Operators undertaking digital transformation projects must communicate clear, aligned organizational vision and goals throughout the organization to improve their chances of success.
That’s the chief conclusion of the TM Forum’s bi-annual Digital Transformation Tracker (DTT) – released this week at its Digital Transformation World event in Nice – which found that the biggest barriers to digital transformation are cultural and organizational.
TM Forum has released the results of the survey alongside its Vision 2020 report, which offers a pathway in the evolution from a communications service provider (CSP) to a digital service provider (DSP), and beyond.
The DTT survey – conducted in Q1 2018 – reveals that over 60% of respondents have already embarked on or are about to embark on their transformation journey. However, increasing cultural and organizational obstacles are slowing down industry progress, with respondents considering a lack of clear aligned vision and goals (42%), cultural and organizational issues (40%), and a lack of top management support (37%) as “very serious” barriers to transformation.
This lack of focus and common vision is hindering CSPs’ transformation journeys. The number of respondents, who said they were “very optimistic” about conducting successful transformation programs fell from 22% in the first DTT survey conducted in October 2017 to 11%.
These concerns are further reinforced by the differing CSP views on the types of companies that they want to become: less than 20% would opt to remain pure connectivity providers, while others would prefer to become platform providers (16%), full DSPs (30%) or partnership-led multi-play operators (36%). Without being clear on the direction and the necessary steps each company must take – whether in terms of increased efficiency or full-scale business model transformation – it is difficult to execute on transformation.
Furthermore, when asked to characterize their culture, only 30% of CSPs believe their organization to be “resistant to change” – in comparison with 64% of suppliers. This lack of objectivity and awareness of cultural barriers within operators may be a further challenge. Very few CSPs – just over 10% – consider themselves as “innovative and risk-taking”, or “agile and diverse” (11%).
“Any change is hard to implement, and CSPs are no exception. Some identify that they are not risk takers, and making a leap of faith into unproven revenue streams is not easy,” said Mark Newman, chief analyst at TM Forum. “Our second Digital Transformation Tracker shows that digital transformation extends well beyond technology itself, and increasingly we’re seeing concerns about organizational and cultural readiness. In order to ready themselves for successful digital transformation, operators must not only be able to articulate a clearly defined vision for their transformation projects, but critically they must communicate their vision throughout every level of their organization.”
TM Forum surveyed 176 respondents from 105 CSPs, operating in 59 countries, and 91 respondents from 45 supplier companies. A full copy of the report can be viewed and downloaded here.
Vision 2020: future CSP business models
Meanwhile, TM Forum’s Vision 2020 report addresses industry uncertainty confusion and CSP reticence to commit to a digital transformation vision.
While plenty of CSPs understand the operational efficiencies that a successful digital transformation program can deliver, they are less sure about the new business models and products and services that a CSP can offer once it has acquired new, digital capabilities.
This report seeks to trace and define the evolution from a CSP to a digital CSP, and beyond to a digital enabler or digital Partner in terms of both business models and the technology and systems required to enable that change.
“To date, definitions of what a DSP is, or could be, are relatively scarce. The terms “platform” and “enabler” are now being adopted by many CSPs – and their technology suppliers – but there is a lack of clarity and understanding about how to monetize such approaches,” said Nik Willetts, president and CEO at TM Forum. “Our Vision 2020 report seeks to address this by laying out the transition from a CSP to digital CSP and beyond. From the new commercial and architectural models involved in becoming an enabler and partner, to the best route to take for strategic investments and access to vertical markets, the report offers a clear pathway to allow companies to be clearer on their digital transformation aspirations. This all starts with the CSP setting a clear vision for its business.”
A full copy of the report can be viewed and downloaded here.