Jointly Lighting up a Digital and Intelligent Future

-- Operators are moving from their own digital transformation to empower thousands of industries digitalization. Although the future is bright, they are also facing great challenges in digital transformation of services, operations, and methodologies. Based on the Arthur D. Hall's model, this article analyzes operators' upgrades in terms of time, logic, and knowledge. As a reliable partner of global operators, Huawei continuously increases digital investment based on the three horizon strategies, offering foundational platforms and technologies and opening up its data, automation, orchestration, and development capabilities. We will handle the complicated parts, and leave our partners and customers with simplicity.

Have you ever wondered how the world will change over the next 10 years? According to Huawei's Intelligent World 2030 report, each person will use an average of 600 GB of mobile data each month, and 23% of homes will have access to 10 Gbit/s broadband. Digital transformation is expected to have a significant impact on the enterprise market, and human-machine collaboration will emerge as a new way of production.

As telecom operators shift their focus from digitalizing their own operations to empowering the digitalization of other industries, they will find themselves in a unique position characterized by new opportunities and challenges.

(1) A new engine for business growth has not been developed: Global telecom operators are investing in the development of new services while monetizing their traditional core services, with the hope of identifying one which will drive a second curve of business growth. However, diversification has not brought them strategic new services that can serve as a reliable source of income.

(2) Operators are facing increasing O&M pressure: As more and more services become available, networks are becoming increasingly complex, and customers are expecting better user experience. However, the challenge for all operators is that there aren't enough O&M engineers to manage this. Leading operators are using digital and intelligent technologies to increase the quality and efficiency of O&M, while transitioning to a future-oriented O&M model.

(3) Understandings of digital transformation plans vary: Different operators, and even different executives working for the same operator, can have different understandings of a digital transformation plan. Operators need to reach consensus on digital transformation goals, value and maturity evaluation criteria, path design, and high-value scenario selection. To effectively drive digital transformation of enterprises, the industry needs to develop generally accepted digital transformation methodologies.

It is clear that digital transformation is essential for operators to improve user experience, make operations more agile, maximize resource utilization, and grow new services. However, this is not easy. There are several reasons for this: The top-layer design is not systematic enough; no business goals are in place to drive the transformation; scenarios and paths are not clearly defined; measures are not well implemented. So to better embrace a digital and intelligent future, how should operators pursue transformation?

Digital transformation is a complex, systematic undertaking. Huawei believes that modern systems engineering methodologies can be used to address structural problems in business transformation.

The three-dimensional lean R&D systems engineering model, which is based on Arthur D. Hall's model, offers a comprehensive framework for different service scenarios that can support instantiation of different types of features. This model can help telecom operators make upgrades across time, logic, and knowledge dimensions:

1. Business upgrades across the time dimension for new experience, new scenarios, and new value

The time dimension in Arthur D. Hall's model represents the end-to-end process of system engineering activities. The process is divided into seven phases: planning, solution formulation, development, production, installation, operation, and update. Operators need to apply the different phases of the system lifecycle to technology R&D, product R&D, service design, and business model planning, and build a "connectivity + X" product management system and operation and production system.

The following figure depicts an operator's three-track business strategy. Track 1 focuses on optimizing the business portfolio; track 1.5 focuses on expanding the target market; and track 2 focuses on developing new services. By integrating these tracks, the operator aims to grow along two S-shaped curves.

The key to a successful business upgrade is to build on security-native connectivity capabilities and jointly create new commodities by adopting the "connectivity + X" model. This will help operators offer better user experience, a range of new scenarios, and create value.

For example, operators in China have been building on 5G-enabled video calls to offer many new interactive features, such as simultaneous translation, conference collaboration, and remote assistance. By providing specialized ultra-HD and AR functions, they have made 5G-enabled call services a strategic new service. In parts of Africa, Southern Asia, and the Middle East, Huawei has been working closely with operators to develop the mobile financial market. Currently, 390 million users have access to mobile financial services, and this number is expected to reach 2 billion by 2025. In the Middle East and China, operators are already providing end-to-end integration services that include network connection, DICT solutions, and consulting for industry markets, enabling more than 20 key industries to make significant improvements in production safety, efficiency, capacity, and environmental protection. These services are creating a global market worth US$4.7 trillion.

