Monday, May 15, 2006

SOA system saved BT from break-up analysis: SOA system saved BT from break-up

SOA (Service Oriented Architecture) might be the current industry acronym on everyone's lips, but at BT it's old news.

"We've been developing an SOA at BT for quite some time, although we didn't realise that's what it was at the time and didn't call it an SOA," said George Glass, chief architect at BT Exact.

In fact, the former state telecoms company turned to what everyone now calls SOA to stop the very real threat of being broken up by Ofcom.

David Graystone, who is in charge of billing, strategy and the future of business-to-business development on the retail side at BT, explained that the problem was the relationship between the wholesale and retail sides of the business.

"What we've got is wholesale Openreach, which offers a range of products and services to any communications provider. But other communication providers use different systems for pricing, forecasting and control mechanisms than BT," he said.

"So what Ofcom is really saying is that it feels the competitive market in the UK is hindered by this continued relationship between BT Retail and BT Openreach.

"Ofcom wanted to open it up and it has done in a number of ways, but the key one here is that BT would operate with the Openreach wholesale market in exactly the same way as any other communications provider can."

Graystone added that the system BT is adopting will have open interfaces onto common gateways, with common forecasts and pricing.

"That way there would be a logical and physical separation," he said. "The alternative, from Ofcom's point of view, and one of the things that was on the cards, was to split BT in two."

To stop this happening, BT submitted itself to Ofcom's Telecommunications Strategic Review, with dates for the new systems to be in place.

"From a consumer point of view our target is 2009, and that is almost underwritten in blood because we have said we will do it as part of the Review, " said Graystone.

However, BT said that Ofcom did not lay the law down completely and it was allowed to negotiate the agreement for the changeover of platforms.

"If you ask the IT and the operations people they would probably like an extra six months to a year, but if you ask Ofcom it would want to do it six months quicker, so we came to a compromise," said Glass.

"The dates are achievable but challenging and that's probably the fairest way to describe them."

BT's legacy system was run by telecoms management company Celona and the two firms are still working together to upgrade the platform.

"We've been working since 1997, when Celona was responsible for the maintenance and support of our Featurenet platform, which included the service management, the order entry and the billing," said Glass.

Featurenet included a billing system that was built in Cobol IDMS and ran on a mainframe and BT found that Celona was also looking to replace it.

"I suppose it was turkeys voting for Christmas, because Celona provided the underlying support anyway and we paid them quite a lot," said Graystone.

"But that motivation came because they were finding it more and more difficult to keep people on a legacy platform."

Tony Scales, chief executive of Celona, admitted: "It's difficult to get new graduates to come into the business to learn Cobol nowadays."

Glass explained that BT's PSTN systems are yet to make the change, although the mobile business and some broadband customers are already on the new platform.

"If I get PSTN, broadband, large VPN services for our global customers and mobile onto it, by and large I've got my revenue on it," he said.

However, the move could spell the end for the Telex message exchange system. "If I have those four major product lines on it, I'm not going to lose sleep over the fact that Telex isn't on it," said Glass.

"Either we'll kill the product as part of the portfolio rationalisation or we'll bring it over as a side activity if it makes sense to do it."

Whatever the fallout from the changeover, BT admits that it was necessary to stop Ofcom wielding the axe and lopping it into two or three smaller pieces.

"They'd have been splitting BT into a network and then a service on top of that," said Glass. "It could have been local loop, and then the backbone network and then the retail side, so three splits."

However, BT maintained that the UK telecoms industry did not want the split to take place.

"We were against it and I think the wider industry was," said Graystone. " The CBI opposed it and lobbied anxiously for us to be retained."

Scales pointed to a recent debate by the European Telecoms Executive Network. "The Telecoms Executive Network has a two-day forum once a year and there is always a regulator's moment in that event, where you get a couple of hours with the regulator and the major operators fighting it out on a platform, " he said.

"It's very interesting when you see the dynamics around the table and there isn't really an appetite for a break-up, it's just not there."

Paul Hollingsworth, director of product marketing at Celona, added: "There was a general consensus across the board, with Cable & Wireless and NTL on the panel saying this seems to be the right thing for them.

"The chair of the panel said: 'would you rather have had a different option?' and it's clear that all of these companies that are competitors to BT would quite like more flexibility and more control of the network, but they don't want to pay for it."

Scales suggested that the repercussions of what happens in the UK market would be seen around the world.

"Last year they had the German regulator there as well and it's very clear that the rest of the world is watching very keenly what is going on in the UK to see whether it is going to work," he said.

However, Hollingsworth ruled out any future split for BT. "I think the whole industry recognises there's been a major change inside BT and if that hadn't been obvious there would have been a far stronger push to ensure the split actually happened," he said.

While its ability to change has kept BT in one piece, the company has also found that putting the new systems in place offers other benefits. BT estimates that the new platform has saved it £1.38bn so far.

"On an annualised basis we have probably halved our cost of ownership of the platform," said Graystone. "That's key because out total cost of IT is high and it was a good test of how can we drive that down."

Glass also admitted that the legacy Featurenet system using Cobol IDMS on a mainframe had its problems. "It was expensive to support and wasn't the easiest application to get changes made on."

However, he said that the biggest savings could come from the way staff use the system.

"You get a standard set of processes so that more and more of your queries and your interactions with the customers can be handled by a generalised team, as opposed to a specialised team," said Glass.

Graystone added that there are benefits for BT at the end of the process. " BT is saying it's been hampered for years in that it couldn't reduce the price in the way it wanted to because of the dominant market position it had," he said.

"But if we say that everyone is competing on an equal playing field then it can sell the service however it chooses and that has been one of the trade offs that Ofcom has made with BT."

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