1、Federico Germani (CH), Bernd Kraus (FT), Andr Krause (DU), Friedrich Neumeyer (FT), Stefan Schmitgen (FT), Juergen Stark (CH), Safroadu Yeboah-Amankwah (CH),CONFIDENTIAL,Primer Document, Version 1.0,Chicago/Frankfurt, March 2004,This report is solely for the use of client personnel. No part of it ma
2、y be circulated, quoted, or reproduced for distribution outside the client organization without prior written approval from McKinsey it is not a complete record of the discussion.,213,CONTENTS,Management summary Situation and demands on Telco IT Assessment of existing Telco IT environments Vision of
3、 a future Telco IT landscape Outsourcing of Telco IT How to get started Appendix 1: Detailed description of IT-supported functions Appendix 2: Glossary of terms,214,Source: McKinsey,IT SUPPORT OF TELCO BUSINESS PROCESSES,Capacity and traffic planning Design of the physical network Management of the
4、network installation Engineering Inventory management .,Manage/control correct functioning of the physical network Manage the load of network traffic Maintain network Manage interfaces to 3rd party networks .,Manage/control sales force Manage sales channels Launch campaigns Manage accounts Manage cu
5、stomer contracts .,Manage and control the order processes for telecommuni-cation services Activate/ terminate services for customers .,Rate and bill telecommunication services according to price lists, contracts and 3rd party tariffs Rate and bill 3rd party Telco services Maintain customer relations
6、hip .,Decision on business focus Investment planning Design of products and tariff schemes Design of market penetration approach,Enterprise resource management HR management Finance Accounting .,IT supports all parts of a Telco operators value chain,Back-office administration,Strategy and marketing,
7、215,Back office applications,Source: McKinsey,OVERVIEW: FUNCTIONALITY OF TELCO IT,Network management,Inventory management,Decision support systems/ data warehousing,Customer care & billing,Service provisioning,Network element management,Maintenance and workforce management,Network configuration Surv
8、eillance of network traffic and performance Fault management,Tariff and customer contract management Order handling Billing, invoicing, A/R Complaint management,Configuration and surveillance of individual network elements such as switches, multi-plexers, routers, etc.),Inventory management of custo
9、mer premises equipment network elements (e.g., switches, mutilplexers, etc.),For detailed description of systems and their functionality seeAppendix 1,HR management Finance Enterprise resource management,Management of maintenance and repair service activities for customer premises equipment, switch
10、network and trunk network components,Analysis of customer behavior, churn, etc. Customer segmentation Profitability analysis,Service configuration and activation (e.g., selection of phone number, line or SIM card activation, etc.) Call collection,216,Source: McKinsey,CHARACTERISTICS OF INCUMBENT TEL
11、CO IT SYSTEMS,Patchwork application architecture Heterogeneous architec-tural approaches across different BUs No layered system structures System and data redundancy Incomplete or unsatis-fying support of business processes,Performance and reliability driven system operations Reliability driven syst
12、em design at the expense of high cost Performance optimization on the level of single systems with reduced overall performance,Legacy issues Historically grown architecture with-out clear concept Complex system interfaces (if any) Outdated technology Difficult, expensive system maintenance,217,Sourc
13、e: McKinsey,ILLUSTRATION OF REAL TELCO IT ARCHITECTURE,Back office applications,Maintenance and work force mgmt.,Inventory management,Service management,Access to redundant systems within one system domain,Access to a multitude of systems across different domains,218,FRAMEWORKS TO UNDERSTAND EXISTIN
14、G IT SYSTEMS,Source: McKinsey,Which applications exist within the Telco?,Issue,Importance of understanding,Frameworks and tools,What kind of support do systems provide?,How dynamic are systems?,What is the technical diversity of systems?,Failure to develop a comprehensive view of the applications an
15、d architecture results in an incorrect focus and limited effectiveness,While technologists often understand the relationship between systems and technology, it is their relationship with the business that determines value and effectiveness,The future viability of systems is often determined by their
16、 ability to meet changing business needs. Stable systems ideally are de-coupled from dynamic systems,Costs for operation and maintenance of system platforms often could be significantly reduced by shared technologies,Application inventory,Application mapping,Application dy-namics/stability assessmen
17、t,Technology infrastructure analysis,219,Source: McKinsey,ORGANIZATIONAL DRIVERS OF TELCO IT,With increasing age, more and more core functions are supported by outdated systems on numerous different hardware platforms Increasing company age causes complexity costs generated by scale effects, multitu
