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Manage Financial Performance

  • 1.  Manage Financial Performance

    Posted Jan 05, 2021 12:52
    Networks are increasingly complex and this trend will continue with 5G with new business models, open architecture, virtualization and automation and so on. Operators have so far been sufficiently profitable not having to financially measure and track investments in detail. In general there has been an ad hoc, top-down and slow approach often involving XLS, best guestimate assumptions taking weeks. The financial results are often too late to help the operations and too general to identify underlying under performance.

    As operators are now investing in 5G, what is your view of the importance of automated zerotouch financial performance management? What would be the best use cases for such a capability?
    #DigitalEcosystems
    #General

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    Carl Gandeborn
    TO BE VERIFIED
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  • 2.  RE: Manage Financial Performance

    Posted Mar 02, 2021 13:29
    A very interesting topic and a big challenge which is getting more and more relevant due on-going network transformation initiatives and considering the global economic outlook and financial constrains

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    jose revuelta
    UNSPECIFIED
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  • 3.  RE: Manage Financial Performance

    Posted Mar 03, 2021 05:33
    Important and relevant topic, no doubt.   Many initiatives would be cancelled if the true financial performance was projected in near real-time.

    We are working on the TMF autonomous networks program which is looking at zero touch (plus several other zeroes!) at all layers:  Customer, Business (P&L), Service, and Network.
    There are plenty of companies operating at the lower layers, but very few focused at the business operations piece.   Take a look at see if its of interest to you.

    White paper: https://www.tmforum.org/resources/whitepapers/autonomous-networks-empowering-digital-transformation-for-smart-societies-and-industries/

    Program:  https://projects.tmforum.org/wiki/pages/viewpage.action?spaceKey=ANP&title=Autonomous+Networks+Project+Home


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    James O'Sullivan
    Huawei Technologies Co. Ltd
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  • 4.  RE: Manage Financial Performance

    TM Forum Member
    Posted Mar 08, 2021 02:02
    I believe that the industry had a glimpse into this matter when it tried to automate cost accounting in regulated operators (the incumbents). I believe there were even initiatives in TMF in the revenue assurance area. At the end, those projects proved quite difficult because the vendors got ground by the inability of CFO and CTO/CNO organisations to collaborate. And probably not strategic enough for the CEO to onboard such projects. It is a difficult sell. Maybe 5G could change this, but I am not sure.

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    Roland Leners
    SATEC GROUP
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  • 5.  RE: Manage Financial Performance

    TM Forum Member
    Posted Mar 03, 2021 03:32

    Carl, I agree with you that the accelerated increase direct connection between 5G networks and business models, requires to look at the network's performance not just by technical parameters, but also by financial KPIs. This is the reason why I believe that financial measurement of the network is imperative and applying Business Assurance methodologies is key to the financial wellbeing of the 5G networks.



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    Gadi Solotorevsky
    Amdocs Management Limited
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  • 6.  RE: Manage Financial Performance

    Posted Mar 03, 2021 05:01
    Thank you Jose.  Working to solve some of the data source, volume and quality challenges are critical. And doing so it will open the opportunity to manage networks taking into account the technical, traffic, subscriber needs while finding the most optimal financial performance. There is a significant profitability opportunity, which focus not only on cost savings, but also taking into account the revenue dimension.

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    Carl Gandeborn
    TO BE VERIFIED
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  • 7.  RE: Manage Financial Performance

    Posted Mar 03, 2021 05:09
    Gadi, thanks for your input.  I fully agree and with the numerous new business models that 5G focus on and operator need to be able to track profitability in detail per model and per customer. Otherwise they are flying "blind" and will not know if they are successful or loosing lots of money. With the large investments going into the network new OSS/BSS solutions as well as new organizational units for sales/marketing of these new business models/solutions, it would seem to be common sense that the operators want to know if they are profitable or not.

