The newly appointed head of the TM Forum shares his thoughts on digital transformation as the industry body’s annual conference gets underway Digital transformation is again one of the main themes of TMF Live – how would you assess European operators’ progress in this area over the past 12 months?

Nik Willetts: In the past year, we’ve seen a shift in the urgency: the conversation has moved from debating the what and why of digital transformation, to how to execute on digital transformation holistically.

Worldwide, we see plenty of transformation efforts underway, but all too often these transformation efforts are siloed.

To really seize the opportunities ahead of us as an industry, we need to deal with the agility problem – and that requires holistic transformation.

What success stories are you seeing and what are the main traits that others can learn from?

A current case study that discusses the importance of digital transformation and working with TM Forum to navigate comes from Telefonica, who has embarked on a massive transformation effort aimed at digitalizing its operating businesses in 15 countries.

Pressure from digital-native over-the-top (OTT) providers and other competitors is forcing the company, like many other network operators, to transform its operating companies into nimble platform-based providers capable of delivering what customers want, when and where they want it.

This means transforming everything from business processes to support systems and the network itself.

This is, of course, an ongoing process and is rich in complexity, but complexity that Telefonica is overcoming through the participation in a number of collaborative TM Forum programmes.

Another example is BT’s Cloud of Clouds, which illustrates how the company is leveraging the Forum’s work to build a new element to its enterprise cloud business, and becoming a holistic IT solution provider in the process.

This is now in use all over the world, in more than 200 commercial deployments, including the smart city of Milton Keynes in the UK.

Another operator in the UK, O2, has teamed up with a car insurance company to offer its customers a better deal on their vehicle insurance, again using the partnering guide plus TM Forum’s Open APIs.

The common trait amongst all of these operators is a will and determination to work collaboratively on common problems to improve business performance, whether for internal processes or end customer initiatives.

In a recent European Communications survey, operators said the biggest digital transformation challenge they faced were that projects were too big, complex and time-consuming. What can they do to overcome this?

What they do ultimately stems from what they know and recognise about their own businesses and where they intend to get to.

While most CSPs have a clear vision about where they’d like to get to, many lack a coherent, consistent view of the pathway to digital transformation, where they are currently, and how to begin their journey.

Telcos remain under financial pressure. Can digital transformation really affect their bottom line?

A key point here is what happens to their bottom line if they DON’T transform.

CSPs’ share of industry profits has slipped from 58 percent in 2010 to a projected 45 percent in 2018.

In addition to developing new business models and rolling out new services, CSPs can boost their existing business and extend their customers’ lifetime value.

This involves creating more personalised propositions and new digital services (cloud, digital payments, IoT, media, etc) to wrap around traditional anchor services (voice, messaging and broadband access).

The degree to which this can be achieved will depend on how well CSPs reshape their operations so they can bundle connectivity and digital services in an integrated customer experience.

It also requires CSPs to bring together their services, touchpoints and customer engagements into customers’ preferred digital channels.

CSPs will derive higher customer lifetime value through such an approach, driving greater customer loyalty (and lower churn) and defending revenues and profit margins for their anchor services.

CSPs who are more mature in the enterprise market could advance by capturing a share of an enterprise cloud services market.

As it is forecast by market research firm Ovum to be worth $174 billion in 2020, this is a major incentive.

Others aspire for B2C diversification: Orange is moving into retail banking while AT&T has set up a smart-home business, AT&T Digital Life.

How would you assess the vendor community’s offering in the digital transformation space – are they giving operators what they need?

Most of the vendor community clearly recognise the importance of digital transformation as much as the CSP community.

But it’s not only the CSPs that need to transform, or consume vendor solutions or services in order to transform – we also need to see digital transformation for the vendor landscape.

Like any industry, CSP agility is intricately tied to the agility of their suppliers.

New services built around vertical-centric digital ecosystems will only become more complex as more processes and lifestyles become even more digital.

By working together collaboratively and utilising the unique environment that the TM Forum provides it is possible to explore business problem spaces together, creating unique insights and prototype developments that break new ground.


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