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May 2011

Network Inventory Integrity: Taking Cost Management to a Higher Level

Network Inventory Integrity: Taking Cost Management to a Higher Level

“There is no outside, no inclosing wall, no circumference to us.  A man finishes his story — how good! how final! How it puts a new face on all things! Lo! on the other side rises another man, who draws a circle around the circle we had just pronounced the outline of the sphere.“

—Ralph W.  Emerson, Circles from Essays 1841

If “thinking outside the box“ was important in Emerson’s horse-and-buggy era, you can bet it’s 10 times more important in the age of Facebook and iPads.  To survive in the B/OSS solutions biz, your antenna must be constantly tuned to what telecom customers really need today.  And there’s no time to waste: Competitors are already drawing circles around your existing products.

So imagine you’re a veteran of the network cost management solutions space.  For years you’ve made money converting paper invoices and verifying interconnect invoices for errors.  But now those markets are maturing and it’s time to figure out what to do for a second act.

The scenario I just described is the precise dilemma Razorsight faced in 2009 as it looked to its future.  To bring in some new expertise, Razorsight looked at dozens of potential companies to acquire.  In the end, it selected SingleTusk Solutions, a small telecom analytics company owned and run by Suren Nathan, now Razorsight’s CTO.  Suffice it to say that Razorsight’s “how do I reinvent myself?“ problem has now become Suren’s marching orders.  But does the pressure get to Suren?  Not very much.  In fact, Suren is one of the most upbeat and friendly guys I’ve ever met who’s carrying a sack of stones on his shoulders.

In the interview that follows, Suren walks you through his thought process as he explains the how and why of carving out a new software niche in network-inventory integrity that is contributing to the transformation of Razorsight’s business.

Dan Baker: Suren, moving from financial assurance into the network inventory space seems like quite a stretch.  What’s the rationale for moving in this direction?

Suren Nathan: Dan, you’re right.  At first glance, inventory integrity looks like a leap into something totally different from our heritage business in cost management.  But if you look at an operator’s problems more holistically, it actually fits quite nicely.

Today’s cost-management solutions are mostly driven from a customer perspective.  So they’re good at margin assurance — figuring out if the network leasing costs relative to a particular customer are lower than the actual revenue that customer generates.

That’s fine.  But consider the wireless market where operators are spending huge CAPEX ramping up their backhaul networks via Metro Ethernet.  Well, those backhaul costs are not really customer specific, are they?  Who would you assign those costs to?  It’s actually a big indirect cost.

So here you have a massive network-cost component that traditional cost-management solutions don’t even look at.  And without an accurate and reliable network inventory, most of the analysis and audits from a cost optimization and management perspective won’t deliver the goods.

So what’s Razorsight’s approach to bringing network inventory under a cost management lens?

Well, to begin with, we’re not the first to tackle this issue.  The sector was actually invented by Co-Manage (now Subex) a decade ago.  The way Co-Manage solved the problem was to put probes in the network and reconciling the probe data to the network itself.  That model works well for service providers who own their own networks.  But most every communications provider spends 25 percent-plus of its total revenues on off-net or leased facilities, and they have no way to probe these network elements.

Our approach recognizes the fact that even if the inventory system is the database of record, you have many other peripheral systems — such as ordering and billing — that feed and interact with that inventory.  All those systems have some representation of inventory — circuit IDs, customer addresses and so forth.  Then there are processes like network grooming, data migration, disruptions caused by M&A, that cause network inventory to get out of sync.

So what we do is reconcile the inventory against these multiple sources.  We pull in billing data from Amdocs, Intec, CSG, homegrown and several other systems.  And we access Order Management and Inventory data from systems like Oracle Metasolv or NEC Netcracker.  And we take a feed from a CRM data such as Siebel.  So all of this provides the unified and reconciled inventory view which can be used by many organizations in the telecom.  For instance, using this approach, it now becomes realistic to reconcile repeatedly — month after month — and that’s a great way to recover stranded assets and stranded capacity.

It must be difficult to sell a system like this.  The buyers are scattered throughout a telecom organization.

