April 28, 2017 | Written by: Brian Love
Categorized: Digital Reinvention | Events
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I recently had the good fortune of being one of IBM’s Digital Strategy leaders in attendance at this year’s Mobile World Congress. During the event, IBM convened C-level executives from 25+ global telecommunications and media companies in roundtables and small group meetings. We engaged telco industry leaders about digitally reinventing their businesses and creating disruptive opportunities before they themselves are disrupted. We heard their challenges, and more importantly, were able to ideate on solutions for driving their businesses forward in the digital world.
The insights and energy generated in these sessions was palpable. The discussions validated a rapidly changing world where customer expectations are on the rise, OTT players own more of their traditional customer relationships, and the demand for data drives massive investments in their networks. Further complicating things is the intense pressure and amount of attention required to grow share and profitability in their core business.
So, with all these challenges, do telco executives even have the time to reinvent their business? The answer is that they must find the time. Here the top things we learned in our sessions and how it may impact you:
- Digital Orchestration. Not surprisingly, all the companies we spoke with have digital initiatives in-flight. What was surprising was that few felt they were maximizing their investments. Most had disparate efforts working under the CIO, CMO, and various business unit leaders – and these efforts often conflicted with one another. Telcos need to find ways to better orchestrate these efforts so they remain aligned to each other and to the overarching digital strategy. These efforts must be sponsored, from the top, by the CEO.
- IT / Business Alignment. Another consistent challenge is the continued divide between the technology organization and the business. The business may be developing innovative, customer-centered business strategies, but if the CIO does not provide the technology to execute, the innovations will stall. Business and IT planning must be coordinated to ensure that investment in the platforms, APIs, and employee tools are supportive of the customer experiences the businesses envisions.
- Talent Reinvention. Most participants indicated that only 30-50% of their workforce are prepared for their digital future. Telcos need significant retraining or refreshing of their team’s capabilities. Tomorrow’s employees will need to be digitally-savvy, which means being customer-focused, agile in approach, and iterative in delivery. Difficult decisions may be required to get your team in place to compete in the future.
- Innovation through New Businesses. Many companies were having trouble innovating within their existing corporate structures. The pressures of maintaining their current business frequently impede their ability to invest in innovation. To handle current and future disruptions, telcos should consider standing up new entities and/or companies to drive their innovation agenda. These new companies are more likely to have the freedom to experiment, evaluate new partnerships, and have differentiated measures of success and incentives. It will also allow the legacy business to focus on optimizing the core business.
Many of the insights we discovered by speaking to telco leaders apply across industry lines. Businesses of all kinds, from retail to banking to industrial products are also struggling to understand how best to reinvent.
Arun Aggarwal of CEMEX shared insights from his company’s reinvention journey onstage with us at MWC – click to hear his story. For additional information about IBM’s strategy practice and our insights on digital reinvention, click here.