> Opinion Paper

NGN
Migration Scorecard

2008 / 07

www.detecon.com
 NGN – Migration Score Card

Table of Contents
1 Executive Summary ............................................................................................ 3
2 How to master NGN complexity .......................................................................... 4
2.1 Handling the big black box NGN ................................................................. 4
2.2 Migration KPIs and their dependencies....................................................... 5
2.3 Derivation of strategic directions of impact.................................................. 5
2.4 How to control the migration process .......................................................... 6
2.5 The project management set up.................................................................. 7
3 Conclusion & Recommendations ........................................................................ 8
4 The Authors......................................................................................................... 9
5 The Company.................................................................................................... 10

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 NGN – Migration Score Card

1 Executive Summary

It would be difficult to find a telco player who still doubts that NGN will dominate the
technological future of the telecommunication industry.

So, one might assume that the “correct” path to be taken to NGN is now also known. But in
fact finding this path is one of the biggest challenges facing telco players these days.
Looking at the current NGN developments worldwide the observation is that the migration
process has already started but is at different stages of progress in different regions.

The progress varies depending on the motivation to migrate. This is influenced by a variety
of factors including the network lifecycle, the stage of market maturity, and the company's
ability to push migration (financial and personnel resources).

These factors and their interdependencies have to be considered by every ICT provider
contemplating migration to NGN.

The biggest obstacle to a migration from a legacy to an NGN network is the insecurity arising
from the complexity of the topic. Detecon’s NGN Migration Scorecard can help carriers to
make the correct strategic decision concerning the two major questions: when and how to
migrate. It also supports carriers in the monitoring of the NGN migration throughout the
entire migration process.

This paper introduces Detecon’s recommended approach to defining a ‘tailor-made’

migration strategy that reflects a carrier’s individual circumstances.

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 NGN – Migration Score Card

2 How to master NGN complexity

IP technology confronts carriers with various technological and commercial challenges.
Former vertically integrated carriers covered the whole spectrum of the telecommunication
value chain by owning a network platform, generating services, and maintaining customer
relations. The progressive disintegration of the transport and service layers is forcing carriers
to face up to new competitive environments which can be clustered into NetCo, ServCo and
SalesCo. A loss of technical sovereignty and increased competition on the service
layer are the major consequences that carriers have to deal with.
New players like Skype have entered the market and captured direct customer contact by
offering attractive telecommunication services and content without having to run their own
network infrastructure. In order to retain market power and revenue integrated carriers
have to restructure and redesign their business models by, for example, strengthening or
expanding their wholesale business.
Altogether the migration from legacy to next generation networks is accompanied by a huge
range of complex strategic decisions and changes at different levels. None of these
strategic decisions can be seen individually but always in terms of their interdependencies.
Therefore handling an NGN migration requires a holistic approach.

2.1 Handling the big black box NGN

In order to reduce the complexity of an NGN migration, four main ‘topics’ are introduced:
production and delivery, market and service portfolio, management and organization, and
financial performance. Each migration topic has its specific characteristics in a legacy and
next generation network.

Legacy network Migration topics Next generation network

Monolithic platform structure Layered structure (NGN)
Figure 1: Scope of NGN migration
Services
Services
Functions

Functions

Services Service/Application Layer

Central

Central

2.2 Control
Control
Control Production and delivery Control Layer
Transport Layer
Transport
2.3

2.4Vertical integrated provider Brand

Horizontal integrated provider
Sales Sales Sales Market and service portfolio and sales Resid. SME LE

2.5 Service Service Service Services Content WLAN IP VPN

Network Network Network Management and organization Network Fixed Mobile Data
2.6

2.7Multiple platform costs

Increase in Platforms 1980-2005
%
Long-term cost reduction
No. of platform s

Mobile OPEX
100

2.8 Internet OPEX

Business Financial performance OPEX

customers CAPEX
CAPEX
2.9 Voice CAPEX

1980 1985 1990 1995 2000 2005

Legacy Platforms Migration NGN Platform

Figure 1: Scope of NGN migration

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 NGN – Migration Score Card

2.2 Migration KPIs and their interdependencies

The Detecon NGN migration concept is based on a scorecard which supports carriers in
their decision-making concerning identification of a successful NGN migration strategy.