Yes, inventory drives a lot of programs: capacity planning, network optimization, network cost management, service assurance, product-line profitability and many others.  We end up selling to multiple groups at the service provider.  Not just finance, but network engineering, marketing and executive groups too.

This is a unique analytics application that’s not part of the order-to-cash stream.  It’s powerful because without it, customers end up logging into multiple systems to get a unified view.  For instance, to get a cost view, they would need to go to a system such as Razorsight or TEOCO, dip into a Telcordia Granite for another view, and maybe an ASR e-bonding system from Synchronoss or Neustar.

So if you’re a network engineer, operations or customer service rep, and someone needs more information on the circuit, you can access the system, punch in a number, and get the full 360-degree view of the circuit.  When was it ordered, who is using it, what are the service end points, and how much is it costing us?

What exactly do you inventory?  And what are the challenges of getting an accurate picture?

We look at all components of the network to include physical and logical elements.  These include ANIs, segments, circuits and attributes of the circuit.  And we also look at certain physical devices like wireless handsets.  Primarily we focus on logical inventory — inventory that dynamically changes over time.

It’s important to monitor a circuit as it gets assigned, provisioned and groomed.  Ethernet introduces many new challenges here.  Circuits like ATM, Frame Relay, DS3 and T1/EI were fairly simple by comparison.  Now Ethernet is a burstable service.  It’s based on bandwidth as opposed to point-to-point connections.  And here’s the challenge: If you’re buying bandwidth from a wholesaler, there are no standards bodies that tell you how to order and bill those.

In a sense, next-gen IP networks are now going through a curing process, not unlike a big vat of cheddar cheese.  IP is a very fluid environment right now, and it will take some time for the standards to settle and solidify.  Yet as an operator, you simply can’t wait because the demand for iPhone and Androids is pushing you to rapidly build out backhaul circuits to support the boost in wireless data traffic.  So what do you do?  If the standards aren’t there, you’re forced to make up rules as you go along with every carrier doing it a different way.  But even if you can simplify things, you’re still talking about individual matrix-based pricing contracts with a lot of variable costs.  Calculating costs is going to make your head spin.  And you can be sure that this confusion will lead to lots of invoice verification headaches.

In short, this is no longer about inventory connectivity.  It’s more about monitoring a highly flexible kind of inventory, requiring a deeper view than has been looked at before.

Suren, I know you’d love to sell this solution to every service provider, but how will an operator know that a solution like this makes sense?

Well, every wireless carrier is migrating to 4G/LTE with an Ethernet backhaul network to support the vast increase in apps and video downloads.  In parallel, they are quickly disconnecting legacy TDM-based networks.

So network migration is perhaps the biggest driver.  When people are disconnecting a lot of circuits, you need to ensure that the transition is handled properly or you’ll be paying dearly for double coverage.  That’s a big challenge.

The second driver is really around mergers and acquisitions.  Telecom mergers are happening all over the place and to truly achieve operational synergies, you need the inventory to be as accurate as possible.

Finally, Suren, something I’ve been meaning to ask you for a long time.  What’s with the SingleTusk name?  It’s a pretty cool name, but what does it mean?

The name SingleTusk is derived from ancient mythology.  The story follows a chronicler, an Elephant, who was offered a chance of a lifetime: to scribe the greatest story ever told.  The key stipulation was that the entire story had to be recorded in one sitting without stopping.  But in the middle of recording the story, the chronicler’s writing tool broke, so rather than stop and lose the opportunity, he broke off his own tusk and used it to finish his deliverable.

I used this theme to coin SingleTusk — a company that was singularly devoted to customer success and wouldn’t stop until the goal was reached.

This article first appeared in Billing and OSS World.

Copyright 2011 Black Swan Telecom Journal

 

About the Expert

Suren Nathan

Suren Nathan

Suren Nathan is an 18-year veteran of telecom and the chief technology officer of Razorsight.  Previously, Suren was a founding partner at SingleTusk solutions, which served many large and small service providers with innovative cost, revenue and margin analytics solutions.  Prior to that he was a co-founder and CTO of Step 9 Software, selling order management to CLECs.

Razorsight provides SaaS business intelligence and profit analytics for the communications industry, managing both the buy side and sell side of carrier-to-carrier relationships.

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