Digital Transformation & Maturity

Is CSP culture fun and dynamic? Depends who you ask

TM Forum’s Chief Analyst Mark Newman looks at some of the cultural issues communications service providers (CSPs) face as they transform into digital companies. This article is a preview to our upcoming Digital Transformation Tracker (DTT) report, which will be published later this month.  

CSPs recognize the importance of having the right culture for digital transformation – only 3 percent of CSP respondents we surveyed (185 executives from 93 unique CSPs) said cultural issues are ‘not a barrier at all’ to digital transformation, while 62 percent said they are a ‘very serious’ or ‘moderately serious’ challenge.

But addressing culture and organization can be difficult, especially inside large companies that have been in business for decades. CSPs must address three key elements:

  • Customer centricity – CSPs must increase the number of customer-focused roles and aim for customer-centricity within these roles.
  • IT and software skills – Operators are working toward a business model that places much greater emphasis on software and IT skills than traditional telco operations.
  • Organization – CSPs have developed large operational silos that separate IT, networking, product management and product marketing. They must introduce new ways of working that drive collaboration across these groups.

How would you describe your company’s culture?

We wanted to understand the cultural issues that hold CSPs back so we asked respondents to describe the culture of the departments they work in. The choices we offered were:

  • Fun
  • Dynamic
  • Formal
  • Hierarchical
  • Team-based
  • Creative
  • Dull

If CSPs want to become digital, they will need to adopt a cultural style most often associated with webscale and platform providers like Amazon and Google. It can be dangerous to generalize about these digital natives, but they tend to be less hierarchical, less formal and devolve more decision-making and accountability to individual teams. For example, an organization that deploys microservice architecture has decided to move away from a monolithic approach and empower smaller teams of software developers.

In addition to asking CSP respondents about their departments, we surveyed technology suppliers to ask how they perceive the culture of their CSP customers. Results showed a bigger disparity between perceptions than we expected (see graphic below). It is reasonable to expect CSP employees to be slightly more upbeat about the cultures of their organizations, but we did not expect views to be so polarized.

Source: TM Forum, 2017

Are CSPs not being honest, or are suppliers too critical?

While a majority of CSPs see their departments as dynamic and team-based, vendors consider them hierarchical and formal. And suppliers view CSPs as much less creative and fun than CSPs view themselves.

Two important factors likely are contributing to the disparity:

  1. The average age of CSP employees has risen over the last 20 years as recruitment has slowed. Longer-standing employees who have aged with their companies are likely to be less aware of culture than more recently hired employees who have experience working outside.
  2. CSP employees working in a single division or department may be less aware of formal approaches to conducting business, of hierarchies and of formal processes than vendors who must deal with many teams across the organization. Many IT vendors have become frustrated in recent years with CSPs’ approaches to procurement and to terms and conditions, which make it extremely difficult to move to a partnership model.

“The average age at Orange is 46 to 47. Our employees are not millennials,” Orange Chairman Stephane Richard said in an interview with French financial newspaper Les Echos in June. “If we want to understand what’s going to happen in the future, then clearly we need to have young people around us. That’s why we’ve created ‘The Little Factory’. It’s a group of young French people who are less than 30 years old and whose job it is to think of ways of simplifying our working practices to be more efficient.”

Objective assessment

If CSPs are unable to look at themselves objectively, this could prove a major hurdle to digital transformation. Many CSPs have been attempting to reduce their dependency on management consultants in recent years, but the external perspective they bring could be essential in helping drive cultural change.

TM Forum’s new Digital Maturity Model can also help. It is a survey-based tool that lets organizations describe their level of maturity/digital capability, set target maturity levels and benchmark against peers.

Watch Pascal Viginier, Special Advisor and former Group CIO, Orange, explain how his company used the DMM and its companion tool, The GC Index, which helps companies discover the impact individual members of leadership teams can have on the organization as a whole.

To learn more about the DMM, contact TM Forum’s Robert Walker.


    About The Author

    Chief Analyst

    Mark Newman is an analyst with 25 years of experience delivering insights on the future of the telecoms sector to senior level executives and audiences. Mark’s recent research has focussed on telecoms operator business models, digital transformation, service provider diversification, and the intersection between Internet and telecoms. He delivers analysis, presentations, strategy sessions and workshops to global audiences, helping them to plan for the changes that technology and disruptive new business models that will fundamentally transform their businesses. Mark was Chief Research Officer at Informa Telecoms & Media and Ovum before leaving to set up his own research firm, ConnectivityX, in 2016. He joined the TM Forum as Chief Analyst in February 2017.

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