Digital Transformation: The Future of Telecoms

Digital transformation is the process of using digital technologies to transform business - be it by creating new ones, or by fundamentally changing the existing business processes and services, to meet with the evolving market and customer expectations. It is also the transformation of an organization's culture that requires organizations to continually challenge the status quo, inspect and adapt, and get comfortable with failures.

No organization is immune to disruption and the best weapon remains innovation. The increase in mobile data traffic globally, the organic growth of smart phone users and the demand for data intensive applications have left no choice but for mobile operators to transform digitally. Henceforth, innovation and competition remain no longer ‘Business as Usual’ for telecom operators.

The trillion-dollar market over the past few years has been under tremendous pressure as new growth horizons have proven elusive, driving return on investment capital (ROIC) even closer to weighted average cost of capital (WACC). With the onset of COVID- 19, where business recovery is way too slower than the growth, which is driving deteriorating economics, business leaders are now bound to cavort short term advantages to seize untapped growth with a holistic approach to transform.

Most operators have been responding to these daunting challenges by increasing their digital investments and have a clear road map of digitalization. Nonetheless, 3G has given way to 4G/ LTE, and now operators are rolling out 5G.

The following are some digital technologies shaping the future of telecoms:

1.??????Artificial Intelligence and Machine Learning

2.??????Robotics and Automation with Big Data

3.??????Process Mining

4.??????Internet of Things

5.??????Cloud Computing

6.??????Data Privacy and Cybersecurity

However, while undergoing the transformation of limited portfolio of traditional services to a diverse portfolio of digital service, Human to Human (H2H) behavior is also enhanced. Telcos are now moving from a traditional telco organization and culture to a more stable infrastructure centric organization, offering the organization to map its employees’ journey where people’s skills and behaviors are least impacted. Telcos will need to open new communication and partner channels to market its brand to maximize the digital services and product revenues. This may require new operating processes for incentivizing employees and partners to a new vertical of aligning business needs with market expectations.

This journey would require a lean and agile approach to leverage IT architecture that gives the operator the flexibility and scalability to support multiple business models at scale without increasing the operational complexity and cost. This would require a discrete approach for understanding and exploiting data - collection, analysis and monetization, at a speed, without compromising the security to enhance the digital economy for internal business optimization and external monetization. This ecosystem of optimizing the value of new business models will largely depend upon the strategy to manage innovation and collaboration.??

The pandemic has amplified the urgency for reinvention. Faced with an unprecedented crisis, operators are now expected to innovate quickly, adopt to rapid decision-making capabilities focusing on customer centricity. While the industry is experiencing an irrevocable seismic shift, customer behavior has leap frogged five years ahead. With consumers moving online and embracing self-service customer care, the importance of transitioning the entire customer base to digital portal has been augmented. As digital natives set a new benchmark for customer experience across industries, operators can capitalize on recent behavioral shifts to rethink their approach to serving, satisfying, and delighting customers.

To achieve sustained performance, operators need to make several bold moves.

1.??????Create a digital native, scaled customer experience

2.??????Build business at scale

3.??????Go to market with simplified products

4.??????Establish a data driven customer analytics capabilities

5.??????Innovate around customer experience

6.??????Invest in structure and talent

7.??????Deploy and enterprise – agile operating model

8.??????Make data privacy and cybersecurity a priority

9.??????Pay more attention to long term value of digital initiatives

While some telecoms are struggling with transformation, others are beginning to break the barriers. Telecom giants have heavily invested in networks, creating fixed line products that makes them adopt a business model which is rather inflexible. However, the whole point of digital is to be customizable and flexible, which makes the transformation rather a tough one to start with. Complexity of fixed and mobile networking domains makes adopting digital a tough job. Network outages, and bandwidths are one of the biggest concerns. A potential ecosystem partner to support these challenges may be cloud platform partners, device manufacturers, application providers, and channel partners.??

Other reasons for digital transformation projects to fail are i) people and culture of the organization, ii) poor communication and team morale, and iii) lack of measurement and KPIs to monitor the effects. ?

While the benefit of Digital Transformation remains many – from increased productivity to reducing operating costs, improving customer satisfaction, driving innovation while keeping you ahead of your competition, start with 3 key areas for Enterprise Digital Transformation focusing on:

1.??????Customer Experience – for creating more customer touchpoints

2.??????Operational Process – improving internal processes that leverage digitalization and strategic decisions making capabilities

3.??????Business Models – transforming the business by using digital tools to provide global shared services

Industries across all verticals are in dire need of change and the journey is already underway in telcos. It involves evolving and implementing the change across system, processes, culture, skills to align the business needs with emerging trends and customer demands in order to provide a quality and best -in- class service.