Six essential digital dynamics telco providers must master
Why the need for speed and security are paramount for digital transformation in the application economy.
The application economy has grown in importance and brought with it both opportunities and challenges for telco providers.
There are now more mobile phones than people on this planet, and usage is growing five times faster than the human population. In parallel to this mass adoption of technology across the globe, “digital natives” have only ever known a world with devices, the “connected car” is set to be a $46.69 billion market by 2020, and expectations exist in some quarters of free wireless as a basic human right.
However, telcos aren’t necessarily that popular with their customers. Millward Brown’s BrandZTM Top 100 Most Valuable Global Brands 2015 report revealed that, “in spite of commanding dominant market share…telecom providers are less loved than other brands”. Their “uncaring score increased from 103 to 110, only marginally behind the worst scoring categories of global and regional banks”. Lastly, brand loyalty has been traditionally associated with the smartphone brand rather than the provider of the network the device uses.
It is a long time since telco operators used to have just two services—voice and data. They are going way beyond triple- and quad-play services to offer a huge range of services that include content, apps, games and video—along with multiple network types as mobile networks migrate to LTE (Long Term Evolution). This has created a basic need for each service to work, and work well, be reported on accurately to enable billing and customer care, and be transparent enough to satisfy third-party needs.
Telcos have a tough terrain to act in. Their traditional markets have changed so their service portfolios are far greater and their customers demand an always-on environment that delivers instant gratification. To achieve that, new services and products must be delivered reliably and extremely quickly.
The second critical challenge is in their internal organizations, which have not been designed to address this rate of change. To remain successful, operators must adapt or become relegated to the role of dumb pipe providers to leaner, more agile organizations that are able to serve the needs of customers.
Amongst many, six areas that any leading telco needs to address to remain competitive in the application economy come to mind.
Gone are the days when a new release went live and IT could then focus on the next big project. Every release—whether major or minor–needs to be monitored for performance across multiple platforms and devices, but also for feedback via social media. New apps are likely to be discussed by customers and this provides real-time views on what customers like and don’t like. Even negative feedback has a positive side, as it provides an opportunity to quickly remedy issues, tell customers they were fixed and demonstrate what a listening/responsive provider can do.
This is key to support for omnichannel capabilities. Whether a customer orders a home entertainment package with a store rep, a new price plan with the call center or confirms an overseas roaming offer via their smartphone, they will expect every interaction to be known by the channel they are interacting with.
Telcos, like other industries need culture of transformation and to see change as a continuous process, which is why a continuous delivery model is essential. The most adaptive and versatile operators will already be working on revising their SDLC (Software Delivery Lifecycle) to address key barriers to better, faster and more frequently released applications.
Companies such as KPN are implementing technologies such as Service Virtualization, which eliminates dev/test environment dependencies and wait time, enabling parallel work streams on multiple apps. Despite the rise in popularity of open source build and configuration management vendors, certain telcos are also recognizing the need for an end-to-end release management capability and an anchor for all their disparate tools to provide governance and cut release cycle/errors. The excellent Capgemini “Leading Digital” book positions the telco sector as “fashionistas”; keen to acquire many new technologies but lacking a firm vision of where and how these will be utilized.
Agile and Project Portfolio Management solutions can assist here by providing key information on which apps to invest in and the costs of the technologies supporting these. Lastly, automating test case design and execution is essential if quality is to be maintained as the velocity of application development speeds up.
Some apps are mashed-up apps that use standard open APIs. Changes to those APIs need to be adopted within a day, which has created a fragmented service creation environment that makes development and testing of new services to roll-out to customers more complex and costly. The project environment does not remain static. Features and interfaces—such as the APIs mentioned above—change during the project and those changes need to be described and reflected in the project as soon as possible. Equally as new routes to markets and partners are opened up via APIs, the right security and governance also needs to be in place to protect operators and their customers from hacking and other threats. The ability to have a standard integration approach to any channel or business partner is fundamental.
The recent illegal accessing of customer account data (up to 2.4 million names) at the Carphone Warehouse is a reminder of the constant threat all enterprises are under. Consumer levels of trust are at risk of decline and regulators are understandably revisiting legislation and overall practices in this area. This is an area that demands constant vigilance, sophisticated yet simple authentication solutions and a comprehensive approach to test data management and generation.
Telco customers rarely talk about the great fixed price package their provider offers. Much likelier (especially amongst the younger audiences and technophiles) is noise around what is in the new smartphone launched by leading manufacturers. Customers expect to be able to order this latest version on the day it hits the streets and either buy-in store that day, order online with next day delivery or ideally pre-order and receive it on launch day. The ability to provide this service seamlessly and delight handset aficionados can be a major determining factor in customer retention. An end-to-end order (Web or via store) to fulfilment process that fully integrates online portals/systems with back-end mainframes and ERP platforms with zero latency is a must.
Consolidation within the industry continues apace and whilst an acquisition brings new customers and market share, it is essential to minimize churn by maintaining and improving relationships—and in parallel migrating to a common technology platform wherever possible. This is where automated test case creation, early integration testing and simulation of out-of-scope systems can make a difference. These can all help de-risk moving customers off the acquired company’s infrastructure and onto a new consolidated system with minimum disruption.
Customers expect an always-on environment that delivers instant gratification. To achieve that, new services and products must be delivered reliably and extremely quickly. Fortunately, many major industry names such as Orange, Sky, Liberty Global and KPN, T-Mobile, Telefonica Chile, TELUS and Swisscom are rapidly evolving their “production line” capabilities to meet new customer demands. Core to success is a fundamental appreciation that the way in which applications were built to meet these demands in the past will have to change, just as the waterfall development methodology is being superseded by the Agile one. It’s adapt or die in an era of Digital Darwinism.