18、de of technology platforms, offered products and services, regulatory obligations, and complexity of historically grown patchwork Increasing size of Telcos slows down speed of decision-making process and flexibility to react to challenges Increasing size of Telcos requires fundamental change of thei
19、r overall organizational structure with major impact on the IT landscape to maintain operational efficiency,Organizational set-up determines split of responsibilities between central and decentral IT units and therefore influences consistency of IT design and granularity of systems (monolithic vs. d
20、ecentral) Organizational set-up influences make or buy decisions Fragmentation of user demand and system ownership across organizational units determines the degree of stakeholder conflicts,Since the IT structure is not aligned to the business processes, IT functions are accessed by a variety of use
21、rs located all across the value chain Conflicting user expectations and unclear responsibilities in combination with scarce resources cause conflicts,Organizational issues influencing Telco IT systems,Organiza-tional age and market position of the Telco,Organiza-tional set-up of Telco IT,Process org
22、anization,220,ALIGNMENT OF IT WITH THE BUSINESS,align,Company objectives/ strategy,Objectives/ strategy for IT architecture,align,Business unit organization,IT organization,align,align,Source: McKinsey,IT architecture Application landscape Technology platforms,Organizational set-up of company Core p
23、rocess organization Governance model,Key challenge: Align IT organization and strategy to companys strategic objectives and organization,Targeted markets/ customer segments Targeted market position Product/ service scope etc.,What is the right degree of organizational integration or decentralization
24、 of IT functions? Central vs. decentral application support Organizational split between network management and business operations functions What is the appropriate IT governance model? Budget responsibility Process for prioritization of requirements What is the best way to allocate the limited res
25、ources given the heterogeneous or contradicting system requirements of different user groups? How can 3rd parties like standard software providers or system integrators best be involved?,221,Source: McKinsey,DESIGN CRITERIA FOR A VISIONARY ARCHITECTURE,Alignment of business strategy and IT architect
26、ure to establish a more business-focused rather than technology-driven IT,Consolidation of proliferated platforms and applications to re-duce complexity of tech-nology stacks (e.g., hardware, OS, middle-ware, applications, etc.) and achieve economies of scale and scope,Flexible, process-oriented rat
27、her than functional integration of applications,Strict layering between network management and business operations to encapsulate network complexity and free up business operations,High performing IT architecture Functional co-verage aligned to new and emerging business needs Low operating cost Low
28、cost of new development/ additional functionality,222,Source: McKinsey,ARCHITECTURAL VISION: MAIN BLOCKS OF AN “IDEAL“ TELCO IT,Event processor,Order entry/ provisioning,Workflow management,Network element manager,Network configuration and monitoring,Front office,Factory,Billing,Contract manage- men
29、t,Business partner administration,Core business operations,Support systems,Management information systems,Back office applications,.,Wireline network,Shared services,Network element manager,Network configuration and monitoring,IP network,Product definition,Contract manage- ment,Product definition,Co
30、re business,Customer account management,Maintenance management,Business unit 1,Order entry/ provisioning,Workflow management,Customer account management,Maintenance management,Business unit n,.,.,Inventory management,Network element manager,Network configuration and monitoring,Wireless network,Inven
31、tory management,.,Business partner administration,Core business opera- tions,Service provisioning,Converter and router middleware (message broker, CDR gateway),Opportunity to replicate blocks within each layer: conscious decision between effectiveness and efficiency,223,TRADITIONAL MIGRATION METHODO
32、LOGIES,Source: McKinsey,“Patch and swap” approach,“Lifeboat” approach,“Isolate and replace” approach,Standard software approach,Use standard software to replace existing systems,Use middleware to wrap legacy system and add new functionality in small steps,Built up new systems from scratch and migrat
33、e in a big bang,Undirected evolution in highly complicated application architecture tends to increase the chaos,Opportunistically replace single systems,Incorporates the tendency to start mega-project with a high likelihood of failure,Over time increasing amount of functionality built into the middl