2. Upgrading operations across the logical dimension to drive human-machine collaboration

Arthur D. Hall's model divides problem solving into four domains of systems engineering: requirement, solution, verification, and physics. It describes the thinking activities of the subjective world in understanding and reconstructing the artificial physical system.

Similarly, operators' services and networks can be divided into five domains: planning, construction, maintenance, optimization, and operation. Operators can transform their O&M by upgrading their online services to automated and intelligent services to meet their business goals.

The key to successfully upgrading O&M models is to apply digital technologies to each phase to transition into a model that features human-machine collaboration. Many operators choose autonomous operation (AO) for network capability development in order to cope with O&M pressure stemming from service diversification and increasing network complexity. Huawei has already discussed the technical viability of AO with many tier-1 operators across China, Europe, and Asia Pacific. Many believe that the O&M model based on human-machine collaboration will be feasible and have formulated short-, medium-, and long-term capability development plans.

AI will be an essential part of future O&M models. Human-machine collaboration is paramount to AI, as it will change the way people add value. Machines can automate many of the repetitive processes that people used to do, freeing up time for more creative and customer-facing work, as well as monitoring process execution.

3. Unifying assessment standards across the knowledge dimension

The knowledge dimension lists the disciplines that the two-dimensional systems engineering methodology can be applied to, from the most formal and mathematical in structure to the least: engineering, medicine, architecture, business, law, management, social sciences, and arts. In addition to common knowledge, each industry also needs knowledge of other disciplines and technologies of other domains.

Operators are shifting their focus from their own digital transformation to enabling the digitalization of other industries. If they still follow their conventional approach, it would be difficult for them to expand into the industry market. So industry standards organizations, operators, and industry partners need to jointly set digital transformation standards for different industries and upgrade knowledge and standards.

For example, at the recent Operations Transformation Forum (OTF) in Thailand, TM Forum worked together with Huawei and other industry partners to release the Digital Operations Transformation Framework, a digital operations maturity assessment model. TM Forum has also set standards for three digital and intelligent transformation capabilities that have garnered attention across the industry: Value Operation Framework (VOF), Autonomous Operations Maturity Model (AOMM), and Biz DevOps, an integrated standard for business, development, and operations. Huawei hopes that more standards organizations and industry partners will join efforts to set standards and push the industry forward.

Moving forward, Huawei Service plans to increase investment in digitalization following a "three-horizon" strategy:

Digital transformation is a systematic process that requires collaboration between Huawei, customers, industries, and partners. Huawei is already offering foundational platforms and technologies and opening up its data, automation, orchestration, and development capabilities. We will handle the complicated parts, and leave our partners and customers with simplicity. Huawei is ready to help operators succeed in transformation by following the "three-horizon" strategy.

Huawei's first horizon is to digitalize its own core businesses. Over the past six years, Huawei has invested heavily in delivery processes, O&M platforms, and cyber security. One example of this is the Integrated Service Delivery Platform (ISDP) which integrates multiple isolated sub-systems, streamlines project delivery data flows, and automates the end-to-end process. The ISDP now supports the efficient and high-quality delivery of 1,500 networks worldwide.

Huawei's second horizon is to help telecom operators succeed. For example, Huawei leveraged its open, flexible service orchestration platform to help an operator in Pakistan provide customized services that meet 80% of local requirements. The operator gained more than 200,000 clients, became the leading fintech service provider in the country, and increased its market share from 9% to 57%.

Huawei's third horizon is to work with operators to digitalize other industries. Huawei is working with a Chinese operator to jointly expand the market by providing B2B services. The operator saw its revenue from the B2B market double in just three years.

Digital transformation is an ongoing journey. There is a saying in the Middle East that says who travels alone goes fast, who travels in company goes far. Let's work together to create a better future for digital transformation.