Applying eTOM (enhanced Telecom Operations Map) Framework to NonTelecommunications Service Companies - An Product/Service/Solution Innovation Example Alan McSweeney As Its Simplest, Innovation Is … • A good idea successfully implemented and operated • This implies the need for effective processes for generating and identifying good ideas and for bringing them to fruition November 21, 2019 2 Successful Innovation Means … • Having a function and associated processes for Product, Solution and Service Lifecycle Management (PSSLM) − Structured approach to the introduction of innovations within product/service/solution offerings from concept to delivery and operation • There is no easy way to creating a new product/solution/service designed for large-scale sale and use November 21, 2019 3 Move To Service Management Trends in information technology such as cloud and XaaS are moving companies from product to service and utility suppliers • Evolution of telecoms companies mirrors the path many companies want to follow • − Move from provision of telecoms links to services (voice, data, television, gaming, wireless) − Telecoms industry can provide a model for business processes and best practices for other industries looking to move to greater service orientation Move to services can be challenging for companies • A structured approach to innovation in important in such a move • November 21, 2019 4 Spectrum Of Product/Solution/Service Services Supplied As Part Of Solution Product Collection Of Products Provided As A Package November 21, 2019 Solution Solution As A Service (Cloud, XaaS, Utility Services, etc.) Limited Services Ongoing Services Utility Services Extended Services Such As Warranty And Support, Warranty Renewal 5 Migration From Products to Services Where Many Companies Are Now Product Where Many Companies Want To Be Solution Limited Services Ongoing Services Utility Services Need A Structured Process For Innovation To Achieve Services Vision November 21, 2019 6 Spectrum Of Product/Solution/Service Sell Me Products That I Will Use To Solve A Problem November 21, 2019 Sell Me A Solution To A Problem Take Responsibilit y For Operating The Solution To The Problem 7 Innovation Means … • Acceptance of change – innovation implies and requires change • Innovation exposes an organisation to change • A secondary affect of successful innovation is the willingness of an organisation to change • To be good at innovation means to be good at change • Innovation means welcoming change and being able to successfully deliver change • Innovation means continuously challenging accepted conventions • If you cannot change, you cannot innovate November 21, 2019 8 Changes Implied By And Required For Move To Utility Services Changes The Nature Of The Business Relationship With The Customer Changes The Nature Of Financial Relationship With The Customer Changes To The Organisation Cost Model Changes The Services Provided Changes The Information You Have On The Customer Implementing and Sustaining Underlying Organisation Change November 21, 2019 9 Changes Implied By And Required For Move To Utility Services • • • • • Changes The Nature Of The Business Relationship With The Customer: organisation becomes responsible for service management (availability, continuity, capacity, change, release, risk, security, access, facilities, compliance and many others) Changes The Nature Of Financial Relationship With The Customer: from initial payments and with smaller recurring component to near continuous payment for service Changes To The Organisation Cost Model: shift costs to organisation from customer as initial and ongoing investment required to generate recurring service revenue with consequences for cashflow and growth Changes The Services Provided: from initial supply with some packaged services and ongoing support/warranty to service management-oriented services Changes The Information You Have On The Customer: you know their pattern of usage of your service (product) and can obtain and exploit such insights November 21, 2019 10 eTOM (enhanced Telecom Operations Map) • Provides a detailed process framework for a telecoms utility companies that can be adopted by non-telecoms organisations moving to solutions as a service operating model − Developed by TM Forum - www.tmforum.org − eTOM http://www.tmforum.org/BusinessProcessFramework/1647/home.html • Reference framework that classifies and defines the business activities used by a company involved in delivering (online) services – three major process areas: − Strategy, Infrastructure and Product – concerned with planning and lifecycle management − Operations – concerned the core of operational management − Enterprise Management – concerned corporate or business support management • Offers the potential for non-telecoms companies to learn from an effective operational framework November 21, 2019 11 eTOM Business Process Framework Overview Operational Processes – Sales, Fulfillment, Assurance, Billing and Support Customer Strategy, Infrastructure and Product Strategy, New Ideas, Products And Associated Supporting Infrastructure Moved to Production and Steady-State Operations Operations Enterprise Management Fundamental Supporting Business Processes Needed To Run Any Business November 21, 2019 12 eTOM Business Process Framework - Detail Strategy, Infrastructure and Product Strategy and Commit Infrastructure Lifecycle Management Product Lifecycle Management Operations Operations Support and Readiness Fulfilment Assurance Billing and Revenue Management Marketing and Offer Management Customer Relationship Management Service Development and Management Service