Aligning Business to Digital strategy

Huawei

Aligning Business to Digital strategy

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Chaitanya Priya

Carrier Software Business Solution Consulting Services

Digital Service Providers Have a Great Future

''DIGITAL Service is unprecedented convergence of people, things and business through business innovation connecting the digital and physical world, and overturning traditional business scenarios'' – Gartner.

Based on market insights, we can see that the telecoms industry is facing unprecedented opportunities. As society makes a digital transformation, the value of this market will reach 15 trillion US dollars by 2024.

Opportunities arise from traditional connectivity services. By 2024, there will be 6.5 billion users and 8.5 billion smartphones, and hundreds of billions of things will be connected.

Additionally, CSPs can offer more new services to consumers, including digital media services, especially video services. Such services will present an important opportunity for them, as users expect on-demand, rather than just live video services. The telecoms industry is the most competitive in terms of networks and is able to beat the competition by integrating content.

Moreover, solutions required by various vertical industries should also present great opportunities. Restructured by the Internet, the IT industry is now offering cloud services, which will give rise to a 1.5-trillion-dollar public cloud service market. All these will bring unprecedented opportunities to carriers.

Are the Current Communication Service Providers Prepared Enough?

There is a fundamental shift in how competition is defined nowadays. Today, we do not see competition just between products; rather the competition is between industries.

The explanation below gives a very meaningful and conclusive explanation; inside-out thinking has now been replaced by outside-in thinking where product features no longer create value for the end consumer who is more interested in the benefits of a product irrespective of the industry. 

Asymmetric competition has forced value migration from telecom to adjacent industries. Operators are continuing to lose voice revenue mainly because of OTT applications and OTT VoIP services provided by 3PP.

Moreover, it is ironic that the industry that provides the backbone to digitization — telecommunications — has been slow to digitize its internal operations or benefit from this revolution. They've remained largely on the outside looking in, as other industries reap the benefits. Moreover, consumer expectations have also changed in the last five years. The next billion consumers to come online will be making their digital decisions on a mobile device — very different from the practices of the first billion that helped build many of the foundations of the current e-commerce industry.

How to Enable a Digital Ecosystem

Digital mainly focuses on the automation of your existing business and technical processes, an improved customer experience and creating a profitable digital economy. Service and BSS are keys to transformation from CSPs to DSPs. You need to have a digital ambition backed by capabilities to become a DSP. Digital experience mainly focuses on consumers and partners. In the digital economy era, carrier advantages are their network assets, customer assets, and localized service capability and credibility. These elements enable carriers to build a carrier-centered new eco-chain and become the enablers of local economies.

The challenges a leading CSP faces compared to a leading OTT, are many. Traditional CSPs have complex architecture but lack innovative products, and have slow TTM, few partners on board, not very friendly online portals but lack customer interactions. The main reason for these CSPs to react in such a way is because they focused mainly on their network assets and ignored customer assets during the evolution process. Now, CSPs globally have started realizing their mistakes and begun giving importance to both network and customer assets as opposed to just network assets, and shifting from a large-scale business operating model to an innovative range-based digital service ecosystem operating model, and from a unilateral business model to a multilateral business model.

How can carriers quickly provide innovative digital services? How can carriers build an ecosystem that provides massive services? How can they transform enterprise IT/BSS architecture and construct an IT/BSS system that supports E2E full digital service enablement? How best to intelligently provide digital services and implement digital operations with big data at the center? All of these are key challenges and pain points for carriers in the digital transformation from CSPs to DSPs.

Going Digital is the ONLY choice – Evolve or Perish

With the rising tide of digital transformation across the entire industry, many carriers are actively exploring transformation possibilities and putting them into practice. Global mainstream carriers are conducting strategic deployments in the digital economy era.

Carriers like Telefonica have been very instrumental in moving towards a digital economy and even have a digital manifesto on their website which communicates policy recommendations to create an open and safe Internet experience for all and unleash the full potential of the Digital Economy.

However countries are building digital capacity at an uneven rate. A report from The Fletcher School has come up with a Digital Maturity Index which shows the rate of change in digital evolution in different regions. They have explained four drivers of digital evolution, which are – Supply Conditions, Demand Conditions, Institutional environment and Innovation & Change. Sample regions have been put under four different classifications of STAND OUT, BREAK OUT, WATCH OUT and STALL OUT. 

So each carrier needs to understand their digital requirement and realize not to go with a 'universal' approach – Understand the market and factors affecting CSPs and then take an informed decision.

So once a CSP decides to become a DSP, first and foremost they should realize where they stand, what can be re-used from their traditional business and what new components need to be introduced. This is a transformation process which will have multiple and end-to-end impacts on their existing business framework. They need to ascertain their digital ambition and take various approaches to realize their goal. 

How to Align Business and Digital Ambition

Carriers are changing within aspects such as positioning and thinking models and have introduced new business theories and business models. Agile IT, optimized TCO, TTM & energized customer experience, supported with digital service, telecom & non-telecom, new business models and various other attributes can be suggested in order to align both the business and digital ambition. Key factors helping achieve the digital ambition are;

  • Convergent frontend IT: omni-channel, O2O, CEM, etc.
  • Digital partner aggregation: fast TTM and innovative Telco and non-Telco products
  • Backend IT digital transformation: openness, cloud, flexible, scalable, etc.

Choose the Right Transformation Path

There will be different ways to move from a traditional CSP to a DSP. At the end of the transition, carriers must offer an integrated, omni-channel user experience: on the desktop, on mobile devices, on the phone, and in stores. That, in turn, will enable them to build a portfolio of new products and services designed to match the requirements of each customer.

From our experience and expertise we propose five key elements, which are required to boost value for any DSP;

  • Enabling Digital Services – Millions of various products, customer can participate in product definitions
  • ROADS experience (R: Real-time; O: On Demand; A: All online; D: DIY; S: Social)
  • more business models: B2C, B2B, B2B2C, O2O, …, partner aggregation, partner self-management and operation, openness
  • data asset monetization based on big data analytics, shorten TTM, automation integration, simplify the management, ease of change
  • cloud based to reduce CAPEX, modulized COTS to reduce OPEX, replace "IOE"

The transformation will not be easy for many carriers, which are huge organizations that have traditionally moved very slowly. We understand this uniqueness and propose to follow one of the four paths given below:

  • Greenfield – offered for carriers who want the new digital ecosystem and digital service co-exist with their traditional ecosystem for a period and then switchover
  • Add on – few bolt-on solutions like digital front store integrated with the consolidated backend
  • Step Wise – partial optimization of the system in phases, like Order Hub or Federated Offer Catalog to start with
  • Big Bang – end-to-end digital transformation in one shot

What Huawei Can Offer

It is now absolutely critical for all telecom carriers to become digital: to put customers and the digital experiences, products, and services they demand at the center of the carriers' strategic thinking, business design, and operating model.

We can offer you one stop, best of suite solution for all your digital needs – Business Enabling System (BES), the new generation BSS for boosting the digital economy.

Huawei also offers a Digital Maturity Assessment (DiMA) advisory service to CSPs who want to assess their digital as-is situation by analyzing various aspects based on a well-defined execution framework. The insight, in terms of score and feedback provided by this service, will help carriers decide their action plan.