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The Hard Truth about Service Providers’ Product Management

We tend to think that large organizations know it all about creating and managing their products. It doesn’t seem logical that an innovative company such as Lego wouldn’t control their product innovation pipeline or know if the creation of a new Lego set had stopped for no apparent reason. I can’t imagine Adidas planning a new running shoe, but then allowing the whole concept to vanish without a trace.

But in the telecommunications industry, it’s not rare for viable ideas for new telecommunications products to get lost in translation. Recent research by UK-based analyst firm Telesperience, commissioned by global customer experience provider Amdocs, shows that the telecommunications product pipeline is not doing well and almost half (52%) of service providers’ good ideas are not making it to market.

So what are the differences between Adidas, Lego, BMW, NASA and the average service provider?

There are many, but Product Lifecycle Management is one difference that makes a major impact. The telecommunications industry is product-centric. There are other factors, such as customer-centricity and evolving technology, but a healthy product pipeline is essential to any company’s success, including service providers. What do service providers know about the health of their main pipeline?

There are very few (if any) reliable statistics or research papers on telecommunications PLM. This unique research uncovered some interesting facts about service providers and their product lifecycle management. The most striking fact is the low percentage of viable products (products that are relevant and will have a business impact on the market) that actually make it to the market.

On average, less than half (48%) of viable product ideas are being launched, suggesting massive opportunity loss for the industry. Some say that the telecommunications industry is frozen in its tracks – a mature industry in a saturated market – but telecoms DO innovate, it’s just that half of the ideas are wasted due to a sub-optimal PLM process.

To add insult to injury, the research has found that there are differences between the time to market estimations of the business and marketing organizations (they estimate 6.24 months from idea to launch, on average) and IT (which estimates 7.72 months, on average). And the actual time needed for product launches was longer than both estimates, at 8.87 months.  Time to market delays can result in escalating costs. In certain cases, products can entirely miss the window of opportunity, resulting in an even larger loss (think of missing an Olympics-related offer as an example).

The good news is that service providers are starting to become aware of their shortcomings in product lifecycle management. Nine out of 10 providers perceive a centralized product catalog as an essential first step on their road to product lifecycle redemption. More important is the fact that 47% of service providers are already using a centralized product catalog and 44% plan to deploy it in the next two years.

Telecommunications is a fast-moving market. Effective telecommunications PLM is one way to help speed up innovation, maximize revenues and create the differentiation service providers so desperately need to remain viable.

Eitan Elkin is product marketing manager at Amdocs Revenue Management Group