Management and Operations Resource Development and Management Resource Management and Operations Supply Chain Development Management Supplier/Partner Relationship Management November 21, 2019 13 eTOM Enterprise Business Process Model – Common Structure • • • eSample business process model has a three pillar structure that is common to other business process models Generic structure that forms a template for specific actualisations eTOM provides a detailed template for communications service providers that can be applied to other similar service companies Operational Processes With Cross Functional Linkages Vision, Strategy, Leadership, Business Management Management and Support Processes November 21, 2019 14 Sample Enterprise Business Process Models - 1 Business Environment Competitors, Governments Regulations and Requirements, Standards, Economics Customer’s Process Needs Core Processes Business Controlling Process Processes That Direct and Tune Other Processes Business Measurement Process Processes That Create Value for the Customer Customer Acquisition Product Delivery Order Fulfilment Customer Support Enabling Processes Processes That Monitor and Report the Results of Other Processes Processes That Supply Resources to Other Processes Channel Management Supply Management Human Resources Information Technology Business Acquisition Supplier’s Processes November 21, 2019 15 Sample Enterprise Business Process Models - 2 Align Supply Chain Innovate Plan Source Make Fulfil Customers Sell Build People November 21, 2019 Finance Information Environment Governance 16 Sample Enterprise Business Process Models – Common Structure Vision, Strategy, Business Management Operational Processes With Cross Functional Linkages Develop and Manage Products and Services Market and Sell Products and Services Deliver Products and Services Manage Customer Service Vision and Strategy Management and Support Processes Business Planning, Merger, Acquisition Governance and Compliance November 21, 2019 Human Resource Management Information Technology Management Legal, Regulatory, Environment, Health and Safety Management Financial Management External Relationship Management Facilities Management Knowledge, Improvement and Change Management 17 Achieving the Potential – New Product/Service/Solution Innovation Industrialisation and Productisation • Productisation is a pre-requisite for and an enabler of industrialisation Industrialisati on Common Implementation and Operation Approaches November 21, 2019 Productisation Defined Set of Products/Solutions/ Services and Packaging/Delivery Options 18 Innovation and eTOM • Innovation is about managing the value from new ideas • New and enhanced existing products, solutions and services are just one aspect of innovation • Product, Solution and Service Lifecycle Management (PSSLM) is a generalised view of completing the innovation process and achieving actualisation of ideas November 21, 2019 19 Migration From Products to Services Where Many Companies Are Now Product Where Many Companies Want To Be Solution Limited Services Ongoing Services Utility Services Use Appropriate Elements Of eTOM Process Framework To Achieve Services Innovation And Transformation November 21, 2019 20 Innovation Extends Creativity To Implementation And Generation Of Value Manage Sell Market Implement Verify Clarify Develop Discern Using a Structured Approach to Industrialising Innovation Maximises Value November 21, 2019 21 Where Organisations Look For Innovation • Product/solution/service innovation is just one aspect of a wider view of innovation November 21, 2019 22 Where Organisations Can Look For Innovation Finance Processes Products and Services Provision and Delivery November 21, 2019 Business Model How Do You Make Money? Networking and Alliances How Do You Work With Other Organisations For Mutual Benefit? Core Processes How Do You Create and Add Value To Your Products And Services? Enabling Processes How Are Core Processes Supported And Enabled? Product Performance How Do You Design Your Core Products And Services? Product System How Do You Connect Or Provide A Common Platform For Your Products And Services? Service How Do You Provide Value To Your Customers Beyond Your Core Products And Services? Channel How Do You Get Core Products And Services to Market? Brand How Do You Communicate Your Core Products And Services? Customer Experience How Do Customers Feel When They Interact With Your Organisation And Your Products And Services? 23 Product, Solution and Service Lifecycle Management (PSSLM) • PSSLM is concerned with the functions and processes need to define, plan, design, build, deliver, maintenance, manage revise and retirement of all products, solutions and services in the organisation’s portfolio − Enable the organisation strategic and business product/solution/service vision − Drive internal and customer-oriented processes to meet market demand and customer expectations November 21, 2019 24 Product, Solution and Service Lifecycle Management (PSSLM) • PSSLM belongs within Strategy, Infrastructure and Product/Solution/Service (SIPSS) function • Responsibilities of SIPSS function −Develop strategy −Commit to the organisation −Build and resources infrastructure - supports the delivery products, solutions and services themselves and their associated functional processes −Develop and manage products, solutions and services −Develop and manage the supply chain November 21, 2019 25 Strategy, Infrastructure and Product/Solution/Service (SIPSS) Function • Innovation – development of new products/services/solutions lie in SIPSS function • SIPSS divided into −Horizontal functional