The way to a human-centered software company

Software is eating the world.

That is how Marc Andreesen sums up the revolutionary forces that are radically changing our economy and society. New software-based functions and processes are affecting more and more companies and industries. Established industry structures are subject to massive change, oftentimes completely turned upside down. Looking at recent history, no industry is safe from change, starting with the music and media industry, through the tourism industry, to the mobility industry.

Analyses of the S&P 500 compositions are both impressive and alarming and speak for themselves. In 1965, the average time a company stayed in the index was still 33 years. Until 1990 it had already decreased to 20 years. Innosight forecasts, that this will further shorten to only 14 years until 2026. As a result, half of the S&P 500 companies would be replaced within the next 10 years.

Disruption caused by software naturally affects the technology industry itself, and especially the telecommunications industry. That is why:

Telcos have to become software companies.

Our business has changed significantly in the recent years. Drivers: The Internet and ubiquitous connectivity combined with the possibilities of operating system platforms such as iOS and Android. The so-called over-the-top (OTT) players like Google, Facebook or Amazon have penetrated almost all areas of our value chain. They have fueled competition for the best solutions for consumers and business customers and demonstrated how intelligent cloud infrastructures rapidly conquer global markets.

The best customer experience today requires very good software engineering, alongside human passion of course. At Deutsche Telekom, we have therefore begun to transform the ‘DNA’ of our company. Our goal is to become a software company that puts the human being into the center.

1. On the one hand, this affects the architecture of our networks. New, software-driven approaches make them more flexible and efficient. Software Defined Networks, Network Function Virtualization or cloud-based Radio Access Networks are important keywords here. But at this point, I will not delve deeper into the future network architecture. I would rather like to talk about products.
2. Products and services are the other side of the big software ‘wave’. An important project in this space for us is "voicification", i.e. the voice control of our services in addition to Alexa and other offers. This also includes the development of our own platform for AI-supported speech recognition, processing and synthetic, natural sounding output. 

Voicification is becoming increasingly important for a great customer experience - and a welcomed challenge on the way to becoming a software company.

Natural interaction with technical devices and services via speech is one of the major trends of our time. Voice controlled access to our favorite services makes life easier for us. It ensures that devices and gadgets find their place in our everyday lives in an increasingly inconspicuous way. For us as Deutsche Telekom, it is important that our customers can control all services in our portfolio with their voice: TV products, smart home offerings and our communications services. In the future there should be no limits to the possibilities.

What about privacy for users?

The development of a voice platform requires the handling and interpretation of sensitive data. Do we want to expose something as personal as our language and information about our everyday lives exclusively to language assistants that store our data on servers outside of Europe? We would like to offer our German and European consumers alternatives that are strictly GDPR compliant and guarantee transparent handling of personal data.

Language assistance services, especially speakers, have a particular challenge in this aspect. In order to improve quality, the actual spoken texts must be randomly compared with the AI-generated text files from speech recognition. On a regular basis, by real people. Handling of such human intervention in the subsequent speech analysis, which is not communicated very transparently by current providers, is regarded by many people as an invasion of privacy. Users have rightly gained the impression that their data and personal information are not handled sensitively enough. In a DMEXCO survey, 63 percent of the German respondents stated that they tend to or do not trust the providers of smart speakers.

Responsible use of technology.

In current turbulent times of "techlash" I believe that European companies have a special responsibility to set a different focus. In terms of security and trust, it is both a challenge and an opportunity. Thus, we are very conscious of the issue of privacy and responsible handling of customer data. For language improvement and error analysis, language experts in our company - in separate workrooms and with specially secured computers - also do compare some of the automatically and randomly generated text files with actually spoken, anonymous queries. No language algorithm out there can do without this principle. However, we make this handling transparent during the setup process and in the data protection notices. And our customers can easily opt out of it.

My vision: a strong digital Europe with more cooperation.

I am convinced that it is key for Europe's competitiveness to develop, apply and successfully commercialize essential skills in a few key technologies, such as artificial intelligence. Europe is at a critical crossroads that can only be successfully addressed through determination, focused investment and partnerships.

Our speaker is a wonderful example of European cooperation: we are building the AI-based language platform together with our partner Orange from France. I would be fond of seeing more such projects, carried out collaboratively in Europe in the future. It is an important prerequisite for us in Europe if we want to maintain competitiveness compared to ‘tech giants’ from the US and China. A prerequisite for future prosperity.

Deutsche Telekom's transformation: How we work, how we develop our employees and how we create open doors for new talent.

As mentioned in the beginning, voicification is just one example of the demanding avenue towards a software defined company. With both human privacy and consumer experience at the center of our actions. Other examples are our Smart Home product, our Connect App, the Chatbot Tinka or MagentaTV Streaming.

This endeavor goes hand in hand with profound cultural change. A key ingredient is the creation of a ‘maker culture’. In plain English: it is better to ‘make’ (design and program) certain products and experiences ourselves rather than just writing tons of specifications for suppliers and relying only on them.  And as result, lose critical capabilities or not even develop them in the first place. At the same time, right from the start, we are relying on worldwide cooperations, such as with Orange on the voice assistant or with SKT, the leading South Korean telecommunications company, on 5G technology.

Hence, nothing is as it used to be for us. We are determined to foster some of those skills internally that have been standard in the world of Internet companies for a long time. On top of that, we work with a strong global partner network. I am convinced - as a physicist and former developer - that the success recipe for outstanding customer experience is when developers put their heart, soul, and passion into the best services and go the famous extra mile.

Of course, such a big transformation does not happen overnight and surely not without great efforts. We are in the middle of a comprehensive change process. One about building and developing the skills of our employees, but also one about attracting new talent from all over the world to our company.

We are introducing and fostering agile working methods and promoting a creative learning and failure culture. We are running ambitious programs that empower our employees with new knowledge. The focus here is on roles and profiles such as software engineers, software architects, agile product owners, scrum masters, product developers and marketers, as well as designers. The way we do this, goes far beyond ‘normal’ training. 

We have introduced dedicated academy programs for various role profiles. The first graduates are successfully contributing in a variety of projects. This summer, we have started scaling these activities strongly across the breadth of our workforce. Anyone who wants to learn and develop, who wants to give their career a new direction, will find very attractive opportunities to tackle such plans.

An optimistic look ahead!

Today more than ever, Europe and its businesses are challenged in an increasingly competitive digital and global environment and to set their tone.

Let me reiterate my ingredients for this:

• Determination and focused investments into the best customer experience
• Clear commitment to responsible handling of personal data, and technology innovation with the human being in the center
• Openness to partnerships with both large companies and start-ups
• New ways and perseverance with building new capabilities in the own enterprise – fostering new skills in developing our people and creating an environment, in which motivation and creativity prosper. And one that attracts new talent as well.

At Deutsche Telekom, we have embarked on this path. We are happy about many imitators and role models, about partners, the exchange of experiences and joint learning. We are only satisfied when everyone is a part of this! #takepart #dabei