Digital transformation – can you get there on your own?

Written by on March 16, 2016 in Billing & Payments, Guest Blog with 0 Comments

bridgeOur company recently surveyed over a hundred CSPs to check out how they currently feel about the trend towards digital transformation.

Many of the results gave us pause for thought – in particular, how exposed many operators feel by their lack of resources, and how ready many are to seek help on the road to digital transformation – while at the same time retaining a certain wariness of handing critical functions over to third-party organisations.

The gap

The survey explored service provider capabilities which could bar entry to the booming digital economy, and revealed some serious shortcomings in many operational environments. These can be summarised as:

  • An absence of vital functionality – perhaps real-time performance, or policy, perhaps partner management, online commerce or any one of a number of areas that digital transformation is exposing
  • A shortage of skills and resources needed for future business – recognising that digital and ‘OTT’ are somewhat different from communications services in terms of how they’re sold and supported, and in terms of customer expectations
  • A struggle to innovate – vital if the telco is to stand any chance of winning against highly focused, internet-native competitors. This is in such short supply that many telcos revealed plans to create dedicated departments to foster innovation.

‘Agility’ was a key word in the responses – a term all too freely bandied about in the modern IT lexicon, but one with real meaning in business terms. The responses we got suggested that many operators find their systems hard to configure and adapt, to deliver new services and to meet changing customer expectations, making them unresponsive to competitor initiatives or to the ideas coming down their own marketing department’s pipeline. Innovation – cited as a top priority by three-quarters of our sampled providers – is hard to realise when it relies on outdated and inflexible systems and processes.

The bridge

Faced with this gap, telcos can adopt one of two bridging strategies: buy, or hire, what they need – a challenging task when future functional requirements are only hazily understood – or partner with organisations that have the smarts and experience to help them hit their strategic goals – and, simultaneously, take significant risk out of their strategy. After all, why invest large amounts of capital in uncertain initiatives, when the opportunity exists to align investment with commercial success by turning it into an operational cost?

When the subject was raised with our operator sample, results indicated that their appetite for using third-parties is already keen, with almost all believing they would find value in a managed service partner. In fact, two out of three are already using partners to a limited degree, and over half are planning to increase their use of partners over the next 12 months.

Interestingly, when asked about their motivation, the principal driver was not cost per se, but the amount of time that would be freed up for new initiatives. Over half anticipated that they could recover up to 50% of their billing team’s time by outsourcing BSS to a third-party. This has cost-saving implications of course, but the opportunity to develop new and innovative business ideas, and get those ideas to market fast, seems more important to many operators than simple cost-cutting.

The barrier

The only fly in this otherwise soothing ointment is the crucial issue of trust. Slightly over half of our surveyed service providers indicated that trusting a third-party with their most critical systems was the greatest obstacle to increased use of managed service providers.

Trust is of course a vital element in the relationship between CSPs and their partners. To some extent it will develop through experience – or not – over time, but it’s also related to certain key vendor characteristics. We suggest key ‘issues of confidence’ for the operator to explore should include:

  • Domain expertise: does the provider have lengthy, varied, hands-on expertise in the billing domain – not only in developing and deploying their own software but in running that software, and ancillary systems, in a production environment, dealing with customer problems and requirements, being exposed to daily operational challenges and end-user issues? Are they truly a domain expert?
  • Proven results – has the provider delivered before, in an environment like yours? Can they provide good reference points and strong customer testimonials? Are they working with their clients as true partners, with shared goals and remuneration based on business outcomes?
  • Local presence – does the provider intuitively understand your local demands and culture. Can they quickly and easily draw on additional resources and expertise when needed? Or as a customer, are you likely to be out of sight and out of mind?

The journey

The ball is very much in the managed service provider’s court. CSPs have told us they’re willing to work with case-proven partners – and many are more than flirting with the idea, in increasingly critical areas of their business. The trust that will speed the uptake of such partnerships will build over time, but helping service providers to hit their transformational goals and realise IT strategies that make more sense in these disruptive and uncertain times will accelerate that uptake.  

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About the Author

About the Author: Robert has worked in the telecommunications industry for more years than he cares to remember and is a regular contributor to industry forums, conferences and publications, most commonly on the impact of new technologies on billing, charging and the customer experience. He is currently helping Openet to develop its proposition to the wholesale and virtual operator market. .


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