groups • Marketing and Offer Management • Service Development and Management • Resource Development and Management • Supply Chain Development Management −Vertical process views • Strategy and Commit • Infrastructure Lifecycle Management • Product, Solution and Service Lifecycle Management November 21, 2019 26 Strategy, Infrastructure and Product/Solution/Service (SIPSS) - Horizontal Process Functions and Vertical Process Views Strategy, Infrastructure and Product/Solution/Service (SIPSS) Strategy and Commit Infrastructure Lifecycle Management Product, Solution and Service Lifecycle Management Marketing and Offer Management Service Development and Management Resource Development and Management Supply Chain Development Management November 21, 2019 27 Strategy, Infrastructure and Product/Solution/Service (SIPSS) - Horizontal Process Function Details Marketing and Offer Management Market Strategy and Policy Product and Offer Portfolio Planning Product and Offer Capability Delivery Marketing Capability Delivery Product and Offer Development and Retirement Sales Development Product Marketing Communications and Promotion Service Development and Management Service Strategy and Planning Service Capability Delivery Service Development and Retirement Resource Development and Management Resource Strategy and Planning Resource Capability Delivery Resource Development and Retirement Supply Chain Development Management Supply Chain Strategy and Planning November 21, 2019 Supply Chain Capability Delivery Supply Chain Development and Change Management 28 SIPSS – Vertical Process Views Strategy, Infrastructure and Product/Solution/Service (SIPSS) Strategy and Commit Infrastructure Lifecycle Management Product, Solution and Service Lifecycle Management Responsible for the generation of strategies and establishment of business commitment in support of the Infrastructure and Product/Solution/Service Lifecycle processes involving all levels of operation from market, customer and products/solutions/services, through the services and the resources on which these depend to the involvement of suppliers and partners in meeting these needs Responsible for the definition, planning and implementation of all necessary infrastructures (application, IT and network), as well as all other support infrastructures and business capabilities (operations centers, architectures, etc.) Responsible for the definition, planning, design and implementation of all products/solutions/services in the organisation’s portfolio to required profit margins customer satisfaction and quality commitments, delivering new and retiring existing products/solutions/services to the market November 21, 2019 29 SIPSS - Horizontal Process Functional Groups Marketing and Offer Management Defines strategies, develops new products/solutions/services, manages existing products/solutions/services including retirement, manages pricing, sales and channels and implements marketing communications and promotion and offering strategies Service Development and Management Plans, develops and delivers services to operations domain for product/solution/service creation and design, managing and assessing the performance of existing products/solutions/services and ensuring that capabilities are in place to meet future product/solution/service demand Resource Development and Management Plans, develops and delivers the resources - physical and non-physical - needed by operations to support products/solutions/services, manages and assesses the performance of existing resources and ensures that capabilities are in place to meet future products/solutions/services needs Supply Chain Development Management Focuses on the interactions required by the organisation with suppliers and partners who are involved in maintaining the supply chain network of relationships that a service provider manages to source and deliver products, supports sourcing decisions, suppliers and partners selection Strategy, Infrastructure and Product/Solution/Service (SIPSS) November 21, 2019 30 Horizontal Process Functional Structure • Level 1 Four levels of process detail within horizontal structure Level 2 Level 3 Level 4 November 21, 2019 31 Product, Solution and Service Lifecycle Management – Functional Structure – Levels 1, 2 and 3 Level 1 Product, Solution and Service Lifecycle Management Marketing and Offer Management Service Development and Management Resource Development and Management Supply Chain Development and Management Level 2 Market Strategy and Policy Service Strategy and Planning Resource Strategy and Planning Supply Chain Strategy and Planning Product and Offer Portfolio Planning Service Capability Delivery Resource Capability Delivery Supply Chain Capability Delivery Product and Offer Capability Delivery Service Development and Retirement Resource Development and Retirement Supply Chain Development and Change Management Marketing Capability Delivery Product and Offer Development and Retirement Level 3 Sales Development Product Marketing Communications and Promotion November 21, 2019 32 Product, Solution and Service Lifecycle Management – Functional Structure • Functional view of what is needed to productise the results of innovation • Not prescriptive of the approach November 21, 2019 33 Marketing and Offer Management – Levels 2, 3 and 4 Level 2 Level 3 Marketing and Offer Management Market Strategy and Policy Product and Offer Portfolio Planning Product and Offer Capability Delivery Marketing Capability Delivery Product and Offer Development and Retirement Sales Development Product Marketing Communications and Promotion Gather and Analyse Market Information