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White paper the 4 key reasons 70 percent of telco digital transformations fail and how to prevent them

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The 4 key reasons 70% of Telco
Digital transformations fail and
how to prevent them
A whitepaper by
1
Content
Summary 2
Structural change in customer behaviour and expectations 3
Why 70% of all transformations fail? And wh...
2
Summary
Digital transformation has been on the agenda of operators for over a decade now. But till date
many operators h...
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White paper the 4 key reasons 70 percent of telco digital transformations fail and how to prevent them

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Within this white paper we zoom in to why Telcos struggle to deliver successful transformation programmes.
What is it they do wrong and how could they prevent this.

We also look into the different approaches Telcos take when it comes to technology and implementation partner choices

Within this white paper we zoom in to why Telcos struggle to deliver successful transformation programmes.
What is it they do wrong and how could they prevent this.

We also look into the different approaches Telcos take when it comes to technology and implementation partner choices

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White paper the 4 key reasons 70 percent of telco digital transformations fail and how to prevent them

  1. 1. The 4 key reasons 70% of Telco Digital transformations fail and how to prevent them A whitepaper by
  2. 2. 1 Content Summary 2 Structural change in customer behaviour and expectations 3 Why 70% of all transformations fail? And what to do about it 5 Scope and goals not clear 7 Lack of understanding of real customer needs 8 Not changing the internal culture 9 Giving up on quality over budget and time 10 Which strategies do operators typically use? 12 Best of suite approach, digital solution embedded with BSS vendor 13 Tier 1 Digital platform as baseline 14 In house build, open source, solution 15 What has proven to be the most successful strategy 16 The OpenCloudBSS Digital solution 16
  3. 3. 2 Summary Digital transformation has been on the agenda of operators for over a decade now. But till date many operators have still not completed or in some cases not even really started to execute a successful shift to a great online customer experience. Many, other industries have managed to successfully transform their business, leading to increased expectations from customers for their digital interactions with any company. Operators will no longer only have to at least match their direct competitors but also understand the wider digital experience and expectation of their customers to stay relevant. Knowing that digital transformation is crucial for operators to maintain and grow their market share, why do we see so many operators making little progress. Perhaps because 70% of all transformation programmes fail to deliver the expected results? If the stakes of a successful digital transformation are high, then why can operators not get this right? I believe that this is mostly because of a set of common mistakes that are made in failed projects, which could be prevented: 1. Scope and goals not clear 2. Lack of understanding of real customer needs 3. Not changing the internal culture 4. Giving up on quality over budget and time In this white paper I will give you more background information on why these reasons lead to failure and what to do to prevent them from happening. With the conditions to run a successful programme in place, the next question is, what strategy and solution to use to implement and deliver the benefits of a successful digital transformation. Operators in general, use 3 different strategies: 1. Best of suite approach, digital solution embedded with BSS vendor 2. Tier 1 Digital, cots, platform 3. In house build, open source, solution You can find the different options and the pros and cons per approach that can help you to decide which option would work best for your organisation. At the end of this white paper I will tell you the approach I have seen being the most successful way operators can achieve great results. Thank you for reading this white paper and hope it helps you to start AND complete your Digital transformation journey Martin Kievit CEO OpenCloudBSS
  4. 4. 3 Structural change in customer behaviour and expectations “If there is one thing that has changed customer behaviour and expectations during the pandemic, then this is around the digital savviness of consumers in almost all age groups”
  5. 5. 4 Structural change in customer behaviour and expectations Discussions around digital strategies and customers moving more and more towards the use of digital channels as websites and mobile apps have been around for over a decade. Personally, I got involved in the first digital transformation in 2009 where the operator I worked for at the time implemented a new BSS platform and one of the programmes KPI’s was to move people from the call centre to using the self-service website. The key driver at that moment was cost reduction. Any customer using the web instead of calling the call centre was a direct cost saving of 5 Euro per call. Of course, we also had some NPS improvement KPI’s as you would expect, but cost reduction was our main driver. Over time the drivers for digital transformation programmes have shifted from mainly cost saving to much more focus on Customer Experience and NPS improvements. Effectively from reducing cost to increasing revenue and customer life time value which I believe is a much better way to approach business. The real change moving from off line (retail, call centre) to online (web and mobile app) is for most operators a long and slow process. Online sales still account for only 10 to 20% of total sales numbers for many operators and the use of self-service web and mobile applications is also small compared to the number of customers still calling the call centre or visiting shops. In a time where most customers are getting used to buy and service themselves online in other industries, when it comes to Telco, customers still under utilise the online channels. If there is one thing that has changed customer behaviour and expectations during the pandemic, then this is around the digital savviness of consumers in almost all age groups. Online purchasing has become the new normal and customers are expecting easy to use sales journeys that help them to make their decisions. Operators that get this right have a clear advantage over their competitors. “Online sales for many operators account for only 10 to 20% of total sales”
  6. 6. 5 Why 70% of all transformations fail? And what to do about it “This is not because operators are not trying to get their digital strategy right. Many operators have invested large sums of money in Digital transformation”.
