Telcos and the Digital Imperative
The telecommunications industry today, depending on whom you speak to, is either under siege from digital players or in a process of transition towards becoming digital players in their own right. As a fan of analogies, I am tempted to compare the state of the telecommunications industry to the once magnificent Roman Empire, which straddled the known world and was a unifying, if violent force, with significant contributions of infrastructure and institutions. All of these contributions stood the test of time, until they began to weaken under the weight of internal contradictions and the disruptive force of external attacks. Admittedly, this none too subtle and imperfect analogy would suggest that the industry is facing the dire prospect of capitulating to the barbarians at the gate. However, there is still time to salvage relevance, if not supremacy.
The key to relevance in the emerging ecosystems for communications services is to embrace digital as a strategic business imperative. Telcos with their obsession with network availability have been steadily ceding ground to Internet, webscale and over the top (OTT) players like Facebook, Google and others who have benefited not only from the huge increases in their addressable market due to the provision of Internet access services but also from an ability to “harvest” customer data in a relatively laissez-faire regulatory environment compared to telecoms. The digital journey for telcos is daunting and immense but several communications service providers (CSPs) have already made significant strides towards digital transformation of their operations.
Digital as an imperative is driving fundamental changes in Telco
Human beings have the differentiating feature of superior cognition aiding in real-time decision making. CSPs are also on a similar path. Can CSPs transform to becoming “smart”, if not intelligent organizations? The short answer is yes, but the answer obscures the complexity of the process of transformation. Smart is one of the most overused buzzwords in the telecommunications industry, with smartphones and smart devices galore. But the overuse of this buzzword obscures one fundamental point. Data might be the single most important ingredient of any digital transformation initiative, but the mere act of collecting, managing, and analyzing data is not sufficient for the CSP to become “smart”. Without ensuring quality data, the CSP will repeatedly stall in its digital efforts. Quality data leads to smarts. Therefore, CSPs are embracing the digital imperative.
The Telco Digital Journey needs to be human-centric
At the Digital Leadership Summit, a recent industry event hosted by the TMForum, several CSPs shared data and insights on their respective digital journeys. While there were several themes discussed at the event, one stood out. Namely, that any telco digital journey needs to be human-centric, as opposed to technology centric. Early investments in big data platforms by many CSPs have delivered results but not necessarily moved the needle sufficiently to earn bragging rights for CSPs.
A human-centric impetus to the CSP digital journey can be viewed from both an internal as well as external lens. The external factor is the customer base of the CSP, which today is predominantly drawn from the consumer segment. Service levels provided by CSPs are increasing but so are consumer demands as communication services shift from voice-centric towards data-centric services. Customer experience is measured today more in terms of application speeds and performance, as opposed to quality of the voice call, as well as the speed of resolution of complaints and issues. CSPs would do well to place their bets on starting their digital journeys with a priority on a high value customer journey. Quite simply, a better customer experience means less churn and more revenues.
The human-centric aspect of the CSP digital journey can also frequently be internal to the CSP. Too often, digital transformation initiatives do not bring internal naysayers on board. Organizational inertia and cross-purpose are roadkill for digital initiatives if not tackled early. CSPs would do well to start small and build from there. Boiling the entire ocean is not only impractical, but any early failures will inevitably be pounced upon, potentially sabotaging the larger strategic objectives.
The Telco Digital Journey is multi-phase
CSPs need to look at their respective digital transformation journeys as multi-phase and allocate time and organizational resources to this process. This journey can straddle multiple departments and business units within a specific CSP, or even straddle multiple operating companies (OpCos) within a larger CSP multinational group. A great example of such a multi-phase process is MTN, the large South African MNC service provider with operations in over twenty countries in Africa and West Asia.
MTN has put forth a 2025 strategy that places data at the core of their competitive vision and positioning. Three years ago, MTN was focused primarily on data warehouse operations, batch driven with many siloes across organizational units. Data governance was insufficiently developed and imprecise. From there, MTN has been moving steadily towards their 2025 vision by adopting an inverted structure that placed people at the top, with process, data, and technology as underpinning layers. People are being skilled to become adept at business intelligence (BI) with BI competency centers and data governance assets deployed across all OpCos.
MTN is also focused on updating processes and standardizing across OpCos, which is no easy task and takes time to effect. Data assets have been audited and increasingly standardized by adopting a TM Forum compliant data model. Lastly, MTN has been investing in putting in technology assets that can handle the ever-increasing data volumes and velocity. MTN has deployed a centralized data platform called Akima (wisdom in Swahili) that integrates with all data platforms within the OpCos.
Another level of complexity that large MNC groups like MTN must negotiate is the high degree of variance between OpCo markets for privacy and other regulations. This variance has significant impact on their data infrastructure decisions but ultimately, they have settled on a hybrid data cloud scenario with their technology partner, Cloudera, that balances in country requirements.