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White paper

Nokia Siemens Networks


Network management to service
management - A paradigm shift for
Communications Service Providers

Service management
solutions enable service
providers to manage service
life cycle efficiently and
enhance customer experience.

Copyright 2011 Nokia Siemens Networks.


All rights reserved.

2/19

Table of contents
Executive summary............................................................... 3
1.

Communication service providers face key market


challenges ............................................................................. 4

2.

A holistic approach to service management is necessary


for success ............................................................................ 6

3.

Service providers struggle with service management


capability gaps .................................................................... 10

4.

Service providers achieve many benefits from third-party


service management solutions ........................................... 12

5.

The Nokia Siemens Networks service management


solution ................................................................................ 14

6.

Conclusions ........................................................................ 17
Appendix: Service management capability definitions....... 18

Copyright 2011 Nokia Siemens Networks.


All rights reserved.

3/19

Executive summary
Network management is often focused on the network layer, enabling
communication service providers (CSPs) to monitor and track network
outages and issues, call drop rates, and mean-time-to-repair response in a
reactive manner. However CSPs face key challenges that are driving them
to reassess their existing business support systems, operational support
systems, and service management capabilities. Key factors causing these
shifts include an increasingly competitive landscape, seamlessly deploying
new services to customers, stagnant revenue streams from legacy services
and addressing customer churn rates.
Managing seamless, cost-effective service deployment and proactively
identifying the location and cause of problems in this competitive
environment requires CSPs to take a holistic end-to-end approach to service
management. Taking this approach enables service prioritization and
resolution priorities to be identified and evaluated based on the impact
on customer experience. In many cases, CSPs are challenged with
successfully fulfilling these important service management capabilities, and
seek assistance from third-party vendors like Nokia Siemens Networks.
To help communication service providers succeed in this rapidly evolving
environment Nokia Siemens Networks, built on experience working with
CSPs throughout the world, has expanded into the service management
space. Capabilities in this extended view of service management include
service alarm correlation, service modeling, service problem and incident
management and service quality management. These broader service
management capabilities enable CSPs to efficiently deploy, monitor, and
track the status of next-generation voice, data and MBB based services
such as email, gaining, video and other similar wireless communication
services. Service management capabilities address CSP requirements by
creating service views, providing the capability to address service problems,
allow CSPs to manage service quality throughout the lifecycle for a
particular service or set of services. It also provides the capability for the
management of third party SLAs, service inventory management and
new service launch support. By leveraging these service management
capabilities, service providers can provide customers with a differentiated
service experience and a competitive advantage.

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1.

Copyright 2011 Nokia Siemens Networks.


All rights reserved.

Communication service providers face key


market challenges
A dynamic marketplace brings forth a plethora of challenges for
communication service providers (see Figure 1):
Network management capabilities are not sufficient for long term
success. The rate that customers switch or churn between service
providers for individual products and services averages 7% but these
percentages vary widely. A key factor impacting churn rates is how the
customer perceives the quality of service delivery. If individual components
in the network layer are running effectively, the CSP may believe that an
80% QoS is being delivered to customers. However the customer may feel
they are only getting 8% on the agreed upon QoS. The discontinuity in
actual versus perceived QoS performance often leads to reduced
customer confidence, declining loyalty, and loss of business. Service
management capabilities bridge this discontinuity gap and provide logical
connections between the network layer, IT layer and end-user service
experience by providing a holistic services view.
Many CSPs are evolving into an all-IP network architecture that supports
voice, data, and video services over fixed and mobile networks on a single
platform. Fixed mobile convergence and IP multimedia subsystem (IMS)
environments enable service providers to deploy new types of services
over traditional telecom devices, mobile devices, and home entertainment
devices. Finally, BSS/OSS and IT system convergence is occurring as
CSPs identify ways to improve operational efficiency and reduce costs. In
the legacy telecommunications world, IT, BSS, and OSS requirements for
individual services were supported in separate and often redundant silos
of activity. However, now most CSPs recognize the benefits of converging
their IT and communications technology initiatives to streamline
operations, improve process efficiencies, and reduce cost of IT, network,
and communication services operations.
Competitive pressures and reduced revenues drive innovation. Will
communication service providers be relegated to becoming a transport
pipe? In many markets, traditional communication service providers face
competition from cable companies for consumer and small and medium
business voice and Internet access as well as from software vendors
such as Yahoo! and Google and Facebook who are focused on making
traditional communication providers the transport pipe while they collect
high-growth application revenues. Wireless service providers also
experience increased competition for wireless data services from other
cellular operators, from municipal Wi-Fi networks, and from emerging
broadband service providers.
To counter this downward revenue pressure, communication service
providers are deploying new network technologies (e.g. 4G/LTE) to
support new applications and services. CSPs are also looking to rapidly
launch these new services to counter declining traditional revenues.

