Fidecki of Cisco Systems. No unauthorised sharing.

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