Digital transformation - So what?

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Digital Transformation- So what?

Haven’t we always been doing digital transformation in the telecom industry? Surely all the effort and investment that has gone into the move towards all IP network in the last decade have all been about the move to digital?

We have all heard that comment before, but with the speed of change in the world these days, digital transformation has become a do or die activity.

But a question that is rarely asked and answered is: What does digital transformation actually mean? In truth, it is far more than anything to do with the word ‘digital’, or technology itself. It is all about reinventing ourselves, our businesses and even our societies and to fully accept that change should be designed into everything we do. As George Bernard Shaw said:

“Progress is impossible without change, and those who cannot change their minds cannot change anything.”

A very appropriate reminder, and as a later article in this series will explain, digital transformation starts with ourselves. If we cannot change our mindset, we are highly unlikely to be able to change our approach, our teams, our services and our businesses.

THE FUNGIBILITY FACTOR

Let’s start with a word that is rarely used in polite society - fungibility. From my point of view, this word describes perfectly what digital transformation is all about. It means that everything we do should have the intrinsic ability

to be substantially changed.

To some extent, the telecom industry has striven for years to achieve the opposite. We have designed networks, systems and sales approaches to standardize everything.

Furthermore, we have frozen changes around major holidays and implemented approaches where any contract, especially for transmission and connectivity services, must last for at least 12 months, otherwise termination charges will be applied.

You want to increase your capacity? Sure, we need to cancel that order, waive those charges if the new order is of greater value, provision a new circuit, changeover the service to that circuit and then cancel the old one. Yes, this is somewhat old school, but I’m sure many readers will recognize the approach.

But what today’s customers want now is what they experience in their day to day lives - complete flexibility in approach, in commercial terms and the technology they choose to use. And what’s more, they want to be able to control it themselves, to see how well it is performing and to tie the service they are getting directly to their own processes, so that they don’t even need to contact us to improve their service.

EMBRACING THE CLOUD MENTALITY IS NOT AN OPTION

The unicorns of today are dominating the world and driving customer expectations towards the instant gratification of mobile app-based service that we now take for granted. A Unicorn is defined as a start-up company with a stock market valuation of $1.0 billion or more and they have become so dominant such that, in late 2017, CB Insights has tallied 220 unicorns with a cumulative value of $763 billion.

Some familiar U.S. based unicorns include Uber, Airbnb, Palantir Technologies, WeWork and Pinterest. China claims a number of unicorns as well, including Didi Chuxing, Xiaomi, China Internet Plus Holding and Lu.com. Their key common denominator is that they have not just accepted change - they have embraced and welcomed it. They have designed everything about their services and products to be totally fungible - changeable at will.

It is no longer a question of whether you should accept that new reality - you must! Ever wonder what is happening to the once vibrant industry of licensed private hire operators - the people you used to call when you needed to get from A to B in a city? In London alone, the rise of Uber and similar app based services has resulted in at least 10 private-hire companies closing per month.

And Uber isn’t really in the business of providing that service - it is in the business of matching a customer need instantly and smoothly with someone willing to provide that need. Yes, it is currently a taxi, but it could equally be any other type of service.

So there is no way around it, service providers everywhere and at every level need to rethink their business and the way they operate to incorporate the cloud mentality at every level of their business.

THIS IS ONLY THE BEGINNING…

So now that it has been established that digital transformation is not an option and it needs to

be initiated yesterday. The obvious question that comes to mind next is: What should I do now?

The number one focus should be the design of change into every business and technology component and system. We should also encourage the desire to make things work automatically, not just by following rules to achieve a certain service level, but by using software defined intelligence to anticipate issues and resolve them before they become visible.

More importantly maybe, we need to come to terms with the fact that each carrier will not be able to function independently and will not be able to meet all customer needs on its own.

So, we must design partnerships to enable the desired capability to be threaded automatically to deliver end to end service at the instant it is required and to smoothly evolve it as that need progresses. We must adopt the “do it fast and flexibly” mentality of the unicorns and their larger partners in the cloud space, while still achieving the quality and reliability that is expected of global telecom networks.

And that is only the beginning…. The rest of this series of articles will explore in more detail what network service providers should be doing - ideally what they should have already started.

Looking at network transformation, service transformation and finally organizational transformation, we will explore the mindset and approach to move away from an industry focused internally on itself into one focused entirely on the customer and their needs and desires.

This is not easy, it is risky and potentially expensive, but in reality, there is no choice.

Steve Heap CTO, HOT TELECOM

DIGITAL TRANSFORMATION 3