For each of the scorecard topics ‘market and service portfolio’, ‘management and
organization’, ‘financial performance’ and ‘production and delivery’ specific KPIs are defined
that measure success along the migration process.

In order to derive the right NGN migration strategy for the carrier in question the various
interdependencies between the key performance indicators have to be taken into
consideration.

KPI scores are thus derived from actual company performance and then adjusted according
to the interdependencies between the individual KPIs.

Sample definitions of KPI scorecard values Key migration drivers derived from adjusted KPIs

KPI score 1 2 3 4 5

Network status Legacy .. .. .. NGN

network KPI 1
3 2
Market share of 0% 1-5% 5-10% 10- more than
carrier’s IP based 15% 15% 3 KPI 3
-2 2
service offering
KPI 2
Number of 25 % 25 - 30 30 - 35 - 40 more than 1
households with % 35% % 40%
broadband access

Number of migrated 0 >2.5 > 5.5 > 7.5 > 10 Mio.

subscribers Mio. Mio. Mio.
KPI score KPI dependency

Figure 2: KPI valuation and adjustment

Based on related migration project experience the characteristics of the carrier’s network,
organization, and market performance are translated into scores, giving the relative
performance of a specific company area.

Interdependencies between KPIs (e.g. positive correlation between market share and SLA
fulfillment) are then taken into account and the affected KPIs are adjusted by eliminating
these cross-correlations.

2.3 Derivation of strategic directions of impact

The NGN migration scorecard delivers key migration drivers. These can then be clustered
into a four field strategic matrix. Each field requires different action. The consideration of
both the KPI score and the adjusted KPI score (isolated performance) helps ensure that the
KPI is classified into the appropriate strategic field, and that the right action is initiated at the
right time.

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 NGN – Migration Score Card

high
Avoid wrong actions! Never change a winning
team!

• Weak present performance is • Substantial migration progress

caused purely by dependencies • Monitor impact from actions in
between KPIs other fields
(Key migration driver)
Adjusted KPI score

• So isolated KPI performance is

above average

Act immediately! Don't let yourself be blinded!

• Good present performance is

• Undue delay of migration caused purely by dependencies
progress between KPIs
• Strongest need and potential for • So isolated KPI performance is
improvement below average
low

low KPI score high

(Present migration status)
Figure 3: Strategic fields

2.4 How to control the migration process

The NGN migration scorecard enables the monitoring of the right migration path (e.g. by
tracking CAPEX/OPEX development) during the entire migration process. Here the
performance during the implementation is compared with the target performance agreed with
the carrier at the beginning of the project.

5 Production and delivery 5 Marketing / service portfolio

4 4
3 3
2 <
2
1 1
0 0
2005 2006 2007 2008 2009 2005 2006 2007 2008 2009
Planned migration path Planned migration path
Actual migration status Actual migration status

5 Financial performance 5 Management and organization

4 4
Migration deviation
3 3
2 2
< 5% < 0%- > 0%
1 1
0 0
2005 2006 2007 2008 2009 2005 2006 2007 2008 2009
Planned migration path Planned migration path
Actual migration status Actual migration status

Figure 4: Monitoring method

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 NGN – Migration Score Card

2.5 The project management set up

We recommend a five phase plan in order to define a ‘tailor-made’ migration strategy

reflecting the carrier’s individual circumstances:

Agree upon target: All relevant data is collected. The migration targets are identified in
cooperation with the carrier. Detecon’s NGN KPI pool is adjusted according to the carrier’s
individual circumstances and requirements.

Identify status: KPIs are evaluated according to a scoring model with dedicated indicators
leading to derivation of the actual migration status.

