At TM Forum Live! (in Nice in May), Telefónica’s Patrick Lopez will give two case study presentations on customer-centric networks and realizing the benefits of SDN and NFV. Here he explains Telefónica’s Innovation Framework.
I have received many requests over the last few months to explain our innovation process in more detail. Now that our innovation methodology is a widely commented-on Harvard Business Review case study, I thought it was a good time to shed some light on how a large telco such as Telefónica can innovate in a fast-paced environment.
Innovation is not only a decision: it’s a process, a methodology. In our case we have different teams looking after external innovation, through business ventures and venture capital, and internal innovation looking after networks, data and moonshots. The teams that I support, focusing on network innovation, are adapting the ‘lean elephant’ methodology to invent tomorrow’s mobile, fixed and TV networks.
The process starts with directed ideation, informed by our corporate customer segmentation, customer sentiment studies and selected themes. An innovation call centered around specific themes such as “imagine tomorrow’s TV” or “artificial intelligence and networks’ QoE (quality of experience)” is launched across the group, with local briefings including our selection parameters. A jury is convened to review the hundreds of ideas and shortlist the most interesting. The selected intrapreneurs have a month to prepare a formal pitch for their ideas. They are assisted by customer experience specialists who help them refine the problem they seek to resolve, its applicability and market appeal.
After the pitch and selection, the intrapreneurs are transitioned to the innovation team full-time and given a few weeks to create a feasibility plan and preliminary resource budget for prototyping. Once ready, the successful applicants present the plan in detail to the jury.
The lucky few that pass this gate are given 3 to 8 months to prototype their project, together with commensurate resource. At this stage, the project must have strong internal sponsorship, with verticals or markets within Telefónica who are committing to take the prototype into their labs for functional testing. The resulting prototype, together with the value proposition and addressable market, are reviewed before passing to the next phase.
The prototype is then hardened and deployed in a commercial network for friendly and limited A/B testing and refinement. This phase can last 2 to 6 months, with an increasing number of users and sophistication in measurement of the value proposition’s effectiveness. During this phase, a full product/service business case is also finalized, using the data collected during the market trial.
Productization and transfer
Does the project meet the customer needs? It is innovative and does it provide differentiation? Is it profitable and does Telefónica have an advantage in solving real market problems? These are some of the tough questions the intrapreneur and his team must be able to answer before the solution can be productized and eventually transferred to one of our verticals, or used to create a new one.
This process has been the source of Telefónica’s early advances in IoT, big data, smart cities and more. It has also killed, merged, pivoted and spun off hundreds of projects. The network innovation teams I support are aiming at radically changing network topology, deployment and value chains using software-defined networks, virtualization, containerization and Lambda computing all the way to the edge of our networks. We are developers, network hackers, user experience experts, computer scientists, DevOps engineers and more.
The next few months will see some exciting announcements on this. Stay tuned.
You can catch me and we can chat about it at the upcoming TM Forum Live!
TM Forum Live! takes place May 15-18 in Nice, France. Find out more at www.tmforumlive.org