EMERGING TRENDS MANAGED SERVICES: Need Of The Hour

In the current economic environment, focusing on core competencies is the key to survival and success. Businesses are facing increased network complexity, changing bandwidth needs, and reduced budgets. Corporates often find that traditional solutions are not good enough to cope with the ongoing demands, and future requirements, thereby distracting them from focusing on their core strategies. So, in this cut-throat competition, companies are increasingly looking at outsourcing services to managed service providers. Not only this, it helps them in reducing manpower and also doing it in a cost-effective manner.

THE CATEGORIES
Managed services will broadly come under three categories-telecom service providers, telecom equipment vendors, and IT and independent software vendors. And services in each category are different from other, as one has to provide a wide spectrum of services catering to different user requirements.

On the service provider front, the focus is on providing the entire range of services right from consulting to system integration. It also includes remote monitoring, security management, hosting services, call center management services, and others. For telecom equipment vendors, the focus is on managing products belonging to different development cycles, standardizing it and providing ubiquitous network irrespective of the geography. In India, the trend started when Ericsson began managing Bharti's entire network requirement both for existing as well as new capacities. The solution includes designing, building, operating and managing day to day operations of a customer's network as well as providing network coverage and capacity on demand services. For IT and independent software vendors, the focus is on end to end solution, right from evaluation, recommendations, business process engineering, and system integration.

In managed services, the focus is on strategizing-trying to set the short term and the long term goal for the company as well as for different processes; evaluating-once the goals are in place, the focus is on putting processes in place keeping in view the best practices; designing-the focus is on hardware and software architecture, network and security architecture; execution-the focus is on people, processes, technology, and timelines. Also, the focus is on setting up SLAs with respect to each and every process; and operations include managing and operating the infrastructure, monitoring and reviewing it for continuous improvement.

SERVICES PORTFOLIO
Integrated Application Support Services: Application support as a managed service offers end-to-end application support services, encompassing first line support, second line support, and third line support services. The various interfaces and the interdependencies within the support levels implies that only an end-to-end provider is best equipped to bring in the synergies required within the various levels of support.
Application Maintenance Support Services: It includes end user support, user and administrator training, code maintenance and bug fixation, application enhancements, data conversion and migration, specialized reports, application interfacing, and integration.
Remote Monitoring and Management (RMM): RMM of IT infrastructure is ideally suited for companies who would prefer to retain ownership of the hardware and infrastructure, located at their own premises, whilst passing all or partial management responsibility. With this, solution companies can take advantage of the vendor, retain specific skill sets, whilst companies retaining overall control of their system.
Infrastructure Support Services: It includes operating system management, hot fixes and security patches, performance monitoring and tuning, disaster recovery planning, testing and verification, preventative maintenance, and security management end user support.
Revenue Management Services: Under the scope of managed services, revenue management implies providing a wide range of operations support services for a service provider in the area of customer care and billing, with a focus on revenue assurance. Revenue management offers operations support for call collection and mediation, marketing back-office support in terms of managing products and bundles and managing, charging and discounting business rules. It also supports all real-time and batch business processes such as rating, discounting, exposure control, bill processing, bill presentment, accounts receivables and collections.

Case Study

TATA TELESERVICES AND TCS
The Company: Tata Teleservices has a total base of 8.12 mn subscribers in 20 circles of which mobile contributes 4.06 mn, fixed wireless is 3.65 mn, and wireline is 0.41 mn. In January 2006, Tata Teleservices added around 400,000 subscribers. The company offers integrated solutions to its subscribers-fixed services, mobile services, fixed wireless services, and others.

The Services: Recently, Tata Teleservices has outsourced its entire IT infrastructure to TCS. The total deal is worth $250 mn and spread over 5 years. The partnership includes a comprehensive IT roadmap with a state-of-the-art infrastructure to support existing plus new business initiatives and delivering high quality services to both enterprise as well as individual customers. The scope of work includes management of all IT related activities including implementation, application development, and maintenance. It also includes change management across the enterprise. In addition, TCS will also take care of management of datacenters, information security management, training end users on new applications, disaster recovery, and business continuity.