Copyright 2011 Nokia Siemens Networks.


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5/19

A rising tide of CSPs are launching new smartphones, new mobile


broadband offerings and data hungry applications. These innovations
are leading to unplanned and unmanaged network capacity which is
ineffective and will lead to exponential increases in operational
expenditure for CSPs.
Efficiently deploying new services is critical. CSPs seek to deploy
new voice, video, data, wireless, and multimedia services to customers
over fixed and mobile networks, however inability to cross-sell and
upsell services to customers is driving increased demand for service
management capabilities. These service management capabilities enable
CSPs to identify which new services are available and can address each
customers unique communication service usage profile. Delivering these
multifaceted services requires CSPs to predict, monitor, analyze, and
measure network and service performance more closely, and to implement
real-time processes for provisioning individual services and bundles of
services. Billing systems must also be overhauled to provide integrated
billing.

Figure 1. CSP business challenges

NSN believes service management elements enable CSPs to address these


key challenges. For example, service life cycle and service fulfillment
management solutions enable carriers to provision and activate new
services and service bundles by delivering on order, inventory, process,
provisioning, and activation management processes. In addition, service
quality management elements enable communication service providers to
proactively evaluate network capacity and resource availability as well as
ensure adherence to committed service-level agreements.

Copyright 2011 Nokia Siemens Networks.


All rights reserved.

6/19

2.

A holistic approach to service management is


necessary for success
In a legacy communications environment, network service management
capabilities supported basic voice and data services and focused on
optimizing network performance and tracking network-based KPIs such
as mean-time-to-repair but the full impact of network related issues
on customers were not monitored (see Figure 2). In todays complex
communications environment, CSPs must deploy a wide variety of services
including mobile broadband, location-based services, SMS, and MMS.
Managing seamless, cost-effective service deployment and proactively
identifying the location and cause of problems in this new environment is
complicated and incorporates various BSS, OSS, IT, and network
elements. To successfully navigate the complex service environment,
NSN recommends CSPs use a holistic end-to-end approach to service
management which enables service prioritization and resolution priorities to
be identified and established based on the impact on customer experience.

Figure 2. Why service management?

To validate service provider demand for and implementation of end-to-end


service management elements and solutions, Nokia Siemens Networks
commissioned Forrester Consulting to field a study to 30 communication
service operations professionals located in 13 countries in the Americas,
Europe, and Asia Pacific Results from this study validate that a majority of
surveyed communication providers include a wide variety of activities in
their definition of end-to-end service management. In fact, 80% of survey
respondents agree or strongly agree that service management is part of the
broader concept of customer experience management.

Copyright 2011 Nokia Siemens Networks.


All rights reserved.

7/19

Service management is a part, a rather big part, of the whole


customer experience. It includes service support and delivery, both
of which impact the end customer experience very significantly.
(Manager of strategic programs, fixed line voice service provider,
Australia)

Service management is the natural progression [of network


management]; you have to be able to monitor and measure
customer experience and also to service it. Automating processes
and operational issues should have a favorable impact on the end
customer because the two concepts are related.
(Network manager, cable and satellite communications service
provider, Germany)

Today how important are the following service management elements to your business?
Very important
Process management

Important

33%

Service problem management

57%

43%

Service performance management

33%

Order handling & management

33%

37%
40%
37%

Service quality & impact analysis

17%

50%

Service inventory management

17%

50%

Service provisioning & activation


Service traffic management
Service catalogue

23%

40%

20%
10%

33%
20%

Figure 3. Service management elements


Source: A commissioned study conducted by Forrester Consulting on behalf of Nokia
Siemens Networks, May 2011.