Gather and Analyse Product Information Define Product Capability Requirements Define Marketing Capability Requirements Gather and Analyse New Product Ideas Monitor Sales and Channel Best Practice Define Product Marketing Promotion Strategy Establish Market Strategy Establish Product Portfolio Strategy Capture Product Capability Shortfalls Gain Marketing Capability Approval Assess Performance of Existing Products Develop Sales and Channel Proposals Develop Product and Campaign Message Establish Market Segments Produce Product Portfolio Business Plans Approve Product Business Case Deliver Marketing Infrastructure Develop New Product Business Proposal Develop New Sales Channels and Processes Select Message and Campaign Channels Link Market Segments and Products Gain Commitment to Product Business Plans Deliver Product Capability Manage Handover to Marketing Operations Develop Product Commercialisation Strategy Develop Promotional Collateral Manage Handover to Product Operations Manage Marketing Capability Delivery Methodology Develop Detailed Product Specifications Manage Message and Campaign Delivery Manage Product Development Monitor Message and Campaign Effectiveness Gain Commitment to Marketing Strategy Manage Product Capability Delivery Methodology Level 4 Launch New Products Manage Product Exit November 21, 2019 34 Service Development and Management – Levels 2, 3 and 4 Service Development and Management Service Strategy and Planning November 21, 2019 Service Capability Delivery Service Development and Retirement Gather and Analyse Service Information Map and Analyse Service Requirements Gather and Analyse New Service Ideas Manage Service Research Capture Service Capability Shortfalls Assess Performance of Existing Services Establish Service Strategy and Goals Gain Service Capability Investment Approval Develop New Service Business Proposal Define Service Support Strategies Design Service Capabilities Develop Detailed Service Specifications Produce Service Business Plans Enable Service Support and Operations Manage Service Development Develop Service Partnership Requirements Manage Service Capability Delivery Manage Service Deployment Gain Enterprise Commitment to Service Strategies# Manage Handover to Service Operations Manage Service Exit 35 Resource Development and Management – Levels 2, 3 and 4 Marketing and Offer Management Resource Strategy and Planning November 21, 2019 Resource Capability Delivery Resource Development and Retirement Gather and Analyse Resource Information Map and Analyse Resource Requirements Gather and Analyse New Resource Ideas Manage Resource Research Capture Resource Capability Shortfalls Assess Performance of Existing Resources Establish Resource Strategy and Architecture Gain Resource Capability Investment Approval Develop New Resource Business Proposal Define Resource Support Strategies Design Resource Capabilities Develop Detailed Resource Specifications Produce Resource Business Plans Enable Resource Support and Operations Manage Resource Development Develop Resource Partnership Requirements Manage Resource Capability Delivery Manage Resource Deployment Gain Enterprise Commitment to Resource Plans Manage Handover to Resource Operations Manage Resource Exit 36 Supply Chain Development and Management – Levels 2, 3 and 4 Supply Chain Development and Management Supply Chain Strategy and Planning Supply Chain Capability Delivery Supply Chain Development and Change Management Gather and Analyse Supply Chain Information Determine the Sourcing Requirements Manage Supplier/Partner Engagement Establish Supply Chain Strategy and Goals Determine Potential Suppliers/Partners Manage Supply Chain Contract Variation Define Supply Chain Support Strategies Manage the Tender Process Manage Supplier/Partner Termination Produce Supply Chain Business Plans Gain Tender Decision Approval Gain Enterprise Commitment to Supply Chain Plans Gain Approval for Commercial Arrangements Negotiate Commercial Arrangements November 21, 2019 37 Product And Offer Development And Retirement – Levels 3 and 4 Process Details Product And Offer Development And Retirement November 21, 2019 Gather and Analyse New Product Ideas Research and analyse demographic, customer, technology and marketing information to identify new product and offer potential opportunities, compare current capabilities with the identified opportunities and develop new opportunity concepts Assess Performance of Existing Products Analyse the performance of existing products to identify inadequacies and required improvements using information from customers and from operational activities Develop New Product Business Proposal Develop and document business proposals for the identified new product concept, including a business case, identifying the new product requirements, service components, development costs and anticipated benefits, risks and the competitive positioning Develop Product Commercialisation Strategy Ensure that product specific pricing, sales channel support and regulatory approvals are identified and agreed and developed ensuring that all commercialisation aspects of the product development process associated with selling the product are covered Develop Detailed Product Specifications Develop and document the detailed product-related technical, performance and operational specification including required product features, the specific service and resource requirements and selections, the specific performance and operational requirements and support activities Manage Product Development Ensure the co-coordinated delivery in line with the approved business case of all required product capabilities