TM Forum Community

Expand all | Collapse all

How to identify if a solution is a product or a service?

  • 1.  How to identify if a solution is a product or a service?

    TM Forum Member
    Posted Jan 25, 2021 08:59
    Hi Everyone,

    I am trying to distinguish between a product and a service based on ODA.

    1. In the GB922 Service Domain Business Entities - Information Framework (SID) document it mentions that you can buy part of the Service to a supplier, is this only true for services or can it also apply to products? The wording used is "can buy part of the service to a supplier" not "can buy part of the service from a supplier"  - not sure if there is a difference there as this is a recurring saying.

    2. Other indicators such as if a solution focuses on the need to solve a problem this means it is a product and if it focuses on the relationship it is a service - is this always true?

    3. If the solution is in the Global market is it always a service and if it is in the Local market is it always a product?

    Sincerely,

    Tiwa
    #General

    ------------------------------
    Tiwa
    Vodafone Group
    ------------------------------


  • 2.  RE: How to identify if a solution is a product or a service?

    TM Forum Member
    Posted Jan 25, 2021 15:43
    Hi Tiwa
    I'm not sure that any of the above describe the distinction between a product and a service.
    To my understanding:
    • A Product is something that is sold to an end-customer (typically, although it could be sold to other Party Roles, depending on what the exact relationship). The customer is aware of the product, interacts with it, can generate orders for it, pays for it by bill/invoice, etc.
    • A Service is the underlying implementation of a Product in the service provider's network. Depending on decomposition, it's possible that a single Product will need zero, one, or multiple Services for implementation. The end customer is generally unaware of the service.
    In ODA terms:
    • Product "lives" in the Core Commerce functional block
    • Service "lives" in the Production functional block
    Hope it helps

    ------------------------------
    Jonathan Goldberg
    Amdocs Management Limited
    Any opinions and statements made by me on this forum are purely personal, and do not necessarily reflect the position of the TM Forum or my employer.
    ------------------------------



  • 3.  RE: How to identify if a solution is a product or a service?

    TM Forum Member
    Posted Jan 26, 2021 03:20
    HiTiwalade, This is a cause of many confusions. It also makes it a headache for Communications SERVICE Providers given they are required to distinguish between product and service from a financial accounting point of view.

    Here is an EU definition:

    EU definition of e-services for VAT

    The EU VAT Directive was modified by an implementation regulation which contains the standard definition of e-services. This characterises e-services based on the following criteria for a supply for a fee / subscription:

    • A service – as opposed to physical goods
    • Information technology-based
    • Provided electronically – through the internet, copper or fibre optic cable and satellite
    • The supply is fully automated – only minimal human intervention

    Most legacy systems whether from Amdocs, Oracle, Netcarcker, Huawei, Ericsson to mention a few cannot provide bundles of network services and device or CPE equipment while at the same time unbundle the components to satisfy EU accounting rules.



    ------------------------------
    Cato Rasmussen
    Independent
    ------------------------------



  • 4.  RE: How to identify if a solution is a product or a service?

    TM Forum Member
    Posted Jan 26, 2021 03:28
    ...Also Tiwalade,
    You MUST NOT treat Business Process Framework (eTom) Information Framework (SID) or any other papers or document offered by TM Forum as standards.
    They are recommendations/guiding principles that you should apply according to your organisation's values and business models, not other contributors' values and business models.

    ------------------------------
    Cato Rasmussen
    Independent
    ------------------------------



  • 5.  RE: How to identify if a solution is a product or a service?

    TM Forum Member
    Posted Jan 27, 2021 02:45
    I think this whole discussion uses the expressions "Service", "Product" and "Solution" in a wrong way.

    Service is something which contains added value activity (human or automated), no matter if individual or productized.

    A Service can either be a Product (it has been productized, predefined, listed in an catalog, will be produced in an automated way)...
    ... or can be an (individual) Solution, which usually is not produced in an automated way, thus has higher production cost.

    From a customer point of view, Solutions and Products both solve a problem he has.
    No difference if it is sold in a local or global market.

    Johannes
    Deutsche Telekom

    ------------------------------
    Johannes Stumpf
    Deutsche Telekom AG
    ------------------------------



  • 6.  RE: How to identify if a solution is a product or a service?

    TM Forum Member
    Posted Jan 27, 2021 15:09
    Hi Johannes and all

    The terms Product and Service are well-defined in TMF Frameworx, and TMF assets (such as the Information Framework - SID, and the Open API) use these terms consistently. I tried to give a summary in my previous reply on this thread.
    The term Solution is not currently defined or used in Frameworx, at least not in the data modeling parts, to the best of my knowledge.

