Executive Summary

IT readiness for 5G business, especially for network equipment providers (NEPs), poses both opportunities and challenges. The new digital-first world forces NEPs to adapt their business models, leading to changes in their product-service offerings, governed by the demand for a holistic customer experience. The change pushes NEPs to re-think and re-build their IT organizations’ capabilities under the new normal of on-demand, scalable, and marketable solutions. Our approach focuses on the development of a new orchestration (IT capability) layer by simplifying lead-to-cash, leveraging few legacy IT functions, following specific IT design principles to minimize technical debt, and boosting responsiveness to change.

5G opportunities & New business models for NEPs

5G’s evolutionary technology will enable NEPs to tap into new revenue streams

5G has revolutionary potential through its promise of an incomparable consumer experience. This new technology will be an evolution of the existing 4G technology, with both co-existing, until 5G takes over completely.

From a technological perspective, 5G is a revolution. The imminent benefits to end-customer and enterprises will include enhanced mobile broadband, massive machine type communications, and ultra-reliable and low-latency communication.

The question that arises is whether usage and adoption will justify its investment. Both usage and adoption are highly correlated with an NEP’s business and operational model.  In justifying 5G adoption, NEPs will need to evolve to one of the following models:

• Vertical growth strategy through infrastructure ownership models (ranging from each operator owning and operating its own network to hybrid models, where part of the infrastructure is consumed as a service)
• Strategic ecosystem partnership models (ranging from exclusive deals between NEPs/ Software (SW) providers with individual operators to Industry-level partnership through open innovation)
• Horizontal growth strategy competing across the value chain (where NEPs could become operators for enterprises and cloud providers may compete with operators)

The NEP market landscape will change significantly with the emergence of new use-cases, new customers, and new ways of consuming products & services.  The diagram below depicts the model.

NEP Marketplace

New business models bring an underlying shift in the product portfolio & service delivery

The above scenarios most likely will influence the NEPs’ product portfolio mix. Software-centric 5G network evolution will demand XaaS models, SW only product sales (from traditional HW & SW integrated product sales) and after-market services.  Nevertheless, the value propositions for NEPs, described below, could solidify their market position, while driving digital transformation.

The emerging business models will not necessarily serve as a substitute for current models, but will instead co-exist with them. In that case, NEPs may act as the prime integrator where a telecom operator, subscribed or not to an NEP, would place an entire order on NEPs, which involve third-party components including software from other original equipment manufacturers (OEMs), hardware from original design manufacturers (ODMs), application vendors and security vendors.  NEPs may have to work with ecosystem partners, SW vendors, and open sources to deliver products and services to customers.

NEPs could expand their portfolio services beyond their current product offering directly to enterprise. Under this scenario, use cases may include connected car (Automotive), telehealth, remote surgery (Healthcare), smart cities (Energy & Utilities), and smart manufacturing.  In these markets, NEPs can extend their value proposition by bringing together vertical service providers (VSPs) and Communication Service Providers (CSP).  In the vertical markets, NEPs will have an opportunity to deliver their products in SaaS models by creating an ecosystem of vertical apps and connectivity delivery solutions.

Product portfolio changes push NEPs to re-invention

Through 5G and the product/ service portfolio changes it may bring, NEPs need to revamp their external (via partnerships) and internal (via organizational structure, capabilities, and processes) strategy to align with a holistic service experience to end customers.

To retune their strategy, NEPs need to focus their resources in the following domains:

Business Strategy

• Focus on partnerships and ecosystem integration with suppliers, vendors, and telcos
• Invest in Digital Technologies to address digital platform centric business models for service providers. These include digital services platforms,  IoT platforms, and AI to improve service levels and service experience

Organizational Structure

• Restructure the product engineering teams to create collaborative structures organized around customer solutions
• Develop services and consulting solutions that become a vital part of the organizational DNA

IT Capabilities

• Undergo significant change to IT applications & infrastructure to address XaaS models, Partnership Ecosystem, and Solution delivery as a prime integrator. This will warrant changes in backend IT applications.
• Develop new front-end to achieve a complete new digital sales lifecycle, due to a new SW-centric business
• Acquire and/or develop new applications/ capabilities for contract management and service operations

Performance Measurement

• Incentive customer sales through lifetime-value programs
• Prioritize customer-outcome oriented measures and related data collection over product leadership

Business Process

• Develop changes for to lead-to-cash process such as sales, CPQ, supply chain, and finance
• Develop new processes around contract management, entitlement management, and revenue recognition

Data

• Package data (GBs) utilization into solution-oriented products to ensure customer usefulness
• Capture customer data related to usage volume, patterns, and service levels to optimize the lifetime value to customers

The changes in the domains described above drive the NEP’s capability to create, sell, supply, execute, and deploy its revamped services. That is why a detailed roadmap is needed to orchestrate the change drivers (e.g. 5G), the impacted domains (e.g. business strategy), the impact level (low, medium, high) and the new solutions’ scalability (e.g. XaaS, exclusive partnerships). The roadmap requires a holistic approach from the NEPs and a review of the options to build their IT capabilities.