34、eware creates additional legacy,Often available systems are inflexible to match dynamic business requirements and require huge amount of customization,Risks/barriers,Methodology/technique,224,Source: McKinsey,PRINCIPLE OF A RISK-LIMITED MIGRATION APPROACH,(Partial) Implemen-tation of architectural v
35、ision,Radical, revolutionary changes as enabler for further evolutionary steps,No IT mega-projects!,Evolutionary development within the boundaries of the strategic vision,Migration prerequisite: Define long-term IT vision,Migration roadmap and implementation plan,Right mix of evolutionary and revolu
36、tionary moves based on traditional techniques,225,Source: McKinsey,RISK LIMITED APPROACH TOWARDS THE TARGET ARCHITECTURE,Upfront definition of long-term strategy and IT vision,Develop long-term strategic view of future business,Develop view on future business system,Develop “best fit“ architectural
37、vision of future IT infrastructure,Develop long-term master plan for migration into new IT world,Opportunistic but directed migration path,(Partial) Implementation of architectural vision,Evolution of business system and business environment,Evolution of business system and business environment,Impl
38、ement new business requirements in small steps Each implementation step needs to be justified by business case (NPV analysis),Make revolutionary move that brings IT closer to architectural vision Move only if economical or structural factor forces you,226,DEVELOPMENT OF A MIGRATION ROADMAP,Source: M
39、cKinsey,Strategic vision,Master plan,Revolutionary change of IT infrastructure,Evolutionary implementation of new business requirements,Vision of future business system,(Partial) Implementation of architectural vision,Architectural vision,Identification of business requirements,Validation and prio-r
40、itization of business require-ments,Bundling of requirements into imple-mentation projects,Development of technical implemen-tation alternatives,Development of project portfolio (timing, resources),Implemen-tation,Decision: Go/no go for specific alternative,227,KEY FACTORS OF SUCCESS FOR MIGRATION,S
41、ource: McKinsey,Reduction of business complexity In order to avoid over complexity in future applications reduce as far as possible the complexity of the business system (80:20) Filter out all business requirement that do not clearly foster a competitive advantage and create significant return on in
42、vestment Quick implementation of basic architectural moves Identify architectural move that can be implemented with manageable risk and that create an maximum amount of freedom for evolutionary steps Especially introduce technologies like middleware that helps to reduce the handling of system interf
43、aces Size of migration steps For each migration step chose a project size that is still manageable in the light of the available skills, experience, source quantity and technical complexity Under those constraint maximise the size of migration steps in order to avoid unnecessary efforts for interfac
44、ing legacy systems,228,CONTENTS,Management summary Situation and demands on Telco IT Assessment of existing Telco IT environments IT architecture IT organization Vision of a future Telco IT landscape Outsourcing of Telco IT How to get started Appendix 1: Detailed description of IT-supported function
45、s Appendix 2: Glossary of terms,229,Source: McKinsey,HOW TO LOOK AT IT ARCHITECTURE - OVERVIEW,Situation analysis: Characteristics and pitfalls of current incumbent Telco IT system architecture,Drivers of current situation,Tools for assessing a specific Telco IT system architecture,230,Source: McKin
46、sey,FRAMEWORKS TO UNDERSTAND EXISTING IT SYSTEMS,Which applications exist within the Telco?,Issue,Importance of understanding,Frameworks and tools,What kind of support do systems provide?,How dynamic are systems?,What is the technical diversity of systems?,Failure to develop a comprehensive view of
47、the applications and architecture results in an incorrect focus and limited effectiveness,While technologists often understand the relationship between systems and technology, it is their relationship with the business that determines value and effectiveness,The future viability of systems is often
48、determined by their ability to meet changing business needs. Stable systems ideally are de-coupled from dynamic systems,Costs for operation and maintenance of system platforms often could be significantly reduced by shared technologies,Application inventory,Application mapping,Application dy-namics/
49、stability assessment,Technology infrastructure analysis,231,Source: McKinsey,APPLICATION INVENTORY,Application portfolio/interface complexity causes inflexibility and high cost of support,Example: Network OSS,Application inventory = map showing each application (represented by a box) and interfaces to all other applications (re- presented by lines between boxes),232,Source: McKinsey,MAPPING OF APPLICATIONS,Shows functional redundancies Displays diverging functional cuts Illustrates deficits in application connectivity on a corporate level,
