Co-creation: The accelerator for 5G prosperity in the enterprise market
The economic prowess of the telecoms industry has been stagnating for many years. Even the COVID-19 crisis, seen as a great accelerator and strengthener for certain industries, hasn’t changed telecoms’ fortunes. CSPs must evolve from selling standard connectivity products to offering pre-packaged solutions that solve business problems. How can your IT help you achieve this? Angus Ward, CEO at Beyond by BearingPoint, offers some ideas.
29 Sep 2021
Co-creation: The accelerator for 5G prosperity in the enterprise market
The economic prowess of the telecoms industry has been stagnating for many years. Even the COVID-19 crisis, seen as a great accelerator and strengthener for certain industries, hasn’t changed telecoms’ fortunes. CSPs must evolve from selling standard connectivity products to offering pre-packaged solutions that solve business problems. How can your IT help you achieve this? Angus Ward, CEO at Beyond by BearingPoint, offers some ideas.
The 5G opportunity lies in the enterprise and B2B space. Nurturing ‘a factory of collaboration’ where compelling 5G solutions are co-created will be key to enabling use cases across many industries. They include manufacturing, automotive, agriculture, utilities, smart cities, healthcare and transport.
CSPs are consumer-market orientated, with only 31% of them investing in enterprise. A recent report revealed that most communications service providers (CSPs) focus 70% of their B2B resources on less than 1% of the enterprise universe made up of large businesses.
Telecom was for a long time trapped in that mindset of “if you build it, they will come,” and although there has been a shift in that view, the enterprise opportunity remains untapped. Our latest research with Omdia revealed that the number of 5G enterprise projects in the market doubled in the last 12 months, but 5G enterprise projects led by CSPs declined by 5% since 2020 to 16% today.
5G will complement a breadth of technologies such as IoT, AR/VR, mobile edge compute, analytics and AI. CSPs are not specialists in all of these areas, so need to collaborate and adopt principles of openness within an ecosystem that nurtures a multi-technology, omni-partner, vertical-oriented approach. This is where CSPs act as masters of orchestration, bringing technologies together to deliver unique solutions that are easy to understand and simple to implement.
This factory of co-creation then needs to be scalable, repeatable, and generate growth for CSPs. The enterprise customer won’t understand or have time to learn about the technology; that complexity must be taken off their agenda. CSPs should: stop hesitating and be more collaborative without necessarily being in full control of the product or solution; learn how to work with partners to develop commercial models between organizations; and ensure they have a plan in place to navigate customer ownership and the direct impact on customers.
Time is of the essence. The 5G opportunity is attracting competition from players that often have a much deeper understanding of particular verticals and were faster to identify and react to spectrum developments and opportunities. CSPs’ efforts have been outpaced by smaller private network specialists or alternative service providers which represent the fastest-growing model for 5G provision, jumping from 7% to 27% market share in the last year.
Traditionally, there have been two different models to selling solutions in the market – the system integration model where someone buys all the pieces, makes the solution and tailors it to a customer, and the ‘app-store like’ model where one size fits all – a central place to buy generic services. The system integration model usually creates high-profit margins, requires serious capabilities, which take time to develop, and is hard to scale. The app-store model requires lesser capabilities and has potential to scale, but with low margins and adoption because of its generic nature. It has not proven to be successful in the B2B market.
Enterprises need to help build the technology-based solutions that will enable them to run their business better. CIOs need to adopt a new approach to IT and think beyond business support systems (BSS). They need a digital business platform to aggregate their own services and those of their partners, and automate the orchestration and monetization of solutions across any number of partners.
This approach has been adopted by leading CSPs like Telia, NTT and Tata, giving them the flexibility to introduce new business models and drive new revenue by experimenting, launching and monetizing new offerings with an ecosystem of partners at speed.
This is exactly what enterprises are looking for. According to research, the three most critical attributes when choosing an enterprise 5G partner are commercial flexibility, expertise in security, and technical architecture and network design skills. Demonstrating their ability to scale projects and solutions, through long term flexible commitments, will establish CSPs as ideal partners for enterprises with complex, cross-border needs.
In enterprise 5G, standing still is not an option, especially in an era when share prices of telecoms companies dropped on average by 20% over the year. As 2021 enters its last quarter, time is running out. CSPs need to prioritize continuous service experimentation with an agile approach to co-creating 5G-enabled solutions with partner ecosystems – with a laser focus on the customer.