8/19

Copyright 2011 Nokia Siemens Networks.


All rights reserved.

Following are the critical elements that NSN recommends communication


service providers include in an end-to-end service management solution
Service problem and incident management identifies recurring
issues. Traditional service problem and incident management focuses on
monitoring network resources used to deploy voice, video, data, and
wireless services. However, in the current telecom environment, these
capabilities must extend beyond the network layer to include value-added
customer-facing applications (e.g. video gaming, mobility services, and
applications) that leverage network resources. By using service problem
and incident management solutions, operators can obtain detailed insight
into network and BSS/IT service issues and conduct root cause analysis in
real time.
Service quality management supports SLA and QoS delivery. Service
quality management capabilities enable telecom service providers to
proactively evaluate network capacity and resource availability and
address these issues in a timely manner. Using these service quality
management functions enables communication service providers to
evaluate and adhere to committed service-level agreements (SLAs) for
particular communication services. Constant monitoring of network and
service capacity and availability are vital to delivering on these SLA
agreements.
Service fulfillment management enables provisioning and activation
of new services. Service fulfillment management includes service
configuration and activation which enables dynamic provisioning and
activation processing, change management, and release management.
These configuration and activation services enable CSPs to dramatically
reduce the time required to deploy and activate services in some case
cutting service activation time from days to hours. In addition, service
providers can minimize the impact of change management processes on
services and applications.
Business analytics provide end users with unique customer insights.
Business analytics are often a key component of service life cycle
management. Business analytics solutions provide corporate marketing
and promotional teams with real-time reports and analysis into customer
usage patterns and service adoption and can be used to evaluate the
impact of marketing campaigns. By using business analytics insight, CSPs
can cross-sell and upsell new types of products and services to address
the unique requirements of individual customers. In addition, business
analytics solutions provide end users with easy-to-access service level
reports in real time through customer portal sites.

9/19

Copyright 2011 Nokia Siemens Networks.


All rights reserved.

Service inventory tracks and identifies application and service


availability. As firms deploy new types of bundled services (voice, video,
and wireless) it is critical to have service inventory knowledge to determine
if a service can be deployed to a customer. Service inventory is a
centralized repository of information that identifies the specific types of
services and components that a customer qualifies for based on network
capacity, service availability, and technical requirements. This dynamic
repository includes information on wireless, voice, and data networking
assets, as well as details on circuits, services, devices, routers, switches,
and user profiles.
Service modeling provides network and service management
insights. Service modeling provides the visibility bridge the network layer
and the service layer. Through end-to-end visibility, CSPs can deliver on
not only the already established network SLAs but can begin to deliver on
SLAs on services too.
Other types of capabilities that may be included in service management
solutions are billing operations and customer interface management
capabilities. See Appendix for a detailed description of each element of endto-end service management.

Copyright 2011 Nokia Siemens Networks.


All rights reserved.

10/19

3.

Service providers struggle with service


management capability gaps
CSPs consider a wide range of elements as critical parts of service
management solutions. In fact, at least half of the interviewed service
provider executives identified 10 important service management solution
components. In many cases, service providers are challenged with
successfully fulfilling these important service management capabilities. The
top five service management challenges faced by CSPs are summarized in
Figure 4.
For each element of service management identified, please rate how challenging it is for
your organization to currently support.
Service
provisioning &
activation
Service quality &
impact analysis

7%
7%
30%
Service problem
management

13%

Service
performance
management

17%
Process
management

Figure 4. CSP service management challenges. Includes very challenging and challenging
responses
Source: A commissioned study conducted by Forrester Consulting on behalf of Nokia
Siemens Networks, May 2011.

CSPs must address service problem and incident management issues.


Service problem and incident management is an issue facing many
communication service providers. Many CSPs have chosen to focus on the
network level, monitoring and evaluating voice, video, data, and wireless
network resources, choosing to address network KPIs. On the other side of
the house IT teams have been focusing on IT deliverables and finally the
business has been focusing on customer sales objectives.
However, in a rapidly evolving telecom environment it is not effective to have
these siloed views. CSPs are beginning to expand capabilities to include
value-added customer-facing applications such as video gaming, mobility
services, and mobile applications that leverage not only network resources
but IT resources and also resources in the application layer. Service

11/19

Copyright 2011 Nokia Siemens Networks.


