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DTWS: Adapting operating models to new business demands

TM Forum’s annual CXO Summit opened this year’s series of discussions at Digital Transformation World Series by asking senior leaders in the global telecoms industry to explore operating model transformation. The invitation-only event included senior executives from Bain & Company, Jio and Deutsche Telekom, with the telcos revealing some common thinking, despite very different cultural and technological heritages.  Here is an anonymized overview of their exchange.

27 Sep 2021
DTWS: Adapting operating models to new business demands

DTWS: Adapting operating models to new business demands

TM Forum’s annual CXO Summit opened this year’s series of discussions at Digital Transformation World Series by asking senior leaders in the global telecoms industry to explore operating model transformation. The invitation-only event included senior executives from Bain & Company, Jio and Deutsche Telekom, with the telcos revealing some common thinking, despite very different cultural and technological heritages. Here is an anonymized overview of their exchange.

The big change for telecom operators over the last few years has been the shift in emphasis from running their businesses to transforming them, as telcos respond to the need to creatively experiment and scale. And the hardest pieces to address, said one speaker, are leadership and culture.

At the same time, telcos face the challenge of being “more complicated than the average business,” noted a speaker.

This arises from effectively having several different types of businesses -- infrastructure, retail and platform, each with different operating models, capex and margins – all within a single organization. 

Participants acknowledged it is tricky for long-established operators to strike a balance between the operational predictability of their traditional cash-generating business and developing a startup mindset.

Success demands a profound cultural shift within traditional telcos, requiring teams that historically focused on precision to embrace speed, even if it comes at the cost of perfection.

For the management team that means altering people’s perceptions of what is important and making it culturally acceptable to fail and learn from mistakes.

Change also has to be digestible. When it came to making huge organizational transformations, speakers recommended an agile approach. For example, this can involve introducing new practices within a relatively small group of people, who learn, adapt, and then serve as a model to others.

Another important step for long-established telecom operators is to ensure IT and customer-facing business units come together to enable change, when previously IT would have been seen as an obstacle.

New communication service providers have the relative luxury of not being weighed down by legacy business. Nonetheless, Jio’s five key focus areas - the people it serves, investing in businesses of the future, acquiring talent, having the right technology, and being disruptive – reflect those of Deutsche Telekom.

Facilitating new ideas

Speakers emphasized the importance of making it easy for people across the business to share and develop their ideas and of having managers sponsor suggestions that will make a difference. 

Teams’ efforts need to be supported by investment in the right technology “because some of these ideas get bottlenecked if [the] architecture is not there.”

One approach is to have dedicated teams own an end-to-end slices of service delivery, using blocks from across the organization to quickly create new services. 

“If want to do something different for a different segment, teams build their own platform … leveraging more stable blocks.” However, this can require a “new organizational model and different layers in the technical layer.” 

Both telcos agree that having a clear purpose is an important factor when it comes to attracting digital talent, a theme that ran throughout the first week of Digital Transformation World Series. In particular, they pointed to the importance of contributing towards building their respective countries’ future digital infrastructure. 

“If you have a very powerful purpose, and a lot of talented people, the fact that you're creating this digital society, [when we] … explain that to people, they are really excited to come and join us.”