Digital Transformation & Maturity

DTW 2018: CSP leaders may not be getting the platform message across to employees

Telco CXOs appear to be more ambitious about what communications service providers (CSPs) should aspire to become than the teams working inside their companies.

A survey of CXOs attending Monday’s CTIO Summit at Digital Transformation World found that more than 75% believe CSPs should aspire to become platform providers. This message may not be reaching their employees, however, because only 16% of CSP respondents to TM Forum’s second Digital Transformation Tracker (DTT 2) said becoming platform providers should be the goal for telcos. This is a disconnect leadership needs to address, said Mark Newman, Chief Analyst, TM Forum.

Nearly 75 CXOs from global CSPs and their suppliers gathered here in Nice for the summit to discuss how to transform the world’s telcos into more agile, digital organizations. The workshop, which was sponsored by MYCOM OSI, was facilitated by Newman and TM Forum CEO Nik Willetts.

“At last count we were at about 2.5 billion customers that you represent,” Willetts told the group in his opening remarks. “Given that there are about 4 billion people on the planet with mobile contracts, that’s quite significant.”

Culture must change

“We’ve looked at an enormous amount of research out in the market as well as TM Forum’s own research and there’s one thing that’s becoming clear,” he added. “Everybody is talking about a word in hushed tones and they’re saying it very quickly as they change the conversation – they’re talking about culture in our companies.”

Culture needs to change and CSPs believe they have something to learn from digital natives, but navigating this journey is very difficult, according to Willetts. A recent survey by McKinsey of 2,000 executives in multiple industries found that the No. 1 self-reported barrier to digital transformation is culture, and it’s a challenge that impacts the bottom line.

“We can now see that the companies with a stronger culture, with the right corporate behavior and a more sophisticated approach to top management are succeeding and getting better economic results,” Willetts said.

The DTT 2 survey also found culture to be among the top three barriers to digital transformation along with lack of vision and lack of top management support.

“We see a very fractured picture in operators around the world, where we have data within individual companies, where we get very different answers when we ask: Who’s driving transformation? Who’s in charge of this change?” Willetts explained.

What are the takeaways?

Willetts offered five key conclusions about culture and leadership:

  1. Digital organizations move faster than traditional ones –flatter hierarchy and empowerment helps speed decision making.
  2. A digital culture serves as a ‘code of conduct’ that gives employees the latitude to make judgment calls and on-the-spot decisions.
  3. Digital leaders, digital culture and purpose attract new talent.
  4. A digital culture is a prerequisite for success in digital business… and to realize the true potential of new technology.
  5. Digital leaders, structure and ways of working determine digital culture.

He also pointed to five changes telcos must make to be successful.

What’s the CTIO role?

All this change is leading to an expanded and increasingly important role for CIOs and CTOs within telco organizations. Whereas IT used to be viewed as merely a cost center, today we have to also look at the impact of the technology on the business. Partnerships are required, and all of this requires a different kind of technical leadership.

Today, 84% of CIOs in top-performing organizations have business responsibilities beyond technology – they have a business or profit and loss responsibility as well, Willetts notes.

The changes require a new style of leadership, Agile work practices and moving away from a command-and-control structure to less structured teams, he said, adding: “Another model we see playing out is the Spotify model, which is a tribal model where you organize people in small teams around specific products, functions or parts of the business and then you align across them.”

2 issues to resolve

Willetts outlined two key issues CTIOs need to resolve, and these are questions the summit attendees spent most of the workshop discussing in small roundtable groups:

While establishing a vision is one issue, the bigger problem is the gap that develops between leadership and middle management when it comes to implementing digital transformation. The leadership team may get it, and so may the telco’s consultants, Willetts noted, “but the challenge we see is that the rest of the business didn’t change – they didn’t come on that journey with you and you have this gap in the middle which is typically, unfortunately down to middle management… You have to solve that gap.”

Building a vision – whatever the aspiration

Despite the growing support for platform business models, CSPs have very different ideas about what a platform business models look like and what role they should play in them.

During the workshop, delegates were asked to describe the extent of their ambitions using a diagram that maps the transition from a CSP to a Digital CSP to an ecosystem enabler and finally, to a digital partner. There was a consensus among the CXOs that large operators in Europe, North America and developed Asia should adopt enabler and platform business models, although this may only be possible in the B2B or B2B2C market.

There was less agreement about the relevance of platforms to third- or fourth-tier operators in a given market. These players may be able to build platform capabilities but only by federating their capabilities with other CSPs. The concept of federation was explored in detail by former TM Forum President and industry consultant Martin Creaner. He has identified two types of federation approaches – infrastructure-led federation (SD-WAN, cloud, edge-computing, etc.) and service-led federation (IoT, smart city, etc.).



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    About The Author

    Managing Editor

    Dawn Bushaus began her career in technology journalism in 1989 at Telephony magazine, which means she’s been writing about networking for a quarter century. (She wishes she didn’t have to admit that because it probably gives you a good idea of how old she really is.) In 1996, Dawn joined a team of journalists to start a McGraw-Hill publication called tele.com, and in 2000, she helped a team at Ziff-Davis launch The Net Economy, where she held senior writing and editing positions. Prior to joining TM Forum, she worked as a freelance analyst for Heavy Reading.

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