Ovum's ICT Enterprise Insights survey 2016/17 showed that the Asian Telecoms vertical lagged behind others in digital transformation. The banking, financial services, and insurance verticals led the pack, followed by media. In the digital era, Asian service providers must hasten their digital transformation to be persistently relevant to their clients.
Digital transformation is about serving customers better
Some Asian service providers (SPs) might have considered bimodal IT, or embraced it as a strategy. But here’s the challenge: bimodal divides internal IT organizations into two; one team runs fast to develop new digital services to keep up with customers, and the other one continues in slow maintenance mode that barely supports rapid organizational change. This results in a dysfunctional IT organization that is not only frustrated in realizing true agility and adaptability, but also fails to adequately serve customers at their moments of need. Malaysia's airport immigration security system, which suffered frequent breakdowns in the past year, is but one instance of such dysfunction.
To rectify this, SPs must take the following action:
Adopt a single-speed strategy for digital transformation. It’s all or nothing. A single-speed IT strategy ensures that all moving parts are aligned towards common goals – for example, in modernizing backend systems, in improving the speed to market, or in responding quickly to changing customer behaviors. Bimodal teams risk losing customers to more digitally advanced, single-speed ones.
Have senior leaders commit to driving cultural change. Only 23% of Asian SPs said they were well-advanced in supporting a digital culture and organizational structure, and only 10% had full and complete support for this change. Senior managers must commit to, and lead, the change in order for SPs to succeed in digital transformation.
Take a long-term view towards agility. Digital transformation is the first step towards becoming an agile organization, and it takes time. Financial firms, which are more mature on the digital transformation journey, are only starting to create an internal agile organization. For instance, ING Bearing has been on a transformation journey for around 10 years now, and only introduced an agile way of working in 2015. Asian SPs must first focus on building the digital transformation blocks.
In my upcoming reports, I will provide industry best practices to help SPs address the organizational, procedural, and technological gaps on their digital transformation journey.
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ICT Enterprise Insights 2016/17 – Telecoms & Media: ICT Drivers and Technology Priorities, PT0081-000002 (October 2016)
“Where are enterprises in achieving digital transformation?” IT0003-000706 (October 2016)
Six Steps to Digital Transformation, IT0019-003405 (January 2015)
Business Technology and Digital Transformation, IT017-003956 (May 2012)
"Service providers must tune in to digital business transformation," TE0005-000826 (July 2016)
Clement Teo, Principal Analyst, IT Services