Network Resource Management: From Fat to Fit

The measure of service providers’ value today is not limited to financial
parameters such as return on investment (RoI), asset value, and revenue growth
(both relative and absolute), but is also encompassing various qualitative
indicators pertaining to business and operational efficiency. Effective network
resource management (NRM) is fast growing as a viable and practical solution to
help service providers justify their balance sheets. Resource tracking and
organization helps improve the operational efficiency while resource
administration is being used to improve business efficiency.

What NRM Does

NRM involves a mix of complex processes pertaining to identifying, tracking,
allocation and ensuring optimal utilization of the service provider’s assets.
It helps service providers to identify and manage the hidden relationships that
exist within their own business frameworks.

NRM should also allow for business information such as relating the required
capacity of one resource to the installed capacity of another, or a typical
scenario of relating service usage to the installed capacity of the resource
providing that service. To summarize, a resource management solution should be
able to deliver intelligent information based on parameters like physical
characteristics, cost of ownership, cost of usage, role and lifetime of
resources.

All elements of value to service providers’ revenue and operational cost
strategy should be classified as resources. Resources should not be limited to
equipment and facilities but also include customers, vendors, partners,
services, and technologies.

Why NRM?

To realize the importance of NRM, two factors need to be considered in
tandem.

• Changing Regulatory Perspective: The evolving interconnect models
  globally, and unified licensing in India are some of the regulatory changes
  due to which processes such as accurate asset identification, asset
  auditing, and optimal asset utilization are gaining acceptance.
• Competitive Business Perspective: Some revenue enhancement strategies that
  service providers globally have been concentrating on:
• Increase average revenue per user (ARPU) by increasing minutes of usage

• Increase gross margin per transaction

• Increase economic value added (EVA)

Since major telecom networks are already in place and the
industry is becoming very competitive, it’s the low-cost model that is guiding
service providers’ strategies. Thus the marginal cost per service usage is
minimal. Again, due to the low-cost model, even though the minutes of usage has
increased substantially the ARPU has not increased proportionately. This has
forced service providers to look at processes like new service generation,
service provisioning, service activation, inventory and workflow management.

The Resource Modeling Approach

Market indicators show a shift from in-house development to commercially
off-the-shelf (COTS) deployment, as service providers realize the drawbacks of
developing customized applications.

Although COTS solutions offer an exhaustive range of
functionalities, a fully functional deployment can really stretch the capex
investments of service providers.

Moreover, in practical situations, service providers do not
have the need for all functionalities and are reluctant in making massive
investments. A viable solution in these situations would be the resource
modeling approach. In this methodology, solution vendors provide the general
resource management framework with all the basic functionalities, but the
resource/network model over which the application would be based, is designed
only after collaboration between the vendor and the service provider.

This approach allows the service provider to determine his
view, management of resources by layers, services, and domains, as per the
utility level and processes. The resource modeling approach allows the service
provider to perform iterative ‘what-if’ analysis over simulated business
conditions before the final deployment. It supports the design-utilize-redesign
concept for easy adaptation to changing technologies and customer demands.

Today, newer services are being generated before existing
services get stabilized. There is a rush towards gaining competitive advantage
in a market where the rules of the game are constantly changing.. Greenfield
operators need to streamline their activities to recover the huge capital
investments during start-up, while incumbents like to encash their cash-cow
services.

An intelligently modeled NRM solution allows the service
provider to effectively track and efficiently deliver optimal utilization of its
assets. The market is showing positive movements. In days to come, resource
management solutions, bundled with service provisioning and service assurance,
are likely to top service providers’ priority list.

Indranil Roychowdhury,
business analyst, Eftia OSS Solutions