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Becoming a digital service provider: The elusive ‘quad-play’ of digital transformation in telecommunications

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Why a consistent vision for service must be at the heart of digital strategy to avoid the traditional telco quad-play trap.

The telecommunications industry has been talking about the need to transform or die for well over a decade. Breathless talk of the next big thing and the coming revolution has resulted in myriad attempts at enterprise wide change programmes and yet for many, if not most providers the promise remains largely unfulfilled.

Admittedly, the remarkable technology revolution of the last decade and the role that telecommunications operators have played in enabling the increasingly converged B2C and B2B ICT industry is sometimes underestimated. From advanced network rollouts, through the emergence of smartphones, wearables and smart everything in the IoT era, the telco industry is at the heart of the digital age as a result of its engineering expertise.

And yet, too often the communications incumbents are being disrupted rather than being the disruptor.

The digital transformation Quadplay

At NTT DATA, we work with operators and providers across the globe in advisory and technology delivery engagements to help them with their transformation journeys.

We are increasingly seeing digital transformation in terms of a “quad-play” of activities to be addressed and – as with the traditional telecoms quad-play – achieving commercial success is going to be tough.

For today’s business the challenge is to create a genuinely differentiating omnichannel service experience and at the same time put in place the digitised and automated processes and platforms to achieve this cost-effectively.

In parallel, the organisation must identify tomorrow’s customer centric digital offerings to create new revenue streams and at an enterprise level establish the capability to give access to the network and service assets of the company to customers and partners to enable these offerings; an open service eco-system.

Figure 1 – NTT DATA Digital transformation CSP quad-play

Each of these topics can be an enormous undertaking individually,, but mastering them simultaneously requires clarity of strategy and operational excellence.

In our view, the glue that binds this all together and delivers cohesive transformation is “Digital DNA”, that is the culture and environment that embraces the transition. It’s enterprise scale lean and agile working practices, user centric process design, data-driven decision-making, “continuous beta”-thinking and multi-disciplinary teamwork which breaks down organisational siloes.

Play 1: Omnichannel experience perfection

Although many operators have established “Omnichannel” initiatives to join up experiences across channels, too often they lack clarity over the tangible service improvements and user journey changes.

The fact remains that a large number of telcos continue to populate the bottom of most cross industry customer satisfaction surveys. Complex products and services, inconsistent policies between channels, siloed departments and fragmented technology platforms still prevail in many organisations, whether in the B2B or B2C

Clearly, there is no single straightforward solution to this challenge, but the first step is to develop a clear user-centric vision, for customers, partners and employees.

This shared view of how to use different touchpoints effectively and in unison to provide superior experience, be it for sales or service, must be balanced with the commercial viability of the different channels: omnichannel is about consistency, the quality and ease of interactions, and customer channel preference. It should not be misunderstood to mean the same service in all channels – it does not

NTT DATA omnichannel experience transformation

With the vision is in place the exercise of aligning KPIs, objectives and operations and the establishment of the technology architecture to deliver the experience can begin. At NTT DATA, we have developed a robust framework and technology platforms to support this process (see figure 2 and linked video).

Play 2: Radical process simplification and digitisation

The kind of customer, employee and partner experiences expected to achieve omnichannel service success at scale and an acceptable price obviously require telcos to address their legacy challenges, to simplify their front and back office processes and tools and to digitise and automate as much of it as possible.

In our experience, this is achieved best through a pragmatic bottom-up process review that links directly back to the omnichannel service design vision to identify the areas that will provide the most impact, and a top-down initiative to create the core platforms upon which to complete the rollout.

Fortunately, the opportunities to use smart BPM, robotic process automation (RPA) tools and artificial intelligence to rapidly digitise key processes and decision making are now substantial. The technology is increasingly mature and no longer necessarily requires multi-year transformation programmes to implement (see also Spotlight on Next Generation Service, inset).

Once again, the agile approach lends itself well to the iterative delivery of process improvements, but needs to be embedded properly in the organisation: when rolling out such initiatives, we typically recommend the implementation of a so called “multi-speed” delivery model that ensures that you are able to maintain existing operations, whilst incrementally transforming the legacy platforms and processes.

Play 3: New digital offerings that genuinely address a customer need

Finding opportunities to add value through the creation of new digital offerings is probably the most challenging of all the activities in the digital transformation journey; and the industry track record is not great. In a recent article, the TM Forum’s Chief Analyst Mark Newman identified 15 offering areas from B2C products such as OTT video, music, and gaming, through B2B and B2B2C offerings like IoT, cloud and carrier billing, and ranked them according to several criteria. According to Mark, for actual commercial monetisation and ARPU impact, only TV and cloud offerings have achieved a reasonable level of success.

