Reality Check: Retooling for a new technological universe

A few interesting facts about the world we live in:
• Today’s global communications infrastructure connects more than four-and-a-half billion people; more than 65 percent of the world’s population.
• There are now more than 350 million active users on Facebook, spending on average more than 55 minutes per day on the site.
• The number of mobile broadband subscriptions around the world is 600 million; now exceeding the number of fixed broadband subscriptions.
Technological innovation, services, products and solutions are advancing so fast that it’s increasingly difficult to keep up – even for communications and technology service providers and manufacturers. The world is already familiar with Kindles, Wiis, iPods and iPads. But it will be the meters, sensors and Subscriber Identity Modules (SIMs) that will enable new business models and redefine the industrial landscape. To ensure future growth companies must consider implementing a strategy that will place them at the head of the innovation pack, while their competitors are just beginning to adopt the growth mentality.
To succeed in a marketplace where innovation is more important than ever, telecom operators and other technology providers must improve their capabilities across multiple dimensions. They must improve their ability to achieve customer-centricity. They must manage a more open and complex ecosystem. They must attract the best talent. And they must drive cost reductions and operational excellence in ways that include more optimal sourcing strategies.
Customer data is the new king
Developing better, more customer-centric innovations requires the application of analytic technologies and solutions that provide a deeper understanding of the unique interests and desires of customer segments. This enables companies to target profitable customers more effectively. It is in this area that operators have an opportunity to build upon a uniquely advantageous position. By leveraging the copious data they possess about their customers, they can enable services based on personalized content and advertising that is more relevant.
Tools exist today that allow companies to collect and analyze both internal and external data to obtain a comprehensive view of customers and their decision-making processes. They can build a detailed picture of customers’ demographics, buying behaviours and usage patterns across all product portfolios. For example, telcos can analyze their product mix to assess the impact of new offerings on existing bundles or content.
Customer-centricity, based on analytics, enables marketing units to better provide guidance about the types of products and services that will be most profitable. Analytics now allows for forecasting and a ‘what can happen’ view of the business, though the use of predictive analytics, a significant step forward from the previous view of ‘what happened’. But customer-centricity also means that an enhanced customer understanding drives product design and development – as well as the entire customer experience across all of a provider’s products and services. This not only gives a company a better understanding of its customers, it also helps customers forge a stronger and more personal relationship with the company.
In today’s economic climate, the need for speed in decision making has never been more critical. Missing the shift of value to a new customer segment means mounting an expensive come-from-behind response. Analytics is increasingly shaping organizations’ approaches to this challenge
Managing investment as a portfolio
Optimizing the business and operations of a telecom operator to free up cash and capital to invest in innovation has never been more important. The industry is in the midst of a massive wave of investment in 4G networks and fiber networks to the home, and all this traffic needs to be managed in part by driving out cost in the legacy business wherever possible.
Managing investments as a portfolio is extremely important. It is critical to amplifying investments in areas of the business that are truly relevant to the growth agenda. A typical company may have 50 to 100 simultaneous initiatives, many of which are not relevant to supporting that agenda. This creates waste and can delay a company’s ability to move profitable products to market faster.
If cloud capabilities, enterprise mobility, or machine-to-machine strategies are key to a company’s growth, then they must invest heavily in these areas. The future depends on it. They must free up cash through effective cost reduction initiatives and be sure not to spread investments so thinly that none pay off.
Global operational excellence
The communications and content environment today is a large, complex and global ecosystem. A commitment to open collaboration – and the ability to manage an extended array of partners and alliances – is a distinctive feature of successful innovators.
Managing new-product development more effectively is critical to operational excellence and innovation. Many operators maintain a kind of functional separation between those who are responsible for innovating and those responsible for the operations of what is being marketed and sold. Some of the greatest innovators employ a vertical unit across all segments that manage the end-to-end development and operational process – from idea generation to the time when a product becomes a core element of the business. Instead of germinating ideas and “throwing them against a wall to see what sticks,” a company integrates the genesis of a new product with functions related to management of the network and bandwidth, marketing, and acquiring and maintaining customers.
True operational excellence in this environment means restructuring an operator’s product and service development lifecycles to work across and synchronize a more fragmented set of players, both internal and external. This operating model also raises the importance of more effective use of outsourcing and managed services to drive standardization and cost control. By outsourcing non-value-add aspects of their network operations, companies can support investments in service areas that have the potential to provide long-term growth opportunities. Specific areas for network outsourcing include network inventory data management, provisioning, handset testing and service development.
Operators must also increase their reliance on industry-leading capabilities in application and infrastructure outsourcing, as well as business process outsourcing for functions such as finance, HR, learning and procurement.
Attracting and retaining top talent
Communications companies frequently have difficulty bringing in people who already possess the complex set of knowledge and skills required in the specific domains needed to succeed. They also have a serious issue with retaining these workers once they have joined the company.
Industry leaders must take major steps to address this problem. Working on the right compensation plans, putting in place a more attractive and supportive work environment and becoming more actively engaged on university campuses, improve the marketplace perception of a communications company as a “best place to work.” The other challenge involves what to do with tens of thousands of current employees who do not have the skills to succeed in a rapidly changing digital environment, nor adequate understanding of how to operate in a regulated world with a broader ecosystem of partners and competitors. Closing this gap of knowledge and experience requires availing oneself of resources capable of retraining existing workers quickly, on a massive scale, with relevant and timely content.
Some final thoughts
The digital wave has redefined the com
petitive landscape of the communications industr
y and consumer ecosystem. Fast-evolving technologies have redrawn competitive boundaries and companies are struggling to find the business models needed to achieve long-term success in a world where entire value chains have been upended, new competitors have come to the forefront and many long-standing incumbents are in decline.
Amid these changes, growth remains the number one priority. Out of the apparent chaos of these momentous marketplace developments, a relative handful of players will emerge in a stronger position than their competitors. They will be the ones that break from the gate faster and sprint to a point that enables them to dominate for years to come. Driving a customer-centric innovation agenda with new operating models and platforms that improve the ability to manage a complex suite of players is critical to success in this new and ever evolving landscape. And developing skilled workers and leaders is just as important as any business model or network architecture. Those who understand and overcome these challenges will become the technology leaders of tomorrow.