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An increasing number of communications service providers (CSPs) claim to be making good progress with their digital transformation journeys. There is no doubt that CSPs are putting considerable energy into technology-related projects, but are they targeting the right areas and how much of this is transforming the customer experience or impacting the top or bottom line?

Each year, Ovum runs its ICT Enterprise Insights program, in which we interview senior IT executives in over 6,500 enterprises to explore their ICT investment plans and priorities for the coming year. This year's survey reveals that around 70% of the 300+ CSP respondents claim to be well advanced with digital transformation projects or to have completed them.

It is difficult to make year-on-year comparisons between individual technology categories because these vary from year to year, but the overall digital transformation trend is clearly upwards. Last year's results showed that only around one-third of CSPs claimed to be well advanced with digital transformation projects or to have completed them.

Areas of digital transformation where CSPs claim to have made most progress include customer management, revenue management, and data management. The top business drivers for digital transformation are the need to support new digital services and to improve or personalize customer experience, which helps to explain why a great deal of investment has been poured into solutions supporting improved customer engagement, including CRM, CEM, and data management platforms.

However, all too often investment has involved overlay solutions that fail to fundamentally change business processes or break down organizational silos. As a result, the impact on business performance has not always been as positive as CSPs might have hoped, and they continue to record low net promoter scores (NPS) relative to other industries, especially retail and technology sectors.

Clearly CSPs need to implement a lot more changes if they are to become more customer friendly, let alone transform into the lean and agile digital service providers they aspire to become.

The digital transformation section of the survey suggests that it is in areas such as big data, BI, and analytics that CSPs have lagged. CSPs have begun to recognize that this is the case, and as a result most are planning to ramp up spending on big data platforms, BI and analytics, and AI/ML over the next 18 months. For example, AI use cases involving network fault prediction, detection, and correction are expected to be a priority over the next 18 months, along with using AI to support self-optimized networks and to personalize customer operations.

However, it is not just a case of plugging the big data analytics and AI technology gaps. To manage the customer experience in real time across multiple touchpoints and multiple services, CSPs need to make their organization both customer-centric and data driven in the same way that the web-scale digital platforms have done. IT platforms, business processes, and data management strategies need to be integrated in a way that is thoroughly customer-focused. Investment in IT platforms is essential, but without customer-centric processes and data management strategies also in place, no CSP can claim that its digital transformation is "well advanced" or "completed."

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