5G solutions for enterprises means gradually developing more solutions with more technology partners and vertical specialists. Success will be achieved by CSPs that partner and scale at speed.
To find out more about Beyond by BearingPoint and how its technology is helping CSPs such as Telia, Tata Communications, BNET and A1 to transform, please visit: https://www.bearingpointbeyond.com/en. Or contact us at: infobeyond@bearingpoint.com.
The 5G opportunity lies in the enterprise and B2B space. Nurturing ‘a factory of collaboration’ where compelling 5G solutions are co-created will be key to enabling use cases across many industries. They include manufacturing, automotive, agriculture, utilities, smart cities, healthcare and transport.
CSPs are consumer-market orientated, with only 31% of them investing in enterprise. A recent report revealed that most communications service providers (CSPs) focus 70% of their B2B resources on less than 1% of the enterprise universe made up of large businesses.
Telecom was for a long time trapped in that mindset of “if you build it, they will come,” and although there has been a shift in that view, the enterprise opportunity remains untapped. Our latest research with Omdia revealed that the number of 5G enterprise projects in the market doubled in the last 12 months, but 5G enterprise projects led by CSPs declined by 5% since 2020 to 16% today.
Less procrastination, more co-creation
5G will complement a breadth of technologies such as IoT, AR/VR, mobile edge compute, analytics and AI. CSPs are not specialists in all of these areas, so need to collaborate and adopt principles of openness within an ecosystem that nurtures a multi-technology, omni-partner, vertical-oriented approach. This is where CSPs act as masters of orchestration, bringing technologies together to deliver unique solutions that are easy to understand and simple to implement.
This factory of co-creation then needs to be scalable, repeatable, and generate growth for CSPs. The enterprise customer won’t understand or have time to learn about the technology; that complexity must be taken off their agenda. CSPs should: stop hesitating and be more collaborative without necessarily being in full control of the product or solution; learn how to work with partners to develop commercial models between organizations; and ensure they have a plan in place to navigate customer ownership and the direct impact on customers.
Time is of the essence. The 5G opportunity is attracting competition from players that often have a much deeper understanding of particular verticals and were faster to identify and react to spectrum developments and opportunities. CSPs’ efforts have been outpaced by smaller private network specialists or alternative service providers which represent the fastest-growing model for 5G provision, jumping from 7% to 27% market share in the last year.
Ensuring IT helps you carve a middle path
Traditionally, there have been two different models to selling solutions in the market – the system integration model where someone buys all the pieces, makes the solution and tailors it to a customer, and the ‘app-store like’ model where one size fits all – a central place to buy generic services. The system integration model usually creates high-profit margins, requires serious capabilities, which take time to develop, and is hard to scale. The app-store model requires lesser capabilities and has potential to scale, but with low margins and adoption because of its generic nature. It has not proven to be successful in the B2B market.
Enterprises need to help build the technology-based solutions that will enable them to run their business better. CIOs need to adopt a new approach to IT and think beyond business support systems (BSS). They need a digital business platform to aggregate their own services and those of their partners, and automate the orchestration and monetization of solutions across any number of partners.
This approach has been adopted by leading CSPs like Telia, NTT and Tata, giving them the flexibility to introduce new business models and drive new revenue by experimenting, launching and monetizing new offerings with an ecosystem of partners at speed.
This is exactly what enterprises are looking for. According to research, the three most critical attributes when choosing an enterprise 5G partner are commercial flexibility, expertise in security, and technical architecture and network design skills. Demonstrating their ability to scale projects and solutions, through long term flexible commitments, will establish CSPs as ideal partners for enterprises with complex, cross-border needs.
The power of partnerships
In enterprise 5G, standing still is not an option, especially in an era when share prices of telecoms companies dropped on average by 20% over the year. As 2021 enters its last quarter, time is running out. CSPs need to prioritize continuous service experimentation with an agile approach to co-creating 5G-enabled solutions with partner ecosystems – with a laser focus on the customer.
5G solutions for enterprises means gradually developing more solutions with more technology partners and vertical specialists. Success will be achieved by CSPs that partner and scale at speed.
To find out more about Beyond by BearingPoint and how its technology is helping CSPs such as Telia, Tata Communications, BNET and A1 to transform, please visit: https://www.bearingpointbeyond.com/en. Or contact us at: infobeyond@bearingpoint.com.
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