What is digital transformation? Huawei explains

EXECUTIVE INTERVIEW

At TM Forum Live 2016, Telecoms.com spoke to Dr. Dong Sun, Chief Architect of Digital Transformation for Huawei, on the growing trend of digital transformation, what it is, why it is important for operators to begin strategising now, and some of the work Huawei is doing to help.

Telecoms.com: Why don’t we begin with your thoughts on what digital transformation means to Huawei?

Huawei’S Chief Architect Of Digital Transformation, Dr. Dong Sun

Dr. Dong Sun: First of all, when we look at digital transformation this time – since we’ve had various transformations in the past – we look at what the root cause is. The cause is a shift in user demand, basically the new behaviour of users is characterised by us as ROADS – that is real-time, on demand, all online, DIY and social. These are the characteristics of a demographic we call ‘digital natives’; they are people who grew up in a digital era using iPads and other digital devices.

The whole industry, the whole world, needs to adapt to this new user behaviour. That’s the root cause, and the whole industry needs to support this.

Basically we’re looking at how to support this new user demand or behaviour, and based on that we’ve defined some new requirements of digital transformation. Firstly there’s a need for a new digital business model which we call a flexible digital model – and that’s essentially IT-as-a-service. In that, we need to support the different business models in play, and mix existing and new models emerging so carriers can provide whatever the user needs.  This isn’t a fixed or a predefined model.

The second point is a need for a new operations model, a more agile model which we call Digital IT Operations. That means we have to support fast-fail-quick-try business models.

The final point is the need for an enabling platform – and this is the next generation digital operations platforms. At Huawei we call this new paradigm Telco OS. That is the next generation operations system which supports new digital operation models. Those are the three components of digital transformation.

Where is the start for operators, and what do they need to focus on first? Is this an evolution of existing technology?

Definitely it’s an evolution for sure. But for this evolution, we believe that to succeed in digital transformation, the strategy should be ‘think big, start small’. Operators need to look at the big objective, the blueprint and what that should be.

Do operators want to be a digital telco? Or do they want to be a digital services innovator or do they want to provide a better user experience?

The operator needs to set out with the right objective for them, because different companies may have different strategies or objectives based on market conditions or strategy. That’s the ‘think big’ part. The ‘start small’ is a case of identifying the beginning phases, the areas where they can implement easily and get instant results. We encourage operators to pick up some new digital services and we’d normal call this the new service, the new architecture and the new network. That helps make the whole transformation from the offset more focussed and less complex compared to the integration with legacy systems. How do operators support cloud services? How do they support the IoT or video services?

What do you think is the first technology area operators need to look at to begin their digital transformation journey?

Okay in terms of technologies, the core asset for operators is still the infrastructure –the network is still the primary asset, but also IT, so they do need to look at how to maximise value and monetise their ICT infrastructure, both the network and IT. How can you make the ICT infrastructure become virtualized and cloudified into what we call ‘All Cloud’?

That’s a good starting point, but we can’t make this evolution possible because from Day 0 if you want to begin virtualization you need to use a new operations model, otherwise you’re just virtualizing parts of the network without really benefitting from it. There are multiple perspectives of new technologies to consider: the virtualization technologies like NFV/SDN, new operation technology like orchestration and big data, and then we need to apply new development operations method to research and deploy new services. This is the starting point for operators.

Is this what you explored at TM Forum Live?

Exactly, so this week we’ve been running our event here called ‘Building Up Digital Operations and Ecosystems’. The reason we are focussing on these two topics is because we’ve found that virtualization is already relatively mature, lots of people are talking about it, but not many people have paid much attention to operations and ecosystems so far. So then they reach some problems over how or when to do virtualization with no clear business benefit. Now we need to focus on the operations and ecosystems angle.

We’ve brought together some senior execs from major carriers; we’ve had the CIOs from Orange and Telefónica as well as the chief architects from Vodafone and AT&T. But it’s not just about the carriers, we’ve had input from analysts like Accenture and Deloitte to discuss what the digital operations systems and models look like. Then we look at what a digital business enabling ecosystem should be in order to maximise the benefit from digital transformation. We believe in order to make digital transformation a success we need new digital operations model and a digital business enabling ecosystem, which is what we’re discussing with these industry leaders – calling for alliance and partnerships.

And how have carriers reacted to your call-to-arms?

Generally it’s been very positive, and they’re already defined their strategies for digital transformation, and they’re defining the required architectures and solutions for digital operations. we’ve also had companies like Microsoft, IBM and Amdocs joining in on the conversation, and the industry leaders are already seeing the necessity for the operations and ecosystems side.

So what exactly is Huawei doing in this space to help?

Huawei is, first of all, building up Telco OS, as I referred to earlier. We think this is the key enabling platform, because there’s no way you can embark on this digital transformation journey without a new enabling system.

But we’re also developing our partner ecosystem, and we’re building out open labs for NFV, data centre and operations to enable interworking and integration of these end to end solutions among all of our partners and vendors. From this perspective, we are working with 600 consulting experts and 4,000 integration professionals to help make this happen. They are focussing on the integration of a multi-vendor, open system. We also announced a $350 million investment into consulting and systems integration; and we already have more than ten end-to-end multi-vendor partners working on NFV verification scenarios. There are more than 200 software and hardware vendors working in this open lab programme. We’re collaborating with a variety of communities to help develop this too, like the TMF and OPNFV.

We’re also running the Open ROADS community, which discusses the CEM side of things and the digital enterprise frameworks required. There’s also the Telco Transformation Community, and that looks to get industry thought leaders together to discuss digital transformation. Finally, we’ve got an open source development programme OPEN-O to assist with the development of the ecosystem.