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    Carl Gandeborn
    TO BE VERIFIED
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  • 8.  RE: Manage Financial Performance

    Posted Mar 03, 2021 10:01
    The zero touch financial performance would not cancel initiatives, who often are decided on pre-operational assumptions around growth, revenue, costs, profits, and an expected return on investment. By using network and traffic data to track profitability it will help an operator to manage its initiatives, to know where it can increase investments and where to be cautious or slow down.  It's a financial feedback loop that with predictive analytics will guide the operators to make better decisions and optimize their operations.

    I looked at the white paper and it covers many areas, and it would be great to complement the Business Intent with a Profitability dimension.


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    Carl Gandeborn
    TO BE VERIFIED
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  • 9.  RE: Manage Financial Performance

    TM Forum Member
    Posted Mar 04, 2021 05:36
    I am getting seriously concerned about 5G's potential when I read all the above! In neurology it is said: Same thought will trigger the same emotions and experiences that will lead to the same behaviours and peoples reality will stay the same. Obviously, no new thoughts are being introduced. Firstly, when talking business models, it implies a business model per segment, a product service that is most likely will be driven by platform offerings and must test desirability first. If desirability is not tested, telcos will experience a 72% failure rate. Whats is the cost of failure in a telco -> Huge compared to the likes of Amazon.
    The above tells me that in true traditional thinking, feasibility comes. The attempt to bring in viability is shallow, to say the least. It is about time to lift the thinking above KPIs to business capabilities. But above all, telcos need to collect themselves around a shared vision and prevent teams, departments and individuals act in a vacuum to serve self-interests.

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    Cato Rasmussen
    Independent
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  • 10.  RE: Manage Financial Performance

    Posted Mar 04, 2021 13:03
    Cato, too often investments are never followed up from a financial perspective. The original assumptions and business cases are not tested or reviewed despite very large sums being invested. As Peter Drucker stated: "If you can't measure it, you can't improve it".  And it will be difficult to learn from it as well. Operators who will improve its financial performance management can develop a significant competitive advantage.

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    Carl Gandeborn
    TO BE VERIFIED
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  • 11.  RE: Manage Financial Performance

    TM Forum Member
    Posted Mar 05, 2021 02:49
    Thanks for your comments, Carl.  Peter Drucker also said: Manager focus on doing things right while leaders are focused on doing the right things. Doing things right implies things are already defined, and in your argument should be measurable = viewing the wold from the memory of the past. Doing the right things are seeing things through the lenses towards the vision. The former creates insecurity, fragmentation and diminishes trust. The latter shows inclusiveness, non-discriminatory and equality because a leader can only be a leader if she/he has followers.

    Right now telcos (since that is the industry in focus) are by far OVER MANAGED and under led!

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    Cato Rasmussen
    Independent
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  • 12.  RE: Manage Financial Performance

    TM Forum Member
    Posted Mar 08, 2021 02:43
    Hi Roland, I tend to agree with your observation. But why should CEOs engage when they a boarded by function and features all focused on feasibility. The CEO have little option but to defer to the technology departments. The day vendors are willing to change focus to desirability and engage in business capabilities things may change.
    Changes in attitudes and approaches need to be fundamentally changed in most areas, in my view. It is a fact (listen to the neurologist) most peoples' thoughts are 90% the same as the thoughts they had the previous day.

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    Cato Rasmussen
    Independent
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  • 13.  RE: Manage Financial Performance

    Posted Mar 08, 2021 14:20
    Hi Roland, very true that its been difficult in the past for these type of solutions. Earlier there was a stronger direct relationship between traffic and revenue which made an assessment of profitability more straight forward. With bucket/unlimited price plans and an ever increasing complexity the picture is highly unclear. With the different strategic intents with 5G, the question will this if measuring the financial performance along other measurements will increased in strategic importance.

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    Carl Gandeborn
    TO BE VERIFIED
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  • 14.  RE: Manage Financial Performance

    TM Forum Member
    Posted Mar 09, 2021 02:51
    Let's get one thing clear. This has little to do with 5G or any other G for that matter. This has to do with how the product catalogue and the associated account ( T-accounts) are set up or not set up. Telcos traditionally could only bundle as a service, making it impossible to unbundle for separating tracking and reconciliation of the bundle's individual components e.g. traffic from device.