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problem and incident management solutions enable operators to capture


insight into network and BSS/IT service issues and analyze the cause of
these issues in a more holistic manner.
Service performance management is also challenging for many
service providers. Many service providers identify service performance
management as a challenge. Service performance management elements
include fault management, monitoring network quality, evaluating service
performance trends, and comparing these service performance results with
agreed upon quality of service (QoS) or service-level agreements (SLAs).
NSN believes that as communication service providers expand the breadth
of applications and services deployed over many different types of
networks, successful service performance management will be particularly
critical in enabling CSPs to adhere to committed SLAs.

12/19

4.

Copyright 2011 Nokia Siemens Networks.


All rights reserved.

Service providers achieve many benefits from


third-party service management solutions
Now is the time to make the necessary investments to stay competitive.
Service management capabilities are currently used by many
communication service providers, which highlights the important role
these elements play in addressing the needs of CSPs. Only 7% of those
interviewed, were not interested in investing in service management
capabilities. The below quote summarizes the sentiment of many CSPs
interviewed and the urgency many face to fill gaps in their service delivery
capabilities. CSPs are looking to bridge the gap between network
management and service delivery. CSPs understand that they need a
holistic view of service utilization.
There is a key trend going on in the CSP environment today.
Operators are more and more trying to look to the services they offer
to customers. We have to understand the services users are
demanding. If I offer a BlackBerry service, service management
means that I no longer only look into the BES hardware uptime and
availability SLAs. I now look at the performance of my BlackBerry
data service at an end-to-end basis. This is service management. It
allows us to provide service SLAs to the end-user.
(CTO, wireless communication service provider, India)

With the complexity involved in now monitoring and managing several


layers, many CSPs that are in the process of implementing service
management are not doing it alone. They are asking for assistance from
third-party vendors like NSN to help them implement service management
elements such as customer interface management, service problem and
incident management, service inventory management, and service quality
management (see Figure 5). As well as help in service management
elements, CSPs are also looking to third-party vendors to provide assurance
on not only service visibility but also on service uptime and availability
guarantees.

Copyright 2011 Nokia Siemens Networks.


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13/19

Which service management elements are sourced from a third-party vendor?


40%

40%

37%

37%

37%

37%

33%
23%

20%

Figure 5. CSPs seek assistance from third party vendors


Base: 30 communication service operations professionals working for CSPs
Source: A commissioned study conducted by Forrester Consulting on behalf of Nokia
Siemens Networks, May 2011

Communications service providers expect to achieve a wide range of


benefits from using third-party vendor service management elements
(see Figure 6). A key benefit of using third-party vendors is that third-party
vendors have specialized expertise and vendor innovation capabilities.
CSPs look to third-party vendors for help addressing gaps in their internal
knowledge around the technology requirements needed to support end-toend service management requirements. Theyre also looking to leverage
learnings and knowledge that third-party vendors gain through extensive
experience with a wide range of other CSP clients. Other key benefits of
using third-party vendors include increased operational efficiencies and
the ability to resolve problems as well as address industry regulatory
requirements. But primarily, by using a third-party vendor, CSPs will be able
to focus on strategic business initiatives such as marketing, growing the
customer base and launching new services. CSPs will be able to make
better business decisions based on the visibility they gain from service
management.

The benefits we would expect [from a third-party vendor] would be


more in terms of efficiency; financial and non-financial. We would
like to see a multidimensional benefit around price and operational
efficiencies.
(CTO, wireless communication service provider, India)

Copyright 2011 Nokia Siemens Networks.


All rights reserved.

14/19

5.

