The Evolution of Inventory Management in OSS

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1 Market Analysis The Evolution of Inventory Management in OSS Abstract: Advancements in inventory management offer multifunctional capabilities designed to improve network visualization, track network assets and interact with other operating support systems. By Verne Anton Strategic Market Statements Service providers with the best command of their network infrastructure are much better positioned to fulfill the demands for improved service fulfillment and service assurance. (0.9 probability) Service providers that are seeking full benefits of technology without accurate views of their networks and inventory will remain high-cost providers and lose market share. (0.7 probability) Vendors that are able to synchronize advanced inventory management benefits with strategic business strategies will be best positioned in competitive situations. (0.8 probability) Publication Date:24 April 2003

2 2 The Evolution of Inventory Management in OSS Taking Stock of Network Investments Inventory management in the telecommunications world is a science. Networks are constantly in a state of change because events, occurring at any time, change the status of the network, impact the future topology of the network, and affect operations and business processes. Operationally, it impacts the carrier's effectiveness in managing its network and delivering customer services. From a business perspective, it facilitates capital and operational expenditure control, while keeping customers satisfied with the delivery of services. The complexities of inventory management are evident in the following: Thousands of physical elements in the network are codependent and provided by a market full of competitive choices. Thousands of logical elements (for example, virtual circuits) and identities make up services (for example, telephone numbers and IP addresses). Numerous interfaces interact with other systems (some of which are other inventory systems) as data is passed back and forth while the inventory system attempts to keep accurate information of the network at any given time. It is the foundation for capital expenditure planning. It accepts input and provides output to keep the network in synch with its repository of assets. Carriers have invested heavily in their network infrastructure to allow themselves to scale to customer demand, improve return on investment, and adapt to technology and services. While investment during the past two years has dropped significantly, the installed base remains significantly under-accounted for in terms of inventory accuracy. This has led to functional deficiencies not only in the inventory process itself but in a number of processes that rely heavily on the inventory system. Service fulfillment and assurance are affected by inventory management. Attempts to keep inventory records are frequently addressed by in-housebuilt systems and usually housed in the different technological domains of the carrier. No holistic view of the network exists, and any attempt to reconcile assets among the domains is a difficult, labor-intensive process. The lack of successful and timely reconciliation of databases in layers of an operations support system (OSS) leads to the following negative impacts: Stranded equipment assets Stranded bandwidth capacity Needless capital expenditure (without full asset use) Service activation failure or extended delivery times 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 24 April 2003

3 3 Slower network provisioning resulting from critical network performance and fault information Higher operations cost With the constriction of capital expenditures, the discovery and use of stranded assets is an avenue of approach to extract additional value from their networks without the need for additional capital outlay. With the downturn in the telecommunications market, carriers are forced to mine investments for maximum revenue and improved efficiency, rather than continuing to build out their network. This is particularly important in areas such as optical (broadband) services, which are significantly more expensive than traditional narrowband services. Networks Are Not Static Networks and inventory are impacted by daily events. Over time, orders are driving what the inventory database will look like, rather than the database being an accurate representation of the network at any given time. The inventory can be spread among several databases, dedicated to some kind of domain in the network or carrier organizations. A lack of effective integration prevents reconciliation and results in an incomplete view of the network. The problem perpetuates and affects service as exceptions and errors occur. Customer delivery dates are delayed, or services are unable to be delivered because the equipment or capacity that was thought to be there was not. Of course, the reverse is true as well. Carriers thinking that they do not have equipment or capacity will order additional assets, exhausting their capital budgets. From an operational viewpoint, the cost to check and verify add up and ultimately impact operating margins. Inventory Management Solutions Are Multifunctional In its most basic sense, inventory management tracks network assets (tangible and intangible). Assets can be equipment, circuits (physical and logical) and identities such as telephone numbers and IP addresses. However, what is achieving more importance in this service managementcentric world is the identification of services that are combinations of these assets. These services and their definitions must be in tune with the network itself so that any change to the network assets doesn't necessitate a change in service definitions. Many vendors as well as different generations of their technology are prevalent in the carrier networks. Inventory systems are expected to provide complete levels of backward compatibility to eliminate the need for maintaining multiple systems and the subsequent reconciliation efforts among them Gartner, Inc. and/or its Affiliates. All Rights Reserved. 24 April 2003

4 4 The Evolution of Inventory Management in OSS At a minimum, the process of telecommunications inventory management should provide the following: Core network and service database Design and assign capabilities Visual representation of circuits and equipment components Web browser for nontraditional users Work process functions Auto-discovery of configuration, properties, components and working status changes Administration of unique identities such as IP addresses Reconciliation capabilities with other OSSs Standard and ad hoc reporting Robust interfaces An open platform for value-added developers and external application plug-ins Architecture Design of OSSs has been evolving into a three-tier architecture. The three tiers use thin client and an abstract application layer that manages transactions between the database and thin clients, the other OSSs and business applications. The middle application layer simplifies system management and integration with other systems. It provides some flexibility for accessing backend data and functions from a range of client interfaces. The thin client can be any thin client application, usually browser-based and integrated with the inventory application, including the vendor's interface with the system. Other thin client applications can include managing the workforce that interact directly with inventory from a handheld device or bar code applications used for network auditing. Interfaces are the application interfaces through which other key applications, such as provisioning, activation, order management and network management, connect (in real time) with inventory. This is a "pain-point" for service providers because inventory management lies at thecoreoftheirosss.allthesesystemsrequireintegration,whichisa costly process. Some of this pain can be eliminated through pre-integrated OSS suites, available from some vendors or system integrators Gartner, Inc. and/or its Affiliates. All Rights Reserved. 24 April 2003

