Digital reinvention – no longer a choice

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Rapid adoption of emerging trends and technologies can disrupt traditional business models

“If CSPs don’t radically reinvent their business model and core support system (OSS/BSS), then they won’t be able to compete with (or even partner with) digital native companies like Google or Amazon”

In recent years, we have seen a radical shift and urgency on the part of communication service providers (CSPs) to build or acquire digital capabilities. This shift is not only focused on the sales cycle but also on the entire customer journey. So, what exactly has changed, and why this urgent drive towards digital reinvention and sudden shift in digital thinking?

Traditionally, CSPs are providers of network connectivity that enables a variety of communication-specific digital services – mainly messaging, voice, video, and data. For providing these services, CSPs need to have a core complex network infrastructure that provides connectivity over wireline, mobile, cable network, etc. These network functions are supported by a very complex and monolithic suite of monetization and business support applications.

This complexity in business functions has kept CSPs busy with day-to-day operational activities, leaving them with limited flexibility to offer new services and no time to think about how fast disruption in business models can hit them and divert business revenue to digitally native OTTs or digitally enabled startups.

The competing internet ecosystem led by digitally native players such as Amazon, Apple, Facebook, and Google (GAFA) has come to dominate the consumer market and dictates the very definition of digital services. GAFA has radically changed consumer behavior and expectations. Today consumers demand immediate answers 24/7, access from anywhere, ease of use, convenient and customer-focused service, among many others.

This has left CSPs at a crossroads where they are being pushed by new market dynamics, heightened customer demands, and disruptive competitors to evolve from being just a pipe for connectivity services.

The digital reinvention is more about how CSPs will conduct business to prevent becoming a commodity or a pipe for connectivity. While continuing to provide communications services, CSPs are looking to expand their portfolios by adding new products and offerings that complement their connectivity services. This expansion can only be accomplished by acquiring new capabilities and competing with digital-native players or by coexisting with the existing ecosystem as they seek to retain customers and find new opportunities and revenue sources.

Q: What is DSP?

A: A digital service provider (DSP) focuses on improving customer experience by adopting a customer-centric approach, and improving operational efficiency with automation. With a digital-first approach, the aim is to drive all interaction online and provide an omnichannel experience that puts customer in control.

Q: What is DSE?

A: A digital service enabler (DSE) focuses on adopting an outside-in approach to creating new revenue streams, making assets available to partners, and promoting ecosystem growth and enablement.

“Rapid adoption of emerging trends and technologies can disrupt traditional business models”

Old is no longer gold?

The traditional BSS-OSS architecture is being challenged, and limited capablities are keeping CSPs from evolving fast in their digital transformation journey:

  • Customer relationship management (CRM) is evolving into customer engagement management (CEM).
  • Digital process automation (DPA) replacing traditional business process management (BPM).
  • A common information (CI) layer with real-time data availability is required.
  • Real-time charging and activation is pivotal.
  • AI is unique in its ability to extract and apply insights from data in real time.

Q) How difficult or easy can transformation be? And where to start?

Transformation is a continuous journey that continues to evolve along with market trends. If not planned well, it will not yield real benefits. Customer touchpoint transformation is not the only focus for digital transformation. End-to-end as backend systems should also support digital flexibility.

Before you start on this journey, try answering these questions to determine whether you are ready for it:

  • What does “digital” really mean for your organization?
  • How easy or difficult is it to build a digital culture in your organization?
  • What capablities are really missing in your current setup and how can you acquire them (build vs. buy)?The keys towards succesful transformation include:
  • Business and IT alignment
  • Digital culture in the organization
  • Ittrative approach/fail-fast
  • Define MVPs and track value realization at each phase
  • Think E2E
  • Continuously keep revisiting various hypotheses, assumptions, and analyses used for building strategic decisions.

Q) How are emerging trends and technologies influencing transformation journey use cases?

CSPs’ business models are affected by internal and external factors. In most cases, these factors have forced CSPs to acquire new capablities, which has had a positive result in achievening benefits such as customer service improvement, efficiency in operating modes, and expansion in new product/service portfolios for additional revenue sources.

Emerging Trends/Technologies Same benefits & capabality (new/enhanced)
Industry Cloud – Prebuild Process

– Industry Data Model

– E2E ready to use capabilities aligned to industry experience

Omnichannel – Digital Marketing

– Customer Interaction

– Guided Sales/Service

– Self Services

– Common view of product and contents/knowledge across channels

– User/device identity management

AI/machine learning – Productivity improvement

– Proactive sales, service and fraud management

– NBA/NBO

– Automation: Potential savings on staffing

Blockchain – Smart Contract

– Operational efficiency

– Advanced operational trust and security

– SLA Management

Microservice & APIs – Reusable microservices

– API monitization: outside-in

 

Manoj Ghag is an Enterprise Architect part of Global Telecom competency in Capgemini. He has extensive experience in OSS BSS and has worked on many Digital Transformation projects across globe for various leading CSPs. You can contact him at manoj.ghag@capgemini.com or +91 9011040486.

 

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