Inconvenient Truths - NPAC Transition

Chris Drake, CTO and Executive Vice President

January 29, 2014

When a sole supplier tells you that it's "too risky" to replace them, it is time to keep hands on your - and in this case, consumers' - wallets.

Last week's blog by Neustar regarding the risk of transitioning NPAC to a new vendor has proven, yet again, that smart people, like those at The Standish Group, can be convinced of just about anything when armed with only very selective information. The Neustar blog refers to a study on NPAC transition by The Standish Group, a reputable IT analysis firm, which has unfortunately succeeded mainly in overlooking all the inconvenient truths that surround this competitive tender. I feel badly for The Standish Group that they were led down the proverbial garden path by the incumbent supplier; however this is a major industry decision - with a direct, potentially significant dollar impact on the industry and consumers - and it is important to set the record straight on the risks of an NPAC transition.

The essence of the blog is that an NPAC transition to a new provider would match the firm's profile of a "Big Bang" project and thus would most likely go "boom". The report states that the major attribute of a Big Bang is that all functionalities must be delivered on a certain date, and that an iterative project approach, where functionalities are delivered in iterations as stepping stones to the end solution, has a much greater chance of success. But the report relies mainly on generalities and examples from completely different areas, and offers very little insight into the specific circumstances of the NPAC procurement. And how could they? The bids from prospective NPAC vendors were filed under NDA, and this is the first time in fifteen years that there has been a competitive procurement for the NPAC contract. Given the tightly controlled content of each NPAC proposal, the Standish Group is unlikely to have been privy to either the transition strategies or the implementation methodologies of the contenders for this NPAC award. So how do they know a new vendor wouldn't have an iterative approach? Furthermore, they don't seem to understand that the industry can test a competitive solution in iterations or that the NPAC serves multiple distinct regions with the potential to iteratively cut over one region at a time. What "Big Bang"?

The Standish Group identifies complexity, industry and the nature of the application as other factors that impact project success. In their view, the NPAC project is supposedly extra complex and has so many stakeholders with so many divergent viewpoints that the industry could not possibly execute the transition in an orderly and timely fashion. That reflects lack of awareness of basic facts. Nowhere does the report acknowledge that the NPAC has been managed since 1998 by a long-established industry group of domain experts, the LNPA Working Group. Somehow the report also overlooks that the industry is highly practiced in user acceptance testing of NPAC upgrades or that it has proven industry test suites. Nor does the report recognize that the NPAC application is notable for the depth of its documentation, including a Functional Requirements Specification (FRS), an Industry Interface Specification (IIS), and a data model that is detailed in industry Guidelines for the Definition of Managed Objects (GDMO) documentation. And let us not forget the fact that the NPAC was architected by the industry in a layered fashion to ensure that service provider back office systems were insulated from the specifics of the NPAC application via technology gateways known as Service Order Administration (SOA) and Local Service Management System (LSMS), thus minimizing the impact of NPAC changes on industry infrastructure. Did the incumbent make the firm aware of any of these realities so that the report could incorporate more balanced factors in their scoring methodology?

There are even more inconvenient truths that seem to be omitted from this study. For example, the study fails to consider the skills of the contenders and the robustness of existing gateway solutions in calculating the probability of success. In this case, the providers of the SOA and LSMS gateway solutions must have deep domain knowledge, similar to what is required for the NPAC, to develop, deploy and operate those systems. These solutions are neither new nor untested. In fact, these components are already capable of connecting service providers to a new NPAC on a region by region basis. This was, after all, the original, industry-approved design of the NPAC. Moreover, hundreds of service providers already aggregate their interface to NPAC through use of common SOA and LSMS components that are provided by a small number of service bureaus. There is little doubt that a successful NPAC vendor will need these types of significant skills. But what if in addition to this domain knowledge, a contender was an active contributor to the LNPA Working Group for many, many years, had been involved in Number Portability since its inception twenty years ago, and had extensive experience working with local industry to deploy NPAC implementations in numerous locations worldwide? A 4% chance of success for all contenders? Really?

Overall cost savings and transition costs are also major themes in the report, and also reflect an unfortunate lack of information. The Standish Group asserts that it "does not see any real value in replacing Neustar with a new NPAC vendor except for possible cost savings". No real value? Only possible cost savings? Again it seems that the incumbent failed to inform the firm of information posted on the NPAC's own website, such as the industry working group's change order (NANC437) that identifies that a competitive NPAC environment would provide multiple benefits, including: carrier choice, vendor diversity, innovation, and, lastly, cost. As to "possible" cost savings, financial analysts have published public reports that assert the NPAC revenue to the incumbent has grown from just over $100M per year in 2004 to now over $450M per year. So in a 5 year contract valued on the order of $2 billion, can we agree that cost savings are more than possible? The industry - and its consumers - might even anticipate remarkable savings.

The bottom line - this Neustar blog and report about big bang projects going boom is rife with convenient omissions clearly driven by an incumbent focused on protecting their longstanding contract from the pressures of a competitive market. There are numerous technology companies who could successfully transition NPAC given the extent of the documentation, the layered architecture and the well-established industry oversight. Combine that with extensive expertise in the US telecommunications industry and number portability in particular, and the NPAC transition would be in very safe hands indeed. Ideally, this articulation of the realities surrounding the NPAC ecosystem will set the facts straight on the ability of a new company to be successful at executing an NPAC transition.