The challenge of digitalisation for CSPs

Telecoms.com periodically invites third parties to share their views on the industry’s most pressing issues. In this piece Jaco Fourie, Head of Product at Qvantel, takes an in-depth look at some of the pain-points faces by CSPs in the digital transformation process.

In 2017, Forrester Research highlighted the enhancement of self-service and automated conversations as two of the critical trends for customer service providers. These predictions highlight the huge shift in recent years that has seen consumer behaviour change to the use of and preference for fully web-based digital services for discovering, buying and consuming various types of services and goods.

Many industries have already faced this trend and emerged successfully; travel, finance and retail to name a few. This transformation is changing the way that consumers behave and forces Communication Service Providers (CSPs) to seek radically more efficient methods of doing business to serve customers according to their new needs and expectations.

Navigating digitalisation and disruption

This shift in consumer behaviour towards web-based digital services is driving digitalization and disruption. However, selecting the right path to the new future can be daunting, as the digital transformation projects required to enable true digitalization have a high failure rate and are fraught with challenges.
Some of the most common challenges that companies face are the overwhelming complexity in existing legacy systems, lack of internal expertise for driving major transformation, employee resistance to change, a lack of support from 3rd party suppliers, budget constraints and a lack of courage to drive a real change in the business, not just in IT systems.

Each of these problems presents a unique challenge. For example, complexity related to existing systems in which the business is a run, can be mitigated by phased transformation where a purely digital new solution is first introduced for a specific market segment, and once proven, the rest of the business can be transformed to a more agile and digital world in phases.

Budget can also prove to be the overarching challenge, and is one of the largest pain points for digital transformations. Spend can grow very large and projects can be years long, with results only available after the project is complete – and that is only if the project succeeds. For this reason, it is imperative that digital transformation projects have a solid plan for delivering value in the stages prior to completion.

For this challenge, it is possible to seek transformation strategies where new ways of doing business are more efficient, saving money, and when customers are transitioned over time to new propositions with new price points, the business case works both for short term and long-term competitiveness.

Traditionally, operators might evaluate transformation strategies of 1) replacing existing legacy solutions at one go (Big Bang), representing bigger risks, but also fast gains if successful – or 2) establishing a new parallel brand and solution for a new, modern digital business (e.g. purely digital business line where only digital sales and are the way to serve the customers, such as Qvantel’s Digital Express solution). Phased transformation of the existing “running engine” is also an option, but requires a clever technical and transformation project management skills to get right.

Learning from other industries

Operators should be using best practices from other industries and learning from the lessons that they have already demonstrated, while also recognizing their own unique market challenges and the opportunities available to those that ‘get there first’.

As travel companies have learned, a large amount of business is driven by the ability to deliver highly competitive and targeted campaigns through connected channels that can be purchased with a simple click of a button.  If CSPs could harness the same capabilities to deliver targeted offers that enable a personalized package and easy operator switching without waiting for a salesperson or needing to visit a physical store.  This would allow a departure from existing models that see phone call sales and in-store interactions. The Office of National Statistics charts this trend accurately year-on-year showing a continued and sustained growth in online sales in the retail sector.

The benefits of going pure digital

The benefits of increasing digitalization go beyond customer experience and affect the very core of business operators and sales methodology. Digital solutions allow for more rapid shifting of data gathering tools, and for that data to be centralized rather than operating in individual silos across different departments within operator businesses. This enables more data to be collected and analysed with the insights available to customer service teams prior to each interaction, and used to personalize the customer journeys in digital touchpoints automatically for superior customer experiences.

It also paves the way for rapid and real-time offers and deals that can be tailored and modulated to match the trends and data that is being gathered on them. A discount offer can be rolled out across all channels rapidly, and altered as needed to match its success and increase its appeal. Feedback loops from the iterations can learn and become more and more precise in hitting the customer needs and drive sales conversion. This is similar to the way that modern digital advertising campaigns change their focus based on incoming data. Data driven sales have proved effective in online retail for years.

One last thing to consider is the future-proofing necessary to ensure that operators keep up with any additional incoming trends in the sector – such as eSIMs. An eSIM will replace the current system where an operator must issue a chip to a new customer in order to on-board them to the network, with a digital system on the device that fulfils the same function. This will be updateable remotely and will allow easy operator switching. To properly utilize this system – something that is highly in demand – digital sales channels are vital. In the future world where customers can even more easily change their operators, the operators with the best, leanest and most customer-oriented digital processes will win.

Digital transformation is a daunting prospect and the challenges are not small. While we can say there are benefits, the drive towards digital transformation goes beyond business arguments. It is instead an inevitability that operators will need to change their business models and systems to meet the challenge of future consumers and their needs. And be prepared for the new breed of competitors emerging for the digital era. Operators that do not make a step-by-step plan and begin these projects in good time risk finding themselves behind the curve and behind the competition.

Jaco Fourie is the Head of Product Management at Qvantel, responsible for planning and implementing product strategy and updates. Prior to coming to Qvantel, Jaco has led in the dual roles of  CTO – Digital Business Systems and acting Head of Portfolio, Strategy & Solutions – Digital Business Systems for Ericsson, defining and implementing overarching architecture principles and frameworks for the Digital Business Systems (OSS/BSS in Telco) area. Before this, Jaco held many other roles at Ericsson, from 1999 to 2014, including  Head of Product Line Revenue Manager, Head of OSS/BSS Architecture & Senior Expert in BSS, Director of Strategy and Business Development, Director of Sales (Central Europe, Middle East, and Africa), and Director of Technology & Business Strategy.