  7. 7. 6 Why 70% of all transformations fail? And what to do about it So, if this topic of digital transformation is on the agendas of operators for over a decade, what is stopping them from successfully completing this. Why do they struggle to match the experience they deliver with other, more successful industries or companies? This is not because operators are not trying to get their digital strategy right. Many operators have invested large sums of money in Digital transformation But, a quick search on the internet will tell you that a staggering 70% of all started digital transformation programmes fails. From the remaining 30% that gets completed a large number does not reach the goals that were set at the start of the programme. This leads to no material increase from a customer experience perspective. I believe this comes down to 4 things Luckily a percentage of the programmes does reach and, in some cases, even exceeds the expectations set at the start. What is it that these companies get right? In the next chapters I will go through the 4 reasons mentioned above and provide insights in how to prevent these common pitfalls. Scope and goals not clear Giving up on quality over budget and time Lack of understanding of real customer needs Not changing the internal culture
  8. 8. 7 Why 70% of all transformations fail? And what to do about it Scope and goals not clear Typically, a digital transformation programme covers at least a few of the following areas: For any programme to be successful it is important for the programme goals and outcomes to be made crystal clear. Preferably in measurable results. Like: improve NPS with 10 points, reduce Time To Market for new offer launch to 1 day, reduce cost with 10%, increase online sales with 20%, clear sales target structure supporting Omni channel approach cross online and retail sales. Once the programme success criteria have been defined it is essential that they are validated and signed off by the senior management team. Digital transformation programmes will impact the entire company, it is therefore essential that senior management buys in to the programme and provides full support to it. That includes that they might have to take short term pain into their own organisation / department to achieve the longer-term success the programme can deliver. Once the goals have been validated and are supported by the complete organisation a roadmap on how and when to deliver specific results can be created. It is important that a programme delivers incremental success and benefits for it to maintain priority and support. Typically, the attention span of an organisation is 3 to 4 months, if no results are delivered in a period like that programmes typically loose priority and attention. Delivery plans should take that into account. The goals set before the programme really starts must be used by both the delivery team as the Steering Committee to make their decisions along the way. Goals set should never be compromised to ensure the outcome is protected. “For any programme to be successful it is important for the programme goals and outcomes to be made crystal clear, preferably in measurable results.”
  9. 9. 8 Why 70% of all transformations fail? And what to do about it Lack of understanding of real customer needs Many companies start their Digital transformation journey as an internally focussed programme. The programme has its goals set and people are trying to deliver towards these goals without validating if this is what their customers are expecting. Before the programme is started it is important to consider what it is your customers are expecting. What does your competition offer in your industry, which should be your baseline bench mark, what do other industries offer that are operating within your country or to your customer segment, that is your customers baseline bench mark. What are trends in other countries you can learn from. And of course, ask your customers what they would like. This last question could be raised as part of a standard NPS survey which would give you great insights not only before you start your project but would also work as direct feedback loop on any change implemented. The following model could help to create a holistic view of your customer needs to ensure that your programme delivers to and beyond their expectations When it comes to the deployment and roll out of your solution it is again important to create a roadmap with incremental change and improvements that allows your customers to gradually get used to the change and allows you to directly act and steer based on customers feedback on your changes. I suggest you start with aligning with your direct competitors as soon as possible, then bring yourself on par with the digital leaders in your country and perhaps after that start introducing more advanced features, all depending on your customer needs. What is the experience provided by your direct competition & other industries in your market? This sets the bench mark that you will have to reach as baseline.
