Your network has a story to tell you about wasteful Capex practices which are likely reducing your Return on Capital. If you are like most Operators, you may not be listening.
Much of the Telecom Industry’s recent focus has been placed on CEM and related analytics. Certainly, customer acquisition and retention programs are critical as these drive revenue. Network augments and migrations to new technologies are an unavoidable “price to pay” and the lion’s share of management’s attention is placed on squeezing as much revenue traffic onto pipes and spectrum as possible.
Trouble is, EBITDA margins are being squeezed for reasons that I’m sure you are all too familiar with. Amongst many Operators with whom Subex has spoken recently, there is a growing recognition that network costs must be better managed, but also a frustration that lack of visibility and insights undermine the ability to do so.
As I said, your network has a story to tell you—in fact, many stories. What’s more, it will give you critical information that your ERP or Asset Tracking system simply can’t. Without this information, your ability to optimize Capex throughout the asset lifecycle can be significantly eroded.
Can you answer:
Where are my assets?
ERPs are important for managing vendor relationships, driving supply chain process and tracking warehouse inventory. Once an asset leaves the warehouse, responsibility for tracking and managing the asset typically shifts to technical OSS’s (e.g. Network Inventory). Data quality within technical OSS’s is notoriously poor. As a result, assets can become stranded, under-utilized and/or lost. Consequently, Operators spend Capex that could otherwise be avoided if existing assets were effectively harvested and redeployed.
The Asset Lifecycle and Relative Positioning of ERPs vs. Technical OSS
When are my assets generating returns?
A critical capital management objective is minimizing the cash-cash cycle. This is the interval between paying cash to a vendor, and receiving cash from a customer once an asset becomes productive (i.e. carries revenue traffic). Each extra day in the cycle increases your cost of capital. Reducing the cycle requires that you know the answer to:
- How much time elapsed from the purchase of an asset until deployment in the network?
- How much time elapsed from deployment of the asset until it became productive?
Equipped with such time-to-value analytics, finance can better hold Network Operations accountable for any excessively long intervals. Network Operations also has the actionable information it needs to identify and correct inefficient deployment and service delivery processes.
Where did my assets go?
A very common dysfunction is mismanagement of assets once they are decommissioned or retired. Some assets remain powered but unproductive, contributing to excessive energy costs. Others simply disappear (whether moved, shelved or pilfered) and are no longer available for re-provisioning or salvage. A recent PwC survey found that “one half of wireline operators and over one-third of wireless operators indicated that less than 50% of their assets are currently catalogued and managed.” Network Intelligence enables Operators to track movement of assets in the network and provides an early alert when an asset has been removed and does not reappear elsewhere.
What assets do I need?
A critical component of avoiding unnecessary Capex is having accurate and timely Network Intelligence to guide the budgeting, forecasting and planning process. This is especially important for portions of the network which are most sensitive to traffic growth. It is essential to monitor resource utilization and equip planners with metrics and trending to ensure assets are purchased when needed, where needed and for the right purpose.
Introducing ROC Asset Assurance
Drawing on our industry leadership in Data Integrity Management, Capacity Management, Network Discovery and Analytics, Subex is launching ROC Asset Assurance to harness Network Intelligence throughout the asset lifecycle and do for Asset Assurance what Subex has famously done for Revenue Assurance and other business optimization areas. Look for more exciting details on ROC Asset Assurance in the days and weeks to come.
Portfolio Head – Network Analytics
Andy has 20+ years of experience in engineering management, business operations and IT, primarily with Tier 1 operators including Level 3, MCI and GTE. His responsibilities included leading IT development teams that built mission-critical network management, provisioning and inventory systems with thousands of users. Prior to joining Subex, Andy was a Senior Manager overseeing a Data Governance organization at a major Internet Services provider. Andy graduated from the University of Pennsylvania with degrees in Electrical Engineering and Economics (Wharton). He holds an MBA from the University of Colorado.