    There may not necessarily be a relationship between these formal terms on the one hand and informal notions used in common language (including telco marketing language) such as service, solution, and so forth. Similarly, terms used in regulatory or legal papers that this thread. All of these typically refer to things that are visible to end customers, i.e. Frameworx Product.

    Hope this clarification helps.

    ------------------------------
    Jonathan Goldberg
    Amdocs Management Limited
    Any opinions and statements made by me on this forum are purely personal, and do not necessarily reflect the position of the TM Forum or my employer.
    ------------------------------



  • 7.  RE: How to identify if a solution is a product or a service?

    TM Forum Member
    Posted Jan 28, 2021 03:00
    Thank you Jonathan,

    I may not be as familiar with the TMF Frameworx definitions as would be needed to judge this.

    From a business customer market point of view, there are just two aspects I would like to highlight:

    1. Telcos are sometimes referred to as "Service Providers" for a reason. In my eyes it means that Telcos must have productized "services", otherwise they cannot exist. At the same time it is my personal experience that customized solutions are sometimes required in order to fulfill the requests of business customers, especially in the international arena.

    2. For a Telco to offer both, individualized and productized services, it is crucial to handle the difference in a disciplined way, applying strict rules. Otherwise they cannot survive.

    I am happy to learn more about the exact wording used to describe the two business models that obviously exist in this inductry.

    Kind regards
    Johannes
    Deutsche Telekom

    ------------------------------
    Johannes Stumpf
    Deutsche Telekom AG
    ------------------------------



  • 8.  RE: How to identify if a solution is a product or a service?

    TM Forum Member
    Posted Jan 28, 2021 07:54
    Hi Johannes

    The original post from Tiwa asked about the definition of these terms based on ODA, which is one of the TMF core assets (along with Frameworx, Open API, and more). I ask you again to distinguish between common, informal use of the terms (yes, telcos are called service providers, customers expect to receive service, etc.) as against the formal definitions of these terms within TMF core assets.

    Within the formal TMF framework, the simplest residential home phone as against a complex business ICT solution for HQ and 5000 remote sites will both be seen as Products by the customer, instantiated in the telco network as Services, and using Resources (logical and physical). Of course, the complex solution will have 10000s products with relationships between them.

    It's fine to have a discussion based on informal terminology, but then you will find it difficult to "benefit" from the TMF assets.

    Hope it makes sense


    ------------------------------
    Jonathan Goldberg
    Amdocs Management Limited
    Any opinions and statements made by me on this forum are purely personal, and do not necessarily reflect the position of the TM Forum or my employer.
    ------------------------------



  • 9.  RE: How to identify if a solution is a product or a service?

    TM Forum Member
    Posted Feb 03, 2021 13:47
    I fully support this perspective @Jonathan Goldberg and wish to top up to further reinforce this terminology dilemma.

    1) Business, Marketing, Sales teams use vocabulary that is customer and market friendly.  Offers, Promotions, Products, Services, Contracts, Agreements... these are all used colloquially and often in a context at odds with the canonical information model provided by Frameworx.  That is OK because the goals of those teams are to communicate outwardly to the market, not necessarily inwardly to the Provider's systems and data models.

    2) It sure would be nice if the vocabulary aligned perfectly in the outward and inward perspectives mentioned above, but that is not going to happen.

    3) The TMF Information Model is an abstract, conceptual model for representing the real world. No one expects any one vendor or system to implement a physical model that EXACTLY conforms to this model.  Yes, some aspects of the model will appear because they represent "common sense ideas about the real world" however many concepts would be too cumbersome, non-performant or just plain awkward to implement EXACTLY as represented in the model.  Consider the model as inspirational, directional, perhaps even aspirational.

    4) Our job as Information Technology practitioners is to map our client's/employer's real world needs to the canonical model where we see TMF assets providing a benefit to our IT systems.  Not surprisingly, the most common asset in use is the Information Model, with a fast follow by the Open API specifications.

    5) For instance, A "Product Specification" is defined to meet certain modelling goals common to Digital Service Providers.  There is no expectation that  a business team adopt this terminology, nor is there necessarily an expectation that a system will realize a physical data entity called "Product Specification".  The expectation is processes/systems map to the Information Model at the logical level - if they happen to map physically, that's great.