HUTCH ESSAR AND NOKIA
The Company: After BPL acquisition, Hutchison Essar has a total subscriber base of around 15.07 mn. In GSM, the company is presently ranked number two with a market share of around 25%. For the first time, the company has opted for managed services for 9 out of 23 circles (after BPL and Essar Spacetel acquisition).

The Services: Recently, Nokia has bagged a 5-year managed services deal with Hutchison Essar for nine circles. The circles are Gujarat, Karnataka, Andhra Pradesh, Chennai, Uttar Pradesh (E), Uttar Pradesh (W), Rajasthan, Haryana, and West Bengal. As per the agreement, Nokia will provide an array of solutions like network planning, project management, configuration and optimization, network operations and maintenance and the administration of third party vendor contract management. Apart from this, 600 Hutch Essar employees will join Nokia Services business unit. Nokia's managed services is a key part of it services business unit and also a core part of the company's drive to help operators enhance their service offerings and reduce costs.

BHARTI AND IBM
The Company: Bharti is a leading player in GSM services and operates in all the 23 circles in India. The company has 17.3 mn subscribers, commanding 28% of the overall GSM pie. The company also provides telephone services and Internet access over DSL, national and international long distance services.

The Services: The Bharti and IBM agreement focus on three key aspects-consolidate, transform, and manage comprehensive IT infrastructure and applications; joint development of marketing of IT and telecommunications solutions and services for India; and Bharti to be a preferred supplier of telecommunications to IBM in India. The agreement signed in 2004 is linked to percentage of revenue payment based on predefined service level agreement with Bharti. The deal is in the range of $700-750 mn and is valid for 10 years.

In FY 2005-06, the company signed another agreement to offer end-to-end managed services, including connectivity, at client locations around the world. So, Bharti will provide telecom infrastructure whereas IBM will focus on IT infrastructure and technology management services. It will include managed hosting services, business resiliency and continuity services, command center services, and IT help desk services.

Since the complexity of the network increases with each passing year due to increase in size and increase in geography, it makes it extremely difficult to manage the network and also grow at the same pace. With the coming of new technologies, the complexity further increases.

BHARTI AND ERICSSON
The Company: Bharti is a leading player in the GSM services, and operates in all the 23 circles in India. The company has 17.37 mn subscribers, commanding 28% of the overall GSM pie. The company also provides telephone services and Internet access over DSL, national and international long distance services.

The Services: The company has signed Ericsson for management, maintenance, quality assurance, and capacity expansion of Airtel's network for 13 circles. The company had signed another agreement in FY 2005-06 with Ericsson for providing managed services in 15 circles.

The Ericsson deal is set to enable Bharti to channelise its resources and expertise to its core areas of product innovation, value added services, marketing, branding and pricing, while simultaneously providing world class service by leveraging on Ericsson's network management skills. The services include designing, building, operating and managing day to day operations of a customer's network as well as providing network coverage and capacity on demand.

BHARTI AND NOKIA
The Company: Bharti is a leading player in the GSM services, and operates in all the 23 circles in India. The company has 17.37 mn subscribers, commanding 28% of the overall GSM pie. The company also provides telephone services and Internet access over DSL, national and international long distance services.

The Services: As per the contract, Nokia will provide managed services and expand Bharti's network in the circles of Mumbai, Maharashtra, Gujarat, Bihar and Orissa over a three-year period. The total contract value is worth $125 mn. In 2004, the company signed a $275 mn contract for managed services for three years, across five circles. As part of the contract, Nokia will focus on continuously delivering on radio and core network equipment and services based on Bharti's capacity requirements, delivering a cost efficient rollout of on-demand capacity.

Pravin Prashant
pravinp@cybermedia.co.in