Open APIs – the key transformation enabler for CSPs 

Behind all the industry buzz around digitization, customer experience transformation and 5G monetization, there’s still a lingering issue at the core of Communication Service Providers’ (CSPs’) everyday business that needs attention: Up to 80% of CSPs’ IT budgets are still being spent on system integration and customization1. 

This leaves limited resources for innovation and actual IT transformation. This also raises larger questions around CSP transformation:

• Why is the right shift of most CSP business models so slow-paced?
• How do CSPs bridge this gap between traditional IT problems and the latest industry and customer demands?
• How do CSPs evolve and collaborate into the new ecosystem involving hyperscale digital natives?
• What are the best ways to capitalize on new technology waves such as 5G, edge computing, and AI?

Over the last few years, there’s been increased focus from the leading CSPs on open API and open digital architecture (ODA), with the ambition that open API and ODA can be the enablers for their transformation into becoming platform-based, end-to-end service providers.

Read on to find out if open APIs are the solution to the problems facing CSPs.

The key challenges facing CSP leaders today

Let’s look at the key challenge CSPs are still facing: the IT estate of most CSPs is too complex and rigid, comprised of monolithic core IT systems and legacy processes and technologies. Laurent Leboucher, Group CTO and SVP, Orange explains this problem succinctly:

“IT legacy in telco environments very often looks like a Pollock painting. It’s hard to identify through hazy building blocks, and there is almost no loose coupling. Data records are very often duplicated several times, and everything seems to be tied to everything else. This is often the result of many years of silo fragmentations and various attempts to fix those fragmentations with technical projects, which created this entropic technical debt.”² CSPs’ current IT environment consists of many different application stacks that have been modified over years. These often either have overlapping and redundant functionalities or have gaps in the end-to-end integration of their customer journeys, which operators address through further developments and customizations. The problem of complex IT systems has been further intensified with the inorganic growth the telecom industry has undergone, thus adding a further level of closed architecture to the mix.

Open APIs and Digital Architecture solve these problems at their source

The use of open APIs and ODA to connect disparate systems not only protects IT budgets; but also goes to the core of how CSPs can address many of their key functions, including:

• Competing with digital counterparts and catching up with the platform utopia world,
• Evolving further from zero-touch provisioning, and zero-touch automation to zero-touch partnering, enabling a marketplace with simplified and automated cross-platform play,
• Taking demand for digital to an omnichannel personalized experience,
• Evolving business models to best mobilize on the 5G wave,
• And ultimately, ensuring solid revenue, returns on investment, and faster time to market.

What to change, what to change to, and how to change

The three famous questions from Eliyahu M. Goldratt provides a useful roadmap. The challenge of a complex legacy and a siloed IT estate has been common among the majority of CSPs, and so is the need to participate in platform-based digital ecosystems. The most important of these, TMF Open API program, was formally launched in 2016. The TMF Open APIs combined with component-based architecture like the ODA are a wise solution for CSPs looking to reduce IT complexity.

The role of Open Digital Architecture

Open APIs are specifically designed for functional integrations and the ODA to address the challenges of deploying, configuring, and operating in a complex application landscape. As open API is considered the de facto standard for telecoms interfaces, ODA is a component-based architecture that can be viewed as the de facto standard for open digital platforms, which provides a consistent way for components to fully interoperate end-to-end across multivendor ecosystems.

TMF Open APIs along with ODA is the futureproof approach designed with an outside-in perspective. It can provide the plug-and-play interoperability of components within their IT systems (and networks), reduce complexity and enable digitization of customer-facing systems and reduce cost of integration as well as time to market for new services digital services. This while also supporting both existing and new digital services and addressing the implementation of B2B2X digital ecosystems, which will be critical for operating and monetizing 5G and edge computing.

A global trend toward APIs

There is a clear trend regarding the use of APIs as many of the world’s largest service providers such as Axiata, Bharti Airtel, BT, China Mobile, China Unicom, NTT Group, Orange, Telefónica and Vodafone have officially adopted TM Forum’s suite of Open APIs for digital service management.  Equally, there is an increased interest from suppliers to adopt open APIs as more than 128 of the world’s leading CSPs and technology ecosystem participants have signed the Open API Manifesto, which publicly demonstrated their endorsement of TM Forum’s suite of Open APIs ³

Like any strategic change, the adoption of open API and ODA does not come without its challenges. The shift to open API and ODA requires a holistic approach to address key concerns around these key areas:

• Shifting to a centralized approach towards integration: CSPs have historically been complex organizations with legacy processes, multi-layered silos and traditional approaches that take a project-specific view on integrations. Shift to Open API and ODA requires a cultural change to a more centralized integration strategy that puts API first, and is based on industry standards, repeatable frameworks, and processes.
• Initial investment and per API cost: Another concern is to prove the return on the investment from initial projects. To justify the initial, spend or per API cost of initial projects. For open API and ODA to create value for the CSP ecosystem, it needs to have a strategic view rather than a tactical project view. A well-defined open API-led integration strategy sets a foundation and builds the repository of integration assets (TMF Open API library in the case of CSPs) which are reusable and generate more business value with every project and create a lower per API cost.
• System API reusability: It may be quick to achieve reusability in UX and process layer the legacy system and system APIs which are not that flexible. However, carriers are now innovating their COTS (commercial off-the-shelf products) as well as networks due to initiatives such as SDN, promoted by the Open Networking Foundation.
• Commercial readiness: There is a gap between what carriers are offering and can provide in their immediate, 1–2-year roadmap, and what the OTT players and third-party providers need. What they need is an open API that allows them to reach as many companies as possible and not all CSPs are ready.

The good news is that CSPs can address most of these challenges by partnering with the right system integrators and suppliers/API aggregators. The right services partner can help assess your existing IT estate and processes, and bring onboard proven governance models, integration design authorities, reusable API libraries, and repeatable model/business case. This can help reduce the initial effort while increasing the adoption. While increasing return on investment and helping (re)introduce best practices and providing the necessary support depending on the existing resource capabilities. Therefore, with increasing CSP interest – the next big enabler for open API adoption is suppliers. Large, suppliers have traditionally relied on locking in their CSP customers, but it is time to realize that industry fragmentation impedes innovation and the ability to compete, including the adoption of Open APIs.

Lasting Benefits

Open API-based integration and open digital architecture enable CSPs’ IT estate to become more agile and resilient, which translates into tangible business benefits:

• Reduction in time, from concept to cash for new services, as well as the total cost of ownership. APIs significantly reduce the effort and capital involved to integrate with internal and third-party systems.
• Expansion ofthe service offering, enabling – in a significantly reduced time frame – the ability to gear up to meet shifting markets.
• Enablement of the CSP business to quickly innovate, partner, and create mix-and-match products and services. The result is speed, convenience, and innovation.

In the end, TMF open API and ODA are among the most critical weapons a CSP needs in its arsenal today. This means the difference between realizing and squandering the opportunity to monetize innovative 5G services. Most importantly, open APIs will help CSPs evolve and establish themselves as end-to-end service providers. To learn more about our Capgemini Digital Telco Connect solution, our reusable assets, and TMF Open API libraries (or just to have a brainstorming on API-led transformation), contact me.

TelcoInsights is a series of posts about the latest trends and opportunities in the telecommunications industry – powered by a community of global industry experts and thought leaders.