Almost out of the blue, Chief Digital Officers (CDOs) are becoming the most important change-makers in the telecoms industry. Tasked with instilling a new, faster-paced mindset into telco culture (and often hired from outside of the industry for their untainted perspective), these movers and shakers must also handle huge technical digital transformation projects. It is their prerogative to work with the technology that can define how their brand services the digital marketplace.
Subsequently, many CDOs are considering a clean, safe approach to serving the developing digital marketplace that leaves legacy technology truly in the back office, pushing digital enablement to the forefront. Telcos are realising the benefits of offering instant interaction to the ‘touchscreen generation’, enabling users to buy new services and receive usage updates in real-time, says Jennifer Kyriakakis, co-founder, VP Marketing at MATRIXX Software.
They are exposing the capability of their back-end systems directly to their customers through their handsets. As a result, they are no longer using the legacy technology of yesterday and are opting for a complete design make-over.
So, what’s the rush? As Manuel Pangilinan, chairman of PLDT Group in the Philippines said recently, “If you don’t accelerate the pace of digital, someone else will do it for you”. This shows just how competitive the new digital horizon is becoming.
There’s a lot at stake. These transformations could make or break careers, however they shouldn’t need to break the bank if spent wisely. The total market value for BSS is projected to reach an annual spend of about $17bn within the next three years, with about 25 percent of that invested directly into digital transformation.
Unlike the past, that money should not be spent – as in the past – on forcing heavy, clunky legacy set-ups to support products, customers and processes that they were not designed for.
Telcos are also keen on side-stepping the constant time-intensive upgrades, system customisations and change order requests that require months to launch a single new service. The whole procurement, testing and deployment process will be de-risked and switch to a time frame of weeks rather than years.
As a result, the money spent on digital systems will be smarter money, because it will show ROI quickly. Telcos will no longer be asked to put on a blindfold when it comes to delivering a new experience for their customers. Instead, new systems will provide the transparency and control that the customer desires coupled with the quick and sustainable effect on ARPU and Net Promoter Score, vital to the success of a CDO.
While the cloud creates the frictionless technical environment that telcos are interested in as a foundation for going digital, it’s the bimodal model of IT that provides the road map for getting there. Legacy systems will continue to work in the background as new digital stacks are brought up in the foreground.
As high-value customers and services are migrated to the digital stack immediately, lower value elements can sit on legacy technology, waiting their turn to be ported over to the new stack. Eventually, everything is de-siloed but in a time frame that makes commercial sense.
Bimodal IT offers a great path to establishing digital competencies however telcos must consider that they must still run the networks themselves. This means any additional mode of IT must still be telco grade, highly scalable and secure. So if telcos aim to bring up a new digital IT stack, it must not only be more agile, flexible and customer centric – but also must be just as bulletproof as their existing IT infrastructure.
Here, telcos can use their experience to their advantage. They’re very good at understanding real-time network delivery, and now need to consider how that would work within customer service, billing and product provisioning. They’re used to zero downtime – unlike other vertical industries – and can take the concept across to how they serve customers.
While other digital players that can sell their service through a mobile device might seem to be making more progress, they are dealing with less of a scalability issue. For example, Uber processes one million rides a day and Amazon handles 40 million transactions a day. But telcos juggle billions of customer interactions every day, and they already understand how to scale a service once it has proven a success. Therefore, it won’t take long for telcos to offer the same broad set of digital services as other digital pioneers.
As the first wave of telcos take on digital transformation, the need to establish a new digital IT software stack is driving them to look at new developers that are like-minded and can move quickly. We’ll see them working with smaller organisations to get the job done, rather than taking on the baggage and expense of inefficient, large onsite teams.
And, the new stack will offer more flexibility in terms of new services and revenues. Telcos will start configuring their own services and products in a matter of days – doing it themselves rather than calling up their vendor every time a change needs to be made.
It’s a reflection of the type of culture that will become pervasive in the next few months, accelerating digital transformation, responding to customers in an instant and offering them more control, choice and value than they have seen before. The Chief Digital Officer sits at the helm of the necessary and valuable change that is sweeping telecoms.
The author of this blog is Jennifer Kyriakakis, co-founder, VP Marketing at MATRIXX Software.
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