What are the digital transformation priorities for operators?
Big data analytics was the third most popular response, followed by self-service apps and omni-channel. Personalized offers were less of a priority, and DevOps was the lowest ranking aspect of digital transformation strategies.
The survey, carried out on the Heavy Reading subscriber base at large operators and service providers around the world, sought to understand where organisations are placing their investment bets in terms of digital transformation.
Telcos are facing a number of challenges when it comes to digital transformation: the strict regulatory framework in which telecom operates; the multitude of technology stacks that have accumulated over the last 20 years; and a multiplicity of IT systems inherited after years of consolidation across the sector. At the same time, new, asset-light companies, such as Netflix, clearly do not suffer as much of a legacy infrastructure problem.
The new report asked survey participants in what three areas their company will invest over the next 12 months as part of a digital transformation strategy? Business intelligence and analytics was the most popular response, closely followed by customer-facing applications, customer experience management, and operations support system (OSS). Customer relationship management (CRM) was a slightly lower priority, followed by cyber security and applications programming interface (API) development. Workforce collaboration tools and identity/access management scored poorly.
When asked to what extent their company had adopted various technologies and practices for digital transformation, service agility and NFV/software-defined networking (SDN) scored highest for adoption, with more than 60% of respondents saying their company had adopted these two aspects aggressively or moderately. Self-organizing networks (SON) scored lowest, with 28% having no adoption of SON and 27% being at an early stage.
With the threat from OTT players such as Netflix and WhatsApp looming large, the survey then asked participants how they would describe their company's strategy regarding OTT providers.
The most popular response (42%) was partnership, whereby telcos sought to offer bundled services together with OTTs. A brave 24% said their company sought to compete head on with the OTTs by developing their own applications, while a more pragmatic 18% said they would become a platform provider for multiple OTTs. A further 14% said they would focus on quality of service to maintain their competitive position at the network layer.
When asked how they planned to monetize big (user) data, the most popular response was direct marketing and advertising (28%), closely followed (26%) by those who had no plans to monetize user data and instead hoped to simply understand their customers better through analytics. Location-based services (20%) proved popular, as did selling the data to third parties (anonymized or otherwise).
When it comes to how their company expects to use customer insight gained from analytics tools, the most popular response was to create personalized offers, closely followed by self-service apps. Omni-channel was third most popular, while social media related applications scored lowest.
The survey also asked when participants thought their company would have at least half of its operations/services moved to the cloud. A third said it would take place within the next three years, while 37% said between 3 and 5 years. A quarter said it would take 5 to 10 years, and a small minority (5%) thought it would take more than 10 years.
The biggest challenge faced in implementing NFV/SDN was integration with legacy tools (35%), followed by culture (23%). The lack of a compelling business case and a failure to deliver on cost and time to market savings were each cited by a fifth of respondents.
It seems that telcos are split about how they can position themselves to best take advantage to the inexorable rise of the demand for smartphones and new opportunities arising in the IoT.But what is certain is that telcos have access to a wealth of information on their customers, which should put them in a strong position to add new revenue streams and value-add services to their portfolio. Getting the digital transformation strategies right first, however, is paramount if telcos are to tap into this potential.