By: Catherine Michel

Major trends are disrupting the communications industry today: the Internet of Everything (IoE), mobile device technology and apps, cloud computing, NFV/SDN, information growth and security. Tomorrow, it will be another list. Companies are operating in what is now a continually changing digital world, one that demands a modern approach to executing new business models in record time.

Many communications service providers (CSPs) around the globe, however, are not yet making the changes necessary to regularly embrace digital innovation and be market-leading digital service providers (DSPs).  Though still expert at delivering traditional communications services at scale, CSPs are seeing the margins and popularity of those services decline, and adding individual digital services to existing offers is only a temporary fix.  A strategic rethink of their operations and underlying IT infrastructure is really the key to embracing digital innovation and making the successful transformation to a digital service provider.

The threat of digitally native businesses

We are in an era of rapid product innovation, customer sophistication and competition from new start-up companies inventing technologies on a daily basis.  Unhampered by traditional networks and systems, the strategic elements of the digital native’s success are a laser-focus on the customer experience and unprecedented agility in adapting and launching new digital products and services to meet customer expectations.

Fig. 1: Bridging the gap between CSPs and Digital Natives

Digitally native businesses are not preoccupied with internal infrastructure.  Their unwavering focus is the customer, with a product-centric operation.  Their systems are all about the best way to design and deliver products.  The focus is always on what they are providing to the customer and the experience the customer goes through while they are buying and using those products.  Today’s truly satisfying customer engagement is through the most digitally enabled channels.

In stark contrast, traditional elements drive most CSPs’ businesses and operations.  Firstly, they are very infrastructure-focused because of their DNA in IT development and networks.  Their attention is on what sits behind the curtain to make it work, instead of on the customer and their buying experience.  

Secondly, over the years, many business processes have been hard-coded into systems, which leads to very slow times-to-market for new products, compared to those of the growing number of digitally native businesses. Operators tend to think about creating a system process more than establishing an environment in which you can create, sell and deliver new products and capabilities every day, in a business-as-usual fashion.

Finally, some operators continue to approach infrastructure and networks as a technical challenge, and have not been able to embrace new digital practices such as omnichannel selling, DevOps (software development and information technology operations) for introducing a product to market, zero-touch automation for fulfillment or a broad partner ecosystem that is repeatable.