I have received many requests over the last months to explain in more details our innovation process. Now that our innovation methodology is a widely commented Harvard Business Review Case Study, I thought it was a good time to shed some light on how a large telco such as Telefonica can innovate in a fast paced environment. Innovation is not only a decision, it's a process, a methodology. In our case we have different teams looking after external innovation, through business ventures and venture capital and internal looking after networks, data, and moonshots. The teams that I support, focusing on networks innovation are adapting the lean elephant methodology to invent tomorrow's mobile, fixed and TV networks.
The process starts with directed ideation, informed by our corporate customer segmentation, customer sentiment studies and selected themes. An innovation call centered around specific themes such as "imagine tomorrow's TV" or "Artificial intelligence and networks QoE" is launched across the group, with local briefings including our selection parameters. A jury is convened to review the hundreds of ideas and shortlist the most interesting. The selected intrapreneurs have a month to prepare a formal pitch for their ideas. They are assisted by customer experience specialists who help them refine the problem they seek to resolve, its applicability and market appeal.
After the pitch and selection, the intrapreneurs are transitioned to the innovation team full time and given a few weeks to create a feasibility plan and preliminary resource budget for prototyping. Once ready, the successful applicants present the plan in details to the jury.
The lucky few that pass this gate are given 3 to 8 months to prototype their project, together with commensurate resource. At this stage, the project must have strong internal sponsorship, with verticals or markets within Telefonica who are committing to take the prototype in their labs for functional testing. The resulting prototype, together with the value proposition and addressable market are reviewed before passing to the next phase.
The prototype is then hardened and deployed in a commercial network for friendly and limited A/B testing and refinement. This phase can last 2 to 6 months, with increasing number of users and sophistication in measurement of the value proposition's effectiveness. During this phase as well, a full product / service business case is finalized, using the data collected during the market trial.
Productization and transfer
The project meets customer needs? It is innovative and provides differentiation? It is profitable and Telefonica has an unfair advantage in solving real market problems? These are some of the tough questions the intrapreneur and his team must be able to answer before the solution can be productized and eventually transferred to one of our verticals or to create a new one. This process has been the source of Telefonica's early advances in IoT, big data, smart cities... It has also killed, merged, pivoted and spun off hundreds of projects. The network innovations teams I support are aiming at radically changing networks topology, deployment and value chain using software defined networks, virtualization, containerization and lambda computing all the way to the edge of our networks. We are developers, network hackers, user experience experts, computer scientists, devops engineers,.... The next months will see some exciting announcements on this. Stay tuned. You can catch me and we can chat about it at the upcoming NFV world congress or TM Forum live.
Debate: What is left for operator to enable SDN and NFV?
In a live debate held last week at Mobile World Congress, Patrick Lopez, VP Networks Innovation, Telefonica, and Manish Singh, VP Product Management, SDN & NFV, Tech Mahindra, joined TMN editor Keith Dyer to discuss what operators are hoping to achieve with the adoption of NFV and SDN.
The panel asked what the end goals are, and looked at the progress operators have made so far, picking out key challenges that operators still face around integration, certification and onboarding of VNFs, interoperability, the role of orchestration and the different Open Source approaches to NFV MANO.
The panel also looked at how operators can adapt their own cultures to act in a more agile way, adopting continuous integration and DevOps models.
Lopez: “The end game is the ability to create services that are more customer-centric and enable operators to provide real value to consumers, things and enterprises by providing experiences that are tailored for them. And to be able to do that you need to have an infrastructure that is very elastic and very agile – that’s where SDN and NFV comes in.”
Singh: “As we dis-aggregate the hardware from the software, and get to this virtualised infrastructure layer where different network functions are orchestrated – integration, performance characterisation, capacity planning and onboarding all become challenges that need to be addressed
Singh: “There has been ecosystem fragmentation in the orchestration layer and for the VNF vendors that was creating challenges in terms of, ‘How many orchestrators, how many VIMs on the infrastructure layer do I support?'”
Lopez: “It’s really hard to create an industry that is going to grow if we don’t all share the same DNA.”
Singh: “The good news is there is a vibrant ecosystem, and I think having a couple of key alternatives as we drive forward is a good thing. And we see an inflection point where a new way of standardising things is coming up, and that really sets the way for 5G.”
Lopez: “You cannot implement automation well if you don’t understand how you have deployed that NFV-SDN technology. You need to implement that itself to understand the gotchas to be able to automate.”
Singh: “As we look at SDN NFV the other key aspect is the ability to bring new player, VNFs and components into the fold and we are enabling that to be done cost effectively, efficiently and rapidly.”
Lopez: “It [SDN-NFV] works, we can achieve the main core benefits of the technology. It can do what we were planning to do – to run a software defined network. We are there, now it is about optimising it and making it run better and automating it.