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How Digital Transformation Has Impacted Digital Business Management

“Today, every business is a digital business.”

It’s a quote that business leaders across all industries know well. The irony is that as businesses leverage mobile networks to thrive in the digital age, mobile operators are lagging behind.

Despite an overwhelming understanding that they need to adapt, mobile operators face an uphill battle when it comes to digital transformation. In recent years, heavy investments have been made in upgrading to 4G wireless networks. Unfortunately, the 15% ratio of capital spending to revenue hasn’t left much room to invest in internal digital transformation.

As a result, mobile operators are under intense pressure to improve their digital business management capabilities. Competing with digital natives and growing OTT providers will require new business models that diversify the traditional voice/messaging revenue streams that were once so profitable.

The Problem with Current Digital Business Management Strategies

It’s no secret that mobile operators have catching up to do in digital. The $2 trillion digital transformation opportunity in the telecom industry is plenty motivation to make changes.

However, current approaches to digital business management won’t have the kind of impact that mobile operators need to capitalize on that opportunity.

In many cases, mobile operators expend their digital business management efforts on internal IT obstacles. You’re likely dealing with a complicated legacy IT infrastructure filled with interdependent applications that hinder agility. Aging IT infrastructure works against any digital transformation effort. You end up spending all your time sorting through technical challenges, keeping you from moving quickly and making agile decisions.

Mobile operators counter these challenges by investing in upgrades throughout the network to cut operating costs. For example, the widespread shift to small-cell networks can open the door for more flexible management, reducing costs and alleviating some of the pressure from thinning margins.

That’s the problem, though. As margins from traditional business models diminish, it’s not enough to just cut costs and temporarily bolster those margins. Now more than ever, digital business management must focus on innovative, high-potential changes to the organization.

X New Revenue Streams for the Digital Mobile Operator

The modern consumer is always connected and that reality impacts mobile operators both positively and negatively.

On the one hand, video traffic is expected to make up over 80% of internet data in the coming years, which will put your network under heavy pressure. But on the positive side, the constant demand for more data gives mobile operators an opportunity to capitalize on digital transformation.

Rather than letting OTT players like Netflix, Amazon, Facebook, and others continue to erode mobile operator revenues, you can branch out into new revenue streams.

However, you have to be careful not to make the same mistakes with 5G that were made with 4G. Investing in your network and facilitating the move to 5G is critical—just don’t lose sight of the fact that setting yourself up as a digital service provider is now equally important.

Successfully shifting to 5G will help you sustain your subscriber base. It also gives you the backbone necessary to support new services that facilitate new digital technologies for consumers. As you build your digital transformation strategy, consider adapting business models to support these emerging revenue streams:

Facilitating Digital Payments: OTT providers are investing heavily in mobile payments. Whether through partnerships, acquisitions, or internal development, mobile operators can leverage existing subscriber bases to deliver banking and payments services that boost revenue.
Delivering New Network Services: Enterprise customers need to leverage SDN and NFV to power their own digital transformations. Mobile operators can use existing investments to deliver virtualization capabilities that make zero-touch networks available to enterprise subscribers. These add-on services can increase revenue.

Providing Data Services: Mobile operators have more consumer data than just about any other type of business. While consumer data is heavily regulated, you can sell certain network usage information to enterprises looking to better-target potential customers.
Adding Digital Services for Subscribers: Similar to data services, you can use your extensive customer data to add marketing services to your portfolio. For example, you could build out an AI-powered advertising platform to turn network pipes into more valuable revenue streams.

These are just a few examples of new digital revenue streams. They should be leveraged in addition to internal digital business management changes that boost revenue. With the help of artificial intelligence you can transform customer experiences from frustrating phone calls to seamless, omnichannel support and sales interactions anytime, anywhere, and on any device.

Moving forward, digital business management will be judged by how well you can make agile decisions, develop digital products and services with great customer experiences, and use advanced analytics to constantly adapt.

For many mobile operators, there’s just one question to answer—where do you start?

Setting Your Roadmap for Digital Transformation Success

Mobile operators are accustomed to large-scale transformational efforts that take years and are designed to keep the complex IT infrastructure in check.

Trying to take this approach to digital transformation won’t work—it’s expensive and too slow to keep pace with market demands.

Specific roadmaps will be unique for every business. The path to transformation depends on your existing IT infrastructure, your current offerings, and the talent/structure of your organization. However, the best general approach is to determine which revenue streams you want to diversify with and create Greenfield projects to test them.

By keeping investments to a minimum, you can scale digital operations to determine which are good fits for your organization. Then, you can start building a roadmap for a large-scale rollout.

In the background of your Greenfield projects, you can make continuous efforts to break down IT silos and turn backend infrastructure into a more agile, flexible foundation for the business.

Unfortunately, there are a lot of moving parts for any mobile operator looking to revamp digital business management. Your first step should be to decide which projects you’d like to test.

If you want to explore some of your options, we’d love to help. Contact us today to learn about the mobility solutions that can transform your approach to digital business management.

June 21, 2018 0 comment
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