Telcos: the fashionistas of the digital world

Earlier this month, the TM Forum Live! conference was held in Nice, France with the theme “Digital business: Making it real”. I had the privilege of being part of the keynote panel moderated by David Pringle (TMT writer, analyst and editor). It was an engaging discussion with Klas Bendrik (CIO, Volvo Car Group) and Ulf Ewaldsson (Senior VP and Group CTO, Ericsson) on the topic of industry transformation, ecosystem collaboration and the role of networks.

One of the things that resonated with me most was something Ulf said: “I think what is happening outside the telecommunications world is bigger than what is happening inside. We are past the inflection point and it is time to live up to the digital promise.”

Our customers and their consumers today are already fully adapted to the digital environment. If I were to explain “digital” to my boys of 13 and 14 years of age, the digital native generation, it would be easy – they already have a BYOD policy in their school with wi-fi and online learning and assessment.

As technology continues to move at a breakneck pace — with social, mobile, analytics, cloud and other technologies driving the rapid evolution of digital businesses — pioneering enterprises are rewriting the digital playbook. By tapping into new digital ecosystems, many companies – not just the telcos – are stretching their boundaries and re-shaping entire markets and changing the way we work and live.

Interestingly the Capgemini – MIT Sloan report “The Digital Advantage: How digital leaders outperform their peers in every industry” positions the telecom sector in the Fashionista quadrant, i.e. we have launched important technology-based features and business  models, but we tend to digitise in silos.

Our average transformation management intensity is lower than the Digitarati (the leading quadrant) who have a digital DNA and digital transformation starts in the core business. Encouragingly, the telecoms sector is pretty high on the digital index (about 78%) but we are not turning digitisation into revenue with on average less than 10% revenues related to digital.

What is important for our sector is to move away from the silos and enable digitisation across all customer touch-points to improve our return on capital as well as generate new revenue opportunities. Key to this will be working collaboratively within the organization as well as externally to develop new business models that are suited to the new digital eco-systems. Tata Communications, for instance, is innovating around APIs (Application Program Interfaces – set of routines, protocols and tools that make it easier to develop a program by providing all the building blocks. A programmer can then put the blocks together as required, building on top of existing resources) enabling us to open up our platforms to our partners and to engage in new business models. A few years ago this would not have been in the DNA of our sector.

Imagine if my medication or transportation depends on the digital ecosystem: is this system fit for business? Is it fit for life? How do you make the internet predictable? The price of connectivity itself is declining, and the enabling devices, such as smartphones and tablets (or eventually self-driving cars) are themselves becoming less expensive, more powerful, and ubiquitous. Tata Communications is working with partners globally to make the Internet fit for business. Our IZO™ platform will allow enterprises to have a defined SLA and bring predictability.

The key to industry collaboration isn’t the “winner takes all” mentality of the past. Let’s move collectively, taking the ecosystem forward and enabling the next billion dollar markets. Digitisation is something that is happening here and now, it isn’t just about changing organisations one at a time but about shaping the future together.

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