VanillaPlus: TM Forum Digital Transformation Tracker reveals strong industry progress and highlights blockages

TM Forum, the industry association driving digital transformation through collaboration, released the results from its inaugural Digital Transformation Tracker (DTT), a new global survey of more than 90 communications service providers (CSPs) and their technology suppliers which tracks the progress of the telecoms industry’s digital transformation.

The survey showed that as many as 62% of CSPs are actively implementing digital transformation programs and beginning to reap benefits.

Against a backdrop of declining revenues from traditional voice and messaging services, most CSPs believe digital transformation is necessary for survival in an increasingly competitive marketplace. The survey showed that 62% of CSPs expect that revenue will either stay flat or only slightly increase over the next two to three years. Digital transformation is expected to enable them to improve customer centricity and reduce costs.

However, despite good progress on digital transformation across the industry, it is not yet widely adopted. The survey showed around a third of CSPs – 32% – are either still in the planning phases or have not started digital transformation initiatives. When asked about the potential to progress, CSPs cited a lack of vision and goals (62%), cultural and organisation issues (62%) and a lack of support from top management (58%) and skills as serious barriers to overcome.

“We talk a lot about digital transformation in telecoms but, until now, we haven’t really had a clear picture of where CSPs across the industry are on their digital journeys. The Digital Transformation Tracker begins to benchmark progress, and helps CSPs better understand and address the challenges and opportunities that lie ahead,” said Mark Newman, chief analyst, TM Forum.

“Results from our initial survey reveal that digital transformation is so much more than technology transformation, with some of the biggest barriers lying in strategy, organisational leadership and culture. These will be key areas of focus for CSPs as they transform.”

Digital discord

Beyond the headline digital transformation figures, the survey revealed additional complexity in how digital transformation is interpreted and implemented. The survey asked both CSPs and supplier companies how they viewed progress; 24% of CSPs felt they were well along the road and reaping significant benefits of digital transformation, but just 5% of supplier organisations rated their customers’ digital transformation efforts similarly.

Detailed analysis also showed that executives within the same organisation, but residing in different regions, often have different views about the progress of digital transformation in their organisations. This suggests that digital transformation efforts are not communicated, implemented or measured effectively across an entire organisation.

In large, group CSPs, transformation is not uniform in all of their operating companies. The survey found examples where executives in group roles were confident that benefits of transformation were already being achieved, while executives working in the operating companies said that transformation had not even started.

“Perhaps the biggest realisation for CSPs in their early attempts to become digital is that without internal transformation they cannot successfully execute external transformation. Successful transformation touches many different parts of an operator’s business and should improve customer experience; drive operational efficiencies; and enable CSPs to develop new lines of business,” continued Newman.

“DTT has made clear that there is discord and disparity around digital transformation initiatives across many organisations. Without a coherent view of their starting point, pathway, and destination, building and executing a successful digital transformation strategy is challenging, time consuming and prone to failure. Robust methodologies are required to help leaders guide and manage change.”

In May this year, TM Forum launched its Digital Maturity Model, a tool that allows CSPs to assess their digital maturity and plan their digital transformation across their entire organisation. 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 Organisation.

So far, 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 compile its Digital Transformation Tracker, TM Forum surveyed 185 respondents from 93 communications service providers (CSPs) operating in 64 countries, and 175 respondents from supplier companies. A full copy of the report can be viewed and downloaded here.

TM Forum will repeat the tracker survey twice yearly, and the second survey that will focus on the key cultural, skills, organisation and leadership issues that digital transformation needs to overcome. The findings from this second survey will be published in February 2018.

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