Survey says telcos are going digital too slowly – but are they?

digital transformation sloooooooooow
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It seems that service providers are definitely going digital, but slowly. While 80% of them are undergoing a company-wide digital transformation of some kind, 82% conduct less than half of their transactions digitally.

A third of service providers have completed some aspect of digital transformation, but challenges remain, according to a study commissioned by Netcracker and carried out by ICT Intuition.

It does not take a genius to figure out what those challenges are. Legacy systems (and thinking), staff and skills (and legacy thinking) and business risks associated with transformation. The study also proves that those service providers that have initiated digital transformation are benefitting from it. Revenues are up, particularly in the B2B sector.

It will also come as no surprise that some regions are doing better than others. If you look at the acid test (increased revenues from a successful transformation) then the Asia-Pacific region boasts of increased revenues from the business sector of close to 50%, against 25% elsewhere.

It would be easy, of course, to comment on such a survey by saying things like “could do better” and “they need to grasp the opportunity”. But actually digital transformation really is an incredibly difficult challenge. And most of the challenge is in the mind.

One would suspect that if you asked a manager in a service provider in Europe or North America whether he would like to take an enormous risk, for a potentially great reward, then the answer would be no, unless that manager was under 30. Pensions, stability and happy retirements are just too important to risk.

This explains why Asia-Pacific is so different. The answer to the above question would be the opposite. Risk, change, innovation and disruption are a constant.

There is also the point that Robert Machin often refers to, which is what digital transformation actually means. His conclusion is that, generally speaking, it simply refers to a modernization program, a continuous program of improvements that make a company more competitive. The word ‘digital’ is actually a red herring (and a thoroughly overhyped herring at that).

The point is that competition used to come from a service provider’s own kind, where newer billing systems (and therefore greater flexibility and speed when changing prices) were the weapon of choice. Now, competition comes from outside.

And while it is very easy to sit in darkened rooms and ‘measure’ how well service providers are doing, digitally, we should add a little perspective.

We are now some years beyond thinking of digital players as direct competition to telecoms service providers, even if they are eating our lunch in the obvious areas (messaging). More and more partnerships are emerging, evolving and succeeding. These partnerships have also moved beyond the experimental (teaming up with Spotify seems cool) phase and are beginning to make money.

So, while the journey continues, and there should be no let-up in the pace of modernization, the old, bland, powerpoint-powered promises of new revenues from third party services, or gold springing from partnerships, no longer seems that bland.

It would be fair to predict, amongst a continuing welter of statistics about how it is all going, that 2018 will see the launch of even more partnerships and innovative offerings, particularly in Asia. It is also fair to say that the 2018 Netcracker survey will point to more improvement, progress and modernization.

But it will probably also conclude that it is still not going fast enough.


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