Telecom providers must consider a holistic digital transformation approach for long term Success
To say that the ‘business landscape of telecom service providers (TSPs) is undergoing a change’ is an understatement. The industry is undergoing radical changes that have the potential to disrupt the dynamics of the industry forever.
Since the advent of the digital world, the mechanics of operating and doing business have changed completely as a plethora of ‘disruptive trends’ have significantly impacted the rules of the game, ways of working, customer experience, measurement metrics and financial & operating models.
Today, the key challenges affecting the industry are well known. New non–traditional organisations are entering the industry, offering superior customer experience, reduced cost–landscapes and a worldwide reach. Intense competition is resulting in rate cuts, impacting market shares and margins, says Karan Puri, corporate vice president and global head consumer & commercial services at HCL Technologies.
Players such as over-the-top (OTT) are bringing in a fresh wave of competition, altering Opex and Capex scenarios. Some of the disruptive OTT providers are growing at rates that are 10 times faster than traditional TSPs. These changes have resulted in shrinking margins, plunging ARPUs, and widespread revenue cannibalisation.
However, amidst challenges, lie opportunities for future growth. Connectivity is no longer limited to smartphones, laptops, and desktops but also involves home appliances, wearables, and automobiles. An ever-growing demand for connected devices, coupled with changing consumption patterns and behavior of the digital consumer, have become mainstream. In order to capitalise, telecom companies need to build robust digital supply chains and transform their operating & business models to tide over the disruptions and add new revenue streams to build long–term sustainable models.
Key elements of a successful digital strategy
Embracing the ‘digital wave’ will lead to enhanced end–user experiences, expanding opportunities to create new revenue streams and reduce operational costs. As they strive to revitalise customer experiences, telecom providers must look beyond mere front–end user interface systems and engineer a comprehensive end–to–end digital transformation strategy. Core assets in the value chain must be leveraged in a holistic manner, bolstering service excellence and customer experience.
The entire process has to work like a journey, and networks will have to be holistically aligned, in order to function as part of the entire ecosystem. TSPs must therefore look at an end-to-end integration across the value chain, managing existing processes, while smoothly incorporating new technologies. This necessitates a smart combination of the ‘right people, processes, and technologies’.
Organisations should adopt a customer–centric approach in order to map network changes on the features and functionalities demanded by consumers. While front-end systems could be the entry point for the transformation; the following components need to be worked upon for a holistic digital overhaul:
- Virtualised networks: Virtual networks not only promise reduced costs, but also foster agility and innovation. They let providers or consumers instantly deploy and configure services. Network advancement acts as the core component, contributing to enhanced customer experience by revolutionising the way cloud, networks, and managed services are deployed and consumed.
As an example, AT&T’s vision of next-generation network comprises software–defined networking and network function virtualisation, and by 2020, the company plans to virtualise and control over 75% of its network using these technologies to meet the growing demands of data and video of the digital users.
- Operations and Business Support Systems (OSS/BSS): These systems are critical to launching new services, adding new revenue streams, strengthening relationships and enhancing end-user experiences. In a digital world, OSS/BSS can be delivered using cloud computing models, allowing smoother integration and simplification of IT landscapes.
For users, this can lead to enhanced experience through self-service apps & widgets on multiple devices, enabling real-time billing and spending controls, differentiated offerings, quicker and smoother activation of service, optimised packages based on individual needs and other elements of a holistic customer experience journey.
- Automation & artificial intelligence: Automated models and operations can be implemented across the entire customer, network, and IT lifecycle for faster time to market, reduced costs, and ultimately superior customer experience. Through the effective use of automation and AI, TSPs can fast track new products & services, reduce costs and implement new processes such as Agile vs. Waterfall, Dev-Ops, shift-left, test automation, automation of provisioning and configurations, sales processes, customer support, etc.
- Advanced analytics & insights: Advanced analytics needs to be leveraged to track each subscriber, their experience and interaction over multiple channels (like online, social, retail store, and mobile). Insights such as customers’ buying behavior, buying patterns, spending tendencies, and their network activity across locations, devices & applications helps foster predictive capacities and better decision-making.
- User interfaces and experience design: Customers are consistently pushing ecosystem providers to offer state-of-the-art digital interfaces along with consistent experiences across a variety of channels and devices. Design thinking is a must to ensure a unified omni–channel experience that could create a decisive impact on customer satisfaction and loyalty.
In conclusion, as telecom service providers adopt a digital transformation blueprint for enhanced end–user experiences, expanding opportunities, new revenue streams, and reducing operational costs, they must understand that this needs to be undertaken as a journey, where process, resources and networks will have to be holistically aligned, in order to function as part of the entire digital ecosystem. TSPs must therefore look at an end-to-end integration along the value chain, managing existing processes while smoothly incorporating new technologies.
The author of this blog is Karan Puri, corporate vice president and global head consumer & commercial services at HCL Technologies.
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