Time to take a fresh look at operator benchmarks

There are two ways of looking at today’s telecoms operator business. On the one hand it is a stable, mature sector which is unlikely to show any significant ups or downs in revenue and profitability in the coming years. On the other, it is a business that is fighting for its very future as changing technology and competitive landscapes threaten the relevance and future prospects of telecoms operators.

Much depends on whether you are looking at the business in the short-to-medium term, or the longer term. Disruption caused by new technologies and new competitors can take several years to have an impact. And it tends to be those parts of the business that are most familiar with the potential impact of new technologies – in telecoms’ case the network and IT functions – that are most aware of both the risk and opportunities that they bring.

As telecoms operators endeavor to ready their businesses for further disruption, and use new technologies and ways of working to their own advantage, they need tools to measure their progress. We tend to refer to these tools as KPIs or operational benchmarks.

KPIs or operational benchmarks used today typically comprise some or other form of financial measurement – costs, revenues or profitability – relating to different functions of the business. They might include revenue per employee, or opex / capex as a proportion of revenue. Leading consulting firms offer operators detailed benchmarking tools for different parts of their business.

But such measurements or benchmarks do little to help CSPs understand how, for example, technology functions are performing against those from other businesses. If you are responsible for a CSP’s customer experience do you want to measure it against other CSPs – which may not offer the type of experience that you aspire to – or against best-in-class digital service providers? Or perhaps you want to measure it against companies in mature sectors which have successfully created digital experiences for their customers – for example, retail banks?

Similarly, they do little to help guide CSPs as they aim to become software-centric organizations whose operations largely reside in the cloud. Such transitions can fundamentally challenge CSPs’ approaches towards procuring and deploying technology and services and their relationships with their technology partners.

Such new operational benchmarks and KPIs are not going to displace the old ones which have been tried and tested over a number of years. But they will help operators to track their progress as they try to change their DNA, to resist and to adapt to future market and competitive dynamics.

Our new report Operational Benchmarks: making them fit for future telecoms businesses explores the types of new benchmarks that CSPs may need to consider deploying. It is based on a survey of 103 technology leaders in telecoms operators across the world, and briefings with CXOs in tier-one CSPs in Europe, Asia and the Americas. Read it to find out how operational benchmarks are changing to meet the demands of future telecoms businesses.