Organizations in today’s digital age are witnessing technology trends that are profoundly reshaping value chains across industries. Digitalization is an all-pervasive trend acting as the disruptor-in-chief of business and operating models across converging industries. The telecom industry, which is at the heart of the digitalization megatrend and a key digitalization enabler, is not immune to this disruption. In this context, a key question facing telecom-industry executives is: is there an opportunity for telcos to reimagine their operations to leverage digital technologies, and if yes, what is the economic value and how can they achieve this?
A vast number of operations digitalization possibilities are constantly evolving with technology advancements, and represent significant potential to propel telcos towards a new efficiency frontier. Yet, digitalization of operational processes is either unaddressed or unexploited in the digital agendas adopted by telco players.
In this report, we present our perspective on the strategic imperative, the available opportunities for telcos, and the approach to pursuing internal digitalization. We also offer our insight on ways of achieving a target blueprint of “future of telecom operations” at the extreme frontier of operational efficiency to compete and win against more agile and digital-centric competitors.
In summary, telcos have an opportunity to reimagine their operations to leverage digital techno-logies. However, to address the challenges and uncertainties in the hyper-digital era, telcos should:

1. Digitalize operations: Do not ignore internal processes digitalization. Ensure that the digital strategy covers all aspects of the business and operational digitalization to achieve a superior efficiency and cost advantage to compete with leaner and more agile competitors.
2. Look for digital practices beyond the telco industry: Adoption of digital technologies is evident not only within the telco industry, but also in multiple other adjacent and unrelated industry ecosystems. Telcos must seek inspiration from applications and use cases across industries.
3. Transform at an optimal scale: Adopt an iterative, agile and impact-oriented transformation approach, starting with a handful of concepts, taken through various stage gates to achieve tangible business results. Focus on achieving the initial lighthouse successful projects to inspire the organization towards a digital operational blueprint. Opportunities for collaboration with start-ups 1 and partners must be leveraged to bring innovation from the broader ecosystem and bridge capability gaps across the organization.
4. Adopt a robust governance model: Address the challenge of scarce capabilities and expertise for leveraging digitalization in operations. The chosen governance should include executive sponsorship, dedicated capabilities, expertise, and accountability to process owners to ensure an organization-wide and sustainable transformation.

1. What is the strategic imperative for telcos to digitalize operations?

Globally, telecom operators are transforming their business models in an effort to counter the top-line pressure from various market forces, namely digital-native telcos, in-market competition, regulation, etc. The digitalization agenda of leading telecom players reflects the focus on revenue diversification through digital services in a variety of ecosystems. Similar focus, if not more, is necessary to reimagine their operations. Internal digitalization is about the use of latest technologies to simplify business processes and increase quality of service and output, while improving efficiencies.
The operational agility and efficiency imperative for telcos is at its peak, in all facets of operations. To start with, telecom companies can no longer compete with portfolios of standardized products. Customized and contextual services delivered in a personalised manner are increasingly needed to serve different micro-needs of digital-savvy customer segments. Along with evolving product and service requirements is the need to reinvent customer touch-points. Telcos are hard pressed to continuously enhance the experience delivered across touch-points as new customer engagement channels emerge and customers demand seamless experience across channels.

Figure 1: Strategic imperative for internal digitalization

Telcos need to leverage insight from customer and operational data to compete against digital players whose operations are developed on the fundamental principle of data-centricity. These imperatives are increasingly pressurizing telcos’ IT and network architecture, leading to greater complexity and costs, while the need of the hour is higher agility and flexibility. As such, telecom players can no longer afford to avoid digitalization of their operations. Telecom executives must seek answers to some key questions to effectively address the efficiency imperative through digitalization:

• Which digital technologies (e.g. blockchain, artificial intelligence, robotics) will bring real value in the short, medium and long term, in the forms of processes agility, cost efficiency, superior quality, and customer and employee experience?
• What is the emerging blueprint of operations across functions (commercial, technology, HR, finance, etc.) due to application of digital technologies?
• What is the economic value of digitalizing operations?
• How to transform operations while balancing short-term, tangible results with long-term, sustainable value creation?