We explore four options for NEPs to build IT capabilities required to enable their 5G digital transformation:

1. Brownfield approach
   Build on top of their existing IT applications
2. Fully independent – Greenfield
   Set up new systems for the new business
3. Fully integrated
   Orchestration of existing capabilities with heavy reliance on existing systems and databases, etc.
4. Modular Greenfield
   Develop a new orchestration (IT capability) layer simplifying lead to cash, leveraging few legacy IT functions

The above options need to be evaluated against multiple criteria; however, the most relevant ones for NEPs are the following:

Speed to market

A minimal viable product (MVP) is needed fast to support 5G business within the next 6 to 12 months

Adaptability

Fluidity in the market and ability to pivot, given the unknowns of the 5G ecosystems

Enterprise grade

Fully implementable, enterprise product. The product needs to become the future core IT; no quick start-up fix

No legacy creation

Technical debt creation needs to be avoided. Architecture development and execution are of paramount importance

The Modular Greenfield methodology should be the way forward, given that incremental ‘proven’ change and rapid scaling are the most effective enablers to run IT in the digital-first world.

Key principles for NEPs to overcome technical debt of legacy IT toward their digital transformation

Irrespective of the NEPs’ chosen option to build IT capabilities to drive their digital transformation, a few practical IT design principles applied with complex legacy IT organizations of global companies need to be covered. These principles should help IT organizations improve their agility and become more responsive to business change.

Design/ Organizational Perspective
(automate, but not too much)

• Select a mature, implementable technology
• Low-volume/high-complexity process/products are not the best course of action. NEPs should target high-volume/ low-complexity process/products and bottlenecks first
• Move from a functional perspective (where it is unclear where to invest first, creating the need to automate everything) to an operational perspective focusing on high volume/low complexity branches and bottlenecks
• NEPs should limit coding the organization because of its ever-changing nature
• “Who, where, when” go to Process/BPMN layer
• “What” goes to the functional systems

Technology Perspective
(execute first)

• Leverage “pre-built” processes from Cloud Apps vendors: Configure to quote, Order to cash, Quote to cash
• Leverage but limit to vendor “engines” (e.g. manage subscriptions, workflows)
• Select Low Code systems and Integration Layer at the front end (e.g. Salesforce, BPM & RPA, MDM)
• Expose validation rules (only) from Back-Office systems (e.g. Stock or resource availability)
• Separate “non-business/ regulation centric” apps like HR, Accounting, Cash Management
• Use object-oriented approach to product description to “extend” instead of “cloning”

Wipro Value-Added Offerings

The following services can be provided by Wipro to facilitate the understanding and implementation of the models discussed above so that NEPs can effectively develop their 5G strategy.

Assessment of NEP readiness to offer new business models:

• Assess the current operations, IT systems, and business models
• Study future business models, portfolio, and strategy

Define the NEP’s overall strategy:

• Develop Market & Competition Analysis
• Financial Analysis & Modelling
• Develop Technology Strategy
• Develop Business Process to meet NEP strategy & new business models

Define new Business Process:

• Definition of Business Process Flows
• Definition of Business Policies
• Definition of HLD
• Sequence Diagrams & Use cases
• Interface Lists and APIs

Develop IT Architecture:

• Define requirement on IT systems
• Develop Architecture
• Define Interfaces & APIs

Develop & Deploy new IT systems:

• Develop new systems (Greenfield / Brownfield)
• Deploy new systems

Resources:

1. https://www.networkworld.com/article/3387523/the-real-challenge-to-achieving-5g-the-networks.html
2. Internal Wipro documentation

Ravi Emani

Distinguished Member of Technical Staff

Ravi is responsible for the NEPC (Network & Edge Providers and Consumer Electronics) Practice at Wipro. He has over 23 years' experience in the Telecommunications industry and is currently working on various 5G reference solutions.  He has experience in developing SW solutions in 2G/3G/4G RAN, Core, SDN, and NMS domains.

Neil Gomes

Consulting Partner, Technology Business Unit, Wipro

Neil Gomes is a Consulting Partner with the Technology Business Unit at Wipro. He has over 18 years of experience driving consulting and digital transformation initiatives, focused primarily on clients in the Hi-Tech Industry. Neil has a Master’s degree in Technology Management from Carnegie Mellon University and is also an APICS Certified Supply Chain Professional.

Themis Vagiakos

AWS Business Development Lead, Wipro

Themis Vagiakos is an AWS Business Development Lead. He has been working at Wipro since July 2019, after completing his MBA from INSEAD. Prior to Wipro, Themis was involved in business strategy, corporate finance, and business development.

Michael Quarato

Team Member, Consulting, Implementation & Product Management, Wipro

Michael Quarato is part of the consulting, implementation & product management team at Wipro. Prior to Wipro, Michael was a product design engineer in the Aerospace and Defense industry, where he designed complex systems in the radar and microwave field. Michael earned his MBA from The New York University Stern School of Business in 2019 and also holds a Bachelor of Science in Electrical Engineering from the New Jersey Institute of Technology in 2007.