for that business case across the organisation Launch New Products Manage the initial introduction of new and enhanced products into the market and handover to operations for ongoing rollout Manage Product Exit Identify existing products which are unviable and manage the processes to exit the product from the market, identify customers impacted by the exit, develop customer specific or market segment exit or migration strategies, develop infrastructure transition and/or replacement strategies 38 Sample Cross-Functional Scenario - Get Approval For The Development Of A New Product/Solution/Service • • • Product/solution/service consists of components that can be reused to further define and build new products/solutions/services New product/solution/service proposal is then submitted for approval Processes involved in this scenario are: − − − − − − − − − • Product and Offer Portfolio Planning Product Marketing Communications and Promotion Product and Offer Development and Retirement Service Strategy and Planning Service Development and Retirement Resource Development and Retirement Product and Offer Capability Delivery Service Capability Delivery Resource Capability Delivery Outputs from scenario − New product/solution/service with its associated services and resources developed, tested and accepted − Configuration information including pricing rules and promotions • Steps can be iterated for rapid product/solution/service concept exploration and examination November 21, 2019 39 Process Interactions – Get Approval For The Development Of A New Product/Solution/Service Product and Offer Capability Delivery Product and Offer Development and Retirement 1 2 14 3 Service Capability Delivery 5 Service Development and Retirement 4 Product and Offer Product and Offer Service Service Capability Capability Development and Development and Delivery Delivery Retirement Retirement 15 13 6 Resource Capability Delivery Resource Development and Retirement 8 Resource Capability Delivery Supply Chain Capability Delivery Supply Chain Development and Change Management 7 9 11 Resource Development and Retirement 10 Supply Chain Capability Delivery 12 Supply Chain Development and Change Management November 21, 2019 40 Process Interactions – Get Approval For The Development Of A New Product/Solution/Service 1. 2. 3. 4. 5. 6. 7. 8. 9. 10. 11. 12. 13. 14. 15. Provide Product/Solution/Service Development Plan Provide Product/Solution/Service Development Plan Provide Resource Infrastructure Requirements Provide Product/Solution/Service Deployment Plan Provide Service Infrastructure Requirements Provide Supplier/Partner Capability Requirements Provide Supplier/Partner Infrastructure Requirements Provide Resource Infrastructure Requirements Provide Supplier/Partner Required Capabilities Provide Resource Infrastructure Plan Provide Supplier/Partner Integration Plan Seek Approval For Supplier/Partner Infrastructure and Integration Plan Seek Approval For Resource Infrastructure Plan Seek Approval For Service Infrastructure Plan Seek Approval For Product Infrastructure Plan November 21, 2019 41 Repeat Process Cycle At Greater Levels Of Detail For Refinement and Iterative Delivery And Identification of Appropriate Innovations Product and Offer Capability Delivery Product and Offer Development and Retirement Service Capability Delivery Service Development and Retirement Product and Offer Product and Offer Service Service Capability Capability Development and Development and Delivery Delivery Retirement Retirement Resource Capability Delivery Resource Development and Retirement Supply Chain Capability Delivery Supply Chain Development and Change Management Resource Capability Delivery Resource Development and Retirement Supply Chain Capability Delivery Supply Chain Development and Change Management November 21, 2019 42 Use The Framework As A Checklist For Product/Solution/Service Development Marketing and Offer Management Market Strategy and Policy Product and Offer Portfolio Planning Product and Offer Capability Delivery Marketing Capability Delivery Product and Offer Development and Retirement November 21, 2019 Gather and Analyse Market Information Establish Market Strategy Establish Market Segments Link Market Segments and Products Gain Commitment to Marketing Strategy Gather and Analyse Product Information Establish Product Portfolio Strategy Produce Product Portfolio Business Plans Gain Commitment to Product Business Plans Define Product Capability Requirements Capture Product Capability Shortfalls Approve Product Business Case Deliver Product Capability Manage Handover to Product Operations Manage Product Capability Delivery Methodology Define Marketing Capability Requirements Gain Marketing Capability Approval Deliver Marketing Infrastructure Manage Handover to Marketing Operations Manage Marketing Capability Delivery Methodology Gather and Analyse New Product Ideas Assess Performance of Existing Products Develop New Product Business Proposal Develop Product Commercialisation Strategy Develop Detailed Product Specifications Manage Product Development Launch New Products Manage Product Exit 43 Summary • eTOM (enhanced Telecom Operations Map) business process framework can provide a workable model for transition to services for non-telecommunications service providers • Proven framework for area of services provision • Organisations offering cloud and XaaS services moving from products to communications-like utility services • eTOM can be extended outside its core telecommunications focus to these organisations November 21, 2019 44 More Information Alan McSweeney [email protected] November 21, 2019 45