Managing the digital transition for Communication Service Providers

Across the globe, industries face the incoming digitalisation trend and have undergone massive changes as a result. For example, in the travel sector, we have shifted from human-assisted travel purchases over the phone or in a travel shop assisted by a travel agent, to targeted advertising based on online profiles, backed up with the ability to book in a few clicks online.

The more consumer focused industries like travel are often first to feel changes in consumer demands, yet this change is also vital for Communication Service Providers (CSPs) to embrace. Otherwise they risk not matching their approaches to customer expectations and losing out to more nimble competitors who are capable of offering the levels of digital services that customers want today, Jaco Fourie, head of products at Qvantel.

Learning from other industries

It is vital that operators begin to learn the lessons and best practices from other industries including travel, whilst also recognising their own unique challenges. Operators are in an unspoken race, to be the first ones to deliver as competition for the next wave of consumers is high. This is seen in the banking sector where many older banks are losing business to new app based banks, which are providing a more data-driven, automated and user friendly experience.

New systems allow for agile companies to target and sell personalised services through interconnected channels with a few mouse clicks. If CSPs can utilise similar capabilities to deliver personalised offers and enable targeted packages and easy customer on-boarding without the need to visit a store or speak to a salesperson, they will find themselves attracting new business faster than their competitors.

Even if people are visiting physical locations, they will also be checking for prices online and seeing what other deals are available. If you can make your offers easily accessible online, whilst using these new systems to be more competitively priced, then you may be able to take sales from customers waiting in your competitors’ physical stores as they search for better options. Using this approach any pain point or delay in your competitor’s customer journey, in store or online becomes a potential digital sale for you.

It’s time for digital-first

Choosing the right response to this shift in consumer behaviour can be difficult. This usually requires a large shift to new digital-first systems, and the digital transformation projects required to enable this have historically had a high failure rate and been fraught with challenges. This includes budget constraints and a lack of courage to drive a real change in the business, (not just in IT systems) lack of internal expertise for driving major transformation, employee resistance to change and the complexity of pre-existing systems.

Each of these challenges presents a unique issue. In one instance, complexity related to existing systems in which the business is run can be mitigated by phased transformation where a purely digital new solution is first introduced for a specific market segment. Then once this is proven, the rest of the business can be transformed to a more agile and digital world in gradual phases.

Handling the budget question

Budget is often the main difficulty with these projects, and is one of the largest pain points for digital transformation as spend can grow and grow as projects take longer to succeed than expected, if they ever succeed at all. To mitigate this it is important that companies to have a transformational strategy that sees projects with agreed deliverable value before final completion.

The system from its outset must have a plan for gradually making the business more efficient. This should include a plan for transitioning employees and customers over to new systems and methods of operating in phases before the system is fully deployed. A large project which delivers on change and business goals at several stages throughout its deployment is instantly more attractive than a large deployment that may at some point fail completely.

Traditionally, operators might evaluate transformation strategies as being about replacing existing legacy solutions in one go (Big Bang), which represents bigger risks, but also fast gains if successful. An increasingly popular digitalisation strategy is establishing a new parallel brand and solution for a new, modern digital business (e.g. purely digital business line where only digital sales and customer care are the way to serve the customers, such as with Qvantel’s Digital Express solution). Phased transformation of the existing ‘running engine’ is also an option, but requires clever technical and transformation project management skills to get right.

The digital consumer is here

This step-by-step approach to digital transformation does not change the fact that it is a challenging prospect with many struggles along the way. Yet for all its potential benefits, the push for digital transformation grows far beyond simply business arguments.

Instead, operators face an inevitability that demands change, which is that the digital consumer is already here, and there will be competitors out there willing to meet the demand for smarter, agile digital services. This means that every operator that wants to remain competitive and relevant must therefore make a step-by-step plan and begin these projects in good time, or risk being beaten by the competition. Consumers won’t wait to get the service that they are already asking for.

The author of this blog is Jaco Fourie, head of products at Qvantel

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