The Nokia Siemens Networks service


management solution
Nokia Siemens Networks has extensive network management experience,
working with more than 150 communication service providers throughout the
world and adding seven new subscribers per second through these network
management services. To address the increasingly complex environment
facing communication service providers, NSN expanded its management
solutions to include additional service management solution components
and address the clients with a holistic approach.
If you are thinking of sourcing from a third party provider please rate the importance of
the following on a scale of 1-5 where 1 is not important at all and 5 is very important.
5- very important

1 - not important at all

Overall expertise (in technology and/or


business)

83%

Experience with my industry or business


vertical

77%

Price or cost savings

73%

Experience with industry-specific business


processes

73%

Capability with specific services we seek


Proven tools and methodologies
Process maturity (ITIL, eTOM)
Research and analytical capabilities

17%
17%
27%
23%

70%

50%

3%

30%

63%
53%

7%

30%

7%

33%
30%

13%
13%

7%

Figure 6. Third party vendors increase operational efficiencies


Source: A commissioned study conducted by Forrester Consulting on behalf of Nokia
Siemens Networks, May 2011

In addition to these service management capabilities, NSN also offers


business support and application management elements focused on helping
service providers address application, mediation, charging, and other types
of IT and BSS-related KPIs. By incorporating network management insight,
as part of end-to-end service modeling, CSPs can commit to internal
key performance and quality indicators as well as external service-level
agreements. In cases where there are gaps, root cause analysis is possible
through the use of service modeling technologies.
This comprehensive suite of service and network management solution
capabilities enables NSN to equip communication service providers with
a broad portfolio of service management solution capabilities. Service
providers have the flexibility to purchase individual service management
elements to fill specific capability gaps or to outsource a complete end-to-

Copyright 2011 Nokia Siemens Networks.


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15/19

end service management solution to a third-party vendor. Outsourcing endto-end service management solutions enables service providers to:
Improve the availability, performance, and integrity of business services
and processes.
Gain visibility and manage the end-to-end customer experience and deliver
new high-value service and product offerings to customers.
Reduce downtime, improve audit reporting, and reduce associated risks
from lack of network and service layer visibility.
Differentiate capabilities based on service deployment efficiency and
improve the end user experience.
Achieve tangible benefits such as a reduced customer churn rate, a
reduction in subscriber retention and acquisition costs, improvements in
end-user satisfaction rates, and increased revenues.

Figure 8. NSN service management offering

The NSN service management portfolio offers CSPs the flexible option of
using various delivery models for their end-to-end service management
requirements, including implementation, operation, outsourcing, and
managed services. Through the service, CSPs gain access to:
Service modeling: Provides network and service management insights to
help CSPs deliver on internal key performance and quality indicators as
well as external SLAs and enables root cause analysis to identify gaps

16/19

Copyright 2011 Nokia Siemens Networks.


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through service modeling techniques for efficient service problem


management and quality management.
Service problem and incident management: Aimed at extending
capabilities beyond the network layer to include value-added user-facing
applications such as video gaming, these services provide CSPs detailed
insights into network and BSS/IT service issues and help conduct real-time
root cause analysis.
Service quality management: Support delivery of service level
agreements (SLAs) and ensure Quality of Service (QoS) by enabling CSPs
to proactively evaluate network capacity and resource availability, helping
them address these issues in a timely manner.
Service fulfillment management: Includes service configuration and
activation help CSPs dramatically reduce the time required to deploy and
activate new services.
Business analytics: Provide CSPs with unique subscriber insights such
as consumption patterns to help them cross-sell and up sell new types of
products and services.
Service inventory management: A centralized repository of information
that identifies the specific types of services and components that a
subscriber qualifies for based on network capacity, service availability,
and technical requirements.
It also provides an experienced dedicated services organization and has a
history of success delivering network and service optimization solutions.
By partnering with a third-party vendor such as Nokia Siemens Networks
for service management solution requirements, communication service
providers can leverage these specialized skill sets and technical expertise
as well as gain access to a range of solution elements that enable efficient
delivery of a holistic end-to-end service management process.

Copyright 2011 Nokia Siemens Networks.


All rights reserved.

17/19

6.

