Five pitfalls that sabotage telco transformations

Achieving a successful transformation in the telecom industry may not equate to hitting the jackpot, but for many executives, it feels almost as elusive. Most transformation initiatives either fall short of expectations or fail altogether. Our research shows that over 70% of digital transformation projects don’t meet their objectives. For telecom operators facing unprecedented pressures—such as competing with hyperscalers, adopting new NetCo (network) and ServCo (services) structures, and embracing AI and automation—the stakes for getting it right have never been higher.

Telecom transformations typically focus on IT due to outdated and rigid legacy systems that stifle innovation and adaptability. They hinder opportunities to serve customers better, expand beyond the core, and take on all comers. Less clear is why so many transformations themselves wind up hampering organizations, driving disappointment instead of growth.

Based on our experience, five key missteps often derail telco transformations from the outset. Understanding and avoiding these "recipes for failure" can set the stage for a more successful journey.

1) Not looking at the big picture

Transformations often begin with specific objectives, such as modernizing the tech stack to cut IT costs. However, these changes inevitably ripple across the organization. For instance, standardization to achieve cost savings in IT may hinder the ability to offer tailored products and services.

Many telcos fail to anticipate these broader implications. As unforeseen issues surface, the project scope often expands, creating more complexity and overburdening teams. Timelines and budgets spiral out of control, making it challenging to maintain momentum and secure ongoing funding.

IT transformations usually span two to four years, requiring parallel operation of new and legacy systems. To sustain such efforts, companies need a comprehensive business case that considers the full spectrum of impacts—how the transformation will reshape operations, enhance customer service, and drive growth. Success also depends on reimagining processes, streamlining product portfolios, and cultivating a culture that embraces change. This means focusing on more than IT changes. The self-funded journey—IT changes paying for themselves —doesn’t exist.

2) Waiting too long to bring in the business side

Transformations frequently originate within IT, given its expertise in deploying new technologies. Yet IT-led efforts often falter because modernizing an entire Business or Operations Support System (BSS/OSS) is far more complex than implementing a targeted solution.

Telcos need to clearly define the project’s scope, operating model, and business impact from the start. This clarity comes naturally from the business side, which should lead the initiative with strong IT collaboration. A business-led transformation ensures alignment and shared understanding, laying a foundation for success.

3) Going half-in on agile

Agile methods, which prioritize collaboration and adaptability, are becoming the norm in telecom transformations. However, many telcos adopt agile frameworks superficially without fully committing to the cultural and operational shifts required.

Effective agile transformations demand cross-functional teams where business and IT stakeholders share accountability for key features or functions. They also require enabling infrastructure, such as automated software lifecycle management, and a significant investment in training and change management. Telcos must allow time—often a year or more—for agile practices to gain traction and deliver results.

4) Forgetting to align incentives

Transformations involve diverse stakeholders with varying priorities. While the business side aims to increase revenue and improve customer experience, IT focuses on simplifying systems and reducing costs. Meanwhile, network teams may prioritize automation or striving for building network autonomy.

Now add system integrators to the mix. They’ll want to optimize their resource management; for example, by spreading their best employees over multiple clients instead of concentrating them on any one project. And it’s often in their financial interest to customize solutions instead of implementing out-of-the-box functionality.

These conflicting objectives can derail a project unless all parties align on shared goals and incentives. For example, contracts with system integrators should include provisions to balance customization with standardization, ensuring value for the telco. Internally, departments must agree on resource allocation, schedules, and budgets to avoid competing agendas.

5) Lacking a control tower

Many telcos neglect to establish a "control tower"—a dedicated team that monitors progress, ensures alignment, and resolves issues swiftly. Without this central oversight, delays and disruptions can spiral out of control.

A well-functioning control tower acts as a transformation nerve center, connecting strategic leadership with on-the-ground execution. It provides real-time insights and facilitates data-driven decision-making. To maximize its effectiveness, the control tower must operate within a culture that openly acknowledges challenges and promptly addresses them, avoiding the common pitfall of brushing problems aside.

Setting the stage for success

Large-scale transformations are inherently risky, but many telcos compound the challenge by starting off on the wrong foot. By steering clear of these common pitfalls, telecom operators can position themselves for a more successful journey. With proper planning, alignment, and execution, telcos can achieve transformations that not only meet but exceed expectations.