It will come as no, or little, surprise that digital transformation programs among communications service providers (CSPs) are not going as well, or as fast as we would like. The reason, as usual, is not about things technical, it is about things cultural and about communications (or the lack of communications).
This is the main finding of the TM Forum’s first Digital Transformation Tracker (DTT). The survey was carried out amongst 93 CSPs, across 64 countries, and included their suppliers.
Although over 60% of respondents said that they were implementing or planning to implement digital transformation projects (and the same number agreed that revenues will be flat for the next two to three years), it seems the barriers to success are only too familiar.
The other point to remember is that while 60% plus are implementing or planning transformations, that simply highlights the 30% plus that have not started yet.
The survey also highlights some interesting points such as the fact that when group CSPs were surveyed, the answers differed between one operating company and another, in some cases significantly (one respondent at group level happy with the transformation progress, one in an opco was unaware of any plans or progress). And the barriers: CSPs cited a lack of vision and goals (62%), cultural and organization issues (62%) and a lack of support from top management (58%).
This is not surprising, but it is frustrating. We have known for a long time that transformations – whether they be billing, IT or corporate – generally only succeed with complete support from the top, first class communication and a very clear vision.
Perhaps most damning is that when the suppliers were surveyed they did not share the confidence of their customers in how well things were going. Only 5% of suppliers agreed with the CSPs’ views.
Culture is still The Big Problem, without doubt. CSPs have goals and targets that demand incremental growth, increasing EBITDA and lean cost structures.
True digital players have disruption in their DNA. They are also ‘cool’. The game plan for the large digital giants depends upon being the largest in the room. Profit is not a priority. And the cost of capital is ridiculously cheap. Amazon’s shareholders funded the takeover of Whole Foods for $13 billion by throwing money at the company such that its increased share price covered the cost of the transaction.
And it is, of course, eye watering that hundreds of cities have bid for the pleasure (and profit) of housing Amazon’s new HQ. Amazon is so big and will create so many jobs that it has become its own galaxy, its own black hole, into which entire cities will disappear. The irony is complete, that the biggest company on the planet is being offered tax breaks in exchange for locating within their tax jurisdiction. If Amazon were regulated like a telco, the story would be very different.
The thing is that disruption simply is not part of a CSP’s DNA. It probably never will be, but then again, if their role is not disruption, maybe they should concentrate on being the infrastructure on which disruption happens and with which they partner.
The TM Forum will conduct this DDT twice a year. The next one is expected in February 2018. Let us see how digital a CSP can (or needs to) become.
Interesting survey results. If telcos want to transform to become digital companies selling lots of services through digital channels to their customers, then when transforming their systems (e.g. revenue management) and processes, why do they get their existing billing vendors to do the job? Isn’t that just replacing the word telco with the word digital, and missing the point?