I’m back from the annual TM Forum LIVE! event held every spring in Nice, and as the saying goes, I would be a very wealthy man if I had a dime for every session, booth, press release, or conversation I had that used the word “digital”. In most cases, Operators are at least in the planning phases of their own digital transformations, and there were considerable learnings to take away from all the interactions and sessions we attended at the event.
Operators know that they can play an important role in the “Fourth Industrial Revolution”, as well as the significant opportunity that this presents to them. They also know that their window to claim market share won’t be open forever. Bringing urgency to the matter is the realization that their share of the industry’s profit pool has declined from 58% in 2010 to 47% in 2015 and is forecasted to fall further, to 45% in 2018. Competitive offerings from external cloud/OTT providers providing truly “digital” user experiences are responsible for much of this disruption, and operators need to react. Fast.
As they work to transform their infrastructure to enable digital services for their consumer and B2B customers, almost all operators that we’ve spoken to are constantly at odds with two conflicting realities of the digital realm:
- Their need to continuously launch and deliver innovative new services, along with their existing core services, that are always successful in delivering a delightful user experience, using completely digital processes
- Their complex legacy assets are encumbering their ability to provide truly digital service experiences, and their market agility (e.g. like launching new cloud/OTT services quickly) is woefully inadequate
Indeed, analyst firm Analysys Mason recently commented in a transformation whitepaper that “…from a CSP’s perspective, the biggest bottleneck that holds back timely introduction of new products and services is the complexity and chaos of existing systems.”
We have seen that many operators have tried to address the digital challenge with individual user access to services in a silo’d manner, often resulting in a user having multiple digital identities (one for each service). This has increased the complexity not only to the user but also to the operator, as they attempt to manage multiple user paradigms across different services, and then attempt to marry this to new Cloud/OTT services. Such approaches have made these internal repair initiatives brittle and unsuccessful. These types of internal projects rarely see the light of day, and many have come to realize that they need to get their digital stack to at least a baseline of capabilities as soon as possible, so they can start to deliver on some quick-wins within their organizations.
But how do they get there fast? Most operators believe that replacing their B/OSS stack for something more “digital” is not the answer either, as they still don’t get to a single user ID with uniform user management. Such an approach would also involve too much risk, a massive investment in time and costs, and would have significant ramifications across an operator’s existing services. In the internet economy, operators need to manage their relationships with individual users – not just the account holder, as traditional B/OSS systems do today.
One approach starting to take hold among operators is to deploy a “digital layer” above their existing B/OSS infrastructure that is responsible for Digital Identity and User Personalization. Following an approach similar to Gartner’s Pace Layered Application Strategy, Systems of Record like billing, CRM, ordering, etc, are retained as-is with a planned low rate of change over time. New, external Systems of Innovation like digital user management are brought in above this layer to address new business requirements, where ongoing change is much more likely. The fact that systems of record like B/OSS remain in place reduces risk dramatically, and implementation times of this new “digital stack” is closer to 6 months rather than the several years usually associated with billing consolidation/replacement projects.
Cable & Wireless, a UXP Systems customer, has been launching a new digital service every few weeks. They’re up to over 20 digital services launched in the last year, and now maintain that baseline of digital capabilities I mentioned earlier that provides competitive digital service experiences and maximum agility in the markets they serve. Henry Minogue, European Director of Consumer Solutions Transformation at Liberty Global, presented this approach with our CEO Gemini Waghmare at the TM Forum show. The presentation is available here.
The theme of this year’s TM Forum LIVE! was “Driving the Roadmap to Digital Success”. Their marketing materials asked the question “Where are you on your digital journey?...”. We all left Nice with the perspective that today, operators are finding themselves at different points on the journey, but they are beginning to realize that time is not on their side, and they need to act decisively to get their digital capabilities to a competitive level sooner rather than later.