Telefónica’s End-to-End Digitalization: How Can Suppliers Capitalize on Operator Digital Strategies?
September 22, 2016 Leave a comment
- In September, Telefónica Global CIO Phil Jordan outlined Telefónica’s end-to-end digitalization strategy that focuses on both how it interacts with customers and how it can make internal operations more efficient. The strategy requires digitalization in the front that spans the customer-facing omni-channel spectrum; and digitalization in the back that fundamentally streamlines its organization and operational processes.
- The Telefónica approach provides a strong checklist of digital transformation demands that OSS/BSS suppliers must meet in order to deepen their operator relationships. Without an end-to-end digital platform offering, OSS/BSS suppliers risk becoming sidelined in operator digital transformation journeys.
At the Amdocs Digital Executive Summit during the 2016 CTIA Super Mobility show, Telefónica Global CIO Phil Jordan provided a view of Telefónica’s end-to-end (E2E) digitalization strategy and vision. Telefónica recognizes that the emerging competitive pressures within the digital services landscape require operators to transform their business models and operations; in other words, ‘do or die.’ For Telefónica, these competitive pressures include growing competition from Google Fiber; satellite TV provider Sky, which plans to offer mobile service in the UK later in 2016 (ironically on Telefónica’s O2 network); other new MVNOs such as Dixons Carphone; OTT substitutes including public WiFi, Skype, and Facebook Messenger; and the evolving digital strategies of traditional telco rivals. This trend has compelled Telefónica to adapt its operational and business processes in order to scale and keep pace with the demand curve of digital customers.
Based on the key takeaways of Telefónica’s E2E digitalization strategy, here are the main digital transformation components suppliers need to deliver:
- Front-End Transformation of the Customer Interaction Experience: The customer-facing part of Telefónica’s digitalization strategy starts with using real-time ‘next best actions’ and proactive outreach to rapidly resolve customer requests and issues. Supporting all the channels customers use and identifying the customer’s preferred channels (e.g., online, self-assisted, call center) ensures consistent customer experiences, including channel hopping when needed. Finally, knowing the distinct needs and requirements of the customer drives personalized marketing campaigns and support with smart timing, while reducing the frequency of unwanted and irrelevant offers.
- Backend Transformation of Internal Operations: Telefónica identified the streamlining of its organization and operational processes as essential in meeting the demands of the digital ecosystem and customer. This includes automating processes such as service assurance and service fulfillment, in combination with greater degrees of integration, such as network-wide policy implementations and SDN-enabled service chaining, to boost the agility of operations. Through increased automation, Telefónica plans to reduce manual interventions and human errors, a key metric in measuring the progress of its digital transformation objectives. Finally, adopting an E2E vantage point of the network and operations ensures the visibility needed to manage digital transformation.
With Telefónica providing the key elements of its E2E digital transformation vision, OSS/BSS suppliers need to take several key steps to ensure their portfolios and go-to-market strategies are tuned to address evolving operator demands:
- Strengthen Omni-Channel Solution: OSS/BSS suppliers must offer tools that deliver real-time omni-channel experiences which include online self-management capabilities. These tools include ensuring customer and partner management platforms support the open source RESTful APIs and JBoss middleware needed to normalize business logic across multiple digital storefronts and channels.
- More Integration and Automation: Telefónica’s strategy requires that suppliers offer greater levels of software and systems integration and automation to reduce back-office complexity and the frequency of business processing errors. Delivering these capabilities would also ease the adoption of cloud-native services needed to spur digital services creation and application innovation.
- E2E Data Management Requirement: In order to gain a 360-degree view of the customer across all lines of business, Telefónica requires an E2E and efficient implementation of its data management platform. Embedded application-specific analytical tools, no matter how elegant, must now integrate into its E2E data management implementation.
- Efficient Data Management: The efficient management of data becomes necessary to improve the application of customer insights to targeted marketing campaigns and ‘next best action’ sequences. This requirement links to exercising a 360-degree view of the customer and ensuring the privacy and security of customer data.
- Unified Catalog: The unified management of customer-driven service bundles requires a single catalog of all products and services. This extends to accelerating and easing integration of digital partner applications as well as driving organization-wide agility.
Overall, the Telefónica E2E digitalization vision provides a template for OSS/BSS suppliers to adapt their portfolio development and marketing strategies to capitalize upon the digital transformation needs of operators. The emphasis on E2E data management, increased back-office integration, and network-wide automation of business and operational processes would play to the strengths of top-tier OSS/BSS suppliers with these built-in capabilities, such as Amdocs, Netcracker, Huawei, Ericsson, and Nokia. For these and other vendors, driving operator digital transformation will require more input from the portfolio and services resources of the major suppliers. The E2E digital transformation needs articulated by Telefónica will likely parallel the needs of other operators. Thus, building a portfolio to meet Telefónica’s requirements will likely resonate with most other major operators pursuing the digitalization agenda.