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    Cato Rasmussen
    Independent
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  • 15.  RE: Manage Financial Performance

    Posted Mar 10, 2021 04:55
    By integrating, translating and correlating data from the network, billing, CRM and accounting domains, it's now possible to generate an a zero-touch clear detailed picture of the profitability across the network, services and customers.  With this insight other relevant financial KPIs e.g. ROI can be calculated and it's the base for predictive analytics helping operators with business cases and future network focused investments.

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    Carl Gandeborn
    TO BE VERIFIED
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  • 16.  RE: Manage Financial Performance

    TM Forum Member
    Posted Mar 11, 2021 03:24
    Are you saying that by making your operation dependent on the memory of the past, they will be perfectly positioned to move on to the future possibilities?
    Cognitive analytics can only collect and correlate on past data.
    If investment capital is funded by obtaining short-term loans and the interest rate increases, what will happen to your past ROI calculations. Or if prices are being pushed down due to competition etc.

    This is exactly the same arguments for technology solutions vendors and consultants have been running with for decades and never hit the mark.

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    Cato Rasmussen
    Independent
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  • 17.  RE: Manage Financial Performance

    TM Forum Member
    Posted Mar 12, 2021 02:46
    *Perfectly* positioned?  No... but then nothing is perfectly positioned.  However, one part of knowing where to go is knowing where you are.  'Memories of the past' are what we might term 'experience'.  Experience is not everything in the game of life, it needs to be combined with a small amount of naivety or perhaps childishness and an appropriate amount of risk-taking, as well as some more subjective items like vision.  But those things without experience are much less worthwhile than with experience.  Just as experience without those other things is also much less worthwhile.

    It's possible to build bad experiences through poor reflection, just as it's possible to ignore valuable experience.  Many suppliers and vendors are happy to narrow the message simply to sell their products.  That's not a good reason to throw it out altogether, though.  It's a reason to become a good judge of message.

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    Michael Ansley
    Polkomtel S.A. (PLUS)
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  • 18.  RE: Manage Financial Performance

    Posted Mar 12, 2021 04:27
    With a more detailed and up to date financial reporting, operators will have a better base for decision making. Granular to more clearly see where/what service and by whom in the network profitability is generated and current to give them an opportunity to react before it is far too late.

    This financial reporting is not possible today and it gives them a real chance to further improve their decision making.

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    Carl Gandeborn
    TO BE VERIFIED
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  • 19.  RE: Manage Financial Performance

    TM Forum Member
    Posted Mar 15, 2021 03:42
    Go back and take a closer look at how the vendor (based on users input) conducted Polkomtel's process designs. e.g. By gathering current and past tasks, defining them towards functional specifications. E.G. Ending up with an old fashion product catalogue design not capable of auditing and tracking components of a bundle's elements individually. With all the possibilities of utilising a brilliant accounting (T-Accounts) architecture that the vendor was capable of providing, it was designed and defined based on old fashion service rating principles. That much for the experience! This was as much due to Polkom tel as it was on the vender at the time.

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    Cato Rasmussen
    Independent
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  • 20.  RE: Manage Financial Performance

    TM Forum Member
    Posted Mar 17, 2021 09:24
    Not being involved directly in what you are referring to, I cannot answer with certainty, but I can imagine that you are largely correct, regarding PLK.  However, whether the solution is simply to abandon any activity that cannot be competently performed is open to question.  Personally, I feel that is not a good strategy.

    As I mentioned previously, I think it is important 1) to get the financial reporting working well (I'm open to discussion what 'working well' means), and 2) to use multiple means to assess the business, not just financial reporting, although financial reporting is a significant part of it.

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    Michael Ansley
    Polkomtel S.A. (PLUS)
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  • 21.  RE: Manage Financial Performance

    TM Forum Member
    Posted Mar 18, 2021 03:40
    "Working well" is quite simple. It has to be agreed at the senior-executive level and in no way by IT. In my view, financial reporting should be hinged on business capabilities and not task and functionality.

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    Cato Rasmussen
    Independent
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