Future OSS/BSS

Telefónica’s digital transformation success: Accelerating the change

Jose Manuel Gacon Carus, Global IT Strategy & Governance Director, Telefónica Global IT, shares the major successes and takeaways from the company’s multi-country transformation initiative so far. What’s next? Make it go even faster!

The pressure on telcos is increasing, with new players, new ways of doing business and new customer expectations. Additionally, digital-native businesses represent a big threat to our revenues and pressures on customer retention, even if they’re not competing directly against us.

It is, therefore, urgent to accelerate the digitalization we started years ago and deliver the capabilities that our customers now demand.

To compete in the digital world, at Telefónica we have developed a company program to transform ourselves to be an end-to-end digital business, focused around the customer and data, and ready to compete in an open ecosystem.

End-to-end digitalization is a complete business-led transformation in order to evolve the way we interact with our customer, the products and services we deliver and the way we work internally. This is not only about IT; it encompasses organization, people, processes, technology, etc. This requires a holistic and coordinated approach, as everyone is contributing to the transformation. We are integrating the customer and company views, aiming to achieve two key goals:

  • Any interaction on any screen: Getting the right mix of channels, being efficient and effective in assisted and self-assisted channels
  • Zero back office: Increasing share of automated operations, reducing errors and making the processes lean, using the minimum feasible number of human resources.

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To really bring this to life, we have translated the goals into actionable items so we can characterize the current situation and understand how to improve it, and we can picture it in a matrix with the axes: Automation (X) and % Use of assisted channels (Y).

The transformation has been designed with the customer at the core, following the complete lifecycle with customer journeys and processes that have been standardized at company level. For this exercise, the use of TM Forum assets was very valuable. The Telefónica Business Processes Framework is certified and fully compliant with TM Forum’s Business Process Framework (eTOM), and a lot of our process-related work is derived from there.

This, and the customer journey methodology, has allowed us to set a common transformation language for business, IT and operations, across the same country, and across the whole Telefónica Group.

Effective end-to-end digitalization enables three different but complementary dimensions to boost a company-wide deep transformation. And it is measured through KPIs:

  1. Customer experience: End-to-end digitalization should provide the customer experience expected by the customer of a digital company
  2. Operations and operational efficiency: End-to-end digitalization should boost operational performance and the percentage of automated operations
  3. IT: End-to-end digitalization should enable the capabilities required to increase operational performance and customer experience

Additionally, the volume of interactions should be taken into account to characterize the company’s situation as key input to prioritize initiatives.

Considering these dimensions, we analyze each end-to-end process for the digitalization of each operating business. We can then combine the results into the matrix for analysis (adding volume and customer satisfaction magnitudes). With this approach, it is possible to assess the operating business situation and the main opportunities against end-to-end digitalization  objectives.

Telefonica 2

Once the baseline position is defined, the main opportunities against end-to-end digitalization objectives can be captured in a transformation plan with four different types of transformation initiatives, based on the following information:

  • Enable and improve digital capabilities
  • Enforce adoption of self-assisted channels
  • Improve operational performance by redesigning processes and tapping into digital capabilities
  • Improve and redesign customer experience

In order for it to be effective, we need to ensure that the transformation plan observes a set of global principles. Firstly, the business should be leading (deciding why and when, defines customer experience) with a clear owner reporting directly to the CEO (empowered and connected with the leadership of the major structural programs but not CIO/CTO).

We are involving multidisciplinary teams with a core team centered on the customer lifecycle view, with the support of other areas when needed. If possible, this plan will leverage global assets and existing work, but should always ensure consistency with our company strategy and the global transformation initiatives

But how is IT enabling end-to-end digitalization?

We, as key enablers of the transformation and the capabilities, must broaden our vision and face this transformation in a comprehensive way. It is mandatory to address business processes, applications and integrations, as well as the required infrastructure and operations to support them.

Thanks to the maturity of the industry standards achieved in recent years, our transformation strategy is based on the reference models defined by TM Forum — mainly the Business Process Framework (eTOM), Application Framework (TAM), Information Framework (SID) and Integration Framework.

To ensure continuity, we have defined some transformation principles to be followed that embrace these standards, as well as others such as:

  • Enforce the business to adopt (and not adapt) new processes
  • Choose ready-made solutions in the market
  • Pre-integrate product-based solutions (but also make them easy to integrate with others)
  • Freeze legacy investments
  • Always look for future-proof solutions.

Following these principles, we are executing Full Stack, a business-led processes and application transformation initiative that is going to provide significant benefits to the business and enable the capabilities required to move forward in our digital journey. Full Stack addresses most of the BSS domains aligned with the Application Framework (TAM) — sales management, billing, customer management, etc. — but to cover end-to-end processes it needs to be complemented with satellite projects that will be executed locally at the same pace as the main projects.

Telefonica 3

At global level, the scale of the transformation reflects one of the broadest and deepest transformations of the industry. We are transforming multiple business lines, in multiple operating businesses, resulting in different projects running in parallel in 15 countries.

The Global IT Governance Model ensures maximum standardization and reuse. This allows us to learn from leading operating businesses in the transformation across the group in the way we manage, approach, structure and carry out the projects to leverage the experience, enhancing similar transformations in multiple operating businesses:

  • Adapting and enriching the Telefónica framework (processes, architecture, methodology, tools, etc.)
  • Influencing the industry and the standards, being a TM Forum key partner
  • Improving the partnership model with our strategic vendors (Amdocs, Netcracker and Huawei) and evolving their solutions through influencing their roadmaps

Transformation is real, and it is happening now. We are live with the new capabilities in six markets in Brazil and HispAM and have migrated more than 50 million customers. In 2017, we will have 10 markets live including Europe and many more millions of customers migrated.


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Global IT Strategy & Transformation Director

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