Successful Digital Transformation: It’s Complicated

LotusFlare’s Stephen Krajewski talks about advice LotusFlare has been given by its CSP customers to increase the chance of success in digital transformation projects.*

Digital transformation currently occupies a complicated place in the telecom industry at this point in 2022. On one hand, virtually everyone I speak with in the industry believes that digital transformation is the right thing to do for one very good reason - the need to stay competitive by meeting the changing needs of their market.

There are other good reasons too. According to Ovum’s research the three biggest drivers of digital transformation in Asia Pacific are stronger customer relationships (80%), business agility including speed, partnerships, new business models (66%), and cost reduction or operational efficiency.

On the other hand (there’s always another hand) it seems that digital transformation as a project within an individual or group of CSPs - i.e., transformation programs to digitize a business and the experience given to customers - too often falls short of expectations and outcomes.

There are a myriad of reasons for falling short so I’ll talk about the things that are more likely to put a digital transformation program on a path to success LotusFlare has observed. LotusFlare is a relative newcomer to the telecom telecoms industry so, coming from the internet world, we have a somewhat different perspective on digital transformation. Let me take you through some of the things we’ve observed in speaking with and working with leaders in CSPs in the process of helping them launch new digital telco brands, which, in our view, is the approach of digital transformation for the 5G era.

Goals Before Tech

One of the clear missteps CSPs make in digital transformation projects is that many tend to approach transformation predominantly from the technology. As a vendor of cloud commerce and monetization services, we know this all too well.

In working at the RFP stage with a number of CSPs, LotusFlare has observed that CSPs invariably have a much clearer idea of what they want in the technology than what they want to get from the technology. It’s understandable because new and improved technology should get you new and improved processes for business. Alas, it doesn’t work that way.

LotusFlare sees that businesses that have a clear outcome in mind are more likely to be successful in their transformation. An example is a recent conversation with a CIO where I asked “Do you really actually need what we offer?”. Rather than talk about the state of their legacy systems and what functionality was missing, the CIO launched in and quickly named the 5 KPI areas that the business had to change as goals for the program. And by way of interest, they were NPS, order fallout, sales conversion, call resolution and share of revenue devoted to IT over a period of time.

This response was not only refreshing but encouraging because they have a clear idea of the goals of their process they were embarking on. While they are at an early stage of their transformation, I bet their process will be successful because they understand the goals to be achieved before technology enters into the picture.

Prepare To Change Culture

Digital transformation is, by any way look at it, incredibly complex. What’s really happening is that the whole company is being asked to change how they work and what they use on a day to day basis. This is more than just technology; it goes to the culture of the business.

Because of this companies and programs that are building in a cultural change aspect are in our experience more likely to succeed. LotusFlare is working with a CSP who made it clear that the cultural change had started well before they went and spoke to any enabling technology vendor or agency. Their change program is championed at the executive level and that is made real by an on-going change program that gets at the culture of the business. Organizationally, many CSPs carve a dedicated team to focus on digital transformation not only to get focused on project goals but more importantly to act as an agent of culture change.

Let The Market Do The Driving

It seems basic - like setting clear goals - but being focused on detailed conditions of markets is sometimes forgotten a requisite for digital transformation success. LotusFlare has learned from the digital leadership of CSPs to acquire a deep understanding of their position in the market. Their advice is to closely watch competitors, the maturity of the market, the true market demand and, most of all, what the people want.

One digital leader pointed out that understanding market maturity was particularly important, especially when it came to making a more digital offering available. He noted that in their case, some regions simply had low digital penetration, for one reason or the other. More mature markets are much easier to enter as long as you position yourself in a unique way. The key was to understand how other telcos in the market are perceived and create your digital brand from there.

IT and Marketing: The Best of Partners

When digital transformation works, as one CSP put it, you can see that a bridge between IT and marketing has been built. Interesting comment indeed. In his view, nothing will enable a CSP to deliver exactly what the customers want like aligning these two departments. And, while it may be so simple, the idea of great alignment does make sense, especially knowing how much CSPs look for enabling systems to be “catalog-driven”. The catalog - or rather the many catalogs - is the place where IT and marketing meet.

I know from my own experience in the industry that there is often friction over the catalog, the locus or repository of offering innovation in any organization. The main issue is that marketing and IT are never actually working on the same goal when it comes to getting the right offers and then rolling them out to the market. Each has expectations of what the other will help them deliver - how, when and what - and when it goes wrong repeatedly the relationship breaks down or stops altogether.
The CSP we’re working with reported that it's really a matter of working on the relationship. Their sensible advice - these teams should spend time together, sit in meetings together, and work together directly, instead of feeling like two different entities. It may be difficult to do but getting these two departments better aligned will increase the chance of successful digital transformation.

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Stephen Krajewski
Senior Director of Marketing
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