Find drivers: Interdependencies are evaluated, key migration drivers identified and
classified.

Define and implement strategy: Alternative strategic actions are identified, characterized
and mapped to accelerate the migration process. A milestone plan is developed in order to
manage and control the implementation of the migration strategy.

Control process: The implementation of the migration strategy is managed and controlled
according to the defined milestone plan.

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3 Conclusion & Recommendations

The migration scorecard is useful in various strategic and operational contexts, irrespective
of the carrier’s position in the NGN migration process.

Even if a carrier is not yet thinking about migrating to NGN the enumeration of the
carrier-specific KPIs and their interdependencies can for example also be used in order to
take an inventory of the existing networks. The results can be very useful for make-or-buy
decisions, supporting the pre-qualification process for proposals from network solution
providers.

From the very start of migration planning, but also during an ongoing migration
process the scorecard can be used for strategic decisions at management level: it can be
used to ensure the right timing and pace of the NGN migration as well as supporting the
qualified planning of the entire market entry strategy. On the operational level the scorecard
facilitates the monitoring of progress during the entire migration process, and the
identification of corrective actions if the actual figures differ from the determined targets.
Delayed and particularly wrong corrective actions can be avoided due to the reflection of
dependencies between the KPIs and the respective adjustments in the scorecard. The result
is precise KPI monitoring.

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 NGN – Migration Score Card

4 The Authors

Wolfgang Löffelsender has been Managing Consultant in the Competence Practice

Strategy & Marketing Management since 2004.

With more than 15 years of consulting experience for fixed network carriers and mobile
operators, he has gathered substantial experience of developing and implementing migration
strategies, as well as managing the launch and operational start up of IT services and IP
VPN services. A further emphasis of his project work lies in the program management of
complex ICT change management projects.

Wolfgang.Loeffelsender@detecon.com

Renata Zmrzla has more than six years of telecommunications industry experience in the
national and international context. She is a Consultant in Detecon International’s
Competence Practice Strategy & Marketing with a bias on product (portfolio) management,
market entry strategies and marketing strategies in saturated markets.
Renata.Zmrzla@detecon.com

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 NGN – Migration Score Card

5 The Company

Detecon International GmbH

Detecon International is a leading worldwide company for integrated management and

technology consulting founded in 2002 from the merger of the consulting firms DETECON
and Diebold. Based on its comprehensive expertise in information and communication
technology (ICT), Detecon provides consulting services to clients from all key industries. The
company's focus is on the development of new business models, optimization of existing
strategies, and improvements in corporate efficiency using strategy, organization and
processes. This, combined with Detecon's exceptional technological expertise, enables us to
provide consulting services along our clients’ entire value chains. Our consultants’ industry
know-how and the experience that we have gained in successful management and ICT
projects in over 100 countries forms the foundation of our services. Detecon is a subsidiary
of T-Systems, the business customer brand of Deutsche Telekom.

Integrated Management and Technology Competence

We possess an excellent ability to translate our technological expertise and comprehensive

industry and procedural knowledge into concrete strategies and solutions. From analysis to
design and implementation, we use integrated, systematic and client-oriented consulting
approaches. These entail, among other things, the evaluation of core competencies, modular
design of services, value-oriented client management and the development of efficient
structures in order to be able to distinguish oneself on the market with innovative products.
All of this makes companies in the global era more flexible and faster – at lower costs.

Detecon offers both horizontal services that are oriented towards all industries and can entail
architecture, marketing or purchasing strategies, for example, as well as vertical consulting
services that demand extensive industry knowledge. Detecon's particular strength in the ICT
industry is documented by numerous domestic and international projects for
telecommunications providers, mobile operators and regulatory authorities that focus on the
development of networks and markets, evaluation of technologies and standards, or support
during the merger and acquisition process.

Detecon International GmbH

Oberkasselerstr. 2
53227 Bonn
Telefon: +49 228 700 0
E-Mail: info@detecon.com
Internet: www.detecon.com

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