The cable industry is dynamic, with many competitive pressures. Time to market is a key driver to launch and grow new products along with new sales and service channels.

There is growing competition between the telcos and MSOs in residential markets for double- and triple-play customers, and there is tremendous growth in services aimed at small to medium-sized businesses (SMBs) all the way up to the enterprise market, including such new products as Metro Ethernet, SIP trunking, vertical industry solutions and 3G/4G wireless offerings. There are competitive pressures to deliver better customer service as a key differentiator…and at lower costs.

Limitations are being placed on IT budgets in this industry, just as they are across most other industries. At the same time, business users require faster innovation and highly automated services. Their requests for IT and business services often are being delayed or turned down internally due to scarcer resources. This means they have to wait too long to have their needs met.

All of this makes software-as-a-service (SaaS) or “cloud computing” offerings good solutions. SaaS services can be turned up quickly without the need for deep infrastructure investments. SaaS is easy to deploy and to prove out, resulting in low upfront costs. However, managing these applications effectively within the enterprise still presents some challenges as well as opportunities.

The rapid growth of business-class services in the cable industry has driven a need for sales-automation solutions. In the intensely competitive residential-service area, cloud-computing software is being put to work to help cable companies automate an entire sales channel with mobile capabilities, and to drive productivity and cost savings.

Cable companies also are leveraging cloud computing to respond to the competitive need for better customer service and more state-of-the-art self-service offerings. They are using the cloud to create integrated CRM across sales, marketing and customer service to remove pre-existing silos in these areas. They also are tying in marketing intelligence and campaign management in addition to sales and service.

Cablecos that have allowed their business users to innovate on the cloud platform have developed the following business applications:

• Sales Force Automation for Business- Class Services Sales

• Sales Force Automation for Residential Sales

• Customer Support and Contact Center Marketing Automation

• Order Acceptance Workflow Manage ment

• Sales Rep Organizational Management

• Capital Request Workflow

• Rapid Prototyping

• Custom Apps for Serviceability and Capital Request Approval Workflow

• Configure, Price, Quote, Order

Cloud Adoption Metrics

In terms of cloud adoption, nine of the Top 10 cable operators are using cloud apps today, and the remaining operator is considering it. The nine operator all use cloud apps for business-class services sales automation.Some expect the four leading MSOs to be using cloud solutions for residential-sales automation by the end of the year.

MSOs already are using such cloud solutions as Salesforce.com’s ServiceCloud for customer service in some capacity, including case management, chat, email management, social-media monitoring, and unified-agent desktops. Marketing and lead-to-order automation also are being used by cablecos today or are on the near-term roadmaps for the majority of MSOs. Three of the Top 10 cable companies are using cloud apps for marketing campaign management.

Besides Salesforce.com, some of the most popular cloud applications include:

• Google Apps for Collaboration, Analytics and Mapping

• Eloqua Marketing Automation and Google AdWords for campaign management

• EchoSign and DocuSign for e-signatures

• SpringCM and Apptus for contract generation/document management, and Twitter and Facebook for social monitoring

This is just the tip of the iceberg in terms of the growth in adoption of cloud computing solutions and the success it will bring to the cable industry. Gartner estimates that the current market for cloud solutions is $46.4 billion and, by 2013, the market will reach $150.1 billion. IDC forecasts that spending on cloud computing will accelerate, capturing 25 percent of IT spending growth in 2012 and nearly a third of growth the following year.

On the CRM cloud computing front, Gartner stated strongly last year that “avoiding SaaS will prove futile for most organizations, because many new CRM applications will only be delivered through SaaS.”

Business users’ expectations are rising. They have come to expect their software (even at the office) to be as simple, easy to use, low-cost, reliable, browser-based and able to scale rapidly as such consumer apps as iTunes, Gmail and YouTube. Mobile-computing expectations also are high. Consumer devices like the iPhone are revolutionizing the way people approach problem-solving, and most subscribers expect their information to be readily available via smartphones from any location.

