TM Forum’s Digital Transformation Tracker and Vision 2020 report identify the barriers to digital transformation, and the required enablers for systematic change
Digital Transformation World, Nice, France — 14 May 2018: At its Digital Transformation World event, held in Nice (14-16 May), TM Forum, the industry association driving digital transformation through collaboration, has warned that clear, aligned organisational vision and goals must be communicated throughout those operators undertaking digital transformation projects to improve their chances of success. This industry call to action is driven by the results of the TM Forum’s bi-annual Digital Transformation Tracker (DTT), which found that the biggest barriers to digital transformation are cultural and organisational. TM Forum has released the results of the survey alongside its Vision 2020 report, which offers a pathway in the evolution from a communications service provider (CSP) to a digital service provider (DSP), and beyond.
Digital Transformation Tracker 2: How to fix the cultural divide
The global survey of more than 100 CSPs and their technology suppliers tracks the progress of the telecoms industry’s digital transformation. Conducted in Q1 2018, the latest results reveal that over 60% of respondents have already embarked on or are about to embark on their transformation journey. However, increasing cultural and organizational obstacles are slowing down industry progress, with respondents considering a lack of clear aligned vision and goals (42%), cultural and organizational issues (40%), and a lack of top management support (37%) as “very serious” barriers to transformation. This lack of focus and common vision is hindering CSPs’ transformation journeys. The number of respondents, who said they were “very optimistic” about conducting successful transformation programs fell from 22% in the first DTT survey conducted in October 2017 to 11%.
These concerns are further reinforced by the differing CSP views on the types of companies that they want to become: less than 20% would opt to remain pure connectivity providers, while others would prefer to become platform providers (16%), full DSPs (30%) or partnership-led multi-play operators (36%). Without being clear on the direction and the necessary steps each company must take – whether in terms of increased efficiency or full-scale business model transformation – it is difficult to execute on transformation.
Furthermore, when asked to characterize their culture, only 30% of CSPs believe their organization to be “resistant to change” – in comparison with 64% of suppliers. This lack of objectivity and awareness of cultural barriers within operators may be a further challenge. Very few CSPs – just over 10% – consider themselves as “innovative and risk-taking”, or “agile and diverse” (11%).
“Any change is hard to implement, and CSPs are no exception. Some identify that they are not risk takers, and making a leap of faith into unproven revenue streams is not easy,” said Mark Newman, Chief Analyst, TM Forum. “Our second Digital Transformation Tracker shows that digital transformation extends well beyond technology itself, and increasingly we’re seeing concerns about organizational and cultural readiness. In order to ready themselves for successful digital transformation, operators must not only be able to articulate a clearly defined vision for their transformation projects, but critically they must communicate their vision throughout every level of their organisation.”
To compile its Digital Transformation Tracker, TM Forum surveyed 176 respondents from 105 CSPs, operating in 59 countries, and 91 respondents from 45 supplier companies. A full copy of the report can be viewed and downloaded here. TM Forum repeats the tracker survey twice yearly.
Vison 2020: Future CSP business models
Industry uncertainty confusion and CSP reticence to commit to a digital transformation vision is addressed in the TM Forum’s Vision 2020 report, also released at Digital Transformation World.While plenty of CSPs understand the operational efficiencies that a successful digital transformation program can deliver, they are less sure about the new business models and products and services that a CSP can offer once it has acquired new, digital capabilities. This report seeks to trace and define the evolution from a CSP to a digital CSP, and beyond to a Digital Enabler or Digital Partner in terms of both business models and the technology and systems required to enable that change.
“To date, definitions of what a DSP is, or could be, are relatively scarce. The terms “platform” and “enabler” are now being adopted by many CSPs – and their technology suppliers – but there is a lack of clarity and understanding about how to monetise such approaches,” said Nik Willetts, President & CEO at TM Forum. “Our Vision 2020 report seeks to address this by laying out the transition from a CSP, to digital CSP and beyond. From the new commercial and architectural models involved in becoming an enabler and partner, to the best route to take for strategic investments and access to vertical markets, the report offers a clear pathway to allow companies to be clearer on their digital transformation aspirations. This all starts with the CSP setting a clear vision for its business.”
A full copy of the report can be viewed and downloaded here.
