Here is a digital transformation reality check for telecoms

digital transformation
Image credit: Elnur /

While most industry observers are gazing at the horizon and wondering what cool new trends 2019 has in store, Openet and have just published their latest ‘state of the industry’ report. The fundamental question this year is ‘Digital Transformation, are we there yet?’

The answer may be ‘no’ but, of course, transformation (of any kind) takes time.

In this age of instant gratification, we expect culture to change overnight and it doesn’t. We expect the telco mindset to be replaced by a cool digital culture and it isn’t.

Yet change is happening and the journey is actually further on than some might realise. Of the 1,500 service providers interviewed for the survey, most see themselves as about 35% of the way ‘there’. Bearing in mind that ‘there’ may be somewhere impossible to get to, as transformation is continuous, it is still encouraging. Particularly given that by 2022, most believe that they will be just over half way there.

The revenues that will come from digital services certainly provide an incentive to transform, growing from $294 billion in 2019 to $462 billion in 2022. That said, the biggest obstacle to digital transformation – as quoted by 20% of the respondents – is ‘insufficient business case’. Interestingly, 17% of respondents said that general inertia was the biggest barrier, which is really rather depressing yet rings horribly true. For so long now, telcos have only had to concentrate on keeping their networks up to date and revenues have kept flowing in. That, of course, is changing and let us hope that the 17% wake up in time.

The ‘insufficient business case’ answer is also a continuing issue. It is almost impossible to quantify the benefits of ‘going digital’ and so much more difficult than building a business case for upgrading the network and cutting costs, or upgrading and simplifying OSS and BSS and cutting costs. This is why the relationship between service providers and vendors has changed in recent years, and drastically so. Developing road maps and looking into the future is what vendors do and now it is fair to say that the majority of the industry believes that the relationship is now a partnership, not a ‘buyer’ and ‘seller’ one.

One other interesting point is the opinion on the best route to transformation. There is a majority that believe that a phased approach, an add-on approach or a greenfield approach is the most sensible (somewhere between OK and good) and there are, amazingly, some who believe that a big bang approach is somewhere between really bad and OK. You would be forgiven for thinking that this approach would be somewhere between complete disaster and madness.

The report is a pretty quick read, and there is plenty more detail on opinions and views about digital transformation. It is free, worthwhile, and can be downloaded here.

The conclusion seems to be that the journey has well and truly started but will take some time yet. Patience is needed and it will be interesting to keep an eye on progress this time next year as the fate of the digital giants becomes clearer and service providers get more confident in their digital identities.

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