Sponsored by CSG:
Innovation, lightning fast speed to market, cost efficiency, exceptional customer experience; all of these are characteristics of leading digital business models and are central to the investments being made by businesses in their digital transformation strategies.
In this new digital era, the pace of change and rapid rate of growth of the digital economy as a contributor to the top line, means your business model and your support systems need the agility, scalability and cost efficiency to enable innovation and growth. Companies no longer have months or years to adapt and scale operations to keep up, they must be ready for exponential growth now.
Adapting to change is nothing new in our industry. But the unprecedented pace of change and colliding trends like the internet of things, digital partner ecosystems, rapid cloud adoption, and machine learning are creating the perfect storm. A storm that is changing the business landscape.
The rules of commerce and interaction are changing so radically that business strategies will never look the same again. The leading companies of our time – Facebook, Apple, Amazon – are continuously resetting the bar with respect to innovation, speed to market and cost to serve. As a result, they have grown revenue by 10-fold in 10 years and market value by 3-6 times their assets. Not because they always have the best technology or the best idea – but because they wrap innovative business models and digital solutions around their ideas to redefine customer experience.
Being competitive in the new digital world isn’t about just upgrading or modernizing. It’s about changing and changing now. Delivering digital services is not enough. This is about transforming into an innovative digital business – and it is essential that it operates at a fraction of today’s costs and drives speed to market in days and hours.
Today’s business models need to embrace the evolved customer, unite a diverse ecosystem of partners, and capitalize on the power of cloud, real time data and the digital experience.
According to the 2018 Digital Transformation report, “to make the most of future investments, organizations must learn to combine their best talents, look past familiar or trendy offerings and embrace the technologies designed to actually solve their worst problems.”
Designing the business of the future
There are four pillars that are critical to guide organizations thinking when they are assessing strategies for business transformation.
- The right business model — Becoming digital is not simply about taking existing products or customer interactions and experiences and putting them online. Enduring success in the digital economy means fundamentally rethinking how business is conducted today. The way in which organizations get products to market through centralised catalogues and move to deliver entirely new consumption models (such as pervasive digital services and subscriptions rather than one off purchases) in addition to how consumers now purchase and use offerings is fundamental.
- The right partners — Businesses that work together with digital partners across industry borders achieve far beyond what any individual business could do on its own in the ever-changing digital world. To achieve this, businesses must now integrate with a myriad of existing and 3rd party systems, streamline and simplify business processes, and develop efficient improvements that decrease operational risk and expense. The sharing of knowledge and unique experiences to develop new applications, products and services will become essential.
- The right technology — Not all platforms are created equal, and that will become painfully evident to those that don’t choose wisely and bravely. The cost of legacy system infrastructure maintenance, integration and operations will become prohibitive when digital native competitors operate at a fraction of the cost. Getting there will be a challenge and enhancing legacy systems is not enough. A complete re-architecture that takes advantage of cloud first capabilities and micro services –– is now essential. To remain competitive, solutions must be SaaS, must run in the cloud, and must be a platform with the ability to unify and streamline increasingly complex operations.
- The right mindset — Providing evolved customer experiences regardless of who those customers are—from consumers, to vendors, to partners – is vital to digital success, but it’s only half the equation. History has already shown the lesson – only 12.2% of the Fortune 500 companies in 1955 were still on the list in 2014. To survive and, most importantly, flourish a digital culture must be integrated at all levels of the organization to instill the mentality of agility and continuous learning the digital economy demands.
There is no one size fits all approach to digital transformation, each strategy will be unique to each organization. However, a focus of balancing activities across the four pillars provides the compass to guide a successful transformation.
CSG understands both the challenge and the urgency of change in an ultra-competitive market. Organizations are trapped in a vicious circle of declining margins and the need to invest to change the status quo. Creating a compelling business case to fund new technology and innovation is one of the most significant hurdles.
That’s why we’re working on digital transformation, IoT strategies and cloud-first solutions with our customers now. Our advantage is that we are experts on both sides of the equation—we know how to optimize and get the best out of legacy systems to drive down costs and free up funding, and we have the technology and the innovation to enable a true digital business transformation.
As everyone continues to invest in and research digital transformation strategies it’s also worth looking at what’s driving the urgency. We have been tracking five key trends that we feel are driving the urgent need for digital transformation:
- The Internet of Things is growing exponentially, and businesses must be ready to grow with it.
Back in 2014, the number of devices surpassed the number of people on Earth. Fast forward to 2021, and the Internet of Things will support a staggering 46 billion connected devices.
According to Constellation Research, nearly 50 percent of businesses have an established strategy with production IoT apps, or are piloting IoT projects. These businesses realize they must revamp their traditional business strategy to a digital business strategy. The amount of data connected devices and services generate, and the different systems on which they operate means old, legacy systems must be changed to digital enablement platforms with native cloud capabilities and microservices. This will enable them to keep up with the demand of seamless customer experience and big data vastness.
- The need to create digital partner ecosystems.
In an ultra-competitive market, partnering with companies that augment your platforms, networks, services and customer experience will be key.
International Data Corporation predicts that by this year, over 50 percent of large enterprises, and 80 percent of enterprises with advanced digital transformation strategies will design or partner with industry platforms, developers and service providers.
- Rapid cloud adoption – businesses are doubling down on cloud adoption.
The demands on operations and integration are evolving so rapidly they will break legacy systems, they cannot just be upgraded, they need to be changed. A complete re-architecture that takes advantage of cloud native capabilities and micro services is now essential.
Half of telecommunications companies rely on a hybrid cloud, where they own their own data centers but can fall back on the public cloud for additional capacity and bandwidth. Look for hybrid clouds to increase in popularity in 2018—hybrid cloud adoption tripled from 2016 to 2017.
- Big data analytics will be worth more than gold.
People are consuming over 2.5 quintillion bytes of data every day—that’s the capacity of about 2.4 trillion iPhone Xs. The data from our texts, tweets and web browsing is created on different systems, so there needs to be a common way to make sense of it all. Businesses are investing in big data analytics, spending up to $203 billion by 2020.
It’s not just about the explosion of data—it’s the way in which we analyze and use this data to enhance what we do across all areas of society that makes it so powerful. It’s the way we combine data and intelligence to power innovative and transformational smart services with data exchange models and business model innovation. It’s clear that big data analysis, the cloud and other related technologies will enable this move from data to knowledge to outcome.
- Artificial intelligence and machine learning are the next competitive advantage.
AI can and will “think ahead.” According to MIT Sloan Management Review, nearly 85 percent of businesses think AI will give their companies a competitive advantage, and 41 percent expect large effects from AI within five years. We are still at the tip of the iceberg and 2018 is expected to be a year of exploration in AI.
Digital business models that hinge on AI and IoT such as “as-a-service” and “mass personalization at scale” require large amounts of data and computing power to execute. In addition, the connections for IoT are in the cloud and AI processing will increasingly rely on cloud-based services to function. These trends will continue to drive investment in SaaS/cloud and big data technologies
- The Internet of Things is growing exponentially, and businesses must be ready to grow with it.
CSG simplifies the complexity of business transformation in the digital age for the most respected communications, media and entertainment service providers worldwide. With over 35 years of experience, CSG delivers revenue management, customer experience and digital monetization solutions for every stage of the customer lifecycle. The company is the trusted partner driving digital transformation for leading global brands, including Arrow Electronics, AT&T, Bharti Airtel, Charter Communications, Comcast, DISH, Eastlink, iflix, MTN, TalkTalk, Telefonica, Telstra and Verizon.
CSG has one vision: flexible, seamless, limitless communications, information and content services for everyone.