Asia’s telcos are lagging in digital transformation – here’s how to fix that

digital transformation
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For Asia’s telecoms players, digital transformation requires an all-or-nothing strategy, buy-in at the top and a long-term view.

The Asian Telecoms vertical is lagging behind others in digital transformation, according to Ovum’s ICT Enterprise Insights survey 2016/17. The banking, financial services, and insurance verticals led the pack, followed by media. In the digital era, Asian service providers (SPs) must hasten their digital transformation to be persistently relevant to their clients.

In going digital, some Asian SPs might have considered bimodal IT, or embraced it as a strategy. But here’s the challenge: bimodal divides internal IT organizations into two: one team runs fast to develop new digital services to keep up with customers, and the other one continues in slow maintenance mode that barely supports rapid organizational change.

This results in a dysfunctional IT organization that is not only frustrated in realizing true agility and adaptability, but also fails to adequately serve customers at their moments of need. One need only look at aviation companies like Delta Air and United Airlines’ booking system failures over the past six months to see instances of such dysfunction.

To rectify this, Asia’s SPs must take the following actions:

  • Adopt a single-speed strategy for digital transformation. It’s all or nothing. A single-speed IT strategy ensures that all moving parts are aligned towards common goals – for example, in modernizing backend systems, in improving the speed to market, or in responding quickly to changing customer behaviors. Bimodal teams risk losing customers to more digitally advanced, single-speed ones.
  • Have senior leaders commit to driving cultural change. Only 23% of Asian SPs said they were well-advanced in supporting a digital culture and organizational structure, and only 10% had full and complete support for this change. Senior managers must commit to, and lead, the change in order for SPs to succeed in digital transformation.
  • Take a long-term view towards agility. Digital transformation is the first step towards becoming an agile organization, and it takes time. There is no silver bullet, and no bimodal model. Financial firms, which are more mature on the digital transformation journey, are only starting to create an internal agile organization. For instance, ING Baring has been on a transformation journey for around ten years now, and only introduced an agile way of working in 2015. Asian SPs must first focus on building the digital transformation blocks.

Written by Clement Teo, principal analyst at Ovum

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