The Road to Transformation
In a related press release Kennedy also stated, "While CSPs cited offering services across devices as a key investment area, they also acknowledged that there is much work to be done to align systems and processes to create a truly differentiated digital service experience. We believe that the combination of cloud-based systems that provide a faster route to monetizing digital services along with specialized expertise in aligning processes, systems and resources are the keys to transforming the entire organization to fully capture the revenue opportunities of the digital era."
Not surprisingly, the next highest investment priority area was optimizing and consolidating IT infrastructure to reduce cost and complexity. Convergence is essential to differentiation, as it can be defined in this context as the ability to collectively leverage their systems, infrastructure and data – in a cost-effective, automated and accurate way – to create innovative new services and a differentiated customer experience. If done properly, of course.
Lack of agility, lack of integration, and updating existing systems topped the list of transformation challenges. Only 28 percent of respondents indicated that their current support systems could support next-generation digital services, and 52 percent indicated that their in-house teams lacked the right knowledge and expertise. An overwhelming 76 percent indicated that they lacked confidence their internal teams could simultaneously support both existing infrastructure and digital transformation. This is indicative of the discord transformative change creates and opens the door to collaborative partnership to augment skills and re-purpose existing resources.
"The survey findings indicate that service providers worldwide are struggling to capitalize on revenue growth opportunities while taking strides to transform their business model to become DSPs. We expect that the dual priorities of running both today’s and tomorrow’s business models will continue to squeeze CSPs and drive a new need for the expertise needed to transform a very complex business model," Kennedy added.
Nearly (97 percent) all survey respondents indicated that they would find value in collaborating with a third-party, managed service provider like CSG International to help them with their transformation. The vast majority of respondents (68 percent) currently rely on third parties, and 56 percent indicated they are either considering using or increasing the use of third parties. Not surprisingly, service providers stated they would add the following skills to augment their existing teams to support the transformation to a DSP state:
- IT infrastructure and business process alignment,
- Customer experience management (CEM), and
- Billing and other BSS systems support.
These correlate directly with the investment areas indicated earlier in the survey, as service providers try to capitalize on these new, short-term opportunities.
Focusing on Innovation
Respondents also indicated a concerted focus on innovation, and a reliance on third parties to do so. The vast majority (77 percent) of respondents indicated their organization plans to establish a department of innovation within the next 5 years. The majority of service providers said they would be able to recover 10-50 percent of their team’s time to focus on innovation by leveraging a third-party partner. An additional 13 percent indicated they would recover more than between 50-100 percent of their team’s time to apply toward innovation. Collectively, 67 percent of service providers indicated significant time recovery through the use of third-parties so that existing resources could focus on innovation. Coupling this with the majority sentiment of using and continuing to expand the role of third parties indicates not only a reliance, but a dependency on third-partners to innovate.
Fueling Change
The results of Pipeline’s recent survey indicate service providers are acutely aware of the opportunities in front of them. Literally, trillions of dollars could be up for grabs. The winners will be those that can quickly transform to embrace this change. For many, it seems that the reliance on third parties to help manage existing systems, add additional expertise, and help to integrate technology, strategy, and processes is essential. But, this is just the beginning.
Fueling the demand for next-generation digital services will be paramount to success. Augmenting resources to focus on innovation is arguably table stakes already. The key will be bringing in the right expertise so that service providers can collectively leverage their unique systems, infrastructure, data, and access to content to deliver a truly unique experience across devices. This is the catalyst that has the potential to increase demand and continue to fuel innovation.
For more information about the Global Business Transformation survey, or to download the survey materials, click here.
