Flying with the Unicorns – The Fastest Route to Digitalising Your Telco

~ Written By Lara Irwin

In the first blog in this series on the Telco sector “From Dinosaurs to Unicorns - Why Telcos Must Go Digital” we looked at the business case for digitalisation. We discovered how older, more established CSP Dinosaurs need to find a way to model OTT Unicorns and identified the products and services that Telcos need to provide on in order to become the digital dynamos their customers demand. In this blog we will examine the barriers faced by Telcos embarking on digital transformation and some top strategies for a smooth transition and competitive advantage.

Verizon, AOL & Yahoo

Telco’s that are pondering great strategies for successfully going digital need only look to Verizon’s recent acquisition of Yahoo to see a great example of the benefits. Bearing in mind that Verizon also acquired AOL in 2015, the Telco now has access to 25 brands boasting hugely popular sites with quality content that drive a vast amount of traffic. These include Huffington Post, Techcrunch, Yahoo Sports and Finance, Flickr and Tumblr. According to the Washington Post the combined unique visitors total 50% more than those of Google. Where there is traffic, there is data. Verizon has impressive analytics capabilities enabling them to track web browsing behaviour and location history. This invaluable customer insight is the competitive differentiator that will allow Verizon to create highly personalised and relevant digital advertisements that speak directly to their target markets, increasing conversion, upsell and retention.

Of course not every Telco is in a position to make major acquisitions to facilitate their digital transformation. So what other strategy options are open to Telcos, what are the challenges and what is the most efficient way for them to achieve success?

3 Top CSP Transformation Challenges

The main challenges facing CSPs undergoing Digital transformation are:

1. Traditionally CSPs have focused on their network assets rather the full customer experience and, as a result, touch points like online portals are clumsy not user-friendly and products are fairly standard and lack innovation.
2. CSPs lack speed in their operations and agility in their development process. According to a recent IDC survey led by Amdocs, globally, 64% of telecoms executives think that the industry will be outpaced by other industries in the race to achieve digital transformation with 50% believing it will take in excess of 5 years to complete the journey.
3. Successful Digital Transformation requires a clearly defined strategy. With IT and business leaders often being on different pages, multi -vendor environments adding to the complex infrastructure and heavy reliance on legacy systems and manual development and testing processes, many Telcos lack the digital expertise to formulate a desirable vision and create the right strategy to achieve it.

 

Solutions for a Smooth Digital Transformation

CX

One way of achieving Digital Transformation is by being more commercially transparent. By creating open ecosystems with digital partners offering cloud backup, file sharing and collaboration tools, Telco’s can create the required depth and breadth of digital services, and deliver services with a competitive level of speed, agility and innovation. Real time analytics, a mobile first approach, a personalised customer experience e.g. through a community, online forum, FAQs, and a customer service channel on social media, will offer a more modern approach to problem solving and reputation management. As Chris Boyd, Head of Digital Transformation at Telefónica observes in his blog on the Company’s Digital Transformation,

“This means we must be more relevant in our customers’ digital lives. The aim is to empower customers to control, manage and enhance their daily life experiences through the use of digital services. These services will be provided on an increasingly digital platform that will simplify service use and improve customers’ overall experience.”

Indeed Telefónica customers can already use their mobile accounts to pay for other commercial services and in the UK customers get “priority Moments”, which provides them with discounts based on location, preferences and time of day.

No No Silo

IT Silos are the enemy of Digital Transformation so CSPs need to abolish these silos and enable their sales team to get an end to end view of the entire customer experience across all touchpoints and channels. Relevant aspects of this view can then be utilised by all the different teams across the business so that the customer has a good experience whenever they interact with the brand via whatever channel they choose to use.

 

Automation, Virtualisation, Standardisation,

In order to keep Digital Transformation within budget and scale up or down according to their needs, CSPs should utilise virtual platforms such as a flexible hybrid cloud model with PAYG, when creating and activating new digital services. Although innovation is key, where anything from systems and processes to test environments and test cases are efficient and relevant, they should be reused and where possible standardisation, automation and virtualisation should be deployed. Order management for example should mimic companies like Amazon with centralised data and high levels of automation. A full service app that can take the customer on the journey from an initial personalised product search to final purchase is the Telco Holy Grail for both customer and CSP.

Aye to API

Telcos that invest in the API economy can reap the cost and time benefits of a streamlined application landscape with reusable components and trusted, proven code and functionality. This enables them to launch services at impressive speed and volume and stay ahead of the competition. The API economy continues to grow apace and Twilio was a shining example of this in the summer of 2016 when it was listed on the New York stock exchange at $1billion and was worth $2.4billion by the end of the day’s trading! The Guardian newspaper gave a succinct explanation of why the company’s value grew so fast,

“Twilio has stayed focused on helping software developers do things that were previously considered really hard. Huge barriers prevented developers from working with the different telecoms providers and their complicated SMS gateways, their many standards and protocols, and their unmanageable pricing structures. Twilio successfully broke down all the things that stopped developers from creating messaging features into a few simple pieces that made a whole new market possible.”

5 Areas of Focus

A recent McKinsey IT study of 80 global Telcos found that those companies that were focused on the 5 areas of (i) robust customer analytics (ii) digitization of order management (iii) self-service customer relationship management (iv) a simplified IT-application landscape and (v) automation of IT-infrastructure management, achieved a profit margin of 43%. Conversely those that had not focused on these areas and were less digitally mature had a profit margin of only 21%, so it’s clear that the focus areas outlines above are a great starting point on the quest to Digitalisation.