Conclusions
Service management is the complete transformation of our
business processes. It is now the most important strategic initiative
for me. No longer is it all about network uptime or CPU utilization.
We need to focus on the customer.
(CTO, wireless communication service provider, India)

The forces driving communications service providers to intensify their focus


on end-to-end service management solutions are clear: the intensely
competitive communications landscape, declining revenues from legacy
services, and increased pressure to deploy new types of services and
service bundles to customers is forcing CSPs to reassess their end-to-end
service management capabilities.
Where should CSPs start with their service management activities? The
starting point will vary based on the specific issues the communication
service provider is addressing. If the CSP wants to quickly and efficiently
deploy new services to customers, the focus may be on enhancing service
inventory and service fulfillment capabilities to help reduce the time
required to identify, deploy, and activate new applications and services
for customers. In comparison, another service provider may outsource all
of its network and service management requirements to Nokia Siemens
Networks. This outsourcing approach enables the CSP to efficiently
and cost-effectively deliver network and service management solution
functionality throughout the end-to-end process. Its also important to
recognize that these service management capabilities often impact activities
in the networking, IT, and BSS/OSS business units, requiring collaboration
across multiple groups in the service provider organization. Irrespective of
where CSPs start with their service management requirements, Nokia
Siemens Networks has extensive experience working with CSPs worldwide
and providing expertise to help CSPs evolve their end-to-end service
management strategic initiatives.

Copyright 2011 Nokia Siemens Networks.


All rights reserved.

18/19

Appendix : Service management capability definitions


Service Management Capability

Definition

Billing operations

Supports capabilities to capture and consolidate information from all


billing systems to provide customers with a view of relevant billing
information in a timely and accurate format

Business analytics

Unique subscriber insights such as consumption patterns to help


them cross-sell and up sell new types of products and services.

Customer experience management

Providing the end-to-end experience for customers as they interact


with the company, starting with getting information on new products
or services, ordering the product or service, provisioning the
service, and addressing customer service and support issues, all in
a consistent, accurate manner

Customer interface management

Supports capabilities to enable customers to interact with the


communication service provider through any channel they choose,
such as online, call center, IVR, mobile, etc., and ensure consistent,
accurate delivery of information across all channels

Customer QoS/SLA management

Reports, portals, and dashboards used to help internal personnel


and external customers monitor and evaluate quality of service
(QoS) and SLA compliance in real time

Device management

Provides capabilities such as inventory view of devices, service


parts planning, defective device monitoring, returns tracking, service
logistics, device exchanges, loaners, and repair management

Order handling and management

End-to-end tracking and monitoring of the order handling process

Process management

Analysis and identification of the steps and activities necessary to


complete a specific end-to-end process required to provision
services

Resource Inventory management

Identification of availability of various types of products, expertise,


and resources in order to ensure the timely deployment and
provisioning of products and services to customers

Resource problem management

Reports and dashboards to track gaps and issues related to the


actual versus. planned use of people, assets, and technology

Resource provisioning & activation

Process of identifying the location, availability, and qualification of


various assets, personnel, and services necessary to complete an
end-to-end process as well as provisioning and activating the
specific product, service, or application

Copyright 2011 Nokia Siemens Networks.


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19/19

Service catalog

Comprehensive, centralized, itemized listing of the requirements


and availability of all products and services available to customers

Service fulfillment management

Includes service configuration and activation help CSPs


dramatically reduce the time required to deploy and activate new
services

Service inventory management

A centralized repository of information that identifies the specific


types of services and components that a customer qualifies for
based on network capacity, service availability, and technical
requirements. This dynamic repository includes information on
wireless, voice, and data networking assets, and information on
circuits, services, devices routers, switches, and user profiles are
among the many communications assets tracked by this module.

Service modeling

Provides network and service management insights to help CSPs


deliver on internal key performance and quality indicators as well as
external SLAs and enables root cause analysis to identify gaps
through service modeling techniques for efficient service problem
management and quality management

Service performance management

Includes service-level agreements (SLAs), fault management and


performance management associated with particular services

Service problem and incident

Service problem and incident management includes monitoring

management

network resources used to deploy voice, video, data, wireless


services as well as monitoring value-added customer-facing
applications that leverage network resources (e.g. video gaming,
mobility services and applications).

Service provisioning & activation

Aimed at extending capabilities beyond the network layer to include


value-added user-facing applications such as video gaming, these
services provide CSPs detailed insights into network and BSS/IT
service issues and help conduct real-time root cause analysis

Service quality management and

Support delivery of service level agreements (SLAs) and ensure

impact analysis

Quality of Service (QoS) by enabling CSPs to proactively evaluate


network capacity and resource availability, helping them address
these issues in a timely manner

Service traffic management

Tools to proactively monitor, track, manage, and predict spikes and


variances in network capacity and service usage

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