    To further this example, a Provider may define a  Product Specification "Internet Access" and associate it with 3 Product Offerings: "Internet Basic Service", "Internet Advanced Service", "Internet Premium Service".  The customer interested in purchasing Internet service for their residence will purchase one of the 3 Product Offerings listed: say "Internet Advanced Service".  This results in a Product Instance of "Internet Access" in the Provider's inventory that is described by/associated to the purchased Product Offering.  associated with that customer who receives monthly bills with a line item "Internet Advanced Service". The customer knows they are using the provider's Internet service (they may not know the exact Product name), they know the branding of the Internet Access ("Internet Advanced Service") and they know absolutely nothing about the magic that happens in the network.

    Net effect: the Provider sold a Service for accessing the Internet by exposing a Product Offering for a Product described by a Product Instance that in turn relies on Service and Resources in the network. The Provider's marketing team may even consider the Product Offering a promotion because they've adjusted the monthly price downward for competitive reasons or their ad campaign has been promoting this Product Offering as "your best value".  Note the mix and match of vocabulary.

    5) In my experience, giving business teams a peek into the underlying information model, in small and very targeted doses, can help,  But don't expect those teams to jettison their vocabulary. For example, it is very difficult for most business people to understand the difference between a Product Offering and a Product instance and a Product Specification. It can be done, but tread carefully.

    6) Regarding the idea of Product vs solution - I have seen no concept in the Information Model that fully expresses the concept of a solution. There is a Proposal concept, but that has different objectives.  I have seen bundled Product Offerings and bundled Product Specifications represent standard configurations of services and devices, say for unified communications or premise security, but that does not quite match the generalized intent of a solution. I am sure TMF would accept proposals and draft designs for such a thing ;-)

    I hope this rambling helps.

    ------------------------------
    Greg Herringer
    IBM Corporation
    ------------------------------



  • 10.  RE: How to identify if a solution is a product or a service?

    TM Forum Member
    Posted Mar 16, 2021 11:41
    thanks @Greg Herringer. Your response best summarizes how TMForum assets such as the Information Model and Business Process Framework should be looked at and used.  I see many times people locking horns over these terms and in such what they want gets lost and some other times people just disregard the information model and process framework by saying that is just a theory. I was finding it very tough to connect what guide books say, how should we use them and what business teams talk about. Your answer is comprehensive and puts many things in perspective.

    ------------------------------
    Akshay Hiremath
    Rogers Communications Inc.
    ------------------------------



  • 11.  RE: How to identify if a solution is a product or a service?

    TM Forum Member
    Posted Mar 17, 2021 06:21
    Edited by alok pradhan Mar 17, 2021 06:23
    @Greg Herringer  Hi , I saw that you mentioned something about "Proposal" concept , can you help me in finding the document , that describes it .  In one of the Implementations ,I  saw the a stage called Proposal in Quote to Order flow  i.e  Quote -> Proposal -> Order ..  so ..just thinking , if it was built on the same concept :) ..i will check the documentations​

    ------------------------------
    alok pradhan
    Netcracker Technology
    ------------------------------



  • 12.  RE: How to identify if a solution is a product or a service?

    TM Forum Member
    Posted Mar 18, 2021 01:12
    Hi Alok!

    I found this in eTOM. It talks about the role of Proposal. I can see it fitting between Quote and Order in a sales process step but I don't see Proposal formally using QuoteLineItems and sending them to OrderLineItems. To me, a Proposal is document presented to a customer that describes the proposed solution which more than likely contains a Quote referencing one or more Product Offers.

    Develop Proposal Against Sales Prospects Requirements


    Develop Proposal against Sales Prospect Requirements develops a proposal (or proposals) for a sales prospect which meets the stated requirements. The development of a sales proposal may require the selection of a standard product offering, may require the development of a non-standard offering, or may require the creation of a project team to construct an offering in response to a customer's Request For Proposal.

    Note that development of a non-standard sales proposal or the response to a customer's RFP may require the development of unique solution designs.  The development of unique solutions, within the context of current deployed capabilities, may require the development of new product offerings to be considered along with supporting infrastructure.



    ------------------------------
    Greg Herringer
    IBM Corporation
    ------------------------------



  • 13.  RE: How to identify if a solution is a product or a service?

    TM Forum Member
    Posted Mar 19, 2021 02:55
    @Greg Herringer  Thanks for proving your thoughts ,  yes your understanding of proposal as a "Proposal is document presented to a customer that describes the proposed solution which more than likely contains a Quote referencing one or more Product Offers.."   perfectly makes sense …

    so the implementation that I was referring to here .. considers Proposal as a  stage on the Order Capture Portal , that comes once after Quote stage , so while at the Quote stage agent selects the offerings ,to be added in the cart  with the prices and required parameters based on Contract term selected  , at the proposal stage , Agent can provide discount on those prices , and update override contract terms as well , if required and then , he can export the proposal as a document to discuss the same with customer ….
    once it is finalized , he comes back on the portal and  proceed from Proposal Stage to Review and submit the order …  and also there are some expiry dates as well , so if agent comes back once  proposal is expired , he cannot proceed further and he will have start from a new Quote -> Proposal ..


