How to transform from a communication service provider (CSP) to a digital service provider (DSP).
Over the last five years, the telecom industry has gone through the hype cycles of 5G, AI, ChatGPT, and digital transformation. While service providers are investing in 5G and AI, these investments are yet to realize the potential of the business cases they were designed for.
On the other hand, the hype around digital transformation has proven to be unavoidable and has yielded high returns on investment. The communication service providers (CSPs) who we have worked with, and who have been at the forefront of the transformation and have become true digital service providers (DSPs), have achieved six times the growth of new customer onboarding and 10 times growth in monthly orders than the CSPs who we have worked with who have taken a more cautious approach.
This was further vindicated by the industry’s response to the COVID-19 pandemic, where being able to pivot to a digital first experience was imperative. Exponential development in the adjacent industries of the digital commerce space, the rise of social media platforms like Instagram, Snapchat, and TikTok, and the evident shift of consumers adopting over-the-top (OTT) services, has catalyzed the need for CSPs to move to become DSPs.
The question for the chief experience officers (CXOs) now is no longer “why” to digitally transform but “how” to make it happen. There is a realization that true digital experiences can only be delivered with the holistic transformation of the legacy systems which support an organization’s change management—they need to be revamped, and the teams need to be upskilled. The enormity and complexity of this change across technology systems, products, processes, and data, typically running in a multiyear transformation program, is a large inhibitor to embark on this journey.
So, what are the key elements that come close to being the secret sauce to running successful transformation programs?
Transformation programs span multiple years and during this time the CXOs are under pressure from their shareholders to continue to deliver the best business results. This in turn translates to the targets set for business owners to meet their annual, half-yearly, and quarterly numbers. Naturally, business stakeholders resist any change that can affect their KPIs. While there is a promise of a better tomorrow, nobody wants to risk their perfect “today.”
Successful transformation journeys ensure that businesses are able to run without any major threat to their ongoing business. The trick is to try and keep the new upcoming system as close in sync with the existing system.
Early adoption and onboarding of DevOps is THE best way to mitigate the impact. While the project team works on the fixed scope of the program signed at the start of engagement, we strongly recommend that clients invest in DevOps at an early stage of the program to make the new system current with all the business changes that have been delivered to the legacy stack. This team can then seamlessly transition into the Business-as-Usual DevOps team and hit the road running when the new system goes live.
There cannot be a better quote than the one made by one of our client’s chief digital officers: “We are undergoing a transformation journey, not a transportation one.” This short but powerful message sets the tone for the vision of the transformation program. Delivering business value in a brownfield transformation situation is very challenging and many a time we see our clients focus more on “transporting” the existing customer base with existing capabilities towards the new platforms. There is no new business value in such a program.
On the other hand, business transformation is not limited to technology upgrades. New business capabilities are delivered via technology, business processes, and organizational change management. For example, one of our clients in the Middle East underwent the Catalog-Driven CRM transformation. We consulted them to rationalize the 20,000+ offers into less than 2,000 rule-based product definitions. We also rationalized over 80% of their product offerings, leading to a 60% acceleration in time to market.
By having a clear articulation of the business vision and goal, the trick is to identify quick wins that can unlock the value of the transformation. This could be a mobile-first strategy to launch a new digital product that is available only on the mobile app or a new digital eCommerce experience with an Amazon-style delivery. By considering these new business capabilities for launch, CIOs can unlock the investment made in the program. Embracing true agility provides a greater framework to deliver continuous business value.
Transformation programs are a little like long-distance running. Runners not only build their stamina and their core strength to endure the physical challenges of such a feat, but they also prepare themselves mentally, often visualizing the celebration that awaits the finishing line. Likewise, organizations need to have a strong team that can run the distance of the transformation program. But more importantly, the mental strength comes from the CXOs and the executive sponsorship.
Having helped many clients successfully deliver long-running transformation programs, we see some common traits in these programs:
Organization Readiness to Change – Successful programs have team members in the client organization dedicated to the program and incentivized for the delivery of the program. One of our clients had set up a cross-functional transformation office spanning strategy, business, and IT. This makes a huge difference in driving the program not only with the partners but navigating the change within the organization.
Governance – We strongly recommend Executive Steering Group reviews at least once a month. While every program has its daily stand-up and weekly operating level reviews, the cadence of the Steering Group meeting ensures that the program is on track and prevents derailment. Multi-year programs often hit fatigue, and at these times, it is the executives who continue to push and motivate the team toward the end goal. As partners, we get equal seats at the table and our recommendations are considered with careful evaluation of how they contribute to the vision of the business.
The dynamic landscape of the telecom industry has witnessed a whirlwind of technological advancements, from the promise of 5G and AI to the extensive influence of digital transformation. While some investments have yet to fully materialize on their full potential, the undeniable success stories emerge from those who have embraced digital transformation wholeheartedly, leading to exponential growth and resilience, especially in the face of extraordinary challenges.
Transformation programs can be overwhelming, but they are not insurmountable. By embracing key principles such as minimizing the impact on ongoing operations, maximizing business value with quick wins, ensuring strong executive sponsorship and governance, and fostering organizational readiness for change, successful transformation becomes attainable. In this era of digitalization, CSPs can not only adapt but thrive by transforming into true DSPs, poised for sustained success in the future. Strong governance, a clear business value, and investing in a strong team enhances the probability of success exponentially.