Digital Maturity Model
TM Forum launched its Digital Maturity Model (DMM) in May 2017, a tool that allows CSPs to assess their digital maturity and plan their digital transformation across their entire organization. CSPs can then, based on their strategy, decide how, when and where to deploy or redeploy budget and resources. The Model covers five main “dimensions” for transformation – Customer, Strategy, Technology, Operations, and Culture, People and Organization.
DMM has been endorsed by leading CSPs including BT, China Mobile, China Telecom, China Unicom, Orange, PCCW Global and Vodafone as well as management consultancies and suppliers including Amdocs, BearingPoint, Deloitte, Detecon, Huawei, Tata Consultancy Services and The GC Index. More information on the Digital Maturity Model can be found here.
“To achieve real impactful change, leaders driving digital transformation need to break down the established norms within their culture and transform them as well. We are working with the TM Forum to help leaders evaluate and understand their current culture in a way that defines the steps they need to take to realise their aspirations for a successful transformational culture. The GC Index is being used, within the DMM and Catalyst Programme, to help leaders create a framework and culture that values the very differences that can stimulate creative and transformational change to increase business outcomes.” – Nathan Ott, Chief Polisher, The GC Index.
David Green, partner at Deloitte, comments: “The communications industry is facing an uphill battle to adapt to a rapidly-changing technology landscape and adopt new digital opportunities. The Digital Maturity Model has the power to support and inform every step of an organisation’s digital transformation journey. Successfully executing a largescale digital transformation will be a crucial differentiator in what is an increasingly competitive telecommunications market.”
About TM Forum
TM Forum is an association of over 850 member companies that generate a combined US$2 trillion in revenue and serve five billion customers across 180 countries. We drive collaboration and collective problem-solving to maximize the business success of communication and digital service providers and their ecosystem of suppliers. We support our members, as they navigate their unique digital transformation journeys, by providing practical and proven assets and tools to accelerate execution, and by creating digital and physical platforms that facilitate collaborative problem solving and innovation. Learn more at www.tmforum.org.
Aisling Roberts/Anais Merlin
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Notes to editor:
The following endorsement quotes from the sponsors have been approved and can be used by the editor.
The Digital Transformation Tracker 2
“As the worldwide leader in BSS, OSS and SDN/NFV, the full scope of digital transformation is critical to Netcracker. We are helping customers in every region not only to navigate this massive transition, but also to succeed in growing their businesses as a result of becoming digital service providers.”
Ari Banerjee, VP, Strategy at Netcracker
“TM Forum “Digital Transformation Tracker 2” provides accurate insights about CSPs´ current digital transformation progress but also about their priorities. Celfocus has worked with CSPs across the globe, supporting their transformative journeys, delivering an execution roadmap and critical success factors. Learning more about business drivers and challenges is critical to better serve our customers and the industry, this report is pivotal in achieving those goals.“
Nuno Periquito, Head of Marketing at Celfocus
“While CSPs today provide smart city solutions, connected cars and the likes, there is another unconventional model that is to be explored more fully – of digitalizing other businesses they serve, thereby donning the mantle of a system integrator. In doing so, they garner a consumer base they perhaps did not have access to earlier. There are two basic criteria to be satisfied for connecting these business providers and their consumers; 1) the CSP’s own backends must provide agile, API enabled connectivity with the business providers and 2) the business provider’s backends and offerings must be API enabled. While point 1 is a path most CSPs are walking, point 2 may be the real silver bullet that allows them to better capitalize their API/digitalization investments.“
Karthik TS, Head – Centre of Excellence(CoE), Torry Harris Business Solutions
Vision 2020 Report
“The unprecedented pace of change in the market is challenging traditional providers to transform into digital businesses that operate at a fraction of today’s costs and drive innovation and speed to market in days and hours. Successful service providers will execute a transformation program and in parallel have strategies in place to fund it. CSG sees the TM Forum Digital Maturity Model as an invaluable tool in supporting these initiatives.”
Heidi Halliday – EMEA Marketing and Events Manager, CSGI
“We believe that network operations must surpass automation and achieve autonomy to build a true digital ecosystem and achieve operational excellence. It is Intraway’s vision that by 2020, operators will be offering dynamic services and customizable packages. The industry will see traditional models replaced with seamless, on-demand-based networking platforms. This shift will be driven by a few game-changers that will shape network operations over the next few years, including AI-based smart orchestration and auto-scalable virtualized networks.”
Lucas Lodeiro, CTO, Intraway