Communications Service Providers

The customer-activated CSP Part 1: What CSPs are telling us!

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Telecom CxOs foresee major changes in the business landscape in the next three to five years. They expect to reframe their approach, shifting to more collaboration and open business models with customer and partners. IBM’s recent survey, of 218 CxOs of communications service providers (CSP) in more than 50 countries, revealed three key themes that telecom CxOs believe will shape their organizations’ future:

  • Open up to customer influence
  • Pioneer digital-physical innovation
  • Craft engaging customer experiences
Open up to customer influence

In search of innovation more than half (55%) of CxOs expect to open up their organizations – bringing down barriers to extend collaboration inside and outside. Their most radical shift may be a new view on what it means to collaborate with customers.  A growing number of CxOs believe customer influence shouldn’t be confined to activities in which customers have traditionally participated, such as developing new products or services. Instead, they stand ready to relinquish absolute control of what is typically considered their domain – developing business strategy. In fact, the majority of telecom CxOs told us customers’ influence on their organizations’ business strategy is second only to the C-suite itself.Customer influence on the enterprise

     Almost two-thirds (63%) of telecom CxOs say customers now have a considerable influence on their organization (see figure at right hand side ). They realize that the groundswell of opinion and innovation being shared on social sites, blogs, text chats and the like is tantamount to customers banging at the door and demanding to be heard. Savvy leaders know that online input is a vital part of the discourse and have plumbed their organizations to listen closely. Those at the forefront don’t just invite customers in for a chat, they recognize it as an urgent call to action.

Deep collaboration with customers is a clear CxO ambition; 88% of telecom CxOs foresee doing so in the near future. But accepting customers as stakeholders in determining their organization’s future has huge cultural and organizational implications. Their businesses can’t just be customer-centric. They must be customer-activated. That requires creating fully reciprocal relationships with customers. It means being ready – and willing – to change course to pursue those paths that create mutual value. And it requires finding ways to include customers in key decisions.

CxOs asked to give up autonomy and customers wary of being targeted will need to find new, more collaborative ways of working together that engender trust. Establishing new levels of trust cannot be the purview of any one domain for the singular reason that trust can easily be broken at any point in the chain. If one issue has the potential to unite the C-suite to act in concert, establishing trust-based relationships with customers stands at the top.

Pioneer digital-physical innovation
The emergence of social, mobile and digital networks has played a big part in democratizing the relationship between telecom providers and their customers. It’s also forcing them to rethink how they work. More than two-thirds (68%) of telecom CxOs now look to partners who will have an equal hand in creating business value. And 49% are sourcing innovation from the outside.The intersection between the digital and physical is the leading edge of innovation. Smart pills and smartphone heart monitors, intelligent vehicles and crowd-sourced traffic routing, books that respond to a reader’s location and apps that enhance the in-store experience: the possibilities are enormous.

Types of digital strategyThat, as telecom CxOs realize, means it is becoming increasingly important to meld the two dimensions. However, half the telecom providers have a weak digital-physical strategy – or none at all (see figure at right hand side). Some telecom providers are reconfiguring their offerings to capitalize on social networks and mobile connectivity. Others are reshaping their operating models to inject customer input into every aspect of the buying and selling chain. But they’re often not doing both at once.

     So what’s preventing CxOs from doing more to unite their business and digital strategy? The biggest hurdle is how social media fits into the mix. The survey revealed the fact that CxOs simply don’t know how to strike the right balance between the social, digital and physical worlds.

Understanding the return on investment is also a challenge, particularly if telecom providers view social simply as something they snap on to existing workflows. Its value is realized when social inspires entirely new ways of working, learning and orchestrating processes across the organization and beyond, making it core to the company’s overall strategy and brand.

Craft engaging customer experiences

As the digital infuses the physical, and vice versa, telecom organizations are transforming the customer experience. More than eight in ten (82%) of the CxOs surveyed recognize the new imperative – a shift to social and digital interaction. And 65% expect to meet an even more difficult demand: understanding and engaging the customer as an individual rather than as a category or market segment.

Telecom CxOs intend to use digital channels much more extensively to engage with customers in the next three to five years – 91% against 36% now. That said, CxOs who have launched multiple initiatives to improve the customer experience are lagging in one area: the social component. Less than half have initiatives underway to engage customers via social business. This is surprising, given that 84% of telecom CxOs aspire to know their customers better in the next three to five years.

     With an absence of a social strategy, telecom CxOs are missing much of the equation, and there’s a huge payoff for making the effort. The better a telecom provider understands its customers, the more likely it is to thrive. The most progressive telecom providers analyze social data to understand customers’ core values and what’s happening in their lives. Such attributes, when well understood, lay the base for customer experiences tailored to the individual. They get us closer to cracking the “social genome” – the traits that make each of us uniquely human.

Pulling it Together

Opening up to customers and pioneering innovation at the nexus between the digital and physical to create engaging new customer experiences aren’t things any telecom provider can do alone. Hence the fact that CxOs want to collaborate far more extensively across internal and external borders in the next few years.
Our research shows there are convincing reasons to do so. The most flourishing organizations are typically those that liaise closely with their customers, partners and suppliers and actively promote the development of employee networks. But encouraging others to collaborate isn’t enough. The members of the C-suite must also pull together. The success of the organization hinges as well on how well the C-suite works together as a team.


Global Industry Leader Telecommunications, Media & Entertainment at the IBM Institute for Business Value

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