Some exceptions do exist; our sister company NTT Docomo is one of the few industry players to have stabilised and even grown revenues in recent years through strategic investments in value added offerings such as the +d loyalty platform, expanded digital lifestyle offerings with partners and carrier billing and payments solutions. Their success stems from concrete customer needs which are being addressed more effectively through the combination of NTT Docomo’s assets and (often) other providers who contribute to a broader value system.

Digital DNA and ways of working have a strong part to play in enabling this new business: clearly strategic intent and robust analysis are important in identifying opportunities (and threats) in the market place, but “test and learn” approaches remain crucial to establishing  value to the customer rapidly and then scaling when  traction is achieved.

In our view, the opportunity remains for a few selected communications providers to be at the heart of the so called digital eco-system, not just as an connectivity enabler, but also as a value-adding partner, combining and bundling offerings from across industries that uses the unique data that telcos have to provide relevant and value adding new services to end customers and enterprises; which leads on to the final transformation play:

Play 4: Embrace the open service eco-system

In a world of digital unicorns, the appeal of so called platform businesses which enable multi-sided value exchange are clear, but they are also rare.

To have an opportunity to benefit from this new economy, operators must immerse themselves in it. For many this has already started with the innovation labs teams, startup scouting and open innovation competitions as well as partnerships with the tech giants. For the select few, it will also result in co-creation opportunities, joint ventures and targeted opportunities for in house proposition development and bundling, which moves it into the main stream of the organisation, But to have a chance of even spotting the opportunity, organisations need to establish a more comprehensive approach to the full innovation lifecycle from scouting right through to industrialisation.

The move to open up network and commercial services is simply the next logical step on this journey, and it is, of course, not without its risks: API level access to core services enables third parties to create value and potentially reap the rewards alone. However, it is our conviction that the operators who create simple, scalable services (from access to pricing and commercial onboarding) and help the community build on them rapidly, will be the ones who are best placed to monetise themselves. You have to be in it, to win it!

Spotlight on Next Generation Service for Digital CSPs

Historically, operators have focused significant efforts into the delivery of channels sales enablement and commerce platforms to drive revenue growth, often to the detriment of in-life service. However, arguably it is precisely in this area that lasting customer differentiation will be achieved.

Whether it is the brilliant and memorable onboarding process (that according to our assessment has a disproportionately high impact on NPS and churn propensity) or the proactive notification of localised services that are relevant in that moment for the user, opportunities abound to create impactful brand affirming experiences.

At NTT DATA we have been investing over the last 12 months in co-creation projects in three areas with our clients to provide a suite of advisory services and technology platforms to deliver against the promise of Next Generation Service:

Omnichannel customer experience platforms: from chatbots and advanced mobile app self-care solutions, through contextually aware natural language automated help voice agents to augmented reality diagnostics, technology is no longer the primary barrier – the opportunity to create memorable positive experiences and actually reduce operational service costs is significant.

Applications of artificial intelligence and robotic process automation: the orchestration of middle and back office processes can be rapidly simplified through increasingly convergent AI and RPA tooling for intelligent process and knowledge capture and subsequent lightweight automation. Rapid bot deployment to automate specific process bottlenecks can be completed in days and weeks rather than months. Crucially, we find that establishing a centre of excellence for these technologies early on, help prevent an explosion of ad hoc bots.

Data driven insight: Predictive analytics algorithms whether they are in the networks space, or to identify patterns in usage to provide proactive personalised information and churn propensity are powerful tools to intensify your engagement with your customer base.

It is easy to get excited about the technology, but the hard part is working through how to prioritise initiatives, understand the current state of the possible and then building the service blueprints and experience guidelines that ensure will stay in your customers’ minds.

Key Takeouts

A comprehensive digital transformation strategy addresses four interconnected fields of play.

To ensure that this digital transformation quad-play is more successful than its telco counterpart, a customer centric vision that addresses real rather than perceived customer needs is fundamental.

Outstanding Next Generation customer service that leverages technologies from artificial intelligence, big data and IoT, automate and orchestrate operations has the potential to be a competitive differentiator. for both today’s and tomorrow’s business models

The establishment of Digital DNA and the underlying culture shift is not a simple undertaking, but it is central to success and organisations are adopting enterprise wide business agility practices to embed this change.



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About The Author

Vice President, Digital & Innovation, NTT Data

Tom is a vice president in NTT DATA’s Digital practice and leads the UK Digital consulting and innovation business. With 18 years of consulting and programme delivery experience on the interface between business, customer experience and technology, Tom’s consulting focus in business and technology transformation and innovation across telecommunications, financial services and the public sector. Tom is currently leading a global investment initiative across NTT DATA Group companies to deliver Next Generation Digital Service solutions for communications service providers.

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