Cable Cloud Challenges

When moving applications to the cloud, companies should be careful not to replicate what may be inefficient or out-dated processes. They should take the opportunity to improve and standardize to the fullest extent possible. Cloud solutions provide the flexibility prototype and then easily mold to your business processes versus forcing you to adhere to the tool’s processes.

Concerns about data security are best addressed upfront. Most can be addressed with a strategic review of data elements and what can and cannot be stored in the cloud. Occasionally, there may be “server huggers” who need to be convinced. Education and communication are important.

Key areas on which to focus regarding security are user access security and firewall access for integration. Privacy concerns sometimes may be addressed with blended applications or integration that stores most data in the cloud, taking advantage of lower costs. However, more sensitive data should be stored locally and combined at the time of display for the agent or sales representative.

Sometimes business users can create solutions that are repeatable throughout an enterprise. IT will need to lead the effort to create an IT governance structure that covers both on-premise and cloud applications. Taking such an approach leverages the best of both worlds.

Innovative organizations will be thinking about creating a “solution exchange” across their enterprise where users can share solutions that can be reused from group to group. IT departments, while no longer driving “software development” in this case, must play a role in certification within such an exchange.

Success Levers

It’s important to start by aligning business goals with IT and then by creating a roadmap for achieving your plans. Typically, cable providers undertake phased cloud-solution deployments that deliver quick wins out of the gate from a first phase, and then they roll out new capabilities in a logical sequence as part of future phases.

Business customers are becoming more sophisticated but they need leadership from their CIOs and IT departments to experience the most success. CIOs should enable business users to create solutions for their non-integrated or non-mission-critical applications first and then integrate them with the rest of the enterprise IT architecture.

To see the greatest productivity boosts, an operator needs to focus the best resources in the areas that provide the company with a competitive advantage. IT’s best resources are needed more than ever as internal OSS/BSS complexities and integration needs continue to grow. IT techs should allow the business to clear the backlog of simpler projects, and cloud computing software enables them to do so.

Cable companies should start off with configurable user interfaces through cloud-solution tools, and then customize them down the road as required. It’s important to spend time on process improvements and change management to keep user adoption high.

Integration with both legacy systems and data migration makes a good cloud system great. Even though the cloud-computing project may be requisitioned by the business users, it’s best not to start it without IT onboard. It is important to tie in IT even if a business unit is empowered to go ahead with the project on its own.

The type of integration IT can provide with legacy systems and data provides great incremental value to any organization. IT also is key for deployment, end-to-end testing and ongoing application support for an enterprise-grade solution. IT’s resistance to cloud computing is reduced when the team is engaged early on in the process, and the industry already is starting to see IT more actively driving cloud-computing solutions out to business users.

In addition, cable companies should leverage their investments in their SaaS platforms. SaaS comes with a built-in database, user interface development tools, access control, workflows and reporting. The more apps built on the platform, the higher the ROI.

Having an in-house cloud platform enables an operator to leverage what is built in other areas of the company, creating an internal application marketplace. The following add-ons could increase platform ROI:

• Mobile support

• Security, audit and compliance

• Development tools ( e.g., Adobe Flex)

IT can provide guidance and the framework by sanctioning platforms for use by the business and by defining for the operator where the platform fits into the overall enterprise architecture. The IT staff can establish the ground rules for provisioning licenses, managing environments, limiting exposure to risk, and setting up security and data access rules.

It’s also important to certify the cloud platform and other cloud apps. A certification process needs to be established to help ensure adherence to guidelines and to publish solutions for possible re-use. IT can establish a governance framework that naturally prioritizes projects while not slowing innovation.

Operators also can use their cloud-computing platforms for revenue enhancement and expense reduction. Research firm IDC estimates that cloud computing can improve time to market five fold while cutting overall costs in half.

To do this, cablecos can start with small controlled projects to deliver successfully on what is important within budget. They can simply extend their enterprise-architecture governance to include the cloud and to incorporate the business users as “developers.”

Once again, success hinges on allowing IT to provide leadership to an operator’s business units.

Tom Bullotta is director/Communication & Media Practice at Acumen Solutions Inc. Contact him at tbullotta@acumensolutions.com.

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