IP & OPTICAL NETWORK COST ALLOCATION
Problem:
Communications services are increasingly delivered over a single, converged IP & optical network. This converged network acts as a single, integrated factory that produces the full range of services. This is in stark contrast to the previous factory which was organized in separate, service specific production lines or silos. This has created challenges for the accounting and controlling departments of CSPs.
Indeed the cost contributed by the network remains an important component of the pricing and the profitability analysis of each wholesale and retail service type. Some services might be regulated and the service provider will then face explicit requirements on network cost allocation. Whereas the network related cost of a service can be relatively easily determined in a silo'ed network, this cost is more difficult to determine in a converged network. Whereas financial accounting information was sufficient for cost allocation in a silo network, a converged network needs actual usage data from the network.
The accounting and controlling department has however no access to such data. It often relies on goodwill from the operations department to supply this data, in an understandable format. This ad-hoc process results in deadlines that are not met and much frustration for all parties involved.
Indeed the cost contributed by the network remains an important component of the pricing and the profitability analysis of each wholesale and retail service type. Some services might be regulated and the service provider will then face explicit requirements on network cost allocation. Whereas the network related cost of a service can be relatively easily determined in a silo'ed network, this cost is more difficult to determine in a converged network. Whereas financial accounting information was sufficient for cost allocation in a silo network, a converged network needs actual usage data from the network.
The accounting and controlling department has however no access to such data. It often relies on goodwill from the operations department to supply this data, in an understandable format. This ad-hoc process results in deadlines that are not met and much frustration for all parties involved.
Solution
NetworkMining’s solution is a combination of software and professional services. This solution enables service providers to feed their cost allocation models with accurate network usage data.
NetworkMining’s software creates this usage data from:
NetworkMining’s software creates this usage data from:
- the raw data that is retrieved from the network using its multi-vendor data collection framework
- service provider specific logic that defines the dependencies between the various network layers
The data retrieval schedule is adapted to the various network layers. For the optical layer connectivity, a daily (or even less frequent) retrieval from the NMS is sufficient. On the other hand, L2 and L3 services might require continuous polling of the router and switch interfaces. The latter creates significant volumes of data, which NetworkMining's software aggregates to allow for further processing by the cost modeling tools. The data is shared via a database and user defined exports from the database.
NetworkMining's professional service consists of:
NetworkMining's professional service consists of:
- Consulting to understand the goals and needs of the service provider’s network cost allocation methodology
- Design of the solution, including the data exchange format (for the cost modeling tool)
- Configuration of the software (data retrieval schedule, data warehouse, …)
- Monitoring of the solution
Benefits
NetworkMining enables accounting and controlling to understand the profitability of their services delivered over a converged IP & optical network. It provides them with a powerful hold on their network factory and contributes to the financial steering of their business.
It also allows service providers with regulated businesses to create an objective foundation for the pricing of their regulated services. It gives the regulatory department a strong hand in their negotiation with regulatory agencies. It also allows it to be independent from the operations department with respect to the regular reporting that they need to perform.