IDC report: Profitability and OSS Support: A Return on Investment Analysis of IBM Tivoli Netcool

W H I T E P AP E R P r o f i t a b i l i t y a n d O S S S u p p o r t : A R e t u r n o n I n v e s t m e n t A n a l y s i s o f I B M T i v o l i N e t c o o l Sponsored by: IBM Randy Perry Eric Hatcher Elisabeth Rainge February 2009 mo E X E C U T I V E S U M M A R Y c.cdi. IDC studied telecommunications service providers, including mobile and fixed-line www service providers, that have implemented Performance Management, Service Quality Management, and Network Fault Management from the IBM Tivoli Netcool suite of 510 solutions. These firms found IBM Tivoli Netcool to be a robust services management 4.53 package that matched their critical demands particularly well. IDC's research and 9.8 analysis of these sites indicates a high level of business value return. Their purchase 05.F and implementation of IBM Tivoli Netcool (investment) delivered a return of 625% 0 (ROI). The savings they achieved as a result of the implementation covered the 028 original investment costs in less than six months (payback). Additionally, IBM Tivoli .27 Netcool's capabilities enabled the 14 customers to achieve an annual average benefit 8.8 of $23.5 million, including: 05.P ! Saving on average $9.5 million annually, including $482,162 in operations staff ASU costs through improved efficiency 1071 ! 0 Increasing revenue by an average of $1.7 million or $0.54 per subscriber AM , ! Saving $0.36 per subscriber mahgni ! Improving mean time to repair (MTTR) a device or system by 54% marF t ! Reducing capital expenditure (capex) by an average of $1.3 million eertS n ! Consolidating network operations centers (NOCs) into fewer centers, reducing eep NOC expenses by 70% and resulting in $293,801 average annual savings S 5 :sr ! Shortening the time to deliver new services to market by 37%, leading to etra increased/earlier revenue uqdae The average annual benefit from IBM Tivoli Netcool of $23.5 million includes cost H la reductions, user productivity improvements, operations productivity improvements, bol and revenue increases in the proportions shown in Figure 1. G

F I G U R E 1 B e n ef i t s o f I B M T i v o l i N e t c o o l
Revenue increase User productivity $1.7 million $0.01 million
Operations productivity Cost reduction $12.1 million$9.7 million
Total = $23.5 million Source: IDC, January 2009

S I T U AT I O N O V E R V I E W
Leading service providers depend on key metrics to measure their continual process improvements and enhance the quality and attractiveness of their service offerings. Just to stay competitive, they must both measure and improve metrics as varied as MTTR; dispatch; call time resolution; time to revenue for new service concepts; churn (customer attrition or loss); and, ultimately, earnings before interest, taxes depreciation, and amortization (EBITDA). For operations management, the relentless focus on efficiency has prompted moves to automation and a variety of supplier partnership approaches, such as working with network equipment vendors to ease network management and/or outsourcing. To stay competitive today and to improve core customer relations competency, service providers must integrate cost-oriented measures of internal processes such as MTTR and call time resolution with customer-facing objectives, such as reduced churn and increased revenue per subscriber.
Today's market realities mean that there are ongoing projects to integrate and synthesize information, which stretch across multiple domains. They require the kind of system integration and synthesis that operational support systems (OSSs) enable. Infrastructure foundations for an integrated view include not only the network foundation but also the corporate knowledge base about that infrastructure, including links to IT systems. Typically, such network technology complexities and data reconciliation challenges can fuel spending independent of OSS priorities. But the foundational pieces of OSS, as described by those we interviewed in the research, can effect a notable, positive improvement on these sometimes far-reaching goals.
2 #216533 ©2009 IDC Looking at the top operational and business issues of service providers, IDC believes th... [download for more]