Operators are transforming, but how are they measuring it?

Communications service providers are making progress with digital transformation, but few of them are using a digital maturity model, according to preliminary findings from TM Forum’s latest research, which Rob Rich, Managing Director, TM Forum Insights, shared during a webinar this week. The research will be presented in more detail in an upcoming Insights Research report to be published at the end of January.

Here's a clip of the webinar:
https://www.youtube.com/watch?v=yNq3aOKSIWk

About 8 percent of 65 survey respondents so far said they are well along the way to reaping significant benefits when it comes to digital transformation and another 71 percent said they have made progress or are at least getting started with transformation. But 46 percent said they aren’t using a maturity model and another 25 percent said they don’t know if they are, which probably means they’re not.

How do you rate?

Using a maturity model can help companies better understand what they’re trying to achieve and what the obstacles are to success.

“It’s really important to have planning tools so you can understand where you are on your journey and how you compare to others,” Rich says. “Metrics are important – you need specific quantitative tests to assess how far you’ve come and to set clear, measurable goals."

He adds: “If you look at the ecosystem in which transformation has to happen, we need common language and we need common definitions if we are going to understand how we’re doing and if we’re going to make the industry easier to deal with for thousands of potential partners.”

To help with this, TM Forum members are developing a collaborative Digital Maturity Model (DMM). The goal is to deliver a Phase 1 version as part of Frameworx 17, which will be released at TM Forum Live! 2017 in Nice, France, in May. So far, we have held three DMM workshops, two in North America and one in Asia. Another is planned for Lisbon as part of Action Week in early February.

5 key dimensions

Huawei, one of several companies participating in the development of the TM Forum DMM, shared details about its own digital maturity model as part of the webinar. The company focuses on five key areas for digital maturity: a clear strategy, the right business model or platform, automated digital operations, digital products and services, and a digital experience that empowers the customer.

“We show [Strategy] as a sort of foundation,” says Emmanuel Amamoo-Otchere, Chief Marketing Officer, Carrier Software Services, Huawei Technologies. “On top you have Platform, Operations, Products and Experience, and at the heart of Strategy is a focus on the customer.”

During the webinar, we conducted a poll question asking the audience of more than 100 people, where their strategy focus has been to date. A third said it has been on digital operations (automation and orchestration of processes), while 30 percent have been focusing on digital business such as marketing, commerce, sales, IoT/M2M, etc. Another 25 percent are focusing on improving customer experience, such as online channels and mobile apps.

Huawei further categorizes its five dimensions with sub-dimensions and uses metrics to assess an operator’s maturity level as Basic (still uses manual processes), Initiator (some electronic channels and simple automated processes), Provider (digital processes and offering portals and digital interactions and marketing), Established (real-time applications, integrated partner ecosystem), or Influencer (completely digital, one-touch business automation).

“Typically from our experience, I can tell you that majority of operators move between Initiator and Provider,” says Chaitanya Priya, Senior Consultant, Digital Telecom & Revenue Management. “It’s also key to realize that these levels are not sequential – for example to go from Basic to Established, you do not necessarily need to go through the Initiator and Provider levels.”

Putting it in action

Priya shared an assessment Huwaei has done for an unnamed operator. “We carried out digital maturity assessment for them in less than two weeks and were able to demonstrate some viable options,” he says. “We even helped them in designing a modulated solution that could fit in or re-use much of their legacy stack and suggested some quick wins and some long-term monetization initiatives for them.”

Huawei is now in the process of building reference scores for multiple operators in different regions that will help define relevant benchmarks. The goal is to be able to offer service providers a digital assessment they can do on their own and use to compare themselves with competitors. The company is also participating in the Forum’s efforts to develop the DMM.

As a final poll question during the webinar, we asked audience members which of the five domains that Huawei has identified they have found most difficult to manage and improve. Operations ranked highest with 41 percent, followed by Strategy (24 percent), Platform (21 percent), Experience (11 percent) and Product (3 percent).

It's not surprising that Operations ranked high given that operational transformation is, indeed, a primary goal for most service providers, but Priya says he's a bit concerned by the lack of attention this particular group of respondents paid to Product. "Digital products and services, will make a difference," he says.

If you’d like to learn more about Huawei’s digital maturity model and hear an engaging Q&A session, you can listen to a replay of the webinar here. And if you’re interested in participating in the work the Forum is doing to develop the Digital Maturity Model, please contact Ken Dilbeck or Rob Rich.