​Why service providers are taking the slow approach to digital business transformation

​Why service providers are taking the slow approach to digital business transformation

Service providers need to tune in to stay relevant.

Just rewind three years back, vendors and service providers commonly cited Cloud, big data, and mobility as the top technology drivers in the ICT market.

Today however, the most-cited drivers are Cloud, virtualisation, and digital.

That’s according to recently released Ovum research, which claims that these three labels are certainly not exclusive.

“Virtualisation is helping to deliver Cloud services,” Ovum Research Analyst, David Molony, said. “Mobility is part of digital channel management and digital channels are generating more data that needs to be analysed and utilised.”

Indeed, defining “digital” is itself a challenge, Molony acknowledged.

“Digital implies the use of ICT to transform an existing business process from end to end, or it involves doing something that could not be achieved with existing IT systems, such as offering a new service or a service to a new audience in a new way,” he explained.

“Cloud, mobility, virtualisation, and digital are important because they signal new priorities that will inform investment decisions.

“Although mobility and virtualisation are well understood, digital business transformation is a bit trickier to promote.”

Molony said service providers and enterprises are undergoing digital change together, but in a mutually uncertain manner which challenges the established supplier–buyer chain.

“Companies also expect ICT to serve commercial purposes more explicitly than it once did,” Molony added.

“IT managers who used to spend 70 per cent of their time in operations and maintenance and 30 per cent delivering services to the business are now saying they have reversed that equation, through increased use of cloud resources and better management of shadow IT and personalised mobility, for example.”

Yet in Molony’s view, despite marketing efforts, many service providers still need to develop and match offerings to the new digital imperatives. Why could this be the case?

“Lack of an end-to-end systems offer is one reason service providers have not got a bigger digital story to tell,” Molony said. “There are signs that formerly separated IT and telecoms providers are preparing for a more digitally unified business process.”

For example, Molony said the configure, price, and quote technology from IT vendors such as Oracle and network operators such as Expereo could simplify enterprise procurement and operations cost management across an enterprise digital platform.

“In our view, digital transformation will not happen until network-oriented service providers have established more vertical solutions and business cases for digital ROI in sectors outside media,” Molony added.

“Some providers received this message early and are well on their way, but others lag behind, and a few are without even a unified strategy around digital transformation services.”

For Molony, there are points of light, though: An increasing number have solutions in automotive (connected car) and healthcare (e-health), and insurance and retail business requirements are also being addressed to some degree, if not comprehensively.

“These digital business models are at least emerging,” he said.

Going forward, Molony believes that cooperation between service providers over industry standards and B2B service management is necessary to drive the formulation of industry-relevant digital services, but this will prove difficult for some suppliers.

“BT’s contract with Gallerie Commerciali Italia, which will provide the shopping mall landlord with Wi-Fi–based ICT infrastructure to support retail data analytics, is an example of a vertical services application we think will resonate,” he explained.

“The same goes for Telstra’s new mining services unit, which uses industry expertise gained from its acquisition of network design and consulting business CBO Telecommunications.

"In the meantime, some multinational corporations, including Daimler (Moovel), GE (Predix), and Samsung (Tizen), are planning or building their own digital platforms for their own supply chain–based business transformation purposes.

“Service providers need to tune into these, too, to stay relevant.”

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