Less than 50% of service providers’ customer transactions are conducted digitally, Netcracker study reveals
Netcracker Technology announced the findings of a 2017 study conducted in collaboration with ICT Intuition, which revealed that while service providers around the world are making progress with digital transformation, there is still much work to be done.
The survey found that 82% of service providers conduct less than half of customer transactions digitally, despite the fact that nearly 80% of respondents said they are moving forward with business-wide digital transformation programs of varying size and scale. This underscores a large perception gap in understanding, completing and benefiting from digitalisation programs.
The study revealed that more than one-third of service providers have completed some aspect of digital transformation, but challenges persist; nearly three-quarters of service providers identify legacy systems and processes, challenges relating to staff and skillsets and business risk as the greatest obstacles to transforming digital services delivery.
Driving a successful digital transformation requires companies to transform myriad business and operational domains, including customer journeys, digital product catalogs, partner management platforms and networks via software-defined networking (SDN) and network functions virtualisation (NFV).
Service providers that have initiated digital transformation successfully have increased revenues, specifically in the B2B segment. According to the survey, service providers that previously generated less than 10% of revenue from business customers are now generating business revenues at closer to 25% of total revenue. In some areas of the world, this upward trend is even more pronounced, such as in the Asia Pacific (APAC) region where the number of service providers that derive more than 50% of revenue from business customers has doubled since 2015.
“The 2017 follow-up survey to our 2015 study clearly identifies that service providers understand the need for digitalisation and virtualisation programs that will enable them to meet rising consumer and business customer expectations, generate more revenue further up the value chain and increase automation end to end,” said Nancee Ruzicka, president and founder of ICT Intuition and co-author of the report. “It is clear that while service providers have taken a cautious approach to digital transformation given the business risks involved, they are now making steady progress toward becoming digital service providers.”
“Service providers have learned a great deal from the digital era’s first wave and now need to improve upon it,” said Ari Banerjee, vice president of strategy at Netcracker. “There are opportunities to deliver more integrated services with smarter customer experiences that are easier for users to manage at a large scale. The data suggests service providers are moving to capture those opportunities but to do so they may need to be both more aggressive and more realistic about the degree of progress they have achieved to date.”
Netcracker’s Digital Transformation Consulting Practice has been working extensively with service providers around the globe in successfully delivering impressive results by enabling digital transformation, achieving higher automation and opening up new revenue streams.