In the Age of Digital Transformation, Telecoms Must Move Past Legacy Business Systems
As entire industries embrace the advantages of a digital transformation and use it to create new value for customers and shareholders, the telecommunications industry is falling behind. In Boston Consulting Group’s 2018 Value Creators study, the telecommunications industry came in at №30 out of 33 industries in terms of value created for customers and investors.
Telecoms, though, seem optimistic about the future. Telecoms.com’s Annual Industry Survey 2017 revealed that about 62 percent of telecoms recognize emerging technology as critical to long-term success and about 77 percent have a positive outlook for 2018 overall. Still, for these outdated giants, the road ahead is fraught with challenges. The solution? Decreasing reliance on legacy business and operations systems and joining the digital wave.
Why should telecoms embrace new tech?
Part of the difficulty these companies face today stems from the new breed of consumer for which they’re competing. Today’s customer has incredibly high expectations, brought about with the emergence of customer experience as a differentiator. Companies such as Amazon competed on convenience but also experience: free shipping, free returns, satisfaction guaranteed, and so on. This has raised consumer expectations for every digital experience.
Yet telecom companies are often still running custom-built, on-premises legacy systems for business processes such as billing, catalog management, customer support, and subscriber management. The size and complexity of these companies make them slow to change. Even when a telecom simply wants to add storage, that can require a three-month lead time using a traditional system — but using digital services like cloud video asset management can shrink the time it takes a telecom company to add storage to mere seconds. Going digital also improves both horizontal and vertical scalability, but replacing existing systems with cloud capabilities is inevitably time-consuming and costly.
Exact timelines for adoption of a new back-office platform depend on the number of systems involved, but six months to several years is a rough estimate. Costs can range from a few million dollars to hundreds of millions. In fact, one leading U.S. provider spent a staggering $2 billion on adopting a cloud-based system. On top of the cost, another barrier is that existing operations teams are reluctant to introduce something that could make their jobs obsolete.
How to start a digital transformation
Of course, the telecoms that don’t make the digital transition will themselves become obsolete. In order to become competitive once more, telecoms will need to fully adopt cloud management software and break down the legacy barriers to innovation. If you find yourself and your company in this situation, consider using these strategies as a starting point:
1. Start from the edge.
Work from the outside in. Start where you expose your services to the rest of the world, such as your APIs or video catalogs. These edge systems are likely built with newer technologies that will be easier to transfer over to a digital solution. Plus, they’ll make the biggest difference in the lives of your customers. Work in slowly toward your core systems, which could have been installed as long as 50 years ago. Taking them digital will be more difficult, as they weren’t constructed with anything like the cloud in mind.
2. Get your operations team on board.
You can’t expect to smoothly integrate a digital solution without help from your operations team. Your ops team can show you exactly what needs to change in terms of daily processes, both now and in the future. Identify your internal influencers who can help drive change — not just your upper-level managers, but your mid-level managers and even employees in the trenches who have the respect and admiration of their peers. When introducing a project of this magnitude, it is critical to get everyone excited about the change in order for it to be successful.
3. Invest in your current staff.
If you make a point to build new skill sets among your staff members, they’re far more likely to embrace change instead of resisting it. To effectively use any new digital system you implement, your employees need to be up to speed with modern technologies, from SaaS management to APIs to microservices and security. Familiarize them with the latest developments in cloud tech as well as the pros and cons of each platform so that you can evaluate the best course of action for your systems together.
Many telecom companies are dinosaurs. If they want to stand a chance in the future, they’ll need to evolve to be much more agile. Evolution doesn’t happen overnight, but starting the process on the exterior consumer-facing systems will help improve ROI and built momentum for cloud adoption, and investing in and including your staff will ensure buy-in while creating the best possible end result.
A digital transformation might sound overwhelming — but we’re here to help. Sign up for a demo today to learn more about Evergent’s agile cloud-based platform.
Vijay Sajja is the founder and CEO of Evergent. Vijay drives the product vision and customer experience for Evergent, and he personally oversees customer relationships along with other aspects of the company. He is a business and technology leader with more than two decades of experience in building business and operations support systems for leading service providers around the world. Before founding Evergent, he founded and led Infotech Solutions, a technology services company that delivered subscriber billing and customer care solutions for companies including EchoStar, Lucent Technologies, TCI, and Qwest. Vijay holds a Master of Technology degree from the Indian Institute of Technology in Kharagpur, India.