  10. 10. 9 Why 70% of all transformations fail? And what to do about it Why 70% of all transformations fail? And what to do about it Not changing the internal culture Digital transformation is not just a technology change. I know this is (or at least should be) an open door that everyone is aware of, but this is where it still goes wrong in so many cases. Source: https://www.tutorialspoint.com/human_resource_management/human_resource_management_organizational_culture.htm To successfully change a culture a plan covering all elements in the picture above must be in place. In reality however, the IT department is replacing all systems supporting the digital experience to customers, but Marketing, Sales and Customer Care teams are too busy with their day to day activities that they do not have the time or interest to get engaged. Once IT is finished with their activities, they have delivered a solution that is not in line with what the business was expecting to get. Sounds familiar? Or operators introduce Omni Channel sales capabilities, so customers can order online and pick up in store or start in store and finish their order online or any other combination but forget to align their sales target and commissioning system with this. Once the capabilities are introduced the incentive for the sales teams to use them are not there. Arguments start on who gets the commission for which order. The last and most common example in this category is forgetting that running a new agile platform can only work if all internal processes and the mind set of people working within these processes are aligned with this new way of work. Rigid ITIL processes around Release Management will hamper the ability of the agile teams to deploy their releases to production. Long Product Life Cycle Management processes will still prevent the company from releasing new products within the aspired 1 day. Making changes to all processes and policies involved and changing the environment and mind set of the people are key to reap the success the programme has delivered. Without these changes the capabilities might be there, but they will not be utilised.
  11. 11. 10 Why 70% of all transformations fail? And what to do about it Why 70% of all transformations fail? And what to do about it Giving up on quality over budget and time All programmes come under pressure. Unforeseen things happen either inside or outside the programme. Business requirements change due to new insights from competitors or technology changes along the way. Things are more complicated than expected and therefore take more time, cost more money and many other reasons. This is the time where the programme and its support in the organisation gets tested. Effectively there are 3 things any programme can do to cope with this pressure: 1. Increase programme cost 2. Extend programme time lines 3. Reduce programme quality / outcome (remove features) These are always hard decisions. There is never more budget available, everyone is under pressure already. Extending the programme time lines might lead to missing important deadlines, incur even more cost or loosing interest and priority in the organisation. The easiest and most chosen option therefore is often to sacrifice features and reduce the programme scope. Although this is an easy way from a programme management perspective this is also a very dangerous way to go. Once you start reducing the features the programme will deliver you directly start impacting the value that will be delivered by the programme. Any feature in scope should contribute to your goals set at the start. Therefore, if you sacrifice one of these features there will be an impact on the results the programme will deliver. For this reason, I strongly suggest to not go down this route because although it might get you to the finish line within the time and budget which are of course great, missing out on the benefits of the programme might have a much larger impact on the bottom line of the company. How to solve this dilemma? Programmes should be run based on a business case. Not only at the start of the programme to justify the programme to even start. But actively throughout the complete delivery of the programme and evaluation of achieved results at the end. How to balance between quality, cost (budget) and time? This is typically one of the key questions in any project that can influence the result and success considerably.
  12. 12. 11 Why 70% of all transformations fail? And what to do about it By running your programme in this way any change to the programme can be evaluated. Not only from a time and cost perspective but also from a bottom line perspective. This means that once a change has passed some initial evaluations from a technical perspective and is seen as a valid change the impact of the change on the business case needs to be assessed. Does this change positively impact any of the original programme goals (or prevents negative impact if not implemented)? What is the impact on the business case of this change, both from a cost and revenue perspective? It is possible to relate NPS increase to churn and with that quantify the expected Customer Experience increase In the same way any decision to drop or swap a feature from the existing scope should be evaluated on its impact to cost and revenue. This will allow the Steering Committee to make an informed business decision beyond the simplified view of cost and time lines.
