TeBIT 2015 Executive Report: Digital Delivers
09 November 2015
Posted by: Fred Werner
One of the best ways for our Members to share knowledge and best practices is through Benchmarking and Surveys. It does not take many words to explain the biggest finding of this year’s telco IT benchmarking study (TeBIT) conducted annually by ETIS in co-operation with The Boston Consulting Group. To put it simply, digital initiatives pay off. This turn of events warrants the headline treatment—and perhaps a sigh of relief from Europe’s telecom operators.
This year’s study found that of the participating telcos, those that were most active in the digital space—deploying the widest variety of initiatives—suffered the smallest revenue declines. The correlation was clear, compelling, and significant. Telcos have struggled in recent years, often unsuccessfully, to maintain their revenue level, so the validation that digital initiatives are a way to stem or even turn the tide would seem to be break-out-the-champagne news.
But a couple of findings also revealed by this year’s survey suggest that telcos should not pop the cork just yet. Many participants—representing a mix of integrated, fixed, and mobile operators from both mature and emerging markets—are pursuing digital initiatives without a comprehensive, long-term strategy. Instead, they are trying a little bit of everything. In addition, at many telcos, there are few business-transformation initiatives—or none at all—being undertaken. The lack of strategy and transformation initiatives may well be tempering the payoff. As Gian Enrico Paglia, Telecom Italia’s director of IT and convergent architecture, put it, “Digital has to be a concerted, company-wide effort, with telcos not only implementing new capabilities but also changing internal processes.”
Now is an opportune time for telcos to think bigger, and deeper, about digital initiatives, particularly given our other major finding: participants are in the beginning stages of deploying digital products and services. The bulk of telcos’ support, sales, and marketing efforts are still conducted through traditional off-line channels. In addition, most TeBIT participants are only just starting to develop capabilities in big data, an area closely related to, and dependent on, digitization; digital offerings generate data, and companies will gain actionable insights by analyzing it.
Indeed, more traditional areas—such as fulfilment and billing—continue to be the focus of telcos’ investment budgets. Emphasizing these areas has long been a sound move, because they affect the customer experience and can help operators differentiate themselves. But digital initiatives can also help companies stand out from the crowd. And by demonstrating the payoff—even through scattershot approaches—TeBIT 2015 raises the question of whether telcos should embrace digital initiatives a bit more boldly. This question doesn’t cast doubt on telcos’ current investment focus but rather asks if they should spend more than they do today on digital initiatives.
Over the years, TeBIT participants—and their IT departments in particular—have always found ways to manoeuvre in light of business challenges and opportunities, recalibrating their approaches to best suit their circumstances and needs. A case in point is IT operating models: as these models have become more complex, telcos have improved the way they manage the costs. TeBIT 2015 found participants better at this than ever.
Telcos are running a tighter ship even as they operate a more complicated one, and this points to their ability to adapt. Digital initiatives are a new lever that operators can apply in their ongoing quest to innovate and optimize. How telcos apply this lever will have a major effect on how far they step beyond—or fall behind—the competition.
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