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Network managed services

The network managed services market is not as healthy as it appears at first glance.

Overview

The global marketplace dynamic of convergence, the blurring of traditional industry and technology lines, is driving a wide array of challenges in the network managed services arena—both for Communications Service Providers (CSPs) and the companies that serve them.

The ever-increasing capacity demands and continued cost pressure associated with convergence should drive further growth in the market for network managed services. However, based on the experience of both CSPs and Network Equipment Providers (NEPs), it is clear that all is not well in the network managed services market.

Measured by revenues alone, the network managed services market appears buoyant. However, CSPs are voicing a number of complaints related to network managed services, including both contracting and operations. Both CSPs and NEPs are struggling to find governance models that balance the end-to-end responsibility of the vendor and continued operator control, while at the same time allowing enough flexibility for future changes.

As a result, while CSPs still see network managed services as a key pillar of their strategy, they view it as a “grudge spend” for which they can muster little genuine enthusiasm.

Background

The findings of Accenture’s recent global survey, aimed at understanding CSPs’ views on a number of major issues related to today’s network operations, has helped confirm CSPs’ ambivalence about managed services.

Survey results show that managed services is still considered one of the means by which CSPs can move toward a new, leaner and more effective network operating model.

It also found that CSPs are not sure if they are receiving full value from managed services, and that there may be considerable room for improvement in the way those services are currently being delivered.

Recommendations
As a disruptive force, convergence is a threat to the unprepared, but it is a tremendous growth opportunity for companies that can out-innovate and out-execute their ever expanding list of competitors.

Traditional operating models cannot fulfill all these needs and more than that, a single model for network managed services cannot be the best choice for different tiers of CSPs, which have different needs and should diversify their operating models to stay competitive.

As a potential antidote, managed services need to deliver genuine, dramatic business change. When seeking to assist CSPs, technology vendors and service providers need to bring compelling value propositions through innovative, value-based contracts that capitalize on advanced solutions and that focus on outcomes, not activities.

Further, when deploying managed services in network operations, CSPs can benefit from working with an ally that is able to help them define the right strategy, support them in execution until the expected benefits are realized and carry out the transformation initiatives that are required to adapt to the new operating models on a sustainable basis.

Authors

Sebastiano Pardi is a Manager of Accenture Communications, Media & Technology, Network Services. He specializes in Network Operational Excellence. He is based in Rome.

Christian Rouffaert is a Senior Manager of Accenture Communications, Media & Technology, Industry Solutions and Services for UK and Ireland. He specializes in network operating models and network-driven product innovation. He is based in London.

Learn more about Accenture Network Services for Communications, Media and Technology.

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