In life, there are fads and there are trends. Fads are things that become popular one day and gone the next. In the 70’s, people were crazy for waterbeds. More recently, people would lay face down in bizarre places and called it “planking.” These are fads. Trends, on the other hand, have a bit more staying power.
Digital transformation is not just the latest IT fad, but instead is a major part of the internet trend. This recent trend includes cloud computing, mobile, artificial intelligence, SDN/NFV, big data, and IoT. Digital transformation is the implementation of all of these components, to rethink business models, improve competitiveness, and create new products. It revolves around innovation and the use of technology to fundamentally transform businesses.
Digital transformation is a multidisciplinary initiative that involves the entire enterprise—from sales and marketing to ops, from finance to HR. It requires special attention to soft-skills, focusing energy beyond the engineering aspects of a digital transformation and organizational change as the business is re-tooled. And finally it requires constant communication. It’s not surprising that digital transformations take time.
Digital transformation not only impacts the businesses who implement it, but the customers they cater to. When a brand goes through their digital transformation journey, the customers will receive a better customer experience through personalized messaging, enhanced customer support, and more.
Frankly, digital transformation is hard. So where does the telecommunications industry fall as it relates to its digital transformation maturity?
A recent study Deloitte Digital Transformation Executive Survey 2018, ranks various industries by their digital maturity. According to the study, digital maturity is measured by added business benefit. The study identified the TMT or Technology, Media and Telecommunications industry with the highest percent of maturity when compared to other industries like Consumer Packaged Goods or Financial Services.
It’s no surprise that TMT was ranked highest among industries. In the tech sector, you have digitally native companies such as Apple, Google, and Facebook. In media, there is Netflix, Hulu, and other digitally native companies that distribute content and media. But then there is telecommunications, not quite at the level of digitally maturity as the digitally native leaders.
From rigid to flexible
Consider the large cost that goes into supporting and expanding networks—industry average for CAPEX is approximately 15% to 18% of revenue. This is where most service providers have focused their digital transformation investments. From a business transformation perspective the value proposition is strong, as it affords:
- Lower cost over time as service providers migrate from closely coupled hardware/software to standardized hardware/software
- Siloed OSS/BSS systems to horizontal platforms that are open and API-enabled
- Migration from physical to virtual
Digital transformation programs are slow by nature. For context, AT&T announced their network transformation program in December 2014 and early this year announced the program would reach 75% completion in 2020. Digital transformation is a continuous process but the end result will be a network infrastructure that is highly adaptive, service-aware, and enables the service provider to innovate and deliver new services faster.
Industry experts estimate virtualization of the network will provide billions in savings. If the study defines industries as “digitally mature” by its added business benefit, savings of billions on the bottom line certainly hits that mark.
So as the network transformation progresses and produces tangible results, service providers must focus their attention and investments on re-tooling the customer-facing side of the business—getting new contracts, adding lines and devices, upselling additional data, and using customer data to improve the customer journey. All these customer-facing processes need to be simplified, unified, and automated for the best possible customer experience.
Digital intelligence for a better digital experience
Historically, customer experience systems and initiatives have not been particularly successful. And progress in this area has been modest at best because typically these initiatives were isolated projects with objectives focused only on quality of service, such as network traffic, data speeds, and other service-related issues. But what providers didn’t focus on was actual customer service—call center experience, account management, etc. The focus was too narrow and a bit too technical.
It is not often that industries get “redos.” With the introduction of each new generation of mobile networking, 1G to 2G to 3G to 4G, service providers squandered the opportunity to redefine the customer experience.
With 5G, opportunity is knocking yet again. With more and more emerging technologies within the digital transformation space, service providers have the tools to transform the customer journey and create digital experiences that surpass digitally native companies like Facebook, Netflix or Google.
Recently, a large Canadian mobile operator used AI to determine the likelihood that a customer will promote or detract a specific service to others. The results were positive. With the data collected, the brand was able to build customized chatbots resulting in 53% less customer complaints.
Deloitte’s study provides a snapshot of where industries are on the digital maturity scale, based on business value created. But where the study falls short is on measuring digital maturity based on the “digital intelligence” of industries. True digital maturity is a company’s ability to leverage data to create intelligence about their customers: what do they like and dislike? Their favorite cuisines…film genres…sports? Where and when customers use the most data for their favorite app? Just think of the possibilities.
At Localytics we believe there are three core tenets that can significantly enhance a service providers’ “digital intelligence”:
- 360 view of the customer
- Seamless interaction across multiple customer channels
- Contextual, personalized, and prescriptive engagements.
Executed correctly, these core tenets can contribute to greater lifetime customer value through increased revenue and reduced churn.
It’s imperative for service providers to get this right. If you don’t, you risk being left behind, chasing your competitors who take on an all-encompassing digital transformation.
Digital is here to stay and should not be disregarded.. There have been plenty of companies who ignored trends—how did it work for Blockbuster to ignore the streaming trend? Or how big box retailers have fared against Amazon? Shopping to content, transportation to banking—everything that can be digitized likely will.
Service providers have the opportunity to be industry leaders to digitize and revolutionize the customer experience. Brands’ digital transformation will do wonders by putting their customers first. Transitioning from product-level service to a comprehensive customer service experience will set apart the leaders from the stragglers. It won’t be easy and it won’t be a quick journey. But keeping up with the trend and growing your business around where you’re going instead of where you’ve been. By constantly evolving and innovating on your brand’s digital transformation journey, you’ll be set up to make your customers happier than ever and grow your revenue faster.
For more information on digital transformation, read our ebook The Acceleration of Digital Transformation in the Telecommunications Industry