Who's Ready for Digital Transformation? No one.

By: Robert Hingston

The advent of the digital age is upon us. Whispers of ‘Digital Transformation,’ ‘Internet of Everything’ and ‘5G’ have grown to a roar and there is no hiding from the increasing consumer appetite for more connectivity and more services—delivered more quickly, of course. Communications Service Providers (CSPs) need to find out where their next big business will come from.

It may not be from the consumer industry, but instead from the B2B and enterprise market.

In order to deliver these demands, service providers and operators need to take a long, hard look at their infrastructure and make fundamental changes if they are to cope with the sheer volume of information that will soon become mainstream. What many are discovering is that they do not have the right systems and capabilities in place. When they don’t, productivity and profitability suffer: hours are lost in manual interventions, time to market is delayed, and revenues bear the damage.

In 2018, Sigma Systems conducted an independent industry survey of 100 tier-one and tier-two CSPs worldwide. In it, we asked how prepared they were to manage the next wave of digital services and what they were doing to transform their supporting infrastructure in preparation. The research showed that CSPs believe that addressing and improving their offer creation, selling, and delivery capabilities would benefit their businesses in the age of digital services. Specifically, it revealed that only 45 per cent of the respondents had fully automated sales processes, with an average of five percent manual intervention in the remaining 55 percent of companies.

Looking at this from a financial point of view, a one-percent reduction in manual intervention in order fulfillment would increase revenues across tier-one and tier-two CSPs by as much as $8.1 billion. In addition, the respondents said that decreased time-to-market would deliver an extra 1.1 percent increase in annual revenue. Based on tier-one and tier-two CSPs alone, this would equate to a revenue increase of around $7.4 billion. This means that, taken together, these seemingly marginal improvements would increase revenues by as much as $15.5 billion.

With 5G networks and the Internet of Things already being deployed, these revenue opportunities are effectively being squandered because of highly complex and insufficiently automated systems. Missed revenues and extra costs will only increase if service providers continue to drag their heels.

The introduction and adoption of 5G network technology is probably the biggest technological and commercial event for the telecommunications industry in decades. Billions of dollars will be spent to make the 5G era of networks a reality and CSPs are banking that there will be even greater demand in the years to come. We are at an inflection point where 5G technology will begin to have an impact on communities, governments and enterprises worldwide. It will redefine the way in which individuals and organizations interact with each other, as well as shape the rollout of new services by industries.

The next 18 months will be crucial for service providers to examine their 5G readiness level. According to a recent 5G use case and adoption survey by Gartner, two-thirds of organizations plan to deploy 5G by the year 2020. The lack of readiness to deal with the basics—losing money through fundamental flaws in their BSS/OSS—might sting now, but in the 5G world, it will become crippling.

The Internet of Things (IoT) will continue to deliver new opportunities for digital business innovation for a decade; many of these opportunities will be enabled by new or improved technologies. According to Gartner, IoT will also experience several long-term trends that will impact IoT solutions, sometimes in a beneficial way and sometimes not. By 2023, the average CIO will be responsible for more than three times the endpoints he or she managed in 2018. Looking at the bigger picture, this will only exacerbate the potential revenue losses for CSPs that have not properly prepared their internal systems.