The difficulties of engaging the board and upgrading legacy IT infrastructure are key challenges to digital transformation at telcos, according to two leading c-suite execs.
Telefónica Group CIO Phil Jordan and Three Ireland CTO David Hennessy outlined the issues they are facing as they attempt to transform their businesses at an event in Berlin on Thursday.
Jordan revealed the “brutal honesty” he has had to employ with his masters at the Spain-based operator as it looks to achieve its goal of becoming a fully digital business.
The CIO is in charge of “end-to-end digitalisation” at Telefónica, one of six elements that make up the company’s digital transformation programme.
“[Digital transformation] is broader than IT. It’s a complete business transformation,” Jordan said.
To Telefónica, digital means realtime, automated processes, while end-to-end means those two capabilities must be across every channel – both internally and at the front end where the customers are.
Jordan said he wanted his presentation to outline the gap between the vision and the reality of digital transformation.
One of the challenges he has faced is demonstrating the concrete practicalities of the concept.
“The board struggles to engage with me on where we are on the [digital transformation] journey,” Jordan said.
“[They want to know] ‘How do we know we’re becoming more digital?’ [and] ‘How do we measure it?'”
Jordan revealed that Telefónica uses a scorecard that measures how automated and realtime fixed, mobile and bundled offers are in three channels: assisted (ie, shops, contact centres), on the web and on the smartphone.
The assisted channel is the most digital currently, with the smartphone the least.
“I’ve been brutally honest about what we have to do,” Jordan said.
The CIO also revealed he had written some white papers for the board “to explode some of the myths” around digital transformation.
“The board thought it was just an IT problem...I’ve been a pain in the arse pointing out that it’s not just about IT,” he said.
Jordan was speaking at an Amdocs customer event, where Three Ireland’s Hennessy outlined how digital transformation was one of the key focus areas following the company’s acquisition of O2.
Three formally acquired its Irish rival in 2014 but is only now starting its digital transformation programme.
Highlighting the painfully slow pace at which telcos operate, Hennessy said it took six months “to get the new organisation together”.
A rebrand was “the first, critical” job, according to the exec, and that took nine months.
The three-step digital transformation programme is now underway, with an initial focus on upgrading its billing platform and security capabilities.
Hennessy revealed that following the takeover, the enlarged operator ended up with 246 IT systems that were mostly 10-15 years old.
Three is aiming to get on “a single set of systems” by Q2 next year, when it also plans to introduce realtime rating.
It hopes to have the likes of digital self-serve platforms, a “full omnichannel experience” and automated fulfilment capabilities in place by Q1 2018.
“We can’t do things as fast as we like,” Hennessy admitted, “but it’s important to get it right.”