Digital transformation remains one of the industry’s biggest buzzwords and it was in glorious technicolour evidence at the TM Forum’s annual conference in the south of France this week.
Displayed across many vendor stands and used as the title of numerous conference sessions, it was the topic on everyone’s lips.
But what, if anything, does it actually mean in practice today and when will it come to fruition?
Luis Alvarez, CEO of BT Global Services, was the first to tackle these questions in the show’s second keynote speech.
“Digital as a destination is a myth,” he proclaimed.
According to Alvarez, the conversations about all things “digital” that are happening at the UK-based operator include ‘how to be more productive?’ and ‘how to interact better with customers?’.
Telefónica, on the other hand, certainly regards digital as a destination.
Perhaps more than any other European telco, it has nailed its colours to the digital mast over the last few years.
Last December, for example, it outlined a new “100% Digital” strategy.
Taking part in a panel discussion, the Spain-based operator’s CIO Phil Jordan said the key things that separate a digital service provider from a common or garden service provider include real-time, automated processes and being data driven.
It was a start and European Communications went out onto the show floor to delve a little deeper.
First stop, Ericsson. The Sweden-based vendor’s Head of OSS/BSS Ove Anebygd said digital transformation was ultimately about software, not humans, running business processes.
Like Jordan, he said the real-time aspect was key.
Specifically, Anebygd pointed to the digitalisation of customer interactions, recognising customers as individuals and being faster to market with new services.
Huawei’s Chief Architect of Digital Transformation Dong Sun thinks it is important to stop and think about the reason why we’re all talking about digital transformation.
In his view, it is because users are becoming more digital themselves, whether it’s in the services they consume, the devices they use or the means through which they want to engage with businesses.
What does this mean for telcos? More flexible business models, services “made available on the fly” and a new architecture to underpin it all, according to Sun.
Like BT’s Alvarez, the Huawei exec thinks the journey is more important than “the destination”.
Vincent Rousselet, VP of Strategy and Market Insights at Amdocs, defines this destination as increased revenues, lower costs and a better customer experience.
He differs from BT and Huawei in saying that the destination is absolutely “what it’s all about” and that digital transformation was just the means to get there.
But he warns against setting arbitrary timescales to reach this nirvana: “If an operator says ‘in 3-5 years time we’re going to be a digital telco’ in five years time something entirely different could have appeared [that would render it out of date].”
The move to become more “digital” is not just affecting telcos, of course.
BMW CIO Klaus Straub also did a keynote to offer an insight into what one of the world’s most respected brands is thinking about digital transformation.
He predicted that BMW would be a tech company rather than an automotive one in the future.
The drivers behind this are five-fold, according to the CIO: big data and machine learning, cloud, IT security, computer performance and mobile connectivity.
Like his peers in telecoms, Straub made a point of saying that BMW’s focus on its customers was “getting stronger”.
Whereas previously it outsourced a lot of customer contact to the dealerships that sold their cars, the fact that it is providing connected services means BMW now has a direct line to drivers.
“Many investments have to be made, many changes are happening,” Straub said.
Jane Zavalishina, CEO of Yandex Data Factory, was keen to pick up Straub’s mention of machine learning.
The Netherlands-based company is a subsidiary of internet company Yandex, which owns Russia’s most popular search engine.
With a company motto of “Forget big data, think machine learning”, it provides a range of industries with a set of algorithms to, in the case of telcos, reduce churn and create personalised marketing campaigns.
Zavalishina’s message is that all businesses must embrace a new way of working based on experimentation of data.
But she warns: “You cannot change your business until you change the culture and peoples’ mindset.”
Applying some rudimentary data analysis to the conversations at TMF Live!, there are a few clear trends around which the industry is coalescing.
At its core, digital transformation is about introducing realtime, automated processes.
In turn, this enables telcos to create new data-based services and engage with customers in ways that suit them.
But there is another, more uncomfortable by-product – that automation could lead to some serious job losses at operators.
“I have no reflection or understanding of what that means,” Ericsson’s Anebygd retorted when this premise was put to him.
Huawei’s Sun was happier to tackle this thorny topic.
“People have to work harder, learn something new,” he warned.
But he was able to put a positive spin on it too.
“Automation makes things work more smoothly but it also creates new services and [therefore new] jobs,” he said.
BMW’s Straub agrees that digital transformation didn’t have to lead to mass redundancies; the automaker’s mechanical engineers were being retrained as software engineers, the CIO said.
Anebygd is on more stable ground when asked, after all this talk, when we will see a fully digital telco in Europe?
“Within the next two years,” he says without hesitation.
There is still plenty of buzz around digital transformation to be created yet.
Keep reading on European Communications.