5 5 A Broad Range of Inventory Management Solutions Is Available Inventory tracking, traditionally, is spread across the carrier technology domains with little integration between them. These systems could scale adequately, given the boundaries of the domains being inventoried. Any attempt to centralize assets to a central repository would create additional demands for scale in terms of assets, transaction volume and users. One of the key inhibitors for purchasing vendor-supplied inventory systems is the perception of lack of scale. Because the inventory management function is processed driven, the value propositions of vendors are beginning to resonate more. Telecommunications inventory solutions are provided by the following vendors, some as specific niche offerings and others as part of integrated suites: Cramer Systems Granite Systems Visionael NetCracker MetaSolv Arkipelago Telcordia AiMetrics Eftia Protek Gamma Projects Alcatel Networks Nokia Lucent Technologies Cisco Systems Related Solutions Reconciling network data with the overlying OSS inventory databases can be accomplished through the use of network control planes or autonomous agents. An intelligent network control plane, provided by such companies as Elematics, is tightly integrated with the underlying physical assets of the optical network, enabling real-time, fully synchronized network element and services inventory management across an entire multivendor network. This provides carriers with a single, up-todate view of their network and service inventory something they generally have not had in the past with the network as the database. Reconciling the network data with the overlying OSS inventory databases provides a mechanism for recovering stranded network assets and 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 24 April 2003

6 6 The Evolution of Inventory Management in OSS capacity. By integrating the intelligent network control plane software with the network and OSSs, the carrier can experience complete visibility and maximized allocation of their network resources (that is, equipment slots, ports, services, cross-connects and interoffice facilities). Sheer Network's broadband OS is designed to handle large-scale data networks through its distributed autonomous agent architecture. Autonomous agents model network behavior and topology. Each autonomous agent acts as a decision-routing node, handling simple local decisions, and communicating to its neighboring (acquaintance) agents to perform complex networkwide tasks in a state-of-the-art distributed computing framework. Other network applications with deep discovery capabilities will identify discrepancies between the network itself and the supporting systems. Syndesis, a provisioning and activation vendor, has used its technology that communicates directly with network elements or element managers to look at the provisioned state of the network. The product, NetDiscover, performs a reconciliation process comparing physical and logical inventory. Data Integrity Is Critical The measure of efficiency of what OSS brings to carriers must begin with integrity of data. Short of that, the true potential of any of the systems is compromised. The nature of disparate OSS systems lends itself to fragility. The combination of extensive network build-outs, sold services, resold services, and what is ratable and not ratable adds complexity to the process. Accurate knowledge of network components, their status and availability can provide dramatic improvements. Service providers can obtain some substantial improvements in margins by correcting the data discrepancies so often found in their operations. The optimum value of a support system hinges on the integrity of the data it moves from process to process. Carriers desire a unified view of their customers, services and networks. This would require a level of data integrity so often missing in OSS, which inhibits the understanding of the relationships among key business and network data. Any initiative to improve data integrity will improve what OSSs were designed to do. Gartner Dataquest Perspective The range of database discrepancies (typically 10 percent to 40 percent), combined with the fact that an incumbent carrier spends about half of its expenses on operations, strongly suggests that most carriers should reassess the status of their network inventory. This assessment should have the highest priority when allocating scarce capital. With complete support for relevant network elements, the carrier can achieve complete equipment, service and topological inventory status. Financial benefits can be determined if a carrier can quantify the value offered by the new generation of inventory solutions against a broad range of operations and 2003 Gartner, Inc. and/or its Affiliates. All Rights Reserved. 24 April 2003

7 business metrics. Expenditure that provides near-term return on investment through operational efficiencies and improved management of its network assets will have a positive impact on service fulfillment, service assurance and, ultimately, the bottom line. Continued development of in-house solutions is not likely to be a permanent cost-effective fix. One of the key concerns for carriers is scale, which is an unacceptable trade-off for costs and, indeed, an obstacle vendors must overcome. Vendors should leverage experiences with other customers to create models for prospects to use. Gartner Dataquest Recommendations Given the prevalent discrepancies between the actual network assets and the state of the network resident in OSS applications, carriers should consider re-architecting their methodology of maintaining their inventory and asset information by doing the following: Carriers should be evaluating their inventory processes before additional network build-outs or any significant modifications of their OSSs. The complexity of integrating an additional inventory solution later will only add cost and delay operational efficiency. Carriers should be striving for end-to-end views to ensure the capture of capacity of assets at the component level and other relevant holistic views. Carriers (with the assistance of vendors) must map the features and functionalities into strategic business benefits to justify the expenditure. The integration team, a combination of external and internal resources, must pay due diligence to the data-migration process to ensure accuracy of data and subsequent integrity of the network inventory. Exhaustive testing during the project should be conducted to ensure that benchmarks (real-time inventory updates, consistent network views and other critical information flow) are reached without compromise. Key Issue How will operation support systems facilitate the optimization of a public network infrastructure? Gartner, Inc. and/or its Affiliates. All Rights Reserved. 24 April 2003

8 8 The Evolution of Inventory Management in OSS This document has been published to the following Marketplace codes: TELC-WW-DP-0357 For More Information... In North America and Latin America: In Europe, the Middle East and Africa: In Asia/Pacific: In Japan: Worldwide via gartner.com: Entire contents 2003 Gartner, Inc. and/or its Affiliates. All rights reserved. Reproduction of this publication in any form without prior written permission is forbidden. The information contained herein has been obtained from sources believed to be reliable. Gartner disclaims all warranties as to the accuracy, completeness or adequacy of such information. Gartner shall have no liability for errors, omissions or inadequacies in the information contained herein or for interpretations thereof. The reader assumes sole responsibility for the selection of these materials to achieve its intended results. The opinions expressed herein are subject to change without notice