Like every service provider, you face constrained budgets and concerns about return on invested capital. You scrutinize every investment decision and strive to do more with less. To make smart, sustainable investments, you need confidence, key market intelligence and proven business modeling techniques.

With the Cost Transformation Program, Alcatel-Lucent (News - Alert) draws on its extensive transformation experience to offer comprehensive business modeling, testing, launch and go-to-market strategy services. The Cost Transformation Program enables you to make rational decisions that reduce costs and make cash available for new solutions that deliver sustainable long-term value.

A key issue is that connectivity no longer has the intrinsic value it once did. Customers demand added value, and they’re getting it. Incumbent service providers need to provide the value their customers are seeking — namely, a rich communications experience.

Alcatel-Lucent has established a cost transformation program to help service providers evolve their businesses — through the achievement of High Leverage Networks and non-linear cost reductions, and by making well-informed strategic investments. The program focuses on minimizing expenses, effecting strategic, well-managed network transformations and generating new revenue opportunities.

In today’s evolving marketplace, revenue is centered less in the individual user and more in the traffic transported between users: data, media, and bits. Overall usage is a key measure of revenue, which Alcatel-Lucent refers to as average revenue per usage (ARP Usage). To maximize margins while reducing costs, an overall goal for service providers should be to achieve the lowest total cost of ownership (TCO) per transported bit.

Alcatel-Lucent’s model for cost transformation involves three key areas of focus:

• Architecting based on a High Leverage Network vision

• Achieving non-linear cost reductions

• Making strategic investments

The Alcatel-Lucent High Leverage Network concept supports continuous bandwidth scaling, automation and built-in intelligence such as subscriber, service and application awareness to provide enhanced Quality of Service (QoS) and traffic optimization to provide the best possible quality of experience (QoE).

This approach ensures that revenue growth can be secured while cost efficiencies are realized.

The point is not to completely overhaul the network to realize a High Leverage Network, but to build on the existing network intelligently and strategically to address short-term requirements and pave the way to long-term value and sustainability, with a focus on decreasing expenditures and increasing profit margins.

Looking toward a fuller migration, Alcatel-Lucent works with service providers to determine the various cost benefits that might be gained depending on where the transformation initiative begins.

Alcatel-Lucent has helped providers assess their current networks holistically, from end to end, identifying opportunities for optimization and cost reduction — in the network itself, in the service providers’ service portfolios, and in related cost centers such as real estate, power consumption and maintenance. Applying its expertise, Alcatel-Lucent has helped major players reduce costs significantly. Sprint (News - Alert), for example, saved $719,000 in the first year and $2.4 million annually after Alcatel-Lucent inventoried its full set of 2,500 network elements and outlining a plan for consolidation and the elimination of excess equipment.

When migration is managed well, expenditures decrease across the board. By reducing network complexity and cost, and by optimizing energy consumption and sourcing, service providers can prepare for the growth they require, increasing their agility and accelerating their time to market for new offerings.