Digital Transformation Critical For Profitability: Amdocs

Businesses that embrace digital technology are expected to have upper-hand on their competition quite easily as they are expected to get 26% more profits than their competition. In order to know more on how businesses and telecos can embrace digital technology, Dataquest spoke to Jatinder Ahuja, head of India and South West Asia Business, Amdocs.

In today's world what does digital transformation mean for enterprises?

Our industry is at an historical intersection, driven by digital immediacy and evolving customer experience expectations. Service providers must be able to offer customers experiences that will be valuable to them as individuals on any digital dimension, even non-telecom-traditional ones. They must diversify to be able to offer new types of services to new types of customers, leverage data to improve service quality, and establish the agility to introduce new promotions within hours and instantiate them within seconds. They must be able to win customer attention time and again, in ways they couldn’t before, developing stronger customer affinity to their brand to better compete.

One of the major benefits of digital transformation, in particular moving customer care and commerce to online, self-service channels, is the ability for a service provider to improve their customer engagement and achieve a much closer relationship with the customer. In fact, for many segments, such as millennials, online interactions are the desired option. Engaging with customers in multiple digital dimensions opens a whole new world of contexts in which the service provider can interact with their subscribers, be it offering new services on Facebook or placing roaming package promotions on Saavn or Whatsapp.

Service providers are increasingly realizing how much progress they need to make to compete as digital service providers. Not only do they have to bring products to market much more quickly, they need to integrate their technology and business stacks, and unify their different channels to the customer.

Why is Digital Transformation critical for telcos?

According to MIT Center for Digital Business/Cap Gemini Research, businesses that embrace digital transformation are 26 percent more profitable than their average industry competitors, enjoy a 12 percent higher market valuation and see a nine percent increase in revenue with existing physical capacity through efficiencies. Digital transformation is a critical enabler for capturing digital age opportunities. According to Ovum, 80 percent of service provider executives see it as an immediate and critical objective. However, while the majority of service providers today are actively working to deploy digital technologies to improve their businesses, research conducted for Amdocs by IDC among 81 service providers around the world shows this is happening without a unifying top-level vision and strategy, with service providers struggling to re-align processes and re-train staff. According to the research, 50 percent of C-level and other service provider decision makers predict that it will take their companies more than five years to transform. This is not fast enough according to 64 percent of respondents who believe that the communications industry will be outpaced by other industries. It’s clear companies fear timelines are slipping, and that they have serious concerns as to whether they have enough strategic focus and digital skills to transform fast enough.

What role does the Chief Digital Officers (CDO) play in taking the vision of the organization forward?

Research conducted for Amdocs by IDC among 81 service provider decision makers around the world, with half holding C-level roles, shows companies are racing to get a digital strategy and chief digital officer in place to address gaps in digital strategy, skills and leadership.  According to the research, 46 percent of service providers still do not have a digital strategy in place, and while 89 percent of respondents highlight the importance of having a chief digital officer (CDO) to lead and drive such a strategy, only 28 percent have one. Despite having strong technology capabilities, the communications industry will find it difficult to implement and bring to market digital transformation projects quickly enough predict 69 percent of the respondents. When asked what factor would most help their companies transform into digital service providers, having the right skills to create and implement digital transformation strategies were ranked first and second.

What are the Key ingredients for successful digital transformation?

In order to succeed, service providers need to address the four business imperatives for digital success:

• Delivering personalized, omni-channel customer experiences across digital dimensions, including retail and eCommerce.
• Creating a diversified business to capture new revenue streams from the business sector (from home offices to small and medium businesses and enterprises), and the Internet of things (IOT), as well as from multi-play and entertainment offerings.
• Becoming data empowered to anticipate needs and to make customer, business and operational decisions based on insights and predictive analytics.
• Achieving service agility to shorten the time to market of multi-play offerings to mere hours, and use network functions virtualization (NFV) to accelerate the fast rollout of new technologies and hybrid network services.

What are the drivers that can change the telecom industry?

The world is changing at an accelerated pace. Customer behaviors and business models which were unthinkable 10 years ago are commonplace today and technology innovations are being adopted at unprecedented scale and speed, particularly by OTT players.

New services, technologies and players are impacting the communications market in dramatic ways, changing the services we consume and the ways in which we consume them.

Just look at WhatsApp: five years after its launch, it had 600 million active users, completely disrupting the traditional text messaging market. In five years from now, consumer and business customers’ expectations will have evolved again.

Add to that Generation (Gen) C consumers who are not defined by their age, but rather by embracing all things digital, wanting empowerment through technology and craving fast and intuitive interactions. They are taking connectivity (with each other and with content) to new levels, new devices and new experiences.

What are the powerful tools and technologies aimed at improving Customer Experience?

In order to deliver on customer expectations in the digital age, service providers must be able to offer customers true omni-channel experiences, consistent and personalized across channels. They also need to allow channel hopping mid order so that customers don’t have to re-navigate their order from the beginning. According to Vodafone, 96 percent of consumers use digital as part of their typical purchasing journey. And from various research, we know that 40 percent of shopping starts on one device and ends on another.

Analyzing the network experience in real time and exposing it to the business and customer care people inside the service provider - a step change in how service providers can leverage real-time data to proactively interact with customers - further improves the customer experience. Just as retailers offer promotions based on what consumers have just purchased, service providers can do the same, for example offering a promotion for video streaming services for customers who have benefited from an improved network experience following new network investments.

Why should Customer Experience be the primary driver of business?

The stronger brands are the ones associated with an experience. One of the clearest examples of this is the game-changing entry of Apple’s iPhone into the wireless market. While great technology can differentiate a product, what really counts is the customer experience. With all service providers using similar network infrastructure and all consumers using almost identical devices, service providers must be able to differentiate themselves based on the customer experience they offer.

Furthermore, to level out the playing field with other industries, service providers must be able to take the customer experience to the next level, introducing experiences based on customer affinity. This means knowing the customer, their usage, their preferences and their profiles in order to provide the experience they want, an engagement based on trust and personal value.

How can CDOs Drive Digital Transformation?

CDOs can serve as the missing link in many of today’s Service Providers’ Digital Transformation journeys. The CDO, would be the main executive sponsor, as we see in many cases reporting directly to the CEO. They would run the matrix project, with resources from all parts of the organization. In some cases, we see the whole budget for the program is managed by the CDO, impacting all parts of the organization – but planned, strategized and executed by the CDO. The CDO, with their leadership and overall sponsorship of the program, would be able to ensure it follows through in the organization, as well as bring in the relevant innovation from the outside.