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Straight Talk Service Provider

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Rarely in ICT has a term been so unfairly maligned as "utility." Yet this makes little sense. In the business-to-business (B2B) segment, where telco efforts to grow have only occasionally been successful, if service providers continue to sell and support current and future services in the ways they do now, then the profits they derive from enterprise services will only stagnate and decline. Efficient, utility-like delivery of the vast majority of B2B services is essential.

And rarely in ICT has a term been so abused as "digital"; it now seems to be a shorthand expression for any IT modernization project undertaken in recent years. So when telcos use it, what do they mean? Their answers will vary, but what they should mean is a transformative improvement in every business process from product creation to cash and customer support. For organizations that are over a century old, and that sell hundreds, if not thousands of products, this can be a daunting proposition.

How can century-old organizations with highly complex and interdependent products and support systems achieve this? The answer is for telcos to rediscover their inner utility heritage, learn to love it, and then turn it to their advantage in new ways for the digital world.

Ovum recently spent time with senior executives from Telstra, which is in the early stages of a root-and-branch transformation under the "Telstra 2022" (T22) moniker. Central to T22 is portfolio simplification and the digitalization of almost every business process. The goal? A highly componentized set of services building blocks that will enable mass customization of product and agile delivery and support. Telstra is investing heavily in new IT systems to streamline the following processes: concept to market, prospect to order, order to activate, request to resolve, usage to cash, and strategy to performance (analytics). While it has chosen well-known vendors to support the transformation of each of these processes, it is also notable how much of the work is being undertaken by its own in-house teams; in a sense, it is avoiding over-outsourcing responsibility for new process design and creation. Could this be because Telstra recognizes that building and maintaining in-house expertise in digitalization could actually be a differentiator now and in the future? We think so.

To take but one simple example, most business VPN orders today require tens of steps and much human intervention, but the best providers in the future will be able to capture a customer order and deliver it in just a handful of steps and with a minimum amount of human involvement. In Telstra's case, its first fully digital product set in Enterprise will be in its workspace services portfolio, but enterprise buyers should expect more soon. Telstra is of course not alone: all leading telcos are investing heavily in systems to digitalize the enterprise customer experience, in the broadest sense. Our meetings with the likes of Vodafone and Verizon are now peppered with talk of digital tribes (developers), agile development methods, and self-service marketplaces. Digital must include the broader ecosystem too: Telstra has committed to making its digital back-office platforms available to its partner channel. This is a lesson that others should take on board.

There is certainly risk as telcos invest to make the creation, delivery, and support of business services more efficient. In some cases, senior managers may impose unrealistic timelines on these complex IT projects, and business history is littered with IT projects made unsuccessful through politicization or timeline compression.

Telcos were born as utilities. Digitalization should be seen as an effort not just to transform, but to return to roots. Today, most businesses shun ICT complexity. As providers of enterprise services, telcos should simplify, then be the simplifiers.

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