    ------------------------------
    alok pradhan
    Netcracker Technology
    ------------------------------



  • 14.  RE: How to identify if a solution is a product or a service?

    Posted Aug 03, 2021 02:37
    @Greg Herringer this a great summary of the frameworx. and i like this positioning. The network will expose a network service (internet connectivity to the business). The business can than sell this service with an addition of a local streaming provider subscription and in these two worlds.. the concept of product or service will not be the same thing.​

    ------------------------------
    Thembinkosi Ndebele
    MTN Group Limited
    ------------------------------



  • 15.  RE: How to identify if a solution is a product or a service?

    Posted Jan 28, 2021 08:20

    Hi Johannes,

    I like to see the Solution as the right answer to a customer's need and the result of providing a Product & a Service.

    NB. It corresponds to the use cases we solve at ITD (our Product would not bring the Solution without Service) …not necessarily working in another context.

    ------------------------------
    Jerome PERRET
    IT-Development
    ------------------------------



  • 16.  RE: How to identify if a solution is a product or a service?

    Posted Mar 11, 2021 08:33
    As Johannes put it, the "Solution" is not currently used in Frameworx. There was a discussion on this topic when John was around and the consensus was, that Products and Services are the core entities (and Resources which are more of a Fulfillment view).
    The P-S-R model on which the Offer is based on, is also reflected in the instance after the activation.
    Solution can be termed as something that is built  by using these Products and Services.
    However we have concept of Market Offer, Bundle etc, and hence the term Solution may not be relevant in B2C and or even the B2B2C context.
    In Enterprise B2B where both Connectivity and non connectivity Offers are available with the ability to customize the offer, Solution may be used. But it is as good as the Market offer with a lot of customization.
    End of the day, it depends on how we all use the SID entities to model the Offers.

    ------------------------------
    Sri Jagadish Baddukonda
    CSGI
    ------------------------------



  • 17.  RE: How to identify if a solution is a product or a service?

    TM Forum Member
    Posted Mar 12, 2021 10:09
    Actually Solution is used in Frameworx. There is an Application "Solution Management" with the "Overview:
    Solution Management applications provide the necessary functionality to manage the analyzing, composing, and recommending of the right solution to a given potential customer"
    I think this is in line with the comments in this thread about solutions to be created for one customer's specific requirements/needs.

    ------------------------------
    Kaj Jonasson
    kajj@appliedbss.com
    ------------------------------



  • 18.  RE: How to identify if a solution is a product or a service?

    Posted Mar 18, 2021 15:27

    Greetings team, with great respect to all points of view I want to share with you what our teacher and mentor John Reilly spoke to me a few years ago on  the occasion of a training to be TMForum instructors.

    "The product, it's a marketing concept", used to be placed in a place with no particular    price to implement the provision of "potential" customers, they have specific characteristics that come from marketing specialists with the mission of creating a differentiator in   the face of competition (other service providers),   in such a way that it manages to captivate the customer's attention and manages to consciously or unconsciously associate in the market psych and go to the sales channels of the company that aim to position themselves as dominant in the market.

    In other words, the product is to compete. In this sense, one can observe for example that in one company the Product is  called @Acelera and in the other @ABA and under both underlies a telecommunications service such as broadband Internet. Other perspectives were presented until much less is done in Latin America, telecommunications companies were monopoly and in those cases it could be observed that what we call product   and feed services calls in the same way and that from there comes the confusion since in that scenario competition does not exist. Everything  is clarified  in the definition made in the SID of the EBA Product. Another example that you can use to differentiate the Product are so-called "Combos",where you can observe several services underlying under a name that you are commercially generic as "Tripple Play Ya" and below is offered internet, voice and television service, who have their detailed service specifications. 

    Also the Master  really told  me,  observes who captures the information of what the customer requires, that is done in a Customer Order, usually generated as an order in the application that can be a CRM, after converting that order into the detailed specifications of the services is one of those who make the process of Creation Service Order. It is from there that it is known that different plaforms will be sent service activation configuration   commands or  even lower the installation of a resource in red or client premises for example.

    In conclusion. The product is a specification that meets marketing attributes, The Service is a specification that complies with engineering attributes.



    ------------------------------
    Victor Araque
    ZTE Corporation
    ------------------------------