  13. 13. 12 Which strategies do operators typically use? “On high level there are only 3 routes chosen by operators. Leave it to the BSS vendor, follow a Tier 1 digital platform operator or in house-build”
  14. 14. 13 Which strategies do operators typically use? Over the years I have seen operators taking different approaches to their digital transformation execution. On a high level they come down to 3 main strategies that are being followed. In the next chapters I will zoom in on these different approaches Best of suite approach, digital solution embedded with BSS vendor This approach is usually only taken if the digital transformation programme runs together with a BSS (CRM and Billing) replacement programme. To be able to take this approach, if desired, timing is important. Within this approach the operator selects a BSS vendor that does not only provide the CRM and Billing back end applications and internal user interfaces but also asks the BSS vendor to take the responsibility to deliver the digital channels consisting out of eCommerce, web self-service and a mobile app. One of the key drivers behind this approach are typically moving as much responsibility of this large, complex project to a single point, the BSS vendor. Over the last few years BSS vendors have invested heavily in fully pre-integrated digital solutions they can deliver together with their BSS platform. Best of Suite approach Tier 1 digital platform as baseline In house build solution
  15. 15. 14 Which strategies do operators typically use? The benefits of this are clear: • Single vendor solution from commercial and delivery perspective, reduced programme risk • Pre-integrated solution delivers fast initial results, all available features can be launched from the start • Commercially this often also looks more interesting at the start But next to these benefits there are also some downsides on this approach • BSS vendor solutions are often not mature, digital native solutions. Lacking the flexibility digital teams require to improve the journeys, look and feel and content • Integration to 3rd parties like Campaign Management for Next Best Offer and Next Best Action or to external content providers to for example enrich device data information are not flexible or sometimes not even possible • Journeys are hard coded and limited flexibility for the digital teams to for example make small tweaks in the check-out process to improve conversion rates • Introduction of new features must follow the BSS vendor release process and cannot be done in an agile way • The time to market for these types of solutions is typically long because of the dependency of the overall BSS programme. The digital solution can only go live when the BSS platform goes live The success of this approach is mainly strong around the moment of go live. Full functionality is available at the moment of go live and usually a big improvement compared to the as is situation is achieved. After going live digital teams struggle more and more to improve the customer experience and journeys to address their specific market requirements. Tier 1 Digital platform as baseline Within this approach operators select a tier 1 digital platform as for example Liferay, Adobe Experience Manager or Magento. Well established digital platforms that support a wide variety of use cases in multiple industries.
  16. 16. 15 Which strategies do operators typically use? These solutions can be deployed together with the replacement of a full BSS platform but can also be deployed completely independent as a programme on its own that has clear focus and goals. This approach comes with its own set of benefits as: • A rich set with out of the box available templates and digital features • Training material available to get teams up to speed in a short period of time • More influence on actual look and feel and journeys for the operator compared to the best of suite approach from the previous chapter • Good availability of SI’s that have experience in delivering the selected platform But like with all things in life where there is an upside there is also a down side. For this type of solutions these typically are: • Platform is industry agnostic and does not cater specifically for the Telco industry which leads to a lack of Telco specific capabilities • To be able to support different industries the platform is big and heavy with many features in the platform that are not required and used negatively impacting the performance and complexity to maintain • Rigid CMS data model • Limited possibility to tweak the page rendering beyond making changes to templates In many implementations we see operators building workarounds to handle some of these limitations either during the initial project or once the first changes after going live must be applied. In house build, open source, solution This approach is typically used by companies that have digital transformation as part of a wider transformation programme. Not so much a BSS transformation programme in this context but more a business model transformation, with focus on extending the types of services sold to customers, building a layer on top of different back end systems covering for example mobile and fixed or transforming themselves into digital service providers.
  17. 17. 16 Which strategies do operators typically use? Which strategies do operators typically use? As part of this approach operators typically start building in house (agile) teams and take control of their own digital future with less limitations then in the other 2 approaches. Instead of selecting readymade full solutions the teams are separated into CMS, integration / business logic layer and presentation layer teams. Every team gets the freedom to select their own solution they want to work with to drive the best result for the overall project. They can decide to get a cots product and develop on that in case of for example a headless CMS or business logic layer or can decide to start developing their own component from scratch. With a true agile approach, epics and use cases are defined and planned into sprints. The teams work closely together in small iterations to develop and integrate their components into an overall solution. The benefits of going this way are: • Full flexibility and control over capabilities and user experience • Fast time to market once solution is launched • Close cooperation between business and IT development teams using product owners for the different components • Influences company culture positively with inhouse team and agile way of working Just as with the other 2 approaches there are of course also down sides on this approach: • Starting with less or none Out of the Box assets requires more in-house knowledge as to what to build and how to structure for example CMS data • Initial project will take more time to deliver a full set of capabilities • Increased responsibility on the operator side to deliver Taking on the responsibility to deliver digital channels in house requires full dedication and support of the complete C-level team to make this a success. It takes upfront commitments and cost to change the organisation and invest in building up the capability to deliver long term change using incremental growth and improvement.
  18. 18. 17 What has proven to be the most successful strategy “Successful companies become successful not because they have their strategy 100% right at the start but because a flexible architecture and organisation that allows them to learn, adapt and grow at the same time they bring instant, incremental improvements to their customers”
  19. 19. 18 What has proven to be the most successful strategy After talking to and observing the results of dozens of operators we see the companies that transform not only their customer experience but successfully transform their own organisation into an agile, customer experience focusses company are the ones that drive real success. This typically comes with building up in house capabilities to not only define the strategy but also implement this strategy with focus and success. Successful companies become successful not because they have their strategy 100% right at the start but because of a flexible architecture and organisation that allows them to learn, adapt and grow at the same time they bring instant, incremental improvements to their customers. It is this learning fast and flexibility that allows the successful operators to achieve their success. Large “set in stone” programmes setup in waterfall over a 12 to 24-month period are destined to fail in this arena. A combination of building up the in-house capability while working with a flexible, agile solution provider or solution integrator that can help to quick start the initial phase increases the chance of success. The initial, new, team can work with the partner and learn from mistakes made in other programmes. The programme can delivery quick results to maintain momentum in parallel to strengthening the in-house capability. While choosing the partner it is important that the technology provided will not lock the operator in moving forward. The technology selected should provide enough flexibility for the in-house teams to progress the solution into the required direction for your brand and customer needs. “Successful companies become successful not because they have their strategy 100% right at the start but because of a flexible architecture and organisation that allows them to learn, adapt and grow”
  20. 20. 19 The OpenCloudBSS Digital solution “As baseline we have taken the in-house build approach focussed on a solution fit for purpose for Telco’s”
  21. 21. 20 The OpenCloudBSS Digital solution Based on what we learned, looking to what does and does not work we have developed our OpenCloudBSS Digital platform. As baseline we have taken the in-house build approach focussed on a solution fit for purpose for Telco’s. We use an opensource, headless CMS from Strapi, which allowed us to build our own data model and structure. It also provides us with the possibility to manage all content for any webpage and the mobile app in a single place. Our middleware is in-house build and handles all business logic and integrations that require coordination of collecting the information before it is submitted. This is usually the case with data required for BSS systems, Campaign Management (Next Best Offer) and Payment providers. The online component takes care of the rendering of the pages in the correct format for the device used by the customer to ensure a great experience on any device. With our solution we enable operators to get the benefits from the most successful approach faster. We provide 3 different cooperation models: 1. Our team works as your internal team and delivers the Digital transformation based on a combination of our platform and experience 2. Our team works closely with your team to start the digital transformation journey and as we go along, we hand over the solution and activities completely to your team. 3. Your team uses our solution as baseline to start their digital transformation journey. This helps them to kick start the project, benefitting from the Telco specific assets and data models we have already build as part of our solution. If you are looking to kickstart your digital transformation and would like to brainstorm on how to best achieve your results, feel free to reach out!
  22. 22. 21 Martin Kievit Chief Executive Officer martin@opencloudbss.com +44 75 77 644 992 About us We are passionate about providing a great Digital Customer Experience! In our view the importance of the Digital Experience for customers is ever growing. Expectations of customers about what they can do themselves and the experience provided to them when servicing themselves are increasing, driven by new technological opportunities implemented by direct and indirect competitors of your company. Finding a great balance between providing a great Digital Customer experience and changing the focus and mindsets within the organisation while actually achieving results is always a challenge. We love being part of that process! Our team is a great mixture of people with a background in Marketing and Sales within service providers and great, creative technical engineers that love to make simple to use solutions. This allowed us to build a platform that your customers will love to use. We’re always looking forward to new business opportunities! Interested in our platform, services or looking for more information? Feel free to drop me a message or give me a call!

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