Ecosystems and platforms key to unlocking CSP transformation

Andreas Polz, CTO, BearingPoint//Beyond, will be speaking at Digital Transformation World North America on September 24, discussing the TM Forum Catalyst proof-of-concept project he's been working on. He shares some of his insights ahead of the event in this blog.

In a heavily digitally disrupted world, a critical component of transformation for communications service providers (CSPs) is establishing the right partner ecosystem, and as a consequence, adopting new business platforms to support it.

CSPs are under pressure to innovate in order to counter commoditization, win customers and grow top-line revenue. Few innovations are created solely in-house, making the right partner ecosystem paramount.

This is even more so in digital, where services can be seamlessly added and combined at speed. Co-innovation and co-funding of more sophisticated and harder-to-replicate offers to which CSPs add their own service wrapper and experience, is the way to go.

CSPs aren't executing

A recent study from BearingPoint together with Coleman Parkes Research revealed that CSPs have high expectations of the value that partner ecosystems will deliver to their businesses – 50% anticipate a 16%+ revenue bump in just two years. However, CSPs have yet to embark on the execution of ecosystem strategies, frustrated primarily by a series of technological challenges.

In short, while CSPs realize the strategic importance of partner ecosystems to their future, they are failing to overcome internal barriers preventing successful execution.

Our research shows that companies adopting digital platform-based business models grow at twice the rate of those that don’t, simply because this allows them to generate value from their partner ecosystems. Despite the importance of partner ecosystems, CSPs are significantly behind in implementing new business models and digital offerings based on these, still relying on rapidly commoditizing products rather than proactively moving to differentiate to win new customers and protect revenues and profits.

We’ve found that while business benefits drive the appeal of digital platform-based business models, technology challenges are frustrating CSPs' attempts to execute – whether it’s making sure that partners get paid, creating agile environments for experimentation or simply providing a platform to bring together partners to create new services and exchange data and ideas.

Without a shift to new underlying digital business platform technologies that are designed to facilitate partner ecosystem-based innovation and more sophisticated offers